Safaricom on Wednesday announced the launch of Safaricom Spark Venture Fund, a USD 1 Million fund with an objective of getting techpreneurs in Kenya access very much needed financing, mentoring and access to resources. The venture fund comes as a result of many things, top among them the fact that Safaricom has been keen to be central to developing of the community that is also their customers.
The telco started sometime back with an innovation call to partner with developers come up with products that could plug in to Safaricom network and add value to consumers. But this wasn’t going anywhere even as Safaricom went to the hubs where the developers are to get them to get them on board. They were branded idea thieves and thus they had to drop the idea and work on one that would work while at the same time being socially productive.
That’s when they went and partnered with Strathmore to launch appwiz that would focus on developing startups and have them access many resources like mentoring, developer training and access to marketing tools. Appwiz is the drive that led to Safaricom thinking about an Innovation fund that would come in for existing developers with products that are scalable. Advise from the principal Fund Managers, TBI Invest that Safaricom consulted was that they needed to leave the innovation project as they already had trust issues and focus on an entrepreneurship based model.
How This Will Work?
Safaricom Spark Fund is a USD 1 Million equity fund or debt instrument, not a grant. Entrepreneurs, after applying and qualifying will get access to the fund either in form of equity investment, convertible debt or debt that can be refunded that will allow the entrepreneur access much needed finance to develop. Startups are eligible to receive amounts between USD 75,000 and USD 250,000 in the fund set for an initial 2 years period. Evaluation of success and demand from startups will see the Safaricom board avail more funds in the future.
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.
The startups will, under the program access marketing tools from Safaricom as an investor and other resources like the Mpesa API, USSD, Bulk SMS and Safaricom cloud hosting. Administration of the finance will be done by TBL Invest which is Safaricom advisor for this project. Nzioka mentioned that the proverbial M-Pesa API will be available for developers, though sparingly. The company has been criticized for many years of promising that this was coming.
Safaricom is keen on supporting entrepreneurs in the following fields: security, health, education and public transport. Industries that have mass impact with Kenyans served by Safaricom. Nzioka Waita, Safaricom Director of Corporate Affairs did not forget to mention that Safaricom is keen on developing their product offering.
“Penetration of mobile devices is a integral part of the strategy and our main aim is to grow mobile and broadband usage. We want to have more Kenya-centric mobile apps that can tap into that 31 million mobile users in Kenya. There are more mobile phones in Kenya than taps working in Kenya,” Nzioka added at the launch driving the point home that developers needed to look at that as a huge business potential.
“Developers come up with a very good idea, but they cannot sustain it and exit very early, this is the missing gap,” Victor Kyalo, Kenya ICT Board CEO. Victor said this lauding the efforec by Safaricom to get tech entrepreneurs to bridge that very needed gap of finance, mentorship and practical market access.