Safaricom unveils Sh90 million fund for mobile app innovators

Safaricom CEO Bob Collymore. (Photo:File/Standard)

Safaricom has launched a transformative $1 million (Sh90m) Venture Fund aimed at accelerating the development of innovative mobile applications and solutions by providing much-needed capital to ICT start-ups.

The Safaricom Spark Venture Fund will be offered to Mobile ICT start-ups based in Kenya either through equity investment in their businesses or in the form of other debt instruments. Start-ups will be eligible to receive amounts between $75,000 (Sh6.8m) and $250,000 (Sh22.5m). The fund has been set up for an initial two-year period. “We see this as a much-needed catalyst that will help actualise our aspiration to nurture a vibrant ICT economy in Kenya.

It will directly address the key start-up and developers’ pain points such as the cost and speed of accessing a platform where they can test their solutions,” said Director, Strategy and Innovation at Safaricom, Joe Ogutu.

The funds will be administered together with international tech fund TBL Invest, who have already been appointed by Safaricom as the principal fund managers, and all prospective applications will be subject to approval from a cross-functional investment committee made up of Safaricom management, TBL Invest and an external industry expert.

Despite contributing over 60 per cent of Kenya’s Gross Domestic Product (GDP), small businesses are under-funded and 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.

Innovation ecosystem

The launch of the fund follows a number of initiatives that Safaricom has engaged in over the last 12 months to support the innovation ecosystem in Kenya, including the development of an annual mobile app competition known as Appwhiz. Corporate Affairs Director and member of the Board of Trustees for the Fund Nzioka Waita described the innovation as part of Safaricom’s DNA.

He said this latest initiative illustrates the commitment and passion that Safaricom has 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 in order to grow and scale them,” he added.

To qualify for the fund, start-ups must have, among others; a working product or service with an active user base that demonstrates their ability to create transformative solutions; be locally based and have adequate talent to oversee the project.