Kenyan Web3 startups raise Sh4.4bn since 2021, report shows

Hashed Emergent, the venture capital firm accelerating web3 adoption in Africa and other emerging markets, has released the inaugural edition of the “Kenya Web3 Landscape Report.” The report offers a comprehensive view of the country’s startup ecosystem, developer activity, and regulatory outlook, prepared in collaboration with knowledge partners Web3Clubs and the Virtual Assets Chamber of Commerce.

The report positions Kenya as East Africa’s leading web3 ecosystem, anchored by resilient founders building on the country’s mobile money legacy and a fast-growing developer base.

Kenya has emerged as one of Africa’s most dynamic Web3 ecosystems, underpinned by a strong developer community, resilient founders, and increasing investor interest. The country has built a natural testbed for stablecoin and on-chain payment infrastructure in Africa. That’s not an accident. It’s the direct result of the country’s leadership in mobile money, and it’s why we’re seeing renewed investment activity across the ecosystem. said Tak Lee, CEO and Managing Partner at Hashed Emergent. “While the market is younger and leaner than West Africa’s, the foundation is strong, anchored by resilient founders building real solutions to real financial problems”

The story of Web3 in Kenya is often told through its mobile money legacy, but this report shows something more specific: a growing startup ecosystem and developer base that’s building ahead of the market, and a regulatory shift that’s being implemented in real time. Our goal was to map the ecosystem clearly, so stakeholders can see where the real opportunities and constraints sit, beyond headlines,” said Uchenna Edeoga, lead researcher of the report and Associate, Platform (Africa), Hashed Emergent.

A rebounding, finance-led investment landscape

According to the Kenya Web3 Landscape Report 2025, over 45 startups founded by Kenyans have collectively raised more than $34M in disclosed funding since 2021. Investment rebounded sharply in 2025, with founders raising $14M, trailing only the ecosystem’s 2022 peak of $17M.

Deal activity held steady through the cycle: 7 disclosed rounds in 2021, 10 in 2022, and 8 in 2023, before a slowdown in 2024 and a renewed uptick in 2025. Capital was heavily skewed toward finance, which grew 25x to anchor the year’s total at $10M, largely on the back of stablecoin-related solutions spanning payments, on/off-ramps, and neobanks. Infrastructure funding also rebounded after two consecutive years of decline, supported by renewed interest in stablecoin rails and real-world asset (RWA) tokenization.

Strategic rounds emerged for the first time in 2025, reaching $5M and signalling deeper engagement from corporate and ecosystem investors. However, the near-total absence of later-stage capital points to a clear growth-stage funding gap, with activity still clustered at the pre-seed and seed levels.

Capital came from a diverse mix of investors based in the USA, Saudi Arabia, Egypt, El Salvador, and Kenya itself, alongside active participation from funds across Europe, Asia, and the rest of Africa.

Developer activity anchors Kenya’s builder culture

Kenya hosts East Africa’s most active web3 developer ecosystem – young, urban, and increasingly diverse. 86% of developers are under 28, while female participation stands at 25%, notably higher than in many other African web3 communities.

The talent base is more experienced than its youth suggests: 43% have built in web3 for three to five years, and 41% self-identify as founders rather than employees. Ethereum remains the anchor chain, appearing in 70% of developer portfolios, though the ecosystem is rapidly diversifying, with growing adoption of non-EVM languages like Rust alongside Solidity’s continued dominance.

Employment remains largely informal: only 22% of developers report full-time roles, while 32% work as freelancers. Stablecoins dominate compensation, with 72% of developers paid this way, reinforcing their role as the ecosystem’s core settlement layer. Builder interest is concentrated around DeFi and stablecoin payments, with emerging attention on AI integration and RWA tokenization.

Nairobi remains the clear center of gravity, accounting for over 82% of developer activity, though secondary cities like Kisumu (8%) and Meru (3%) are showing early signs of activity.

From caution to clarity: a landmark regulatory shift

The report’s third section tracks Kenya’s regulatory evolution, from the Central Bank of Kenya’s early warnings in 2015 through years of legal grey area, to the passage of the Virtual Asset Service Providers (VASP) Act 2025. Assented to by the President in October 2025, the Act is Kenya’s first comprehensive crypto legislation, formally recognizing digital assets and establishing a licensing regime under the joint oversight of the Central Bank of Kenya (CBK) and the Capital Markets Authority (CMA).

Kenya’s tax framework has matured alongside it. The Finance Act 2025 repealed the previous 3% Digital Asset Tax, a turnover-based levy that had drawn industry criticism for taxing volume regardless of profit, and replaced it with a 10% excise duty applied only to platform service fees, aligning crypto taxation with banks and mobile money.

Interim uncertainty persists: subsidiary regulations and licensing procedures are still pending, meaning crypto companies currently operate in a gray zone without formal depositor protections. Kenya’s 2024 FATF grey-listing has added urgency to bringing virtual assets firmly within the country’s AML/CFT regime.

Looking ahead

The Kenya Web3 Landscape Report concludes that the ecosystem’s investment case is reinforced by strong adoption fundamentals: Kenya ranks first in East Africa for blockchain adoption across several on-chain metrics and second in the region for on-chain value received in 2025. With the VASP Act now enacted and stablecoin adoption strengthening, the report frames Kenya as well positioned for continued growth and rising investor confidence – provided the growth-stage funding gap and structural employment gaps for developers are addressed.

Hashed Emergent prepared the Kenya Web3 Landscape Report in collaboration with its knowledge partners: Web3Clubs and the Virtual Assets Chamber of Commerce.

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