Research Report: An inside look at Nairobi’s iHub

As part of a year-long study on various ICT Hubs across Africa, the iHub Research conducted a 3-month study to understand the iHub model, its members and how the iHub impacts the individual members. The study builds on surveys with the 7,011 total members and interviews with various stakeholders. The report was written by Hilda Moraa and Wangechi Mwangi contributed as co-author.

“My skills would have improved anywhere, but they are growing much faster here at the iHub because seeing what other people are doing and producing, motivates me to up my game so that I can keep up. The iHub challenges mediocrity and in that way, people are forced to ever be innovative and to raise the standards.”

This research aimed to understand the impact of the ICT Hubs to entrepreneurs. An ICT hub is a space where technologists congregate to bounce ideas around, network, work, program and design to bring their ideas to fruition. The first ICT Hub of the 15 hubs to be profiled within this study series is iHub, Nairobi’s innovation Hub for the Technology Community.

A few key findings from the report:

– There are 7,011 total members in the iHub in all membership tiers. 5,915 (84%) are male and 1,096 (16%) are female. Looking to increase female participation is a challenge faced by the sector although the numbers are likely on the rise.

– 12 startups were identified in the research process that includes Akirachix, Afrinnovator, Wingu Technologies and Wezatele.

– The Capital Markets Authority (CMA) of Kenya carried out a research study and published a report titled, “Impact Investing: Challenges and Opportunities in the East African ICT Sector.” One interesting observation from this report is that the major source of funding for Kenyan Small and Medium Enterprises (SMEs) is from personal loans and from friends (50.3%).

– The report shares that the largest funding gap is currently at the early stage or ‘seed’ level, particularly for software startups. The research findings of the iHub report similarly mirror the trend indicated in the CMA report, with the majority of iHub respondents finding their own funding to start their start-ups, either through personal savings or friends and family.

– Most of the start-ups generate income by designing products for their clients. 77% of the start-ups interviewed said they had clients for their products or offer consultancy services to generate income.

– There is still a need for the ICT Hubs to train their various start-ups on ‘approach to market’ either via mentorship or through programs run by the Hubs.

– Most of the start-ups’ clients have been obtained as a result of networking through the iHub community. The members refer each other to different potential clients. The iHub members also make a lot of connections during the events that take place at the iHub.

– Key challenges identified by the startups included lack of funding, increasing market competition, lack of the right kind of mentorship, challenges pegging accurate pricing schemes, fighting off larger multinationals, unverified assumptions on the market and lack of data.

Keywords: ICT Hub, technology skills, ideas, entrepreneurs, innovation, co-working, Africa

See the full research report.