Kenya's Startup Graveyard Just Cost Investors Sh93 Billion — And The Bill Isn't Fully Paid

Kenya's startup boom was built on the assumption that there would always be another round.

Twiga Foods shows what happened when that assumption broke. The company raised about Sh24 billion, expanded aggressively and became one of Kenya's best-known startups. It also went through several rounds of layoffs and restructuring as fresh funding became harder to secure. In August, one of its companies entered administration.

Twiga is among 13 Kenyan ventures that have collapsed, been wound up or entered administration after collectively raising Sh93 billion from investors, according to Business Daily's analysis. Copia raised Sh15.9 billion before failing to secure additional funding. Sendy raised Sh3.2 billion before running out of money and failing to find a buyer.

Those failures point to a common problem. During the funding boom, startups could build their businesses around future capital. They could hire ahead of revenue, enter new markets and spend heavily to acquire customers because another funding round was expected to finance the next stage.

When that capital became harder to find, the cost of those decisions became immediate.

Twiga's repeated layoffs were one consequence. The company cut more than 250 jobs in 2023 and went through further restructuring in 2025. The same pattern played out across the ecosystem as startups reduced headcount to bring costs closer to their available cash.

But cutting costs can only buy time if there is a business underneath them that can eventually support itself. That exposed a second problem: some startups had grown faster than their economics could sustain.

Kenya is a difficult market for venture-scale growth. Customers can be highly price-sensitive, acquisition costs can be high and the pool of customers able to support large venture-backed businesses is limited. Venture capital can bridge that gap for years. It cannot bridge it indefinitely.

Then there is the exit problem.

When a startup runs out of money, there are relatively few buyers in Kenya capable of taking it on. Sendy's collapse is a useful example. After raising millions and building a logistics business, it ran out of money in 2023 and failed to find a buyer before shutting down. More than 200 employees lost their jobs.

In a deeper acquisition market, a failed fundraising cycle does not necessarily mean the end of the company. Another business might acquire its technology, customers or team. That preserves some of the value created by the original investment. When there is no buyer, that value can disappear with the company.

That matters because venture capital depends on recycling capital and talent. Failed investments are expected. What matters is what remains after they fail.

Kenya now has a Sh93 billion record of what happens when companies built for continuous fundraising meet a tighter capital market. The number is large enough to show that this was not a handful of isolated failures.

And the funding environment has not disappeared. Kenyan startups raised $984 million in 2025, making the country Africa's largest venture capital destination that year, according to Africa: The Big Deal.