The Role of Corporate Investment in Supporting Startups in Africa: Lessons from Safaricom
A short personal story:
Ten years ago, I graduated with a degree in Computer Science when the tech ecosystem in Kenya was young and burgeoning. I had a startup, iDaktari, which provided private doctor clinics with a nifty administrative tool to manage their practices with the secret sauce being managing insurance claims.
We had applied and gotten shortlisted for a Shark Tank-like competition called Pivot East where startups from all over East Africa would pitch to judges, some of whom were investors. I only had eyes on the $10,000 prize, and the plan was to reinvest half into the business and split the rest with my cofounders. This never happened.
As fate would have it, we didn’t win. Amongst the judges was a Danish Venture Capitalist, Henrik Albertsen, who at the time, had sold off a fund in the Nordics and was curious about investing in Africa. We met over lunch and 3 months later, went on to found Unumed, the world’s first cloud-native Hospital Management System.
My story is one of fate and coincidence exemplifying the fact that there is still work to be done in building indigenous capacity within the African tech ecosystem. In May 2023, I applied and got accepted into Dream VC’s Investor Accelerator program. Outside being an entrepreneur on the continent, I’d always wanted to play my part in Africa’s tech ecosystem, and my experience in the Dream VC program helped me understand the broader nuances.
Having built a company with funding from Europe, I have always felt that there is a lot we as Africans can do to build our VC infrastructure. As there are a good number of initiatives with angel investments led by Africans, I saw a gap and significant opportunity in Corporate Venture Capital. This research paper is a culmination of personal interest, lessons learned during my fellowship program and conversations with the Dream VC team.
Preamble
Over the past decade, The African startup scene has undergone significant evolution with four countries (Nigeria, Kenya, South Africa, and Egypt) leading the continent in the maturation of their startup ecosystems.
In the formative years, investments were ad-hoc and the ticket sizes were relatively small. Platforms such as VC4Africa were very instrumental in creating a database of startups in Africa. In 2012, the Savannah Fund was formed. This began the early formalization process for the startup ecosystem in Kenya as well as the continent at large. Competitions such as Pivot East, a pioneer pitching competition similar to the TV Show, Shark Tank, also attracted the interest of investors and ultimately attracted larger investment ticket sizes.
The ecosystem has seen a surge in tech-driven solutions across various sectors, including fintech, health tech, agri-tech, and edu-tech. VC funding for Africa has risen from approximately $400 million per year in 2014 to $5.2 billion per year in 2022, representing a 1200% increase.
The proliferation of mobile technology, along with the success of mobile money platforms like M-Pesa in Kenya, has positively impacted financial inclusion. African startups have attracted increased attention from global investors, leading to increased funding and the establishment of numerous tech hubs and incubators. Despite challenges like infrastructure limitations and regulatory hurdles, the last decade has showcased the immense potential, resilience, and creativity of African entrepreneurs, positioning the continent as an exciting frontier for innovation and investment.
There are some emerging trends in investment destinations, ticket sizes, and industry. For example, the financial sector accounted for 31% of deals in 2022 and North African countries are attracting more and more VC attention by deal volume and value.
Compared to Asian, European, and American ecosystems, Africa’s tech ecosystem is still in its early stages. In 2022, the African Private Equity and Venture Capital Association reported that there was US$ 5.2 billion in Venture Capital funding raised across 786 deals. This represented 1.2% of the total value of global venture funding in 2022.
Corporations have evolved from playing the enabler role to more direct involvement in startups. “Companies such as Seacom provided iHub with internet in its early years”, Juliana Rotich, the cofounder of iHub, recalls. Today, we have corporations taking a more active role in the start-up scene with a few examples of sophistication such as the emergence of corporate venture funds on the continent. Old Mutual’s Next 176 and Nahdet Misr’s EdVentures are good examples of subsidiaries dedicated to venture funding.
