Kenya has emerged as the leading destination for German-backed startup investment in Africa, recording 50 deals over the past decade as total capital flows into the continent reached $1.88 billion.
The findings are contained in the Germany-Africa Investment Report (2015–2025), produced under the Africa Investment Bridge initiative by the Westerwelle Foundation. The report documents 186 deals across 19 African countries involving 51 German funders, positioning Kenya ahead of Nigeria, Tanzania, South Africa and Ghana in deal count.
The report was launched at the Friedrich Naumann Foundation East Africa in Gigiri, Nairobi, where stakeholders underscored the need for transparency and structured investment pathways to unlock Africa’s innovation potential.
Speaking during the launch, Sebastian Gentry, Head of Programs at the Westerwelle Foundation, said the report seeks to close information gaps that have historically limited international investment in African startups.
“The data tells a clear story: African founders are building solutions in agriculture, financial services, health and climate adaptation,” said Gentry. “By reducing information asymmetry and strengthening local partnerships, investors gain access not just to returns but to one of the most significant economic transformations of our time.”
He noted that Kenya’s strong digital infrastructure, vibrant entrepreneurial ecosystem and supportive innovation policies have sustained investor confidence. Nairobi’s reputation as a regional technology hub has further cemented its status as a preferred base for venture capital deployment and regional expansion.
According to the report, German deal participation across Africa grew by 784 percent between the foundation phase (2015–2019) and the scale phase (2020–2025), reflecting a shift from exploratory investments to larger, structured capital commitments.
Kenya led with 50 German-backed deals, followed by Nigeria with 34, Tanzania with 24, South Africa with 19 and Ghana with 17. Together, these five markets accounted for 77 percent of all recorded transactions over the decade.
For Kenya, industry players said the figures validate years of ecosystem development that have positioned Nairobi as the “Silicon Savannah”, attracting technology startups, accelerators and venture capital firms seeking scalable solutions for regional and continental markets.
Ida Huiskonen, Director of Community and Marketing at the Westerwelle Foundation, explained that the Africa Investment Bridge initiative began with mapping the German investor landscape to understand who was already active in Africa and who was considering entry.
“Every step begins with transparency and understanding where we stand,” she said, adding that the initiative aims to develop practical pilot models and structured entry mechanisms that reduce risk and increase predictability for investors.
Sectoral analysis shows FinTech and AgTech dominating German-backed transactions, accounting for 51 percent of total deals. Kenya’s leadership in mobile money and digital financial services has made it a natural beneficiary in the FinTech space, while agricultural technology aligns with national efforts to modernise value chains and enhance food security.
HealthTech, logistics and education technology gained momentum during the 2020–2025 scale phase, as investors increasingly targeted sectors addressing demographic growth and structural development challenges.
While venture capital firms were numerically prominent, Development Finance Institutions (DFIs) played a pivotal role in facilitating larger-ticket investments. German syndicate exposure peaked at $565.5 million in 2023 before declining in line with global venture capital slowdowns rather than structural weaknesses within African markets.
Despite the dip, collaboration among investors increased, with more syndicate deals and co-investment structures observed, signalling maturation of the ecosystem.
At the launch, Andreas Spiess, co-founder and chairman of Mwingi Kenya Ltd, emphasised the importance of regulatory certainty and credible exit pathways for European investors.
“The elephant in the room is trust. Investors want assurance that their capital is protected from regulatory failure or jurisdictional risk,” he said, referencing past collapses in the startup ecosystem that resulted in significant losses.
Spiess stressed that beyond early-stage funding, Africa must develop structured secondary markets and viable exit mechanisms to attract strategic investors willing to deploy larger pools of capital.
Dr Kevit Desai, Chairperson of the Economic Development Investment Council, highlighted Kenya’s broader regional role.
“With nearly 1.3 billion people across Africa and close to 400 million within the East African Community, fully integrated as a customs union and common market, the potential for enterprise creation and capital growth is immense,” he said.
Dr Desai underscored the importance of cluster development, citing Germany’s success in automotive, energy and food manufacturing clusters as models for East Africa. He argued that coordinated collaboration among academia, SMEs, county governments and investors could accelerate innovation and attract sustainable capital.
He further pointed to Kenya’s coastal region as an emerging frontier for diversified growth in trade, tourism, agriculture and the blue economy, complementing Nairobi’s technology-driven expansion.
Mercy Mukulu, Country Director of the Westerwelle Foundation Kenya, said the organisation is supporting entrepreneurs through incubation and acceleration programmes at its Mombasa hub. The programmes assist startups and MSMEs across ideation, pre-seed and growth stages, focusing on governance, leadership and investment readiness.
Mukulu described Kenyan entrepreneurs as resilient and innovative but acknowledged that scaling operations, accessing affordable finance and navigating regulatory requirements remain significant challenges.
She noted that connecting founders to structured international capital through initiatives like Africa Investment Bridge could unlock greater job creation, technology transfer and regional market expansion.
Although African startups captured just 0.6 percent of global venture capital in 2024, the continent remains the fastest-growing region globally, with projected annual GDP growth of about four percent.
Stakeholders concluded that maintaining regulatory stability, strengthening capital markets and enhancing transparency will be critical for Kenya to consolidate its leadership position and convert foreign investment inflows into inclusive economic growth.
As Nairobi continues to draw global attention as Africa’s innovation hub, the report positions Kenya not only as a beneficiary of German-backed capital but also as a strategic partner shaping the next phase of the continent’s innovation-driven transformation.
By Naif Rashid
