Key Takeaways
- • NIFC plans a Sh65 billion ($500 million) Kenya startup fund to finance technology, AI and SME businesses, with half (Sh32.5 billion, $250 million) earmarked for technology and AI startups.
- • NIFC is in the process of selecting an organisation to co-host the fund alongside a professional fund manager, and says investors are already interested in participating, according to CEO Daniel Mainda.
- • The fund responds to a sharp slowdown in Kenyan startup funding, which fell 45% to Sh16 billion in the six months to June 2026, the lowest first-half total since 2021.
- • The proposal supports NIFC's goal of facilitating Sh650 billion ($5 billion) in FDI and certifying at least 150 companies by 2030, up from roughly 40 companies certified since 2022.
Summary
The Nairobi International Financial Centre (NIFC) plans to establish a Sh65 billion ($500 million) startup fund to finance technology businesses, artificial intelligence (AI) companies and small and medium-sized enterprises (SMEs), according to the original report. Half of the proposed capital, Sh32.5 billion ($250 million), will target technology and AI startups, with the remainder going to businesses in other sectors. The fund will bring together local and international venture capitalists, with NIFC leading fundraising and startup assessment.
NIFC chief executive Daniel Mainda said in an interview that the initiative addresses the difficulty Kenyan startups face in accessing capital, particularly as international investors become more selective about deploying money into African markets. NIFC has started selecting an organisation to co-host the fund alongside a professional fund manager. Mr Mainda said investors are already interested, and the centre is coordinating efforts to mobilise capital and identify businesses that can benefit.
The timing reflects a weak funding environment. Kenyan startups raised Sh16 billion in the six months to June 2026, down 45% from Sh29 billion in the same period last year and the lowest first-half figure since 2021. The report links the slowdown to global economic uncertainty that has made investors more selective across African technology markets. Smaller programmes are also active: Madica secured an additional $6 million from Flourish Ventures to extend its African startup investment programme over three years, with plans to support 25 to 30 more companies.
The technology allocation is tied to AI and digital-finance demand. Safaricom reported 4.5 million merchants in the six months to September 2026, up 90.3%, and M-PESA business services generated Sh8.18 billion in transaction revenue. Kenya ranked 22nd among 56 Commonwealth countries in the Ayre Index's youth AI readiness assessment, scoring 48.7 against a benchmark of 53. The SME allocation is supported by digital lenders such as NCBA Group, whose LOOP BIZ+ platform combines payments and working-capital credit.
The fund forms part of NIFC's broader mandate to position Nairobi as a regional financial centre. Since becoming operational in 2022, the centre has attracted about 40 companies, including Bupa Global and Lloyd's of London, which were certified in June. Certified firms receive a 15% corporate tax rate for 10 years and 20% for the following 10, versus the standard 30%, provided they meet conditions including at least Sh3 billion in local investment and 70% Kenyan senior management. NIFC says it has facilitated Sh26 billion ($200 million) in FDI and targets Sh650 billion ($5 billion) by 2030.
NIFC chief executive Daniel Mainda said in an interview that the initiative addresses the difficulty Kenyan startups face in accessing capital, particularly as international investors become more selective about deploying money into African markets. NIFC has started selecting an organisation to co-host the fund alongside a professional fund manager. Mr Mainda said investors are already interested, and the centre is coordinating efforts to mobilise capital and identify businesses that can benefit.
The timing reflects a weak funding environment. Kenyan startups raised Sh16 billion in the six months to June 2026, down 45% from Sh29 billion in the same period last year and the lowest first-half figure since 2021. The report links the slowdown to global economic uncertainty that has made investors more selective across African technology markets. Smaller programmes are also active: Madica secured an additional $6 million from Flourish Ventures to extend its African startup investment programme over three years, with plans to support 25 to 30 more companies.
The technology allocation is tied to AI and digital-finance demand. Safaricom reported 4.5 million merchants in the six months to September 2026, up 90.3%, and M-PESA business services generated Sh8.18 billion in transaction revenue. Kenya ranked 22nd among 56 Commonwealth countries in the Ayre Index's youth AI readiness assessment, scoring 48.7 against a benchmark of 53. The SME allocation is supported by digital lenders such as NCBA Group, whose LOOP BIZ+ platform combines payments and working-capital credit.
The fund forms part of NIFC's broader mandate to position Nairobi as a regional financial centre. Since becoming operational in 2022, the centre has attracted about 40 companies, including Bupa Global and Lloyd's of London, which were certified in June. Certified firms receive a 15% corporate tax rate for 10 years and 20% for the following 10, versus the standard 30%, provided they meet conditions including at least Sh3 billion in local investment and 70% Kenyan senior management. NIFC says it has facilitated Sh26 billion ($200 million) in FDI and targets Sh650 billion ($5 billion) by 2030.
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