Coastal startups test regional markets without capital backing

Participants at the Wavemakers Supplier Connect: Mombasa Edition, discuss business opportunities and regional market strategies. [Manuel Ntoyai, Standard]

Kenya’s coast region is producing technology and digital businesses that are entering regional markets through operational changes rather than capital injections, according to founders involved in recent cross-border expansions.

The activity spans digital media, education technology and software services and comes without major funding rounds or direct government support, a departure from the capital-centred model that has shaped much of Kenya’s startup growth over the past decade.

Several founders said growth followed internal restructuring rather than new investment, with teams adjusting pricing, narrowing products and targeting specific regional clients after struggling to scale locally.

Some of the businesses passed through private mentorship and training initiatives in Mombasa between 2024 and 2025, where participants focused on cost control, customer acquisition and regional trade exposure rather than fundraising.

One example is StockApp, an agri-tech startup that altered its operating model after reviewing customer uptake.

Ken Gitonga, Co-founder and Chief Executive Officer of StockApp, said the company shifted away from feature development to focus on sales.

“We spent too much time adding features and not enough on customer acquisition,” said Gitonga.

After restructuring, the company expanded operations into Tanzania and recorded a 30 per cent revenue increase in the third quarter of 2025. StockApp later joined Safaricom’s Spark Accelerator Cohort Two, the only startup from Kenya’s Coast in the intake.

Other firms reported changes without immediate scale. Mwangaza Magazine, a digital publication, revised its pricing after failing to generate sustainable revenue under its initial model.

Stephen Caloo, Lead Editor of Mwangaza Magazine, said the team underestimated the cost of service delivery.

“Mentorship gave us space to refine our business model,” said Caloo.

The publication has since attracted clients outside Kenya, though Caloo said growth remains gradual.

Participants in the programmes included youth under thirty-five seeking digital skills and business support amid limited formal employment opportunities along the Coast.

Sarah Kiiru, a fourth-year information technology student at the Technical University of Mombasa, said the training exposed gaps between technical skills and commercial application.

“I could build, but I lacked clarity on applying my skills to actual market problems,” said Kiiru.

Another participant, Musa Sharif, said mentorship shifted his focus from product development to problem-solving.

“One mentor told me, ‘Don’t just build a product—build a solution that delivers value,’” said Sharif.

Despite the regional moves, founders said challenges remain, including limited access to capital, thin margins and reliance on small client bases. Several said expansion has increased operating costs without immediate returns.

While Nairobi continues to dominate venture capital flows and state-backed innovation programmes, the recent activity along the Coast suggests some firms are attempting regional entry through incremental operational decisions rather than funding-driven scale.

Whether those efforts can be sustained without capital backing remains unclear.