For many Kenyans, the end of KOKO Networks did not arrive through a press release. It arrived through an SMS this morning. 

“Samahani KOKO customer, we regret to inform you KOKO is closing operations today…”

That is how a friend of mine’s mother in rural Kenya — an actual KOKO customer — found out that one of Kenya’s most celebrated climate-tech startups had effectively shut down operations.

No public statement.
No press briefing.
No transition plan communicated openly.

Just an automated message.

Ironically, for those who have followed the company closely over the last decade, this moment — painful as it is — did not come entirely out of nowhere.

A company that once genuinely inspired

Back in March 2022, I hosted Greg Murray, the founder and CEO of KOKO Networks, on my Pure Digital Passion podcast.

At the time, KOKO was one of the most compelling impact-driven technology stories coming out of Kenya.

The ambition was bold, possibly even audacious. 

KOKO wanted to fundamentally disrupt how low-income urban households cook — by replacing charcoal and kerosene with bioethanol, distributed through a dense, technology-enabled network of fuel “ATMs” inside neighbourhood dukas and kiosks. 

During that conversation, Greg spoke openly about:

• Building a nationwide hardware and software network from scratch,
• Installing thousands of connected KOKOpoints in dukas,
• Operating smart micro-tankers for last-mile fuel delivery, and
• Using cloud systems and IoT to manage a distributed energy network in real time.

What struck me most at the time was this:

KOKO was not a mobile app pretending to be infrastructure.

It was real, physical, capital-intensive infrastructure — built in some of the hardest operating environments in the country.

The growth story sounded extraordinary. KOKO was ‘blowing up’ as the cool kids like to say. 

By early 2022, the company was onboarding roughly 1,000 new households per day, had crossed hundreds of thousands of paying customers, and was positioning itself as a multi-category retail and logistics platform — not just a fuel company.

Fast forward to today, and we are staring at a very different reality.

The business model that powered the growth

KOKO’s model was never just about selling cookers or fuel.

At its core, it was built around carbon finance.

The company sold bioethanol cookers and fuel at highly subsidised prices to low-income households and then recovered those losses by selling carbon credits generated from:

• Reduced charcoal use,
• Avoided deforestation, and
• Lower household emissions.

This is important.

KOKO was not structurally profitable from customers alone.

Carbon revenue was not an add-on.

It was the business!

What changed — and why it matters

Yesterday, the Financial Times reported that KOKO was on the brink of bankruptcy following a dispute with the Kenyan government over the authorization required to sell its carbon credits into compliance markets.

In simple terms:

KOKO could not sell the credits that kept its business model alive.

According to the report, KOKO’s leadership and board held emergency meetings after the company failed to receive the required Letters of Authorization from the Kenyan Government — approvals that are mandatory under Article 6 of the Paris Agreement framework.

Those carbon sales were expected to happen in compliance markets — including aviation offset schemes — where credits trade at materially higher prices than voluntary markets.

Without them, the economics collapse.

The report further indicates that KOKO is now preparing to file an insurance claim with the World Bank’s political risk insurer, Multilateral Investment Guarantee Agency, alleging breach of contract by the Kenyan government.

The scale is sobering.

KOKO reportedly employed about 700 people in Kenya.
It had invested over US$300 million in building its infrastructure (Oh yes. that’s a really BIG number whichever way you slice it!)
Roughly 1.3 million households were targeted as part of its clean-cooking rollout.

Among its backers and partners were:

• The World Bank ecosystem,
• Rand Merchant Bank,
• and fuel distribution partner Vivo Energy.

This was not a lightweight startup.

This was one of Kenya’s most heavily funded climate infrastructure plays.

The quiet before the collapse

Long before the SMS arrived, there were signals.

KOKO’s once-active social media presence had gone largely silent for months — and in some cases, years.

For a company that previously communicated growth milestones aggressively, even daily, that silence was unusual.

