A new partnership to help grow and finance innovative mobile start-ups in East Africa has been signed. The partnership is between m:lab East Africa and GrowVC International. It is an arrangement expected to benefit recipients of m:lab East Africa’s mobile entrepreneurship development services. The targeted beneficiaries include and are not limited to m:lab East Africa’s resident incubation clients, app development trainees and contestants in the Pivot East Competition.
It has been observed that the regional tech start-up scene continues to experience growing interest from Venture Capital (VC) firms and angel investors from outside the region. A growing number of such investors continue to scout for entrepreneurs to engage in Nairobi particularly around incubation and innovation hubs. This has however not translated to a correspondingly high number of closed investment deals for local start-ups. An array of reasons exist for this. Among the reasons is the low number of “invest-able” start-ups in the region. Another reason quoted in various local forums is high levels of distrust between local start-ups and investors which can be attributed to knowledge gaps among start-ups and investors alike.
Another major reason for low number of investments being made is the apparent mismatch of expected financing levels among local start-ups and those of investors. This comes about with the existence of minimum thresholds for making investments among venture capitalists. The thresholds typically above USD 500,000 are more than tens of times above the needs of upcoming local start-ups. The thresholds understandably exist to ensure that administrative overheads to undertake investment analysis, due diligence and to cover related paperwork are justified by the size of an investment. A target start-up for this amount of investment would normally need to have strong positive indicators such as significant market traction, being revenue positive upwards of USD 1M annually among other indicators for investability.
The partnership between m:lab East Africa and Grow VC international aims to address the challenge of mismatched levels of financing needs. Grow VC’s crowd funding model model facilitates funding in small steps that make sense for entrepreneurs to get better valuations and for investors to better mitigate their risks. Grow VCs platform is also a nurturing ecosystem where entrepreneurs can connect with experts, funders, team members, new customers and partners to realize their ideas. The platform is designed to help start-up companies to secure initial funding of up to USD 1M.
The partnership takes effect immediately for participants of m:lab East Africa’s Pivot East Competition – www.pivoteast.com. The affiliate network on the Grow VC platform for this purpose is now accessible here.
Grow VC International Headquarters is located in Hong Kong, with offices in the US, UK and Finland. their main offices are located at:
- 1 Ropemaker Street, London EC2Y 9HT, United Kingdom
- 845 Third Avenue, New York City, 10022, New York
- 3905 Two Exchange Square, 8 Connaught Place, Hong Kong
m:lab East Africa is a mobile innovation and entrepreneurship development facility launched in 2011 supported by a seed fund from the World Bank’s infoDev agency. It is hosted by a consortium comprising iHub, eMobilis, The World Wide Web Foundation and The University of Nairobi. Its offices are located in the 3rd floor of Bishop Magua Center along – Ngong Road in Nairobi.