The growing interests in Kenya’s booming information and communication technology (ICT) sector is attracting foreign attention, especially from private equity funds which are investing in various ICT opportunities in the East African nation.
Two of such funds, Savannah Fund and 88mph, have earmarked a total sum of Sh856.8 million ($10.2 million) for various investments that would further affirm Kenya’s status as a hub for ICT innovations.
According to a report on BusinessDailyAfrica, Savannah Fund will aid early-stage mobile and web-space ICT entrepreneurs (“techpreneurs”) with a seed capital investment of Sh840 million ($10 million). Likewise, 88mph has also committed Sh16.8 million ($200,000) to fund Kenyan ICT experts who have ideas that could be transformed into profitable enterprises.
Describing his company’s motive for investing in Kenya’s ICT, 88mph programme manager, Nikolai Barnwell said they have identified outstanding opportunities for commercial mobile and web companies in the ICT market which require risk-willing funding and support at its current budding stage.
Savannah Fund, a company owned by a group of Americans and Africans share similar opinion.
Mbwana Alliy, a managing partner said “We are backed and supported by local, regional and international networks of angels, venture capitalists whose expertise we can draw on to help start-ups succeed and scale to fully fledged regional or global companies.”
Savannah Fund will target both newly ideated and already established ICT establishments with its seed capital via two independent initiatives – the accelerator and follow-on programmes.
For the accelerator programme, Savannah Fund will finance 25 new creations with about Sh210, 000 ($25,000) each in exchange for 15 per cent equity; while the follow-on initiative will see the equity fund company investing a maximum of Sh42 million ($500,000) in each liquidity – seeking mature business.
It would be recalled that in 2011, 88mph invested Sh5.1 million ($180,000) in new concepts such Drugs.co.ke – an online pharmacy which according to Barnwell is “paying off well” with an average monthly revenue of about Sh2.3 million ($274,172). And prior to the new seed capital announcement, 88mph had already announced plans to fund new tech enterprises with about Sh2.02 million ($24,000) each in return for 6 to 18 percent stake.