Kenya’s mega telecom giant Safaricom has launched the Spark Venture Fund. The US$ 1 Million fund was launched with the objective of getting techpreneurs in Kenya access very much needed financing, mentoring and access to resources. Key for Kenya’s young techpreneurs that the Safaricom Spark Venture Fund is not a grant. It is a debt instrument. Debt instruments are assets that require a fixed payment to the holder, usually with interest.
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.
The fact that Safaricom has outsourced the management of the fund to an independent third party, could indicate that they are trying to woo young investors who have increasingly become averse to collaborating with the giant organization.
Safaricom’s director of Corporate Affairs, Nzioka Waita, 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.
The website for the fund is Safaricom.co.ke/spark