Kenya’s dominant mobile operator Safaricom has launched a US$1 million investment fund, accelerating the development of innovative mobile applications in Kenya.
The Safaricom Spark Venture Fund, which has been launched for an initial two year period, will offer equity investments and other debt instruments for values between US$75,000 and US$250,000.
“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.
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.