EXPLAINED: Why Kenyan Start-Ups Are Funded in Dollars

  • Kenyan start-ups have secured seed funding running into billions of shillings from regional as well as global investors, which is often in  American dollars.

    Norfund East Africa Director William Nyaoke explained that the preference of the dollar currency is to cushion themselves from the fluctuation of the foreign exchange (FX) rates.

    Nyaoke, who commented on a Norfiunds Ksh3.1 billion joint investment, revealed that investors particularly look out for firms that trade in the dollar for ease of business.

    A photo of Norfund and Ethos East Africa Director William Nyaoke

    A photo of Norfund and Ethos East Africa Director William Nyaoke.


    “FX consideration is usually part of our evaluation and since is a dollar-dominated company and we are a dollar investment company.

    “It was an easier match because we did not have to worry about how the dollar is going to behave because they earn dollars, we invest in dollars they pay us in dollars,” he told NTV’s Julians Amboko.

    Nyaoke disclosed that the current tightening of the dollar by the Central Bank of Kenya (CBK) made the firm evaluate its risk appetite; the amount of risk that an organization is willing to accept in pursuit of its strategic objectives. 

    He added that if the firm operated using the Kenyan shilling it would mean consistent meetings to work out the investment while sustaining the business.

    The director explained that the firm considered the long-term effects of the FX market clarifying that it was part of the risks involved in the investment business.

    Nonetheless, he pointed out that there was optimism that the market would stabilise itself.

    “We know that the market will always have shocks and volatilities. As long as the fundamentals of the business or country remain solid, we look at the bigger picture,” he Nyaoke remarked.

    Among the local firms which have bagged funding include construction tech company Jumba which received Ksh567 (USD4.5 million) capital injection to boost its growth.

    On February 2, internet service provider Mawingu announced that it received Ksh1.1 billion from three investors to expand its growth.

    Jumba Company team pose for a photo.

    Jumba Company team poses for a photo.


Beryl Onyango

Beryl Onyango is a CPA and economics degree holder who has dedicated her career to helping others navigate the complex world of finance. Beryl has spent the past 3 years working as a finance specialist in a fintech company and has 6 years of experience in finance, working with a diverse range of clients and industries. Beryl's expertise lies in budgeting, saving, investing, and retirement planning, but she also has a deep understanding of various other areas of finance. She is interested in financial technology and how it changes how we manage our finances. As a finance writer, Beryl has been sharing her insights and knowledge through her writing, covering various finance and personal finance topics. Her goal is to educate and empower individuals to take control of their finances and achieve their financial goals. In addition to her professional experience, Beryl is a lifelong learner, always seeking to expand her knowledge and stay up-to-date with the latest developments in finance. She is also a strong communicator, able to explain complex financial concepts in a clear and easy-to-understand manner. Beryl believes that financial literacy is the key to achieving financial success, and she is dedicated to helping others achieve their financial goals.

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