Safaricom has launched a $1 million (Sh90 million) Venture Fund aimed at accelerating the development of innovative mobile applications and solutions by availing much-needed capital to ICTstart-ups.
The Safaricom Spark Venture Fund will be offered to Mobile ICT based start-ups based in Kenya either through equity Investment in their businesses or in the form of other debt instruments. Start-ups will be eligible to receive amounts between Sh6.7M and Sh22.5M. The fund has been set-up for an initial 2-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, Strategy and Innovation at Safaricom.
The funds will be administered together with international tech fund TBL Invest, who have already been appointed by Safaricom as the principal Fund Managers, and all prospective applications will be subject to approval from a cross-functional Investment Committee made up of Safaricom management, TBL Invest and an external industry expert.
“Despite contributing to over 60 percent 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. 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,” said Eline Blaauboer, Managing Partner at TBL Invest.
The launch of the fund follows a number of initiatives that Safaricom has engaged in over the last twelve months to support the innovation ecosystem in Kenya, including the development of an annual mobile app competition known as Appwhiz.
“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.
To qualify for the Fund, start-ups must have a working product or service with an active user base that demonstrate their ability to create transformative solutions; be locally based within Kenya; provide a use case demonstrating local market potential;have an identified market segment and have adequate talent to see the project through its goals