Mettā, a global network of entrepreneurs launched in Hong Kong in May, has turned its attention to Kenya's startup ecosystem.

The Mettā community is backed by Hong Kong's Nest VC, which also has its presence in Kenya and has already invested in local startups like Kenya's messaging platform, Ongair.

Maurice Otieno, Head of Operations and Ecosystem Development at Mettā, Nairobi said, "Since our soft opening two months ago we have hosted 66 live events, over 150 members signed up and over 2,000 people are part of our community. We look forward to supporting the growth of Kenya's vibrant ecosystem and are excited about the prospect of giving talented founders access to opportunities across the continent and globally".

Kenya's startup scene is being impacted by unfavorable tax programmes for business and tough procurement rules for startups, according to the Kenya ICT Startup Landscape report prepared by incubation centre, Nailab and the East African country's ICT Authority.

Apart from the unfavorable requirements from governments, upcoming SMEs also face external threats.

The "Growing Kenyan market attracts international ICT players threatening local ICT companies. Globalisation of the ICT industry [also] simplifies international service delivery to Kenyan companies," the report observed.

Lenders are still shying away from providing capital to local startups and most are bootstrapping their way to success.

"The situation is exacerbated by lack of collateral (security) and credit history. Nevertheless, a significant portion (50 percent) of the lenders or equity providers have started to appreciate emerging opportunities within the SME segment," the report continued.

The report found that ideas with a huge impact are attracting investments.

"It was found that only 2 percent of Kenya's start-ups (44 percent in ICT) had received funding from business angels compared to 37 percent at Silicon Valley. It was further noted that, with continued support, the ecosystem has potential of attracting impact investment capital, especially on ideas with strong social and environmental benefits," it said.

The report indicated that the growth of incubation hubs and the strong entrepreneurial spirit could also overcome any challenges in the ecosystem and see the growth of startups to companies.