Innovation on trial in Kenya’s tech ecosystem

Kenyan tech scene reels as Court rules unsigned ideas have no legal protection. According to industry watchers, the Kenyan High Court ruling has dealt a serious blow to Kenyan innovators in an emphatic judgement of “No Contract, No Claim.” Courtesy: Fintech Association of Kenya

Kenya’s tech innovators are reeling after a High Court ruling this month sent a stark message: in the absence of a signed contract, even a billion-shilling idea may count for nothing. The case in question involved software developer Samuel Wanjohi, whose startup Popote Innovations had collaborated with Safaricom on a payment app concept back in 2018.

When Safaricom later rolled out strikingly similar features in its M-Pesa Super App and M-Pesa Business App, Wanjohi sought redress – and initially won. An arbitrator last year awarded him KES 1.1 billion, recognizing that Safaricom had indeed leveraged Popote’s ideas.

But on November 11, 2025, the High Court overturned that award, reasoning that because Safaricom never formally signed the partnership contract, Wanjohi had no legal claim to compensation. In one fell swoop, a promising innovator’s victory turned to dust, and with it came new doubts about the structural fairness of Kenya’s innovation ecosystem.

The Case of the “Unsigned” Contract

At the heart of this saga is the court’s insistence on contractual form over entrepreneurial substance. Wanjohi’s Popote Innovations had pitched “Popote Pay” to Safaricom’s M-Pesa division – an idea for a mobile payments solution that both parties discussed implementing Safaricom even reimbursed Popote for development costs as late as 2020, implying some level of collaboration.

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Yet, because Safaricom never countersigned the draft partnership agreement, the judge deemed the arbitrator’s award void ab initio. In the court’s view, any “revenue share” promise was unenforceable without a fully executed contract, and even the finding that Safaricom’s apps resembled Popote’s concept was dismissed as unsupported without explicit evidence.

Legally, this formalist stance might be correct – no signed contract, no liability. But the ruling has sparked outrage among tech entrepreneurs and observers who see it as alarmingly out of touch with how innovation works. Deals in the tech world often begin with ideas sketched on whiteboards or tentative pilots rather than immediate ironclad contracts.

By the time a startup secures a signature from a behemoth like Safaricom, it might already be too late. In Wanjohi’s case, Safaricom launched its own version of the solution in 2021, without Popote, effectively cutting the startup out.

The High Court’s message – that an unsigned agreement renders the innovator’s contribution moot – has been described by one industry thought leader as a “legally unimpeachable but economically myopic” outcome. It fixates on paper formalities while ignoring the reality that the market opportunity was created and proven by the innovator in the first place.

Fast-Following: When the Incumbent Always Wins

To Kenya’s tech community, Wanjohi’s fight is not an isolated incident but part of a disturbing pattern. Safaricom, the country’s largest telco and fintech platform, has repeatedly been accused of a “fast-follower” strategy – swiftly replicating ideas pitched by smaller innovators, often without partnership or credit. Consider a few examples:

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• Reverse Call Feature: In 2010, a young innovator, Davidson Ivusa, pitched an idea called “Jichomoe” to Safaricom – a service to let users without airtime still make calls by charging the receiver. Nearly a decade later, Safaricom introduced Reverse Call, a feature with the same core concept. Ivusa sued, but in February 2025 the court threw out his case, noting he had shared the idea unsolicited and without any confidentiality agreement. The judge ruled that Safaricom owed no duty to an unsolicited concept and that ideas alone – absent a concrete executed prototype or IP – aren’t protected by copyright. In short, no formal deal, no recourse.
• Zindua Café Submissions: Safaricom once ran an innovation portal called Zindua Café where developers could submit app ideas. One startup, Solut Technology, uploaded an idea for a mobile authentication app named Wavu and even met Safaricom officials to demo it. Safaricom said “thanks but no thanks,” then later launched a remarkably similar service called Thibitisha. When sued, Safaricom’s defense was stunning: the fine print of Zindua Café’s terms waived any rights the innovator might havehad. By merely submitting the idea, Solut had supposedly granted Safaricom “irrevocable and unrestricted rights” to use it. The court agreed that the startup had clicked away its IP rights and dismissed the case, citing that the platform had even warned entrants to protect their IP before submitting. Once again, the house rules favored the house.
• Youth Wallet Concept: In 2021, entrepreneur Peter Nthei Muoki pitched an “M-Teen” sub-wallet idea for teens to Safaricom – only to be told by officials that it wasn’t feasible and was shelved. Months later, Safaricom began testing a “Manage Child Account” feature nearly identical to Muoki’s concept. He took them to court for IP infringement. That case is still winding through the legal system, but Safaricom’s playbook is familiar: they attempted to stall the case and avoid disclosing design documents, indicating a vigorous defense in progress.