Whereas there are several examples of incubation hubs, accelerators, and other ecosystem initiatives supported by corporations, there are relatively few examples of Corporate Venture Capital. Naspers Foundry is one of the more prominent Corporate Ventures on the continent that was launched by Naspers, a South African multinational company with interests in media and technology. The $100 million fund was shut down in March 2023 but would go on to retain its investments in the companies including follow-up cheques.
In 2014, Safaricom started the first Corporate Venture Fund in East Africa — the Spark Fund. This was a USD 1 million fund that supported the successful development and growth of high-potential mobile tech start-ups in Kenya through a combination of investment, business development support, and technical assistance leveraging Safaricom’s unique capabilities, assets, and market positioning. The amount was subsequently fully invested into six mobile technology start-ups in Kenya: Sendy, Lynk, Ajua, Eneza, iProcure, and Farmdrive.
What Role Can Corporates Play in the African Tech Scene?
- Providing Financial Resources and Investment
Corporations have and can continue playing a part in the African startup scene by providing financial capital to startups through various instruments.
Traditionally, banks have always provided capital to institutions. Stanbic Bank with its partnership with Gesellschaft für Internationale Zusammenarbeit (GIZ) offers access to zero-interest financing and capacity building to Small and Medium Size Enterprises. Whereas their primary focus is financing SMEs and not necessarily tech-enabled startups, the model sticks out of the pack as a way for banks to get a little more involved in the operational layers of early-stage businesses.
Corporations can also look at making strategic investments in companies that complement or augment their products and services. For example in Kenya, Safaricom, through their Spark Fund, invested in companies such as Ajua and Lynk.
In South Africa, Nedbank Group, for example, is a local bank that has dipped its hands in the venture investment space. Nedbank Venture Capital invests in early-stage, post-revenue, scalable, and high-growth companies in South Africa and the African continent, with a distinctive focus on scalable disruptive technologies. They partner with these companies through hands-on involvement. This could potentially include leveraging the Nedbank Group’s distribution networks.
Orange Ventures, a subsidiary of the Orange group has also been involved in the VC space in Africa with companies such as Africa’s Talking in its portfolio. The managing partner, Jerome Berger, says the firm offers the best of two worlds, coupling the independent and quick decision-making scheme of classic VCs with access to the unique technological and commercial expertise of the Orange Group.
2. Markets and channels
Corporations have various assets such as large customer bases that startups can harness to create new business opportunities. Startups can collaborate with these corporations to reach a wider audience.
For instance, a telecom giant like MTN or Airtel can provide startups with a platform to showcase their products or services to millions of existing customers. Jubilee Insurance, the largest insurance company in East Africa, partnered with Livia Dawa, an online drug distributor to deliver medicine to clients’ homes and offices. Livia Dawa, being a health tech startup, instantly got access to Jubilee’s patient base across East Africa.
3. Expertise and mentorship
Certain domain knowledge that is critical for startup growth often sits untapped in larger corporations. Often, startups would need partners who are experts in a particular domain.
Kwehnui Tawah, a seasoned venture builder and the founder of Baki Beauty, has two senior managers from L’Oreal on his advisory board. In 2013, L’Oréal announced it had acquired the health and beauty business of Interconsumer Products Limited (ICP) in Kenya from its founding shareholder. In this case, you can see that Baki Beauty leveraged the experience and expertise of L’Oreal in its endeavors to scale their startup in the e-commerce space.
Whereas expertise and mentorship are good assets to a startup, we cannot underpin the level of credibility that renowned corporates offer startups. Given that sales and product adoption are built on trust, a brand association can be the secret source that is behind a startup’s growth.
There have been some corporations that have formalized mentorship programs. Vodafone Ghana has a Small and Medium Enterprise (SME) program that offers support and mentorship to startups and small businesses. Although the focus isn’t solely on mentorship, it includes resources, workshops, and some level of guidance for entrepreneurs.
4. Research and Development (RnD) and Innovation Labs
These can be grouped into both internal innovation labs as well as external accelerators and innovation hubs.
