Thirty Kenyan companies face the risk of closure following U.S. President Donald Trump’s executive order on January 20, 2025, to shut down the United States Agency for International Development (USAID).
This decision, part of a broader 90-day suspension of foreign development assistance, has abruptly cut off a vital funding stream for these companies, many of which are beneficiaries of USAID’s Development Innovation Ventures (DIV) program.
The move threatens to disrupt innovations in critical sectors such as agriculture, healthcare, and renewable energy, while also raising concerns about Kenya’s economic stability and its reputation as a hub for African entrepreneurship, often dubbed the “Silicon Savannah.”
Over the past decade, USAID’s DIV program has invested more than $100 million in Kenyan startups, providing grants ranging from $500,000 to $6 million to help scale operations and prove the viability of innovative business models. These non-dilutive funds have been crucial for early-stage ventures, particularly in a region where access to venture capital remains challenging. Companies like Pula Advisors, an insure-tech startup, exemplify the program’s impact, having received a $1.5 million grant in 2023 to expand insurance offerings to smallholder farmers in Kenya and Zambia. Other beneficiaries, such as M-KOPA and Twiga Foods, have leveraged similar support to enhance their operations in solar energy and agricultural supply chains, respectively.
The sudden withdrawal of USAID funding has left these 30 companies scrambling for alternatives. Without immediate replacement funding, many risk halting operations, laying off staff, or shutting down entirely. This is particularly dire for startups in the proof-of-concept phase, which rely on such grants to bridge the gap to profitability or further investment.
The loss of USAID support also threatens to undermine Kenya’s position as a leader in African venture capital, which saw $638 million in investments in 2024, largely driven by climate tech and other impact-focused sectors.