Startups To Access Up To USD 500K in Funding from Safaricom Spark Venture Fund

Safaricom CEO Peter Ndegwa

In 2014, Safaricom launched a $1 million Spark Venture Fund. Its goal was to allow technology entrepreneurs access to financing, mentorship, and access to key resources for their businesses. It was motivated by many things, including the need for the telco to develop Kenya’s technology communities that also happen to be their customers.

When it went live, more than 200 startups applied for the fund.

Between 2015 and 2017, Safaricom says that the fund was invested in six mobile tech startups. The carrier revealed that it pumped an average of USD 175K per startup and is fully invested and focused on portfolio management.

Back in 2020, Safaricom made key developments about the fund, although this was not revealed to the media widely. The operator says that it made an additional USD 5 million in allocation to the Spark Fund, which has been open to investment in additional startups. To this end, the Fund can now invest larger amounts of up to half a million dollars per startup, and on a case-by-case basis larger amounts, in convertible notes or equity investment.

The first recipient of the Fund was the logistics firm Sendy. The company’s operations have grown over the years, but in 2022, the startup had to make some changes to its operations. For instance, it was revealed that its fulfillment service was being skipped for the competition, reportedly because Sendy was charging a premium. It also stopped its supply services, which forced the company to fire 20 percent of its staff.

Other recipients of the Fund include Eneza Education and mSurvey. mSurvey is a mobile data collection tool that collects information by SMS, where businesses can contact mSurvey to conduct surveys on customer success or even on products and services.  Eneza on the other hand is a mobile platform that unites students, teachers, and parents. Using Eneza, students can access quizzes, and mini-lessons, access textbook material and ask teachers questions, and search Wikipedia via the web, mobile web, or a USSD/SMS-based system.

The investment boost was reiterated this week by Safaricom’s Chief Business Development and Strategy Officer Michael Mutiga. It was a meeting that rounded up the media and social media influencers, during which there was an exchange between them and Safaricom CEO Peter Ndegwa.

Mutiga said: “With this Fund, we can help emergent, young, seed companies. We have taken a risk. Some will work, and some will not work. Our hope is that with diligence and support, we can leverage our network to help them succeed, not just financially, but to also provide for them.”

During this meeting, Safaricom also announced Daima, a product that will help travelers, among other people who might want to keep their lines active past the 90-day deadline of inactivity. It costs KES 200 for six months, KES 500 for one year, or KES 1000 for two years.