Strathmore University’s business incubator @iBizAfrica plans to raise an investment fund to allow it to put money into innovative Kenyan startups and position @iBizAfrica as a sustainable hub going forward.
The @iBizAfrica incubator, a bolt-on to the university’s @iLabAfrica research and development hub, looks to provide a nurturing environment to help students and non-students develop ICT solutions and businesses that can impact society.
Manager Bernard Chiira told Disrupt Africa @iBizAfrica had previously sustained itself by charging incubation fees, but was now working on putting together the structures that would enable it to raise an investment fund and take equity stakes in certain startups.
“As an incubator, as we grow and continue our to support startups, we are also trying to think of ways to make our model as sustainable as possible,” he said.
“One of the things we are looking to do in the future is take equity stakes in companies, and we want to be the best university-based incubator in Africa.”
Chiira said there was a need for more funding for initiatives such as @iBizAfrica, but was what more important was offering startups to do business and sign deals with the government and other large organisations.
“I think we have come to the point where startups are providing real solutions that are as good as solutions by big companies, and we need to invest more in them and give them opportunities to do their business, because these are the kind of businesses that in the next two or three years will be huge and having a lot of impact on the economy,” he said.
He said @iBizAfrica, being a university-based incubator, had an advantage over other hubs given its access to raw talent.
“We are able to access people who have talent from the student community and we are in an environment where research and innovation is the core business of the institution,” Chiira said.
“Kenyans in general are very entrepreneurial and even the students have proven to be very entrepreneurial. Some of the startups that have become very successful in Kenya have been started by people that were still students.”
He said part of @iBizAfrica’s role was to bring together individuals with technical and business skills.
“We do have students that do have very good technical abilities, but they lack business acumen. In that situation we would help them to find co-founders or give them business training and coaching. And then the other way round. The incubator is a place where they marry and people form teams,” Chiira said.
@iLabAfrica director Dr Joseph Sevilla said Strathmore University had always wanted to offer support to students, as often they were not taken seriously by major companies given their age or lacked access to capital. He said the concept had now been proven and the incubator and the research hub were able to assist young entrepreneurs in building their businesses.
“There’s a lot of interest, we’ve gotten streams of people visiting, we’ve got a good group of mentors, and our companies are taking part in international competitions. We have quite a number of potential investors coming here,” he said.
Sevilla believes there is growing interest in investing in tech, even at a local level.
“There is interest, and I have seen it grow over the last few years. Even young professionals that are making money are thinking how to invest it,” he said.
“Typically in the past they would create an investment club, and they would invest in land or something similar. Now they are beginning to realise there is a lot of opportunity for investing in IT, and that is becoming more and more common. To me that is very encouraging.”
He said, however, that investment should be made in a structured manner.
“It is not a case of just giving them money, it is a case of supporting them in the process of growth,” Sevilla said.
“We are not talking about a lot of money, there aren’t that many companies that can handle big investments. What is needed is more investments but in these people that do have the ideas. They have a business plan and they have a team. From my point of view a team is very important.”