Investors are calling for stronger linkages between startups and full-service investment banks as declining startup funding and underutilisation of domestic private capital raise concerns over the ability of emerging businesses to access growth financing.
According to data from the Africa Venture Capital Association (AVCA), Kenyan startups raised KES 16.3 billion in the first half of 2026, down from KES 17 billion during the same period last year.
The decline has intensified discussions on how East Africa can better mobilise local sources of capital to support entrepreneurship, innovation and enterprise growth.
As of June 2026, government securities accounted for approximately 47 per cent of pension assets, while private equity represented only 1.36 per cent and infrastructure debt instruments 0.02 per cent. This is despite pension schemes being permitted to allocate up to 10 per cent of their assets to private equity and venture capital, and another 10 per cent to infrastructure debt instruments under the current investment framework.
The figures were discussed during the 10th EAVCA Annual Private Wealth Conference, which brought together investors, policymakers, development partners and business leaders to explore ways of strengthening East Africa’s domestic capital base and supporting regional-scale investments.
Christine Maina, Chief Executive Officer of the East Africa Venture Capital Association (EAVCA), said strengthening domestic capital and regional integration will be critical to attracting and deploying investment at greater scale.
She said private capital will play a key role in financing entrepreneurship, infrastructure, innovation and economic resilience across the region.
Delegates at the conference emphasised the importance of stronger advisory support for startups, particularly in capital raising, due diligence and valuations. They also called for investment structures that can reduce risks and create clearer pathways for investors to realise returns.
Muathi Kilonzo, Managing Director of NCBA Investment Bank, said the connection between available capital and investment opportunities needs to become more efficient.
“Institutional capital requires investable structures, credible projects, appropriate risk allocation and clear pathways to returns,” Kilonzo said.
He noted that NCBA Investment Bank has mobilised more than KES 100 billion in assets under management, adding that the institution can support startups and enterprises in preparing for their next phase of growth.
Participants identified several measures that could unlock more private capital, including guarantees, blended finance, and credit enhancement mechanisms to share investment risks.
They also called for stronger local fund management capacity, deeper exit pathways for investors and greater alignment of regulatory frameworks to facilitate regional capital flows.
The conference comes as stakeholders increasingly seek to strengthen East Africa’s domestic investment ecosystem and ensure that available institutional capital is channelled towards viable businesses capable of driving economic growth and creating jobs.