A new seed capital fund committed to finding and investing in high-potential East African “pre-revenue” startups was launched Wednesday in Nairobi, Kenya.
Savannah Fund, an East African-focused accelerator fund, aims to find and invest in early stage, high growth web and mobile startups addressing the Sub-Saharan Africa market. The new fund will typically make investments in the region of $25,000 to $500,000.
The fund was founded by Erik Hersman, Paul Bragiel and Mbwana Alliy and funded by several limited partners from Kenya and Silicon Valley, including folks from Zynga and Draper, Fisher, Jurvetson (more on these folks further down). The fund’s founders collectively bring to the table years of seasoned experience in Africa’s tech scene.
Erik Hersman, a prominent blogger and technologist, is the founder of iHub- a very popular innovation space in Nairobi for Kenya’s burgeoning tech community. He is also a co-founder of Ushahidi, a crisis management crowdsourcing platform. Paul Bragiel is a managing partner and a co-founder of i/o ventures, a Silicon Valley-based early stage startup fund. A serial tech entrepreneur, Bragiel has founded companies such as Lefora, an online forum community platform, and Meetro, a location-based social network.Mbwana Alliy, a Tanzanian national, is the founder of Yellow Masai, an online travel resource, and has worked at and advised several Silicon Valley and African-based startups. He has also served as a product manager in the Office and Business Intelligence Group at Microsoft.
Savannah Fund will initially focus on Kenya and East Africa, but partner Paul Bragiel tells me the fund might consider opportunities in other African regions in the not-too-distant future. The fund’s partners aim to bridge the gap in early stage/angel and venture capital investment that currently exists in Africa by providing startup entrepreneurs both with monetary capital and access to a vibrant mentor network comprised of African and Silicon Valley entrepreneurs who have built and funded successful web and mobile companies in Africa and elsewhere in the world.
Co-founder of the fund Erik Hersman vividly explained Savannah Fund’s model in his blog, White African:
“The idea is to bring the Silicon Valley-style accelerator model to Africa, seeing what needs to be tweaked to make it work for our region. It’s a small fund at $10m, with most of the activity focused on classes of 5 startups at a time being brought on board and invested in. They’ll get $25,000 for 15% equity, and have 3-6 months to prove themselves. Those who fail either pivot or leave, those who gain traction have a chance at follow-on funding. A portion of the fund will be invested at the $100-200k range where we’ll look at follow-on funding for the startups in our program, and also at other high-growth tech companies in the region.”
At $10 million, it’s a relatively small fund- and the partners have only succeeded in raising half of it so far. Some of the Fund’s investors include Silicon Valley venture capitalist Tim Draper, Yelp co-founder Russ Simmons, Dali Kilani and Roger Dickey of Zynga, Dave McClure of 500 Startups and Kenyan mobile software entrepreneur Karanja Macharia, founder of Mobile Planet, a wireless application service provider. Most of the fund’s investors will equally act as hands on mentors and will spend decent amounts of time with the fund startups.