Across the continent, this is arguably the most dominant role that corporations have played in the startup ecosystem.
Led by international big tech companies such as Google and Microsoft, African corporations have continued the mantle of supporting innovation hubs across the continent. The famous iHub has, since its inception, been supported by local and international corporations.
Juliana Rotich, co-founder of iHub and a pivotal figure in Kenya’s tech ecosystem, reminisces about the invaluable support they received during the early years. Notably, Seacom provided iHub with complimentary internet access, a crucial contribution. Additionally, companies like Wananchi Telecom and Google were not only suppliers but integral to iHub’s operations, facilitating activities such as fireside chats. iHub’s prominence attracted industry giants, with CEOs and leaders like Eric Schmidt, UN’s Secretary-General Ban Ki-moon, Marissa Mayer of Yahoo, John Sculley of Apple, and Joi Ito of MIT gracing the hub during their visits to Kenya.
Corporations have moved ahead and created innovation departments within their organization to stir intrapreneurship. Safaricom has an innovation department tasked with cultivating Safaricom’s pipeline of new ideas and bringing them to fruition. The plethora of innovations within Safaricom’s product offering has seen the telco giant gradually shift from a classic telecommunication company to a technology-based company.
After their flagship innovation, which was mobile money, Safaricom has innovated a plethora of products that leverage this infrastructure. These include but are not limited to:
- Fuliza: Safaricom introduced Fuliza, an overdraft facility for M-Pesa users. It allows customers to complete transactions even when they have insufficient funds in their M-Pesa account.
- Lipa Na M-Pesa: This service enables customers to pay for goods and services directly from their M-Pesa account. It has significantly enhanced cashless transactions in Kenya.
- M-Shwari: A partnership between Safaricom and the Commercial Bank of Africa that offers savings and loan products through the M-Pesa platform.
5. Exit strategies
There are some examples of corporate acquisitions on the continent. In the formative years, the acquisitions were of a bigger scale such as in the example of Vodafone’s acquisition of a younger Safaricom.
Of late, we’ve been seeing larger corporations acquiring startups, especially those that widen or augment their product offering.
Here are a few examples across the continent:
Naspers acquiring Takealot (South Africa): Naspers, a multinational media and tech company, increased its stake in Takealot, an e-commerce platform in South Africa, through a series of investments and eventually acquired a majority stake.
Ringier One Africa Media acquiring Jobberman (Nigeria): Ringier One Africa Media, a media company, acquired a stake in Jobberman, a leading job search website in Nigeria, to strengthen its position in the online recruitment space.
Interswitch acquiring VANSO (Nigeria): Interswitch, a major payment processing company in Nigeria, acquired VANSO, a mobile-focused technology provider, to expand its digital payment solutions.
Cellulant Acquiring Tingg (Kenya): Cellulant, a digital payments solutions company, acquired Tingg, a consumer super app, to broaden its service offerings and reach in the digital financial services market.
A Deep Dive Into Safaricom’s Role in Nurturing Startups
The East African startup landscape has witnessed a transformative wave, and at the forefront of this evolution stands Safaricom, a telecommunications giant that has played a pivotal role in fostering innovation and supporting the growth of startups in the region.
With a rich history marked by groundbreaking initiatives and a keen focus on technological advancements, Safaricom’s impact transcends its primary telecommunications services. The company has emerged as a key catalyst, nurturing the budding entrepreneurial spirit and contributing significantly to the burgeoning startup ecosystem.
M-Pesa: Pioneering Financial Inclusion
Safaricom’s M-Pesa stands as an unparalleled success story, revolutionizing financial services not just in Kenya but across the globe. This mobile money transfer service became a launchpad for numerous startups, facilitating the development of innovative solutions that leverage its platform for various financial services, including payments, loans, and micro-insurance.
