Telecommunications giant; Safaricom through its Spark Fund, has dedicated 540 Million Kenyan Shillings (around 5 million dollars) towards the funding of tech startups in the East African nation of Kenya.
This move is a part of Safaricom’s aim of supporting tech enterprises with great potential while also investing in and supporting startups what are in one way or the other aligned with Safaricom’s plans.
Spark Fund aims to deliberately partner with startups that are tech enabled and ripe for either an acquisition by Safaricom or a direct partnership.
Each startup, will be given access to business development support, technical assistance, as well as investments.
According to Safaricom, “The fund will support startups through a combination of investment, business development support and technical assistance leveraging on Safaricom’s unique capabilities, assets and market positioning.”
Spark Fund will based on a very strict case by case analysis, invest as much as $500,000 (at least 54 million Kenyan Shillings) and even much higher amounts into various startups. The startups however, need to offer solutions that will be beneficial to their communities.
The Venture Fund will be looking into that are at either the early growth or late seed stage and are primarily in the healthcare, agriculture and education sectors. It is however still open startups focused on other sectors which will go hand in hand with Safaricom’s services.
All startups looking to work with Safaricom’s Spark Fund, must have a business model that is commercially viable, as well as active operations in Kenya. The startups are also required to have services with active user bases or products that are mobile based.
Interested startups will sign partnerships with Safaricom and must also already be generating revenues.
Interested parties are also advised to protect their prototypes and ideas before handing in their applications.
All successful applications will be selected and identified by S&B Ventures which is the Fund Manager. They will then be presented to the Safaricom Board of Trustees and telecommunication giant’s Invest Committee for funding approval.
An internal deal team will be appointed and set up by Safaricom to give post-investment support after the needed funds have been successfully disbursed.
When Spark Fund was launched in 2014, Safaricom set aside $1 million dollars (108 million Kenyan Shillings) towards nurturing various startups and utilizing their market positions, standout capabilities and assets.
The beneficiaries of that first round of funding, were iProcure, Sendy, Eneza, Lynk, Farmidrive and Ajua with Safaricom investing around 175,000 dollars (18.9 million Kenyan Shillings) into each startup between 2015 and 2017.
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