IBM opens its first East Africa innovation center in Nairobi

Continuing a series of investments in East Africa and Kenya, IBM has opened a global innovation center in Nairobi, targeting startups and businesses interested in expanding.

The facility, IBM's 41st global innovation center, will work closely with iHub Nairobi as the link to the developer community and with existing IBM channel partners interested in testing their products and services for the market.

The center is equipped with technology customized for the Kenyan market, to allow users to do real-life tests. For instance, IBM is using traffic cameras set up by Access Kenya, a local ISP, to show how their algorithms and predictive technology can work in solving the traffic problems in Nairobi.

"There is no doubt that Kenya is capable of producing global solutions, this center will provide IT businesses, developers, entrepreneurs, venture capitalists and academics with access to the latest enterprise software and hardware, training and business and marketing support," said Tony Mwai, country general manager for IBM East Africa.

The opening Wednesday was attended by top IBM executives and Mugo Kibati, the head of Kenya's vision 2030, who emphasized the need for collaboration between multinational tech giants with experience and initiatives seeking to improve the local tech scene. In Africa, IBM has innovation centers in Morocco and South Africa.

"This is a great opportunity for Kenya's developer community," said Jessica Colaco, iHub research director. "The iHub provides space to start out and the next stage is a space for the startups to meet and discuss with more seasoned entrepreneurs and companies that show Kenya is capable of providing global solutions."

IBM has been investing heavily in Kenya, in the last quarter of last year its first research lab was opened at Catholic University of Eastern Africa and some of the data used for the traffic situation demo was generated by the research lab there.

In the business community, IBM is showcasing the achievements of Mo De, a Kenyan company that won the IBM 2013 global entrepreneur award. The company provides value added services for telecom companies. After the award, the company expanded its geographic scope globally.

"When we started out, we were just a three-year-old company with challenges attracting funding," said Julian Kyula, group CEO for Mo De. "After the award we got IBM's 102-year history backing us and now we are providing services to clients in Vietnam, a place we hadn't thought of in the beginning."

One of the key components of the innovation center will be the link with venture capitalists. IBM has committed to bring VCs to Nairobi to expose them to the tech industry and in other cases take some of the startups to Silicon Valley, where most of the tech VCs are.

"Several years ago when I started taking trips to Brazil and exposing the industry, some people in the West wondered whether there were business opportunities there," said Claudia Fan Munce, managing director of the IBM Venture Capital Group. "Today, most VCs are invested in Brazil and the same could happen for Kenya and other African countries."

Kenyan startups have faced challenges dealing with VCs because of a lack of understanding on the part of the local entrepreneurs of how VCs work. On their part, some VCs are not familiar with the Kenyan business culture and how it differs from other markets. Munce said that IBM had a wide base of VCs operating locally and abroad and would organize a roundtable with VCs and startups to tackle some of these issues.