Scale Diagnostics: High growth firm performance dynamics in Kenya, Ethiopia, and Rwanda

This report delves into the dynamics of scale-up firms across Kenya, Ethiopia, and Rwanda, with a particular emphasis on the organisational factors that contribute to their growth trajectories. By conducting a comprehensive analysis of scale performance data, we aim to uncover critical insights that can inform and bridge the existing gaps in addressing the demand-based needs of these ventures. Our goal is to equip stakeholders with a deeper understanding of the challenges and opportunities that scale-up firms face, thereby enabling more targeted interventions and strategies to support their sustained growth and success in the future.

This is the sixth insight report in a series produced by GrowthAfrica and Systemic Innovation under a FCDO-funded Research and Innovation Systems for Africa (RISA) Fund project to formalise and implement data strategies to support growth impact ventures and innovation ecosystem enablers in Kenya, Ethiopia, and Rwanda. This report has been developed alongside our partners, ScaleUp Nation, a global scaling authority which is on a mission to significantly increase the number of impact-oriented scale-ups, driving a meaningful change in the world.

This report, leveraging the learnings and practice of ScaleUp Nation’s ScaleUp Scan method, highlights the complexities of scaling high-growth ventures in Kenya, Ethiopia, and Rwanda, showcasing a mixture of potential and current challenges, which may stand in the way of scaling growth. The ventures examined demonstrate diverse sectoral participation, yet most remain small and in the early stages of their scaling journeys. While countries such as Kenya show promising strides towards establishing more mature entrepreneurial ecosystems, gaps in leadership experience, limited access to capital, and infrastructural constraints continue to hamper the scaling potential of many African businesses.

The findings reinforce the importance of visionary leadership, scalable business models, and a strong operational foundation as critical success factors for ventures aspiring to scale. However, the lack of entrepreneurial experience, particularly among leadership teams, poses a substantial barrier, exacerbating difficulties in navigating the unpredictable and complex nature of African markets. Furthermore, access to finance remains a pervasive issue, with many ventures relying on grants and impact funding, rather than being able to tap into more sustainable and growth-oriented sources of capital.

It appears that specific knowledge and practical support gaps exist, particularly with respect to scale up potential. To address this, we are developing an open-source scaling curriculum tailored for entrepreneurship support organisations (ESOs), enabling them to provide essential learning and guidance to businesses. Alongside this, the newly launched, FCDO-sponsored Market Expansion Toolkit will offer companies valuable insights and resources to facilitate successful international market entry.

Kenya’s relatively stronger performance, particularly in leadership vision and customer-centric approaches, may reflect the country’s more advanced entrepreneurial ecosystem, bolstered by better access to both local and international capital and talent. Ethiopia and Rwanda, while demonstrating potential, face additional barriers that include underdeveloped financial systems, regulatory hurdles, and limited scaling infrastructure.

Ultimately, this report underscores the need for a tailored approach to supporting African ventures, one that goes beyond offering capital and mentorship and instead fosters a broader ecosystem of support. This includes more robust leadership development programmes, improved access to markets, and continued efforts to close the talent gap. Only with a comprehensive, multifaceted strategy can African ventures truly unlock their potential and contribute meaningfully to the region’s economic growth and job creation. As we look ahead, it is clear that scaling in Africa remains an art, one that requires not only vision and ambition but also a deep understanding of the unique challenges and opportunities that define the entrepreneurial ecosystems of Ethiopia, Rwanda and Kenya.