Allan Lule, lead operations and start-up management at Makerere Innovation and Incubation Centre
And here I am, getting started— on the top floor of Skyz Hotel in Naguru, where Kampala stretches out below like a giant circuit board, its glass towers blinking in the sunlight, its roads humming with the energy of a nation on the move. The breeze up here? It’s more than just air. It is ambition in motion. It carries the scent of opportunity, the distant hum of traffic, and the clinking of glasses from dreamers discussing their next big idea. I’m here to meet Allan Lule, the man running the show at the Makerere Innovation and Incubation Centre (MIIC)— where he mentors start-ups in things like financing and development of prototypes.
But finding him? That was a whole start-up hustle on its own— missed calls and the classic “let’s circle back” move. Now, finally, we sit across from each other, Kampala sprawling beneath us like a pitch deck waiting for the perfect investor. But here we are now, finally face-to-face, in a cozy corner of the hotel restaurant area, with the city sprawling beneath us.
Our table is an unlikely mix of tradition and modernity—rice, matooke, posho, spaghetti, and chicken jostling for space beside a cold Coke and a glass of mango juice. It feels oddly symbolic, like Uganda’s start-up ecosystem itself: a blend of the familiar and the future, trying to find the perfect balance. “I lead operations and start-up management at MIIC,” Lule says, his voice carrying the calm authority of someone who has spent years navigating the trenches of entrepreneurship in technology.
“It’s a business incubator set up by the Ministry of Finance, in collaboration with Makerere University. We’re here to shape the future of Uganda’s economy through innovation.” Like any good startup mentor, Lule doesn’t sugarcoat the challenges. “The ecosystem is really taking shape,” he continues, nodding as he picks at his plate. “You can see the interest from different players—development partners, the government, angel investors, and even venture capitalists. They’re starting to pay attention to the business models emerging here, models that could grow into the unicorns of tomorrow.”
Less capital
But let us be real—Uganda isn’t exactly drowning in start-up capital just yet. “Yes, the money is coming in, but it’s still slow,” Lule admits, his tone pragmatic. “However, the momentum is there. We’re heading in the right direction.” But what type of funding is this? “Right now, the primary source is grant capital,” he explains.
“Most of the start-ups we incubate are still in their early stages, trying to validate their business models. Grants make sense— they’re less risky and offer the flexibility that early-stage companies need.” He gestures subtly with his fork, emphasising his next point.“But venture capital? That’s where things get interesting. The West is noticing. Investors from Africa and the US are showing interest, hoping to spot the next big thing from Uganda.” Loan capital, though? That’s another story. “It’s too early,” he says with a slight chuckle. “Start-ups here aren’t ready for loans—they haven’t validated their products yet, and profitability is still a distant dream.”
Hardware hiccups
And then we hit a raw nerve: the challenges hardware startups face in Uganda. Lule exhales, his gaze shifting to the horizon as if he is calculating something in astrophysics. “Hardware startups have a long road ahead,” he admits. “Foreign competition is fierce, and the local market isn’t primed for the solutions our startups are developing. Many have to send prototypes to China for production—it is a logistical nightmare.”
He pauses, then adds: “Basic components like Arduino boards and sensors? Not easily available here. They have to be imported, which drives up costs and slows everything down. But despite these hurdles, our entrepreneurs keep pushing.” It is a classic emerging-market dilemma: immense talent, but an infrastructure still playing catch-up. Yet Lule remains optimistic. “We’ll get there. It’s about building the right environment—policy, infrastructure, and investment. Uganda is on the cusp of something big.” As the plates empty and the conversation deepens, he circles back to the importance of shared spaces—maker labs, media hubs, and co-working spaces where innovators can collaborate without breaking the bank.
“The gap in infrastructure remains a challenge,” he says. “Shipping hardware from overseas is expensive, and the local market lacks the suppliers or resources to fill that void. But that’s where shared spaces can help— offering innovators the tools they need to scale their ideas while keeping costs down.” He takes a thoughtful sip of his drink before continuing. “Once prototypes are validated, they can leverage incoming investment to build assembly lines, pushing their products to the market.” Despite these hurdles, he remains hopeful.“ The ecosystem is growing, but we’re moving slowly. The infrastructure is not quite there yet, and a lot of the equipment is still coming from abroad. However, we’re learning, and that’s critical.
Growth doesn’t happen overnight.” When the conversation shifts to policy, Lule’s expression sharpens. “The government needs to implement policies that support scalable and sustainable ecosystems. The Startup Act we’re working on will address tax issues that hinder many startups from fully participating. More needs to be done to encourage foreign investment, but also to ensure local products gain traction in the market.” He leans back slightly, weighing his next words carefully.“It’s not just about attracting foreign investors—it’s about ensuring the local market is ready to embrace the products built here. That means looking at costs, taxes, and how we make these solutions accessible.”
The market problem
But even then, there’s a problem: how scalable is your product in the market? Picture this: You’re a Ugandan entrepreneur with a game-changing product. You’ve poured in sleepless nights, bootstrapped your way to a pro-type, and maybe even convinced a few friends to test it out. But then—crickets. The market isn’t biting. Why? Well, the truth is, it’s not just about financial markets or raising capital but something far simpler: Who’s actually buying? Let’s take a step back. In the US, an average person might easily spend $20 (about Shs73,000) a day—on tech, services, subscriptions, whatever. But here in Uganda? Different story. The purchasing power isn’t the same, and local consumers aren’t exactly lining up to throw money at new innovations. Not because they don’t want to, but because they either can’t afford to or don’t even know these products exist. So, what happens? Founders build great products, but the market isn’t ready for them. Kampala might be comfortable, but you can’t rely on just Kampala to make your business viable. And let’s be honest—if the big telcos like MTN and Airtel are spending billions (averaging Shs300 billion per year each) on marketing just to stay relevant, how do you expect a small startup with a shoestring budget to compete?
The IPO illusion
And about initial public offerings (IPOs)? Forget it—for now, at least, as Lule argues, adding that IPOs work when a company is already making serious money. Think Apple, Google, Facebook—their revenues aren’t just in millions; they’re in billions of dollars. “Even MTN and Airtel could only go public after proving they could turn a profit. No investor is going to throw money at a company that hasn’t figured out how to generate revenue,” Lule says. He adds: “That’s the real challenge. Most Ugandan startups aren’t just struggling to scale; they’re struggling to prove they have a market in the first place. It’s not just about launching a product—it’s about making sure people know it exists and want to pay for it.”
The AI vs climate investment shift
Now, let’s talk trends. Globally, investors are shifting their focus from climate impact startups to Artificial Intelligence (AI) and machine learning. Why? Because AI makes money faster. Businesses are integrating AI into their systems left and right—it’s an easy sell. Climate startups, on the other hand, struggle to commercialise. Who’s paying? Governments? Non-profits? Development agencies? That’s not exactly what a sustainable business model looks like, though. “It’s not that climate solutions aren’t important—it’s just that most investors want returns now, not in 10 years. So unless you can figure out how to make money while saving the planet, you’re going to have a tough time convincing investors,” he elaborates.
THE LAST WORD
The real question for Ugandan startups isn’t ‘can you build it?’— it’s ‘can you sell it?’ “If you can’t prove there’s demand, no amount of funding, marketing, or IPO dreams will save you. The good news? The market is growing. But until then, founders need to think beyond Uganda. Build scalable products. Look at Kenya. Look at Nigeria. Because if your market isn’t ready, you either wait—or you build one,” Lule says.