These episodes expose a troubling asymmetry. A dominant incumbent can observe a promising idea, copy its essence, and deploy it to millions of users via its existing infrastructure. By the time the original innovator even realizes what happened, the market has been captured.

Worse, as we’ve now seen, the legal bar for the innovator to prove wrongdoing is prohibitively high – “almost impossible,” as the Fintech Association of Kenya grimly observed. Without explicit prior contracts or a fully developed product to show one’s exact “expression” of the idea, the courts say there’s no foul.

The innovator is left with nothing but regret – a fact not lost on observers who warn that the system is effectively “forcing innovators to bear an almost impossible legal burden before a single line of code is even written”

In other words, Kenya’s startup David can slingshot all the ideas it wants at Goliath, but Goliath has a legal force field unless David got him to sign on the dotted line beforehand. It’s a chilling prospect that risks breeding a culture of fear and secrecy among innovators – or worse, resignation that any collaboration with big players is futile unless you’re prepared to be bulldozed.

Dominance by Design: Safaricom’s Expanding Empire

Why does Safaricom loom so large in all these stories? Quite simply, Safaricom is the ecosystem in Kenya. The telecom operator’s reach and resources are unparalleled – it controls about 72% of the mobile subscriber market, nearly five times the base of its closest competitors. Its mobile money service, M-Pesa, is used by tens of millions and processes billions of shillings daily, to the point that government officials have dubbed M-Pesa a potential “fiscal risk” to the economy if anything were to happen to it.

Safaricom’s market capitalization alone accounts for a significant chunk of the Nairobi Stock Exchange’s total value, reflecting how entwined the company is with Kenya’s financial fortunes.

In recent years, Safaricom has aggressively leveraged this dominance to move into new sectors. A striking example is mutual funds and investments. Through its M-Pesa app, Safaricom launched the Ziidi Money Market Fund in early 2025 – and by September, it had enrolled 1.15 million investors, almost 48% of all unit trust investors in.

Let that sink in: nearly half of Kenyans who have any mutual fund investments are doing so via Safaricom’s platform, effectively making the telecom the largest retail fund distributor overnight. Traditional fund managers, some of whom have been in the market for decades, suddenly find themselves dwarfed by Safaricom’s distribution power.

While Ziidi’s assets under management are still relatively small (around KES 15 billion, vs. over KES 100 billion at the largest traditional fund), the sheer user base dominance signals where the future is headed – Safaricom could funnel massive amounts of household savings into its chosen funds, taking a cut of fees along the way, and leaving competitors scrambling for the scraps of a rapidly digitizing market.

Safaricom’s incursion into finance doesn’t stop at mutual funds. It has long offered digital lending (M-Shwari, KCB M-Pesa loans), insurance, and is now positioning itself as a one-stop “super-app” for everything from e-commerce to ticketing. Each new foray tightens its grip on consumer data and engagement. It’s no exaggeration to say Safaricom is Kenya’s most powerful private corporation, a position that brings both opportunities and perils.

On one hand, having a strong local platform has helped Kenya leapfrog in financial inclusion; on the other, when one company becomes the default platform for nearly every digital service, the pace of innovation starts to depend on the decisions of that single company. And what we’ve observed is that Safaricom’s decisions often involve absorbing or imitating innovation rather than partnering in ways that allow independent innovators to thrive alongside it.