More telling for me, however, was a much simpler data point:

The mother of my friend — living up-country — has reportedly been unable to access KOKO fuel for several months.

In a nutshell, when physical infrastructure companies begin to fail, they usually fail operationally first — long before they fail publicly.

This is NOT just a KOKO Networks story

It is tempting to frame this as a single company’s misfortune.

That would be a mistake.

This is a far more uncomfortable story about how we structure innovation, financing and risk in Kenya’s so-called Silicon Savannah.

I have written before about:

• How vanity metrics and large funding rounds often mask fragile fundamentals, and
• How too many startups optimise for investor narratives instead of customer-driven sustainability.

KOKO Networks complicates that narrative in ways I could not have anticipated which has me conflicted in so many ways. Let me explain. 

Because unlike many digital startups that collapse after burning cash on marketing and growth hacks, KOKO built real infrastructure, delivered real impact and solved a real societal problem.

Yet, the company still collapsed — not primarily because customers did not want the product.

But because the financing architecture underneath it failed.

When policy becomes existential risk

In my 2022 conversation with Greg Murray, he spoke at length about how:

• New legislation had to be written,
• New regulatory frameworks had to be created, and
• Long-term government alignment was essential to scaling the model.

This week’s events show exactly why.

When your unit economics depend on government-issued authorizations, political coordination is no longer a background risk.

It becomes your primary operational dependency.

Carbon markets — especially compliance markets — are still deeply political instruments.

They are not neutral financial rails.

They sit at the intersection of:

• Environmental policy,
• National development strategies,
• International diplomacy,
• and reputational positioning of governments.

KOKO’s model was therefore not just a climate business.

It was a climate-policy business.

This distinction really matters.

The uncomfortable truth about clean-cooking finance

There is another layer that deserves honest discussion.

Recent academic research has challenged the effectiveness of cookstove and clean-cooking carbon credits — questioning whether the actual emissions reductions match the claims made by project developers.

This does not automatically invalidate KOKO’s operational impact.

But it does introduce fragility into an already complex market.

Meaning, when your revenue stream depends on:

• Methodologies,
• Verification bodies,
• International buyers,
• Government approvals,
• and shifting global credibility of offset mechanisms, your business becomes highly exposed to forces far beyond your control.

A human cost that should not be ignored

Lost in the climate finance debate is something far more immediate.

If KOKO truly shuts down at scale, it is not only investors who lose.

It is:

• Thousands of shopkeepers who built businesses around KOKOpoints,
• Hundreds of employees and field agents,
• and hundreds of thousands of households who reorganized daily cooking around this infrastructure.

That is the painful irony.

KOKO may yet end up being remembered as a company that genuinely improved lives — and still failed.

What this means for Kenya’s startup ecosystem

This moment should force us to ask harder questions.

Not just about KOKO.

But about:

• How many of our “impact startups” are financially viable without layered subsidies,
• How much political risk we price into climate and development ventures,
• and whether Kenya is sufficiently prepared — institutionally — to host complex climate-finance infrastructure at national scale.

Kenya is positioning itself as a green investment hub.

But credibility in climate investment is not built through speeches and summits.

It is built through operational certainty.

Through policy execution.

Through predictability.

A final reflection

When I spoke to Greg Murray in 2022, I closed the episode by saying that what KOKO was attempting felt like more than a business.

It felt like a human infrastructure project.

I still believe that.

But the collapse of KOKO Networks is a powerful reminder that:

In emerging markets, even the most well-intentioned, deeply engineered and socially valuable startups can fail — not because the market rejects them, but because the system around them is not yet ready to sustain them.

If Silicon Savannah is to mature, it must learn to confront that reality — honestly.

You can listen to my full 2022 conversation with Greg Murray on the Pure Digital Passion podcast here:

YouTube: https://youtu.be/5Xi1QW8RGb0
Spotify: https://open.spotify.com/episode/6YVvIGrdB36OrcDtri4mP9