Too much of a good thing in Kenya?

Loresho, Nairobi

David Bank | ImpactAlpha

Smarter Money

A new report suggests that impact investors in Kenya may be distorting the market

A new report on “The State of Social Impact Investing in Kenya” suggests that a growing number of impact investors, many of them pursuing bigger deals, may be driving up valuations and distorting the market.

The perception that social impact investors, in Kenya and elsewhere, may overpay for stakes in startups is not new. As Jonathan Kalan reported for ImpactAlpha way back in 2012, “That has led to some trash-talking between the impact crowd and funds looking for straight-up technology plays — who sometimes vie for the same deals.”

Even more money may be chasing those deals in the future. The report out of the University of Virginia Business School reports that social impact funds could invest $650 million in the next five years in Kenya, about the same amount as was committed in the past decade.

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