Naspers and Tencent-owned mobile messaging and communication company WeChat Africa has announced the launch of a ZAR50 million (US$3.5 million) fund for tech startups on the continent, aimed at providing financial support for startups so they can enter the market on the WeChat platform.
WeChat has already been active in the startup space – most notably with its investment in South African microjobbing startup M4JAM – and now plans to identify startups and support them in getting onto WeChat.
“Our fund aims to provide financial support to businesses so that they can effectively get on the WeChat platform. This will include technical integration and communications tactics across the Naspers’ stable and other suited channels,” said Brett Loubser, head of WeChat Africa.
“Since the success of partnerships with startups such as M4Jam, PicUp and Order In, WeChat’s growth strategy has increasingly focused on integrating with early stage businesses whose models strategically fit with, and clearly demonstrate, the power of the platform and its positioning in the market.
“We have been working with Batstone since mid-2014 and in that time have come to trust their purpose-led approach to understanding and supporting tech businesses. This approach, coupled with their networks, means our partnership is well placed to identify and vet the best possible investment opportunities for WeChat,” said Loubser.
WeChat and Batstone will focus on selecting tech-enabled businesses that have initial market validation as well as a viable product, and could clearly benefit from WeChat’s platform and its access to potential consumers.
“Our experience in the past two years has demonstrated that many companies have huge potential but are unable to communicate what they do clearly,” said Alexandra Fraser, head of Batstone Ventures.
“We don’t want to miss the chance to work with smart businesses just because they can’t succinctly tell us what they can do in an online form so our process will include a face-to-face workshop element to mitigate this risk.”
Batstone will also provide strategic consulting services to effectively support these businesses through their growth phases and entrances to the market.
“This fund fits beautifully into the local VC landscape,” said Fraser.
“Our sense is that it complements many of the existing funds and investment strategies in the market. Ideally we, and WeChat Africa, can partner with great businesses as well as VC funds looking for a platform with large market reach to test their investments’ potential.”