German firm eyes Kenyan, African early-stage startups with Sh4.3bn fund

NAIROBI, Kenya, Sep 19 – Unconventional Capital (Uncap), a German firm, has rolled out a Sh4.3 billion (€30 million) fund targeting early-stage startups in Kenya and other African nations. The facility offers non-dilutive and revenue-based financing to pioneering small and medium-sized enterprises (SMEs).

Some of the investors backing the fund include the Bill & Melinda Gates Foundation and the Bayer Foundation. “This new fund is a significant step forward in Uncap’s mission to support high-potential businesses driving economic growth in critical sectors such as agriculture, trade, logistics, climate resilience, and financial inclusion,” Uncap said in a statement. “Unconventional Capital will collaborate with key partners, including SAIS, an ag-tech initiative funded by the German Federal Ministry for Economic Cooperation & Development (BMZ) and implemented by GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), as well as O-Farms, a circular agriculture program run by Bopinc and funded by the Ikea Foundation,” it added.



Kenya has for years now ranked in the top five in Africa for attracting billions of shillings in investment from local and international investors, highlighting its return on investment for venture capitalists. For example, in 2023, Kenyan start-ups raised $673.78 million, up from $574.

8 million in 2022 as per Disrupt Africa data. “SMEs account for about 90% of African businesses, yet they face many challenges in raising capital. The inefficiency of African capital markets in effectively supporting SMEs, coupled with limited visibility to a broad investor base, continues to hinder access to essential funding for small and medium-sized enterprises across the continent,” Uncap Managing Partner Esther Ndeti, who will oversee the fund, said.

“Over the past three years, we’ve championed innovative, alternative financing for African businesses. We hope this Fund will address capital gaps for early-stage SMEs as they scale, deepening our impact. In the end, we want to not only support more businesses but also set new standards in the industry for innovation and inclusion,” she added.

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