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IT start-ups get Sh89m venture capital funding [Business Daily (Kenya)]
[September 30, 2014]

IT start-ups get Sh89m venture capital funding [Business Daily (Kenya)]


(Business Daily (Kenya) Via Acquire Media NewsEdge) Safaricom is set to establish a Sh89 million ($1 million) angel fund for financing local IT startups.

The telecommunications company said Tuesday it is in the process of recruiting a firm that will manage the fund on its behalf.

Safaricom chief executive Bob Collymore said local technology start-ups are having difficulties accessing capital as financial institutions and venture funds shun tech enterprises at their early stages.

The fund will target four small IT startups that have innovations which can solve the daily challenges faced by Kenyans, are scalable and are IT-driven every two years.



Safaricom's initiative comes on the backdrop of a recent report by the GSM Association (GSMA) which shows that over 80 per cent of Kenyan technology companies in their early stages are either self-funded or rely on funds advanced by family and friends — which is unreliable.   "Lots of startups are experiencing funding challenges in the early stages of their businesses, this is because we don't have enough Venture Capitalists...," Mr Collymore said at an "Innovation in Africa" forum organised by The Economist.

Mr Josiah Mugambi, executive director of iHub, said that funding from family members is not sustainable and has seen many start-ups close shop before they come to fruition.


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