A good example is how the Saving and Credit Cooperative Organisations in Kenya have benefited from having digitized ways of savings and accountability. With M-Pesa integrated into banks, Kenyans can make deposits and receive loans from Saccos over the M-Pesa mobile money platform.
M-Pesa has had a major impact on the Kenyan economy, including helping increase the country’s financial inclusion from only 26 percent in 2006 to 84 percent in 2021. This leapfrog of financial inclusion is a catalyst for many startups in fintech as well as other services.
Spark Fund and Spark Accelerator: Investment into Startups
Safaricom has actively engaged with startups through strategic partnerships and accelerator programs, providing them with mentorship, resources, and access to a vast consumer base.
As pointed out earlier Safaricom launched the Spark fund in 2014 to invest in promising startups that would also leverage their infrastructure backbone.
On November 8th, 2023, Safaricom made a press release announcing that it has entered into a partnership with M-PESA Africa and Sumitomo Corporation, a leading Fortune 500 global trading and business investment company, to launch the Spark Accelerator, a program to support early-stage startups to grow and scale their businesses.
As a Catalyst for E-Commerce
E-commerce in Kenya has been catalyzed by Safaricom’s platforms. Initially, businesses would leverage rudimentary mobile money services such as peer-to-peer money transfers. With the SME-tailored Lipa Na M-Pesa service, businesses can receive money into a business wallet that can then be reconciled. E-commerce platforms have integrated these services into their platforms as well, making it easier for businesses to track transactions and do reconciliations.
As A Platform for 3rd Party Digital Services
Logging into Safaricom’s M-Pesa mobile application, you’ll learn that there are a myriad of services offered through the platform. The M-Pesa app typically provides a range of services beyond basic money transfers categorized into:
- Financial Services
Safaricom offers niche financial products and makes them more digitally accessible. Mali, a unit trust investment vehicle by Genghis Capital is a good example in this category.
2. Shop and Gift
This opens up e-commerce platforms such as ShopZetu which is a multi-brand, multi-vendor online fashion marketplace for affordable and trendy fashion, footwear, beauty, and accessory brands.
3. Public Sector
Government services have not been left behind on Safaricom’s platform with institutions such as the National Social Security Fund providing a way for members to make payments, view statements and manage claims.
4. Transport and Travel
Several transport startups such as BuuPass have made their services accessible on Safaricom’s platform. They range from taxi hailing, train booking, and travel services.
5. Health and Wellness
Ponea Health and SasaDoctor are among the health startups that have partnered with Safaricom to leverage the platform as a channel.
6. Events and Experiences
Mookh, a reputable events and ticketing company in East Africa has also made its platform accessible through the Safaricom M-Pesa platform.
7. Education
Under education, Safaricom has partnered with the Higher Education Loans board as well as ed tech startups such as Kodris Africa.
8. Insurance
Insurance companies such as Prudential have also availed their services within Safaricom’s platform ecosystem.
Safaricom’s Impact on Fintech Startups
The impact of Safaricom on fintech startups cannot be overstated. M-Pesa, the company’s flagship mobile money platform, has birthed an entire ecosystem of financial technology startups.
These firms offer microloans through their mobile apps, utilizing M-Pesa’s secure and widespread payment network for seamless loan disbursements and repayments. Additionally, services like KCB M-Pesa and M-Shwari, developed in collaboration with traditional banks, tap into M-Pesa’s extensive user base, providing banking services such as savings and loans to customers, and amplifying financial inclusion. These symbiotic relationships between M-Pesa and fintech innovators showcase the power of collaboration in propelling financial services to previously underserved populations in Kenya.
In retrospect fintech startups wouldn’t be as vibrant and agile as they are were it not for the role corporations such as Safaricom have played in providing channels and shaping consumer behavior.
Incubating Innovation and Technological Advancements
In its pursuit of technological innovation, Safaricom has not only embraced but actively sought out emerging technologies and disruptive ideas. The company’s involvement in nurturing tech hubs and innovation centers has provided startups with a fertile ground to ideate and innovate. By collaborating with these hubs, Safaricom has played a critical role in ensuring that innovators have a conducive environment to nurture their ideas.