The market conduct of Safaricom thus raises a critical question: are we inadvertently crafting a tech ecosystem where the house always wins? When Safaricom can choose to simply build its own version of any promising service (payments, wealth management, e-commerce, you name it) and immediately scale it to millions of users using its monopoly-grade infrastructure, why would it ever choose to fairly partner with or license from a smaller player? Especially when the legal system seems to back up the strategy of “wait for them to prove it, then fast-follow.”

This dynamic doesn’t just harm individual entrepreneurs; it sends a discouraging signal to investors and would-be founders. If every Kenyan startup’s endgame is either to be acquired cheaply by Safaricom or outcompeted by a copycat feature baked into M-Pesa, many might decide it’s not worth the risk to innovate at all.

Stifling Innovation, Undermining Trust

The fallout from the Wanjohi case and others like it goes beyond one man’s loss. It touches on structural challenges in Kenya’s innovation landscape: power imbalances, inadequate legal protections, and the lack of a competitive check on dominant platforms.

Innovators now face a dilemma whenever they come up with a novel idea that might need a large platform to succeed: Do you approach the giant (for access to its network, APIs, funding, or market reach) and risk being jilted? Or do you try to go it alone, and likely hit a growth ceiling because that giant controls the key rails (like mobile money, USSD channels, or mobile distribution)?

This is not how healthy ecosystems function. In Silicon Valley’s lore, yes, big companies occasionally copy startups – but just as often they acquire them or partner with them, because strong IP laws, investor backing, and open markets make outright copying less trivial.

In Kenya, by contrast, the playing field is tilted so heavily that the usual “innovate or die” mantra of tech turns into “innovate and pray the giant doesn’t take notice.” A creeping cynicism could take hold: why innovate at all if success means your concept will simply be subsumed by someone 100 times bigger, and you’ll be left without recourse?

The trust between Kenya’s startups and its corporate titans is eroding. We risk entering what one might call the “Post-Patent” era of Kenya, where ideas have to be guarded with dragon-jealous intensity because our institutions haven’t kept up to protect fair collaboration.

It’s the opposite of the open, vibrant tech culture that gave rise to things like M-Pesa in the first place (notably, M-Pesa itself was born from a partnership between a telecom and innovators, backed by development funding – a collaboration, not a unilateral invention). Ironically, Safaricom, which once symbolized Kenya’s innovative spirit on the global stage, could end up smothering the next generation of innovation by not playing fair.

Global Lessons on Taming Platform Power

Kenya is not the first country to grapple with the dilemma of an all-powerful tech platform. Around the world, precedents are emerging for how regulators and ecosystems can check the dominance of giants and preserve competition. We would do well to heed some of these lessons:

