Court Documents Reveal How Kytabu Founder Duped Investor in Sh6.3 Million Startup Deal

Court filings have revealed details of an alleged Sh6.3 million fraud involving Kytabu founder Tonee Ndungu, one of Kenya’s well-known tech personalities. The case, filed under number MCCOMMSU/E893/2025 at the Chief Magistrate’s Court in Milimani before Hon. Mary W. Njagi, paints a picture of how a promising investment deal allegedly turned into a costly deception.

According to the documents, Ndungu and his company, Kytabu Company Limited, are accused of defrauding a Nairobi businessman through a fake investment offer disguised as a share acquisition in the education technology startup. The businessman claims that Ndungu presented himself as a seasoned innovator working with global partners such as Mastercard Foundation, Microsoft, and Visa, promising him a lucrative opportunity to own part of Kytabu.

The deal began in January 2025, when Ndungu allegedly approached the investor with a proposal to inject capital into Kytabu, which he said was scaling up its digital learning solutions. Convinced by Ndungu’s charm, reputation, and detailed pitch, the investor agreed to invest Sh5 million in exchange for a 7.5 percent stake in the company.

On 10 February 2025, the two parties signed a convertible loan agreement, and the investor wired the funds to Kytabu’s Stanbic Bank account in Karen. Official receipts and documents were issued, and Ndungu reportedly assured the investor that his shareholding would be updated in the company’s records within days.

However, after the money was sent, all communication ceased. Weeks turned into months, and repeated attempts to reach Ndungu went unanswered. The investor says emails were ignored, calls went unanswered, and scheduled meetings were repeatedly postponed.

By July 2025, having received no updates or returns on his investment, the businessman filed a lawsuit through Mumbi Karoki and Company Advocates, demanding a refund of Sh6.3 million, which includes accrued interest and legal costs. The suit accuses Ndungu and Kytabu of “negligence, breach of contract, and deliberate misrepresentation.”