Navigating Impact: A Qualitative Study on Impact Investing in Kenya's Venture Capital Landscape

Abstract: Impact investing has the potential to allocate capital and innovation to address some of the most urgent and complex problems facing humanity and the planet. The purpose of this thesis is to study how impact investing is practiced and perceived in Kenya, mainly from a venture capital professional's perspective. We performed 21 interviews with investment professionals active in the local venture capital market in Kenya and found that funds tend to adjust both their pre- and post-investment impact evaluation to the individual investment opportunity rather than following a standardised impact framework. Furthermore, impact-specific risks and challenges seem to be closely related to market-specific risks and challenges, and the most frequently mentioned are currency risk, institutional voids, weak infrastructure, and inexperienced management teams. Finally, various stakeholders' general perception of impact investing is positive, and our findings indicate a convergence between traditional investing and impact investing in the local venture capital landscape in Kenya.