Safaricom has launched a $1 million Spark Fund for local tech startups in a move set to change Kenya’s startup scene for good.
The Safaricom Spark Venture Fund is aimed at accelerating the development of innovative mobile applications and solutions by availing much needed capital to ICT start-ups.
The funds set to be adminstered with international tech fund TBL Invest and an external industry expert, will give Mobile ICT based start-ups based in Kenya between USD 75,000 and USD 250,000. Startups will either give equity in exchange for the funds or take it as debt instrument. 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.
“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. 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.
This is not the first time for Safaricom to engage startups, as it has been running mobile app competition known as Appwhiz now in its second year.
“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.