Most businesses in Kenya initially rely on internal resources to establish their operations, before exploring financing from banks or SACCOs. Family and friends also remain a common fallback. Only when these options are exhausted do many entrepreneurs approach banks and cooperative societies, although they often encounter challenges such as insufficient collateral, the perception that small enterprises carry high lending risk, and several other structural barriers.
At this stage, corporate investors emerge as an important source of equity funding, since they can invest in businesses of any size. Their decisions are informed by an assessment of the enterprise’s future potential and do not require the provision of financial security.
Venture capital offers an additional financing avenue. It is particularly suited to start-ups or high-growth companies that require investment without the obligation of immediate repayment.
While venture capital is commonplace in developed countries, it’s less common in Africa due to a combination of factors. First and foremost, the venture capital landscape in Africa is not well developed, and much of the capital comes from international investors. However, these investors don’t really understand Africa and the unique context of investing in the continent. The perceived risk of investing in Africa significantly hampers capital flows. This is why Africa attracts less than 2% of global capital flows. This starves African enterprises of much-needed capital.
The few investors who want to invest in Africa have decried the lack of a robust set of businesses that are investor-ready or bankable. Most entrepreneurs don’t readily pitch their business ideas to venture capitalists, in part because they lack awareness of how to target and apply to this group.
Additionally, most enterprises have not established the appropriate organisational structures and operational modalities to make their businesses attractive to venture capital investors.
It is with these challenges in mind that the European Investment Bank set up the Boost Africa Initiative. Launched together with the African Development Bank (AfDB), and supported by the European Commission, the initiative looks to help bridge the existing financial gap in venture funding in Africa, while at the same time offering young entrepreneurs in Kenya and Africa technical and capacity building support to launch and grow innovative business ideas sustainably.
“At a higher level, Boost Africa is supporting incubators, accelerators, early-stage and growth-stage fund managers who then, in turn, invest in companies from the inception stage to the growth stage to more mature companies,” says Edward Claessen, Head of the EIB’s Regional Hub for Eastern Africa.
Claessen notes that for the venture capital industry to play a more substantial role in supporting young businesses and the private sector at large, a substantial amount of funding is required – a need that the public sector alone cannot fulfil.
“We have had to find a way to attract private sector money into these venture capital funds since the amount of capital needed is extensive, “ he added.
One of the Boost Africa beneficiary companies is XENO Investments, a digital platform that helps individuals, families, and institutions plan, save, and invest toward their financial goals.
Founded by Aeko Ongodia, XENO began as a small start-up struggling to secure traditional financing. “Being a young business with no collateral or revenue history, no bank wanted to touch us,” said Ongodia.
That changed when XENO secured seed investment from Seedstars Ventures, a venture capital fund backed by the EIB through Boost Africa. The funding enabled the company to accelerate its growth dramatically, expanding its customer base and doubling its assets under management in less than a year.
“Through the Boost Africa programme, we received critical funding and technical support that transformed our business,” Ongodia said. “Within a year, our customer base grew from 120,000 to over 500,000, active users doubled from 30,000 to 60,000, and assets under management increased from USD 15 million to USD 30 million.”
From Start-up Struggles to Scalable Growth
XENO’s growth story illustrates how the EIB’s Boost Africa approach goes far beyond finance. Through its Technical Assistance Facility (TAF), the programme provides management training, capacity building, and governance support to ensure businesses grow sustainably.
“The support we received helped us strengthen our internal systems, improve operational efficiency, and attract top talent. It was not just funding; it was the knowledge and structure we needed to grow responsibly,” said Ongodia.
Technology lies at the heart of XENO’s model. Its digital platform allows users to plan their financial future, select investment goals, and track progress in real time. This user-friendly innovation enables users to invest with a single tap, a breakthrough in a region where financial inclusion remains a key development challenge.
For the EIB, supporting enterprises like XENO aligns with its broader vision of using finance as a catalyst for inclusive growth. The Bank has committed billions of euros to projects that promote digital transformation, innovation, and entrepreneurship across Sub-Saharan Africa.
“EIB’s involvement through Boost Africa demonstrates how strategic investment, combined with technical expertise, can unlock Africa’s entrepreneurial potential. Our goal is to empower businesses that create jobs, drive innovation, and expand access to essential services,” said Astou Dia, Boost Africa Lead for Kenya.
Building Africa’s Financial Future
Today, XENO stands as one of East Africa’s promising financial technology firms, offering digital investment tools to hundreds of thousands of users across the region. Its journey underscores the transformative power of EIB-backed blended finance.
“The growth we have achieved through EIB’s support would have taken us years under traditional financing,” Ongodia reflected. “Boost Africa helped us unlock our potential and prove that with the right partnership, African innovation can compete on a global scale.”
The European Investment Bank continues to position itself as a key partner in Africa’s development story, empowering entrepreneurs, accelerating digital transformation, and ensuring that inclusive growth reaches every corner of the continent.
