Kenya’s dominant mobile operator Safaricom today launched a US$1 million investment fund, aimed at supporting mobile ICT startups in Kenya, and enabling the development of innovative mobile solutions.
The Safaricom Spark Venture Fund is available to mobile tech startups in Kenya, and will offer equity investments and other debt instruments for values between US$75,000 and US$250,000.
The fund has been launched for an initial two year period.
“We see this as a much needed catalyst that will help actualize our aspiration to nurture a vibrant ICT economy in Kenya. It will directly address the key startup and developers’ pain points such as the cost and speed of accessing a platform where they can test their solutions,” said Joe Ogutu, director of strategy and innovation at Safaricom.
Safaricom has appointed international tech fund TBL Invest as the principal fund managers, with all applications to be considered through an investment committee formed of Safaricom and TBL Invest representatives, as well as an external industry expert.
TBL Invest said it was encouraged by the fund, which will contribute to solving the funding challenges faced by startups in East Africa.
“Despite contributing to over 60% of Kenya’s GDP, small businesses are under-funded and do have access to the same level of advice as their counterparts in other countries,” said Eline Blaauboer, managing partner at TBL Invest.
“It is encouraging that Safaricom will also extend access to structured mentoring to beneficiaries of the Venture Fund as that will be an additional assurance that the selected ventures remain sustainable in the long run,” Blaauboer said.
In order to be eligible for funding, startups must have a functioning product or service – with an active user base – displaying an ability to create transformative solutions. Startups applying to the fund should also provide a use case showing market potential, and must have identified a market segment. Applicants must be based in Kenya; and have a team in place capable of achieving the goals presented.
“Innovation is part of Safaricom’s DNA, and this latest initiative illustrates the commitment and passion that we have to help nurture a vibrant ICT powered economy. The Spark Fund demonstrates the existing benefits that Safaricom would be able to offer to start-ups we will invest in order to grow and scale them,” said Nzioka Waita, corporate affairs director and member of the Board of Trustees for the fund.
Disrupt Africa reported Safaricom has recently ramped up its efforts to support tech startups in Kenya, and recently partnered with local startup Dynamic Data Systems on the launch of M-Pesa payments tracking app M-Ledger. Safaricom said the partnership was the first in a series on planned collaborations with tech startups in the country.