Investors Push for Deeper Capital Markets Linkages as Kenyan Startup Funding Falls

Investors are urging deeper engagement between startups and full-service investment banks to unlock advisory support for capital raising, due diligence, and valuations, as new data shows Kenyan startup funding continuing to slow.

According to the Africa Venture Capital Association, Kenyan startups raised KES 16.3 billion in the first half of 2026, a modest decline from KES 17 billion over the same period last year.

The slowdown has sharpened focus on how the region can better mobilize local capital pools. As of June 2026, government securities accounted for approximately 47% of pension assets, compared with just 1.36% in private equity and 0.02% in infrastructure debt instruments; this despite pension schemes being permitted to allocate up to 10% of assets to private equity and venture capital, and a further 10% to infrastructure debt instruments, under the current investment framework.

The findings were discussed at the 10th EAVCA Annual Private Wealth Conference, which brought together investors, policymakers, development partners and business leaders to examine how East Africa can build a stronger domestic capital base to support regional scale.

“As we mark 10 years as an association, we are looking ahead to strengthening domestic capital, accelerating regional integration and positioning East Africa to attract and deploy global investment at greater scale,” said Christine Maina, Chief Executive Officer of the East Africa Venture Capital Association (EAVCA). “Our rebrand reflects this broader ambition: to evolve with a changing investment landscape and help structure the next stage of Africa’s growth. Private capital will be critical to financing entrepreneurship, infrastructure, innovation and economic resilience, and our ambition is for EAVCA to be at the center of the partnerships, policies and investment needed to shape that future.”

Delegates stated that strengthening advisory support, building institutional-grade investment infrastructure and creating clearer pathways for capital to be recycled back into the market will be critical to reducing risk, deepening markets, and unlocking the region’s next generation of enterprises.

“The opportunity before us is to make the connection between capital and opportunity more efficient,” said Muathi Kilonzo, Managing Director, NCBA Investment Bank. “Institutional capital requires investable structures, credible projects, appropriate risk allocation and clear pathways to returns. NCBA Investment Bank has the privilege of being the largest full-service investment bank in the region, having mobilized over KES 100 billion in assets under management, and we have the capacity to help startups and enterprises prepare to unlock their next phase of growth,” said Kilonzo.

Delegates identified several priorities for reform, including using guarantees, blended finance and credit enhancement to share risk; strengthening local fund management capacity; deepening exit pathways; and enabling regional capital flows through more aligned regulatory frameworks.

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