Global Report

Welcome to the ‘Silicon Savannah’

Nairobi’s high-tech startups.

Su Kahumbu, the founder and creative director of iCow (Photo: Nichole Sobecki)

Su Kahumbu, the founder and creative director of iCow (Photo: Nichole Sobecki)

Kahumbu was working as an organic farmer outside of Nairobi, Kenya, in 2010, when she launched iCow, an app to help farmers track the gestation periods of cows. “It’s a very basic tool, yet vital in the bigger picture of a dairy farmer’s life,” says the 49-year-old. Within months, she was getting good news from farmers: they were getting more milk from their animals, and fewer calves were dying. Since then, Kahumbu has added more features, including ways to manage production and contact veterinarians.

She recently signed a contract with Safaricom, Kenya’s biggest Internet provider, to bring the app to a larger audience. The goal is to have a million users in the next year. “People are saying, ‘Wow, look, there are these issues, and we can actually solve them with applications,’” she says.

Kahumbu says her success would have been impossible without taking advantage of Nairobi’s robust startup scene. She went to iHub, a “place for techies to meet where the Internet is fast and free,” as described by its director of operations, Nekesa Ware. IHub is one of a cluster of technology think-tanks on Ngong Road, home to a growing number of startups and research centres.

Google, Microsoft and Intel have set up shop in Nairobi too, and IBM recently chose the city as the site of its first African research lab, based on the strength of its developer community, says Kamal Bhattarcharya, director of IBM Research Africa, in an e-mail. “There is definitely a buzz across the technology sector,” says Bhattarcharya, out of which is emerging not only new products but “a promising talent pool.” One of IBM’s first projects is using analytics to crunch data from Nairobi traffic cameras and social-media feeds to tackle the city’s notorious gridlock.

Nairobi’s tech boom began with M-Pesa (Swahili for “mobile money”), one of the world’s first cashless payment systems operating exclusively on mobile phones. Launched in 2007, more than 40% of Kenya’s population now uses the service—it’s estimated M-Pesa processes more than 10% of Kenya’s annual GDP. M-Pesa has done for Nairobi what Research In Motion once did for Waterloo, Ont.—attract a critical mass of talent to the area and show local entrepreneurs that global expansion is possible. (M-Pesa has since expanded to Tanzania, Afghanistan, South Africa and India.)

All this activity has confirmed Nairobi’s status as Africa’s “Silicon Savannah,” with Kenya’s technology exports soaring from US$22 million in 2003 to $100 million in 2010, according to the World Bank. Government investment in undersea telecom cables in 2009 improved network stability and speed, and lowered prices as well. Between 2003 and 2010, the number of Kenyans with access to mobile or Internet tripled.

Overseas companies are benefiting too. Bart van Eyk has been working in Kenya since 2008. Van Eyk, who is based in Amsterdam, is the chief executive officer of Musoni, a microfinance network operating exclusively on mobile phones. Musoni has 10,000 clients in Kenya, managing more than US$10 million in loans. Van Eyk says operating in the country isn’t always easy. “Africa has a reputation for being very challenging,” he says. “There are cultural differences, and setting up greenfield in a new country means you also need to invest in creating networks that are basically non-existent when you start.” There have also been economic concerns, such as high inflation and currency devaluation, as well as the perennial threat of political instability, most recently with the March 2013 elections.

For all Nairobi’s challenges, Kahumbu, the creator of iCow, sees plenty of room to grow. “We’ve had requests from almost every country in sub-Saharan Africa,” she says. “We’ve had a request just this morning from Mexico.” The company is in the “expansion phase,” she says. “We’re going to go where the farmers take us.”