• India’s Payment Reforms: In India, the government and central bank recognized the risk of having one or two firms monopolize digital payments. They built the Unified Payments Interface (UPI) – an open, real-time payments network that any bank or fintech can plug into. No single company owns UPI; instead, it levels the playing field. Notably, Indian regulators even introduced a 30% market share cap for any single UPI app’s transaction volume (implementation of this cap is ongoing but the principle is clear). This was a direct response to concerns that platforms like Google Pay or PhonePe were becoming too dominant. The message: no private app should become “too big to fail” in payments. UPI’s success has been staggering – it processed 13+ billion transactions in a month as of late 2024, fostering a competitive fintech ecosystem where dozens of players can thrive on a shared infrastructure. Kenya could take a page from this by accelerating our own instant payment switch and insisting on interoperability as a baseline, not a grudging afterthought. (In fact, the Central Bank of Kenya’s recent digital payments strategy explicitly calls for a Pix/UPI-like open system to undercut M-Pesa’s dominance – a vision that now needs urgent action.)
• European Union’s Digital Markets Act (DMA): The EU has moved aggressively to curb the excesses of Big Tech. The DMA, which came into force in 2023, targets so-called “gatekeeper” platforms (think Google, Apple, Meta) with rules to prevent anti-competitive practices. One striking requirement is interoperability. For example, Meta’s WhatsApp – which in Europe is as ubiquitous as M-Pesa is in Kenya – is being forced to allow third-party messaging apps to connect with it. This is revolutionary; it’s akin to requiring Safaricom to let other fintech apps initiate and receive M-Pesa payments seamlessly. The goal is to break the siloed control of big platforms and give users more choice (imagine being able to switch to a different mobile wallet without losing the ability to transact with M-Pesa users). Europe is also enforcing data portability and clamping down on self-preferencing (where a platform pushes its own services over others’). The broader lesson from the EU is that regulation can prod dominant companies to behave in ways that preserve competition – it doesn’t kill innovation, it actually protects it. European regulators saw that letting Big Tech run roughshod was stifling smaller competitors and harming consumers, and they acted decisively. Kenya’s regulators, too, might consider stricter pro-competition rules for Safaricom: for instance, mandating open APIs and fair access to critical telecom/mobile money infrastructure for all players, or even structurally separating M-Pesa from Safaricom’s telecom business if need be (a remedy once floated in Kenya, though shelved, perhaps prematurely).
• United States Antitrust Actions: The U.S. has a storied history of breaking up monopolies – from Standard Oil in the 1910s to AT&T in the 1980s – to unleash competition. The AT&T breakup is especially instructive for telecom-led innovation. AT&T’s monopoly on phone service was ended, and the result was an explosion of new services and technologies (not least, the commercialization of the internet) that might not have prospered under a single-company regime. Today, U.S. authorities are again pursuing antitrust cases against tech giants like Google and Facebook, arguing that their dominance harms innovation. While these cases are ongoing and the U.S. approach can be slow, the underlying belief is that competition, not monopoly, drives long-term growth in tech. Kenya doesn’t necessarily need to smash Safaricom into pieces, but it does need to ensure that Safaricom’s dominance doesn’t become an insurmountable barrier for everyone else. Sometimes, that means drawing lines that even the biggest player cannot cross.
• Closer to Home – African Market Dynamics: Across Africa, we have examples of both extremes. In markets like Tanzania, regulators and telcos cooperated early on to implement mobile money interoperability, allowing users to send money across different networks easily. This reduced the lock-in effect of any one mobile money provider and spurred more balanced competition. In Nigeria, policymakers initially kept telecoms out of mobile money to allow bank-led fintech innovation – a decision that arguably delayed mobile money’s takeoff there, but also prevented any one telco from seizing the market early. Nigeria is now cautiously allowing telcos into the space, but with multiple strong players (MTN, Airtel, banks, fintechs) vying on relatively equal footing. The contrast with Kenya is stark: our early start with M-Pesa was a boon, but it also created a quasi-monopoly that now needs undoing in the interest of the next stage of fintech evolution.

These global precedents share a common ethos: keep the playing field fair and open, especially when a platform gains outsized power. The best innovations often come from the edge – a hungry startup, a skunkworks project, an unexpected partnership.

If the edge is forever at the mercy of the center (Safaricom being the center here), we’ll miss out on a lot of those innovations. Checking platform power isn’t about punishing success; it’s about preventing success from calcifying into complacency and tyranny over the ecosystem.

Even Safaricom, were it to reflect deeply, might acknowledge that an environment where it faces real competition could push it to greater heights (regional expansion, product improvement) rather than just resting on its laurels and captive market.

A Call to Action: Protecting Kenya’s Innovation Future

The High Court ruling in Safaricom vs. Popote is a watershed moment. It could be remembered as the judgment that snuffed out Kenyan innovators’ last bit of optimism – or it could galvanize much-needed reform. We have a choice to make as a tech community and as a nation.

For regulators and policymakers, the choice is about balance. Kenya has benefited immensely from Safaricom’s rise; now it must ensure Safaricom’s dominance doesn’t devour the seed corn of future innovations. This means enforcing rules of engagement between big firms and startups.