Notable partnerships include iHub, a renowned tech hub in Nairobi, and academic institutions like Strathmore University, Dedan Kimathi University of Technology, and Jomo Kenyatta University of Agriculture and Technology (JKUAT). These collaborations encompass initiatives like the Safaricom Academy, which offers courses and training in tech-related fields at Strathmore University, as well as mentorship and support for students at Dedan Kimathi University and JKUAT in technology, entrepreneurship, and research.
Global Inspiration from Safaricom’s Model
Safaricom’s success in nurturing startups has garnered global attention, serving as a model for other companies and regions seeking to foster innovation and entrepreneurship. The company’s approach to partnership, investment, and technology adoption has become a benchmark for creating a thriving startup ecosystem.
Safaricom’s role in the startup space in Kenya cannot be overstated. Through its innovative products, incubation programs, strategic partnerships, and technological support, the company has played a pivotal role in nurturing and accelerating the growth of startups. The success stories emerging from these collaborations have not only empowered the local entrepreneurial ecosystem but have also contributed significantly to the advancement of technology and business innovation in Kenya.
Safaricom’s commitment to fostering a conducive environment for startups continues to be a driving force in Kenya’s entrepreneurial landscape, positioning the company as a key enabler of innovation and economic growth.
The telecommunications giant’s commitment to creating an enabling ecosystem through initiatives such as the Safaricom Spark Fund and the Safaricom Alpha innovation unit exemplifies the significance of strategic investment in early-stage ventures. By providing not just financial backing but also mentorship, access to resources, and market insights, Safaricom demonstrates the importance of a holistic approach to startup support. The company’s emphasis on collaboration, partnerships, and open innovation further underscores the idea that corporations can act as catalysts for entrepreneurial growth by actively engaging with the startup community.
Looking Ahead
It is now common knowledge that startups are faster and more agile than corporations but lack the channels to scale which often sit with the corporations. Corporations are on the other end of the spectrum where they are more structured and hierarchical but also often come off as slower-moving in embracing change and are more comfortable with the status quo.
As we have seen in Safaricom’s case, corporations can provide the petri dish needed to disrupt entire industries. Whereas it is commendable what Safaricom and other corporations on the continent have done there are several ways the startup ecosystem in Africa can be catalyzed further by corporate involvement.
Replicate Lessons from Safaricom’s Model Across the Continent
The case with Safaricom has shown us that corporations hold the key to mass markets. New products, often innovated by startups, can be brought to market through corporate channels.
Telecommunication companies across the continent have garnered huge customer bases for traditional products: voice, SMS, and data. Corporations can ensure mobile money services are reliable and efficient in the countries they are in. This will simply spur the growth of startups that typically rely on payment platforms to scale.
The entry of Safaricom into Ethiopia has set Ethio Telecom into an innovation run. Ethio Telecom rolled out its mobile money platform, Telebirr. Ethio Telecom has 70 million subscribers and eyes are on Ethiopia to see what innovative ideas are going to be spurred in the coming years.
Telcos are not the only corporations that are challenged with playing a critical role in the startup ecosystem in Africa. In industries such as healthcare, we are seeing companies such as Livia and MyDawa partnering with insurance companies to deliver services at a fraction of the cost of traditional hospital models. Whereas telehealth is still in its infancy, insurance companies are being challenged to accept claims for services delivered to patients virtually.
Insurance companies, faced with the burden of the high cost of claims coming from hospitals, should start rethinking their business models to reduce the cost of premiums for their clients. This is where eHealth startups are perfectly placed to fill the gap.
In the food industry, there has been an acceleration in online food orders and delivery. COVID-19 played a catalyst role where most people worked from home and got accustomed to ordering their meals online. This trend persisted post covid and has opened up new opportunities for food companies to innovate. Food companies such as Glovo and UberEats have taken a significant share of how food orders are delivered to consumers. Large restaurant chains have scaled down their physical operations in favor of this new trend.
