Last year I travelled to Kenya – the first time I’d been back in East Africa since I left Tanzania in 2018. As we drove into Nairobi’s city centre, I soaked up the atmosphere.

For a long time now, the capital city has been seen as one of the main start-up capitals of Africa, alongside Lagos and Cape Town. Home to Mpesa, one of Africa’s biggest tech success stories, it has since been dubbed the ‘Silicon Savannah of Africa’ with new tech hubs popping up every day and funds setting up shop, ready to invest into the latest unicorn.

The capital is a hive of activity for entrepreneurialism. Whilst the tech market continues its stratospheric rise, a new ‘restoration economy’ is starting to emerge. Kenya, like many other countries in the tropical belt, is being impacted by climate change and biodiversity loss. Much of the country’s farmland is degraded, and forests and other landscapes are rapidly declining, leading to damaged landscapes and higher carbon and greenhouse gas emissions.

But at the same time, there is a rapidly growing market for nature entrepreneurs; dynamic individuals and enterprises with ideas that have the potential to protect and restore nature and address the looming biodiversity and climate crises.

I was in Kenya to meet some of those people, many of whom we are already working with through Regeneration, a partnership between Palladium and Systemiq that helps nature positive businesses and entrepreneurs get to scale. Regeneration is active in East Africa, supporting nature entrepreneurs and businesses at different stages of growth to access finance, access to markets, and specialist technical assistance.

The goal of the trip was to learn more about the wider market context and to gather insights around the idea of establishing a ‘Nature Hub’ – a place that offers specialist services to entrepreneurs and brings different market players together – to unlock barriers to help them scale and grow.

The Nature Hub would offer virtual and in person services to support entrepreneurs with nature friendly businesses to scale up. This includes through access to technical training on NbS (Nature-based Solutions) hot topics, such as carbon accounting or GIS mapping, networking activities to meet with investors and funders, mentoring from NbS experts, business model support, desk space, and community building activities.

In an early-stage market or ecosystem, hubs can play a crucial role in helping to accelerate ideas and start-ups by providing capacity building support. They can also act as conveners, bringing different actors together across a sector and facilitating connections to funders and investors to create a conducive environment for businesses to thrive – like a systems orchestrator for nature investments, and project developers.

And whilst Nairobi and other business centres are teeming with tech hubs, there are few equivalents for niche, nature positive businesses. “I see the role of a Hub in providing a space to nurture talent, catalyse connections and accelerate nature focused businesses that need specialist support to advance their ideas and secure investment,” says Feker Tadesse, East Africa Regional Director at Palladium.

“Nairobi is an ideal spot because we are already supporting a portfolio of nature entrepreneurs and a Hub could help to address common challenges that they face, as well as provide that space for peer support and better linkages with funders and investors.”

How Hubs Can Help

I joined the Regeneration team on a site visit to learn more about the regenerative businesses that we’re supporting. Our first stop was a fruit juice company, Orchard Juice Ltd, on the outskirts of Nairobi. We were whisked around the factory to see the high-class facility they had recently moved into and the slick operation they had set up for turning Kenya’s array of fresh fruits into juice to sell to local restaurants, schools and households.

We passed many of the factory workers who had stopped for lunch after a morning’s work, just some of the many people employed by the factory, alongside hundreds of smallholder farmers from whom they source their fruit across the region.

The juice company was doing well and had scaled its operations hugely since they were established in 2008. But their CEO, Pauline Kabiru, told us that the climate change impacts that they are seeing each year are becoming more extreme.

For example, a particular type of mango they grow is appearing much later in the season and oranges have been drying up due to changes in rainfall and temperature.

While they’ve managed to adapt their fruit juice recipes according to availability of other fruits, they are particularly aware of their reliance on smallholder farmers, whose crops are suffering due to climate change. The fruit juice company was helping farmers to provide adaptations and solutions to protect against the worst effects of climate on their crops, such as treatments to protect against aggressive seed weevils.

Finance is the Next Step

It was inspiring to see nature entrepreneurs like Pauline thriving despite the challenges of climate change. But when asked what was holding them back, she told us it was access to affordable finance to move into bigger premises thus enabling them to grow their production. In East Africa, and other emerging markets, accessing affordable loans or debt finance without extortionate interest, even with a very clear vision for growth, can often be very challenging.

This is just one of the ways a hub could help – by helping the community of funders to understand more about business models like Orchard Juice Ltd, as well as facilitate better connections between nature businesses and investors looking for opportunities to invest into nature positive businesses.

My next stop was a coffee shop to sample some of Kenya’s finest coffee and meet with some pioneering nature entrepreneurs. I chatted with Ines Serra Baucells, the CEO of Biosorra, a biochar company, and Ariana Day Yuen, the founder of Forested, a multi-country business that sources sustainable, forest-grown ingredients for export markets.

When I asked what they needed to scale their businesses, they told me that having a place where they could access NbS expertise and learn more about business models for nature would be very valuable.

Whilst Nairobi is full of tech accelerators and incubators, the nature market is still very underserved. This was also backed up by a market survey we conducted that showed 84% of entrepreneurs were keen to get support from nature-based solutions experts. They’re also looking for more opportunities to meet with other entrepreneurs to network, in person or virtually, and exchange ideas and knowledge.

Many of the gaps and challenges I heard about are typical, but not insurmountable.

In an early-stage market, a Hub could play a vital role in helping to connect the market, bring together different actors, strengthen the ecosystem for nature and climate focused businesses and entrepreneurs. The scale of the dual climate and biodiversity crisis will require innovative and new solutions.

By the end of my trip, I was feeling hopeful about the impact the nature sector could play on the climate crisis with the right support.

The next step is further scoping out the needs of the entrepreneurs and identifying partners to make the Nairobi Nature Hub happen. To explore this idea with a member of our team please contact info@thepalladiumgroup.com