The Nairobi International Financial Centre (NIFC) plans to establish a Sh65 billion investment fund to finance startups and small businesses in Kenya, with half of the proposed capital targeting technology and artificial intelligence (AI) companies as the country seeks to attract more investment and support job creation.
The proposed fund, equivalent to approximately US$500 million, will bring together local and international venture capitalists, with NIFC coordinating fundraising and the selection of businesses for investment. The remaining Sh32.5 billion will support startups and small and medium-sized enterprises (SMEs) operating in other sectors.
NIFC Chief Executive Daniel Mainda said the initiative is intended to address the difficulty young businesses face in accessing capital, particularly as international investors become more cautious about financing African ventures.
“Access to capital is a challenge for Kenyan startups, so how can we provide capital for these startups? That’s why we want to co-host a fund of $500 million so that we can deploy it into that segment,” Mainda said in an interview with Business Daily.
The centre has started the process of identifying an organisation to co-host the investment vehicle alongside a professional fund manager. Mainda said potential investors had expressed interest, although the partners, management structure and final investment arrangements have not yet been announced.
The proposed fund comes as financing for Kenyan startups faces renewed pressure. In the six months to June 2026, local startups attracted approximately Sh16 billion in funding, a 45 percent decline from the Sh29 billion recorded during the same period in 2025. The latest figure was the lowest half-year funding level since 2021.
By mobilising capital from international and domestic investors, NIFC hopes to provide businesses with funding to develop products, expand operations and create employment. The technology allocation is expected to support companies developing digital products and AI-based solutions, while the other half will reach businesses beyond the technology sector.
The initiative also forms part of NIFC’s broader strategy to position Nairobi as a regional financial hub and attract foreign investment. Since becoming operational in 2022, the centre has attracted about 40 companies and facilitated approximately Sh26 billion in foreign direct investment.
The proposed fund's success will depend on securing investor commitments, appointing its partners and establishing a clear framework for selecting and financing eligible businesses.