Buy, Don’t Build
One of the lessons Safaricom came to learn is that as a corporation, they may not be able to build all their products in-house. Sometimes, it is more efficient to acquire a startup providing similar products to those a corporation would want to build.
In 2014, Safaricom acquired M Ledger, an Android-based app that allowed subscribers to track and monitor all their M-Pesa transactions simply and easily by providing a financial journal on their devices.
Corporations can follow the likes of Safaricom and acquire startups that augment their services. Banks can acquire fintech companies. Hospital Groups can acquire Telemedicine and Electronic Medical Record (EMR) companies and spearhead innovative offerings to their patients.
Leveraging the buy, don’t build approach, corporates can incentivize startups to build augmentative products that provide real value to larger corporations rather than work with the premise of “replacing” incumbents.
Corporate Venture Capital (CVC)
As corporate involvement matures across the continent, mature companies can take a bolder leap into the more structured approach of corporate venture capital. According to the Corporate Financial Institute, Corporate Venturing refers to directly investing corporate funds into external startup companies.
Corporate Venture Capital emerged as a strategic investment approach adopted by established companies seeking innovation and growth. Originating in the late 20th century, CVC became a means for corporations to stay competitive and foster innovation in rapidly evolving industries. Initially, many large firms began to realize that relying solely on internal R&D might limit their ability to adapt to the swiftly changing business landscape. This led to the recognition that partnering with or investing in startups and emerging technologies could provide access to external innovation, novel ideas, and agile business models. By the 1980s and 1990s, prominent companies in sectors like technology, telecommunications, and healthcare started to establish dedicated venture arms to actively invest in or collaborate with startups, aiming to gain a competitive edge and explore new markets. Today, corporate investments globally account for $200 billion per year, representing 19% of total VC deals and there are more than 4,000 CVCs actively making investments.
CVCs provided a means for corporations to invest in potential disruptors or innovative technologies and allowed them to tap into the entrepreneurial spirit and agility of startups. These investments often brought benefits beyond financial returns, including opportunities for partnerships, access to new markets, and early insight into emerging technologies that could be strategically beneficial to the parent corporation. Over time, the practice has evolved to be an integral part of corporate strategy, enabling companies to diversify their portfolios, explore new business models, and stay ahead in an increasingly dynamic and competitive business environment.
Corporate venture capital (CVC) entities typically have two primary approaches when it comes to making investments: they can either invest directly from their corporate balance sheets or opt to invest through external venture capital (VC) funds.
Safaricom’s Spark Fund was managed by TBL Mirror Fund, an example where Safaricom uses a Venture Firm to manage its investments. Now, Safaricom is re-entering this space with plans to put up new subsidiaries that will inject capital into seed-stage and growth-stage businesses as part of its next growth frontier. The structure and size of these funds remain unknown although the telco has indicated in 2023 that their rollout is imminent.
As CVCs are a fairly new frontier in Africa, some lessons can be borrowed from more mature CVC ecosystems in Asia and the West. Some of these include:
- Long Term Vision
Developed startup ecosystems often have a more long-term perspective when it comes to investments. African startups can benefit from understanding the importance of sustainable growth and nurturing relationships with corporate investors who are willing to support them in their long-term vision rather than seeking only immediate returns.
Intel Capital exemplifies the principle of long-term vision in its ethos: Investing in the future of computing. Across Intel Capital’s portfolio, the common denominator is that the companies are building tech that is based on the future.
2. Knowledge Transfer
CVCs often offer startups access to the parent company’s resources, expertise, and networks. African startups can learn the significance of seeking CVC partners that provide not just funding but also knowledge transfer, access to new markets, and technological know-how.
Johnson and Johnson’s Innovation is a good example of a CVC whose approach fosters knowledge sharing. Their mission is to unlock the potential of life science innovation no matter where it originates.
