Kampala-based hub and incubator Innovation Village has launched a startup fund focused on investing in companies thus far locked out by existing fundraising mechanisms.
Innovation Village is a launchpad for innovators and entrepreneurs, assisting the launch and growth of high-impact ventures.
The hub and incubator is now expanding its horizons with the launch of the 97Fund, which team leader CK Japheth told Disrupt Africa was targeting a raise of between US$10 million and US$20 million, with capital from public, private and philanthropic investors.
“We have US$100,000 raised so far and in conversations to close US$1 million. Investments will be no more that US$250,000,” he said.
Innovation Village is launching the fund as it wants to continue supporting Ugandan entrepreneurs, most of whom are denied funding under current conditions.
“We’ve mostly seen independent unconnected initiatives like workshops, short-term training opportunities, and grants, but more popularly innovation competitions that select the top three out of 100 or more submissions,” Japheth said.
“The prize money is normally between US$500 and US$5,000, and goes on an iPhone or laptop because you can’t do anything with the prize money. It is also possible that the winners are just good at pitching, not that they necessarily have a promising venture. The 97Fund distributes opportunity to the 97 who would normally not be picked up in the competition and can demonstrate they have what it takes to solve big challenges.”
The fund will operate as an open-ended fund, similar to unit trusts. It is targeting competitive long-term financial returns, matched by high social and economic developmental returns, to its investors.