Milimani Court Case Exposes Alleged Sh6.3 Million Fraud by Kytabu Founder Tonee Ndungu
Paul Nyongesa
Milimani Court Case Exposes Alleged Sh6.3 Million Fraud by Kytabu Founder Tonee Ndungu
A Nairobi-based entrepreneur who once basked in the limelight of Kenya’s tech innovation space is now facing serious fraud allegations. Tonee Ndungu, the celebrated founder of the education technology startup Kytabu, has been sued for allegedly defrauding a Nairobi investor of Sh6.3 million in what is being described as a botched startup investment deal.
According to court documents filed under case number MCCOMMSU/E893/2025 at the Chief Magistrate’s Court at Milimani before Hon. Mary W. Njagi, Ndungu, who fashions himself as startup founder and entrepreneur who works with firms like Mastercard Foundation , Microsoft, Visa among others,and his company, Kytabu Company Limited, is accused of orchestrating a calculated scheme to obtain funds under the guise of a share investment.
How It Happened
The controversy traces back to January 2025, when Kytabu approached a Nairobi businessman seeking investors to support its supposed expansion into new digital learning markets. Ndungu, leveraging his polished reputation and network among tech giants such as Microsoft, Mastercard Foundation, and Visa, allegedly convinced the businessman to invest Sh5 million for a 7.5 percent stake in Kytabu.
A convertible loan agreement was signed on February 10, 2025, and the investor promptly wired the funds to Kytabu’s Stanbic Bank account in Karen. The documents appeared legitimate, complete with receipts and correspondence confirming the deal. The investor was promised that his shares would reflect in the company’s registry within days.
However, after the transaction, communication reportedly ceased. Emails went unanswered, calls were ignored, and meetings were postponed indefinitely. The investor claims that Ndungu and his management team failed to honor the agreement or refund the money despite multiple follow-ups.
Legal Action and Allegations
By July 2025, the frustrated investor, through Mumbi Karoki and Company Advocates, filed the current suit demanding a refund of Sh6.3 million plus interest and costs. The court documents allege that Ndungu misrepresented the company’s financial health and deliberately kept the investor in the dark about Kytabu’s operations.
The Fall of a Tech Darling
Tonee Ndungu once symbolized Kenya’s promise in the education technology sector. Kytabu, his flagship project, aimed to digitize textbooks and make learning materials more accessible to students across the country. He frequently appeared on international platforms, speaking about innovation and inclusion in education, and was hailed as a changemaker in the digital learning space.
But the recent lawsuit paints a starkly different picture. Critics within the startup ecosystem now point to a pattern of failed deals and questionable business practices among founders who thrive more on image than delivery.
As the case proceeds before Hon. Njagi, the verdict could not only determine whether the investor gets justice but also reignite debate about accountability and transparency within Kenya’s startup sector — where innovation sometimes masks exploitation.