3. Risk Mitigation
Mature ecosystems often have a diverse portfolio approach. Diversification helps mitigate risk, which is essential in venture capital. African entities can learn to spread their investments across various sectors or startups to minimize the impact of failures.
M12, Microsoft’s Venture Fund has a notably diverse portfolio in both the industry and startup stages.
4. Regulatory Framework
Understanding regulatory landscapes is crucial. African markets can benefit from studying how mature ecosystems navigate regulations and compliance issues, ensuring that their investments align with legal frameworks.
For example, in the US, CVC activities often fall under the purview of the Securities and Exchange Commission (SEC). Regulations under the Investment Company Act of 1940 might apply if a corporate entity’s investment activities resemble those of traditional investment companies. Compliance with SEC regulations is essential to avoid being classified as an investment company.
Corporations can lobby governments to push for regulatory frameworks that safeguard transparency, integrity, and accountability in corporate investments in startups.
Conclusion
The evolution of Africa’s startup landscape has been marked by a transformative journey, propelled by the active participation of corporations like Safaricom. Over the past decade, the continent has witnessed a surge in tech-driven solutions across various sectors, demonstrating resilience and innovation. Corporate involvement, notably through initiatives like Safaricom’s Spark Fund, has significantly shaped the ecosystem. This engagement spans financial investments, market access, mentorship, and even pioneering innovations such as M-Pesa, which became a bedrock for multiple startups in fintech and beyond.
Safaricom’s model serves as a beacon, illustrating the multifaceted role that corporations can play in nurturing startups. From fostering financial inclusion to incubating innovation, the company’s strategic investments, accelerator programs, and innovative products have not only empowered the entrepreneurial landscape in Kenya but also set a paradigm for the broader African continent. The success stories emerging from these collaborations underscore the potential for corporations to be key enablers of technological innovation and economic growth.
Looking ahead, the replication of Safaricom’s model presents a promising avenue for corporations across Africa. Adopting a ‘buy, don’t build’ approach and embracing corporate venture capital can further fuel the growth of startups and enhance corporate offerings. Leveraging the power of large customer bases, strategic acquisitions, and mentorship programs, corporations can solidify their position as catalysts for disruptive innovation in various industries.
Exploring the long-term sustainability of corporate-led initiatives, such as Safaricom’s Spark Fund, would offer valuable lessons on the evolving dynamics of corporate venture capital in Africa. Furthermore, an examination of the collaborative efforts between corporations and governmental bodies could shed light on the role of public-private partnerships in fostering a conducive environment for startup growth. As Africa is generally regarded as a nuanced market, an appreciation of these dimensions would greatly help other corporations who are looking to set up in Africa.
As Africa’s startup ecosystem continues to mature, the active involvement of corporations, inspired by the Safaricom model, will be pivotal in catalyzing the next phase of innovation and sustainable growth. By learning from more mature corporate venture capital ecosystems and fostering long-term partnerships, African corporations can pave the way for a thriving entrepreneurial landscape that not only benefits startups but also drives the continent’s economic and technological advancement.
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Special Thanks:
- Special thanks go to Juliana Rotich, whose interview provided insights into the African tech ecosystem in the inception stages. I’m a product of Juliana’s work with iHub and it was such a pleasure meeting one of the OGs of tech in Kenya and Africa at large. I’m forever indebted.
- I’d also like to thank Harry Hare, Chairman of CIO, with whom we share the love for fostering tech in Africa. His understanding of the investment barriers by African high-net-worth individuals provided the nudge to look at Corporate Venture Capital.
- Many thanks to the 2 founders of Dream VC, Mark and Cindy, who led us through the 5-month fellowship. A special thanks to Mark whose editorial skills and attention to detail have sharpened this article to what it is.
- To all my fellow fellows in the Investor Accelerator 2023 cohort, thank you very much for the wonderful time we had.
