Kenyan operator, Safaricom, has revealed a USD 1 million venture fund. The fund is aimed at accelerating the development of mobile applications.
According to Safaricom, the 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 USD 75,000 and USD 250,000. The fund has been set-up for an initial two years.
According to Telecompaper, the funds will be administered together with international tech fund TBL Invest, which was 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.
According to Safaricom, the launch of the fund follows a number of initiatives that it has executed over the last 12 months to support the innovation ecosystem in Kenya, including the development of an annual mobile app competition known as Appwhiz.
Safaricom revealed that in order to qualify for the fund, start-ups must initially have a working product or service with an active user base that demonstrate their ability to create transformative solutions. The company also said that each application must be locally based within Kenya. Furthermore, start-ups needs to provide a use case demonstrating local market potential as well as have an identified market segment and have adequate talent to see the project through its goals.
Joe Ogutu, director of strategy and innovation at Safaricom stated that: “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.”
According to PC Advisor, Safaricom had previously been accused of “stealing” ideas from local start-ups that pitch business plans in the hope of accessing a mobile platform, 17 million subscribers and the financial marketing muscle that the company commands. In the last two years, Safaricom has moved to clean up its image, partnering with innovation and start-up acceleration hubs to provide support to developers.