For instance, perhaps any time a dominant player like Safaricom engages with an innovator’s product, there should be mandatory innovation safeguard clauses – simplified NDAs, or an obligation to disclose if they develop a similar product internally, or even a revenue-sharing mandate if the concept is later implemented in some form.

It also means bolstering our intellectual property laws for the digital age: copyright and patent regimes that appreciate software and fintech innovations, and faster adjudication mechanisms for IP disputes. The fact that Wanjohi’s arbitration took years and then a court case on top is itself a deterrent (few startups have the resources or endurance for a 5+ year legal battle). Justice delayed is innovation denied.

For Safaricom, the choice is about legacy. Does it want to be remembered as Kenya’s innovation catalyst or as a monopolist that hoarded the benefits of innovation? Safaricom could choose the higher road: engage in more good-faith partnerships, establish a venture fund to invest in local startups (with terms that don’t amount to a stealth land-grab of IP), open up its APIs more fully and fairly, and support pro-innovation regulation instead of lobbying against it.

A self-aware Safaricom might realize that it stands to gain from a vibrant tech ecosystem – more ideas to integrate, more usage of its networks, and goodwill that money can’t buy. In fact, Safaricom’s recent moves – such as publishing some APIs and collaborating (to a point) with fintech developers – show it’s not blind to this. But actions like fighting Wanjohi tooth and nail send the opposite signal.

The company’s market conduct will speak louder than its press releases. If Safaricom continues to exhibit a “fast-follower, crush-the-competition” mentality, it may win the immediate battles but lose the war of public trust and long-term relevance. Dominance can breed hubris; just ask Nokia or BlackBerry – oh wait, they were dominant until they missed the next big wave of innovation.

For the startup community, this is a moment for solidarity and strategic action. Innovators must push for collective reforms – through associations, through conversations with regulators, and yes, through the court of public opinion.

There’s also a need for savviness: learn from these cautionary tales. Protect your code and concepts; insist on MOUs or NDAs when entering talks with big firms; explore markets beyond Kenya if you can, where competition might allow you a foothold; and consider strategic alliances with other players (could a consortium of startups and smaller financial institutions create alternative digital platforms that undercut the Safaricom monopoly?).

It’s easier said than done, but innovation has never been for the faint-hearted. If anything, these challenges underscore that Kenyan innovators have to be as inventive in strategy as they are in technology.

Finally, for the public and consumers, it’s time to recognize that convenience at the cost of competition is a bad bargain. M-Pesa’s ubiquity is convenient – until it isn’t, when fees stay high or when outages hit, or when that convenience crowds out better solutions. We should demand competition because it leads to better services and prices.

Today it’s a mutual fund via Safaricom; tomorrow it could be Safaricom deciding which loans you get, which e-commerce deals you see, which media you consume – all because competitors never got a fair shot. A plural, competitive market serves the consumer best.

In reflecting on the High Court’s decision, one can’t help but compare what happens globally on Big Tech: that unchecked platform power eventually warps markets and governance. Kenya is now face-to-face with its own Big Tech moment.

We can let things continue on the current trajectory – where Safaricom’s win becomes a Pyrrhic victory as it rules over a diminished, fearful innovation landscape – or we can pivot, using this episode as inspiration to fortify the rules and norms that ensure the next M-Pesa can come from anywhere, not just from Safaricom’s halls.

The narrative arc of Kenya’s tech sector is still being written. We owe it to ourselves to ensure that it remains a story of David and Goliath – a story where today’s giants and tomorrow’s upstarts can co-exist, compete, and collaborate on a level playing field – rather than a cautionary tale of Goliath alone.

Safaricom’s latest court victory might have been legal, but it wasn’t just. True justice in the innovation ecosystem will be served when great ideas can flourish based on merit, not quashed by sheer market muscle. It’s time to move from rhetoric to reforms that protect our innovators, even as we hold our giants to higher standards. Kenya has blazed trails before – we can do it again, now by building a tech economy that’s not only thriving but also fair and inclusive.