For the longest possible time, Kenya has been a major market in the African tech ecosystem. As part of the Big Four and home to some of the continent’s biggest tech companies, the country has been recognized for its contributions to the cause.
However, a short string of events in the landscape, tied with existing narratives, paints a different picture.
MPost, a startup founded in Kenya back in 2016 to pioneer the idea of turning mobile phone numbers into virtual addresses, is relocating from its original market, setting up HQ in Kigali, the capital of Rwanda.
The company says it will officially start operating its new base this November and parts of the statement make reference to more favourable conditions in Rwanda, where it launched an outpost in 2021. The startup also operates in Burundi and Tanzania.
Amid the move, MPost is reportedly setting up shop at Norrsken, an investment fund and coworking hub under the auspices of Swedish impact investors. Norrsken itself made inroads to Rwanda in 2019, with a mission to back growth-stage African startups.
Related Article: BioNTech’s InstaDeep picks Rwanda as AI research hub in Africa
In a statement on the relocation, MPost’s founder, Twahir Mohamed said the relocation will help the company leverage the Rwandan market as an anchor for its intended expansion across the continent.
“This decision serves as our launchpad into Africa, and we look forward to contributing to Kigali’s thriving business community while leveraging the support and resources available at Norrsken to propel MPost to new heights,” he said.
The Kenyan government has been particular about taxing lately, laying much of the emphasis on the tech market. As a result, digital economy players, including Jumia, Multichoice, and have complained of the possibility of overtaxation and its effects on digital payments/commerce.
MPost’s complete relocation is clearly symbolic of the growing discontent with Kenya’s ever-expanding tax net. Last year, Wasoko, one of Africa’s fastest-growing B2B eCommerce startups, set up its innovation hub in Zanzibar, ignoring its home market. However, the company has yet to make an official statement about its experience in Kenya.
Rwanda, on the other hand, has been attracting attention recently, both from first-timers and ventures with operations in other parts of the continent.
Companies like Paystack, Flutterwave, Zipline, and BasiGo have expanded to the market, while investors from across the world have been betting on revolutionary companies domiciled in the jurisdiction, like Kasha, Ampersand, Food Logistics, and Payday.
The country has for a stretch of time been pointed to as Africa’s ideal tech testbed and launchpad. Thanks to efforts from the Paul Kagame-led government and key industry shifts, that perception is gradually becoming a reality.
Earlier this month, Rwanda announced visa-free entry into the country for all Africans, in a bid to boost the free movement of people and trade and rival Europe’s Schengen initiative—becoming the fourth African country to do so after Kenya, Seychelles and the Gambia.
It’s important to recall that for the last few years, Africa’s tech community has been on an inadvertent search for a practical central hub, a market with the makings of an industry citadel or capital. However, many contenders exist besides Rwanda, each with its unique propositions.
MPost’s host in Rwanda formally opened the Norrsken House Kigali on November 8th, its first hub outside Stockholm, in a ceremony where the country’s president, Paul Kagame, was in attendance. The $20 million, 12,000-sqm campus looks to become a nerve point for tech companies from different parts of Africa.
“Rwanda is an excellent testbed and a proof-of-concept hub,” Niklas Adalberth, the chairman of the Norrsken Foundation, who founded—and has exited—BNPL giant Klarna, is quoted to have said during his address at the launching event.
Norrksen revealed earlier this month the close of its $205 million debut fund to invest in Africa-focused growth-stage tech companies. Similarly, the country launched a $30 million Rwanda Innovation Fund backed by the African Development Bank (AfDB), with the purpose of pumping capital into tech firms out of East Africa.