NEWS

Alarm as startup founders splash investor wealth

As the benefits of the global start up boom spreads to Africa, the amount of money flowing into startups in Kenya has been on the rise giving relief to otherwise struggling ambitious tech entrepreneurs.

This flow of cash has however not always been put to the best use. Some of the founders dive deep into a life of luxury immediately the money starts flowing in.

Former Ihub chief executive Mary Gicharu last year during the Nairobi Innovation Week said some startups founders buy luxury cars and live posh lifestyles and forget their businesses. 

Also read: 5 Things that perfectly sum up #UtapeliStarterPack

She narrated how investors put money into a startup in one of the hubs in Nairobi, the founders immediately quit their company and went to buy luxury cars and started travelling.

She urged entrepreneurs to stop the trend.

In total, African startups raised a record Sh72.5 billion across 458 deals, the 2018 venture investment report by WeeTracker shows. Kenyan startups took Sh12.6 billion.

A software developer named Moses Odhiambo, not his real name last years received Sh9 million from investors and decided to buy an expensive car, he quit the  startup and left his investors with nothing to hold onto. 

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