Kenyan start-ups to benefit from digital transformation following Google investment

By Patrick Ndegwa 

Kenya is set to benefit from a $1 billion investment by Google over the next five years to boost digital transformation in Africa. Announced at the company’s Google for Africa virtual event in October, the investment will assist start-ups and entrepreneurs on their digital journeys and help usher in the next era of connectivity for citizens across the continent.

In addition to a previous commitment from Google of $10 million in COVID-19 economic recovery funds to SMEs and technology start-ups, the finances show that private companies have a critical role to play in the country’s full realisation of a digital economy. For it to thrive, our digital economy needs a supportive ecosystem made up of public and private enterprises, partners, and service providers working together to activate a connected Kenya, manifested thanks to 21st-century infrastructure and access to affordable Internet for all.

Kenya’s digital landscape

Kenya inhabits a unique position in Africa in terms of its digital userbase. Our country ranks 79 out of 110 on the 2021 Digital Quality of Life Index, the third-highest-ranked country out of 18 others on the continent. Over 85% of our population is connected to the Internet; a commendable figure in the context of accessibility and affordability challenges faced by many countries globally.

Kenya’s shortfall, however, is Internet stability, with little improvement to both broadband and mobile Internet speeds. This is a major hurdle which has consequences for both users and businesses. For businesses, it impacts any digitalisation strategy, stunts ICT operations growth, and limits reach within Kenya’s borders and beyond.

In favour of Kenya’s digital potential are some of the elements needed for a thriving digital economy. Our country is home to a young, tech-savvy population. According to the Digital 2020 report, 98% of Kenya’s Internet users connect via mobile phones – digital devices that continue to become more affordable and capable of more comprehensive functions related to ecommerce, finance, and many other sectors.

ICT is also identified as a key foundation sector under the Kenya Vision 2030 development programme, thanks to its strong linkage to other sectors. In the programme’s Third Medium Term Plan (2018-2022), trends in the ICT sector and their application to other sectors will accelerate as the country takes advantage of the Fourth Industrial Revolution.

This will help support another critical element: start-ups and SMEs that offer new and innovative solutions via technology and online portals.

Tech startups are leading the way into the 21st century

Referred to as the “Silicon Savanah”, Kenya is home to a wide range of technology start-ups that aim to revolutionise and digitise services to offer them to consumers and Internet users in new, practical, and convenient ways. Kenya itself also stands to benefit economically and socially thanks to the start-up scene through the provision of jobs, investment opportunities, and inclusion of its citizens in a global online community.

Fintech companies like Lendable and Alternative Circle, which offer financial products such as Maestro and the Shika mobile app, are examples of how the country’s financial sector is moving away from analogue systems and services. By way of a simple Internet connection, users and businesses have the portals and tools they need to make and manage smart money decisions.

Kenyan ecommerce, a sector that experienced exponential growth during the COVID-19 pandemic, has the likes of Sokowatch and Copia Global. These companies help support the local online shopping ecosystem, giving businesses a platform to offer their products and services and reach their customers quickly and conveniently.

Other start-ups across health, logistics, and education sectors, alongside other African service providers, all contribute to realising Kenya’s potential as an online economic powerhouse.

What else makes a digital economy?

Investment and development in Kenya’s digital infrastructure lay the foundation for a cutting-edge digital economy.

Progress begins with a quality Internet connection offered with widespread coverage at affordable rates. This opens the door for the provision of state-of-the-art ICT technologies including hosting facilities, fibre networks, cloud services, and high-speed wireless broadband – solutions that enable businesses to achieve their full potential and guarantee that users are always connected to each other.

For tech start-ups, the provision of reliable Internet acts as a gateway to capabilities that best serve them and their clients. They can introduce smart solutions, such as online payment platforms and communication tools, that boost productivity and efficiency.

With the right infrastructure, companies can become their own data centres or access off-site facilities that cater to all their traffic and data-related needs. This technology is cost-effective, helping companies to reserve capital for other business activities, which, in turn, spurs even more growth.

What an interconnected future looks like

Investment in ICT opens the door for employment and training opportunities which benefit a growing digital economy and the citizens who participate in it. The result is an ecosystem where businesses, individuals, and public entities act as partners, working together to maintain it.

With the likes of Google, a multinational tech giant, and other private companies investing in Africa’s digital transformation, Kenya’s start-ups and citizenry have much to look forward to, including a more connected future.

(Patrick Ndegwa is the Business Sales Lead for SEACOM East Africa).


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