#Safaricom To Launch #Safaricom Venture Fund and Why It could Be A game Changer

Safaricom will today
launch Safaricom Venture
Fund for start-ups in Kenya.
I am not sure at this
moment , how much they
are going to put up as the
starting amount for the
fund but this is big for the
Kenyan tech industry. I
think this could be the
game changer the industry
has been waiting for.

There are a number of
reasons why I am saying
this huge and it is not just
because it is Safaricom. The
number of funds operating
in Kenya are by the foreign
firms or foreigners. That is
not bad thing but I think
there will be a definite shift
in thinking when the local
money men and women
start investing in the local
start-ups. Many locals still
don’t see the opportunities
in investing in the tech
start-ups, and that gap has
been filled by a number of
foreign firms. I once asked
a number of tech
entrepreneurs or people
who thought they were at
the time what they would
invest in if they have 10
million shillings to invest.

Majority of them talked of
real estate, land, transport
but very few mentioned
investing what they were
doing. It was and still clear
indication on how people
think about the technology
and its potential in this
country.

With Safaricom in, this
could change the
perception about the
industry. Many Kenyan
developers dream to work
with Safaricom and that is
the reason why they run to
them with any ideas that
come to their minds. If you
are a keen watcher of the
industry, then you must
have heard about many
developers accusing
Safaricom of stealing their
ideas in the past. It is even
said that Safaricom stole
Mpesa idea despite the fact
that Mpesa is owned by
Vodafone. The problem has
always been Safaricom’s
desire to be everywhere,
what one would look at as
going the horizontal
integration route. The good
guys at Safaricom always
have their eyes open.

Unfortunately sometime
they see an opportunity,
long after some young men
and women had seen the
same and worked on
something for some time.
Those fine young men and
women in the course of
their work, end up
discussing their idea with
one or two Safaricom
employees with hope that
Safaricom will buy into their
idea. The main reason for
doing that is the cost of
developing and marketing a
product. If you get
Safaricom on your side, you
would think that they would
bring in enough money to
never worry about the cost
of developing and marketing
the product .

But when you look at some
aspects of what is known as
an idea, then you start to
see why Safaricom don’t buy
into many of those who
present theirs to them.
Some of the questions I
asked myself which I once
mention here (Check the
comment section). When
people first run to
Safaricom, when they think
of something or come up
with idea, what do they
necessarily expect from
Safaricom? At this point
people need to understand
that an idea is not
patentable and then there
is the issue of how much do
you sell an idea for. And if
you are Safaricom, how
much do you pay for an
idea, taking into account
that at the ideation stage
there are many unknown
variables.

Above is the reason why I
do understand Safaricom’s
tendency to launch a new
product whenever they
sense an opportunity in a
certain sector. But for a
company the size of
Safaricom when they launch
a new a product or a service
in most cases they don’t
employ people specifically
to work on the new product
but use the existing
employees who probably
have other roles at the
same time. For that reason
I always believe that a
start-up which decides to
stand tall and concentrate
in building a better product
would definitely have a
better chance for success. A
simple case for vertical
integration. Then you
would ask, what then
should Safaricom do instead
of the so called Horizontal
integration maneno. The
best route is to look around
and see if there are people
who are already working on
the kind of product they
want , then buy them out
instead of trying to reinvent
the wheel. The advantage of
this is that on top of
acquiring the product you
also acquire the skilled
individuals behind the
product. Best still, their
passion for what they are
doing. A good example is
when Radio Africa, bought
Trinc Media. And bad
example is When Radio
Africa were not able to buy
Ghafla then they came up
with Mpasho.

But Safaricom is changing.
Just last week, they
acquired Mledger app. Still
trying to find out how much
they paid for it but it
seems they have learned
they lessons over the years.
And with the launch of
Safaricom Venture Fund
today, then you realize that
they are now completely a
different animal. Now the
Start-ups with ideas can go
to them without fearing
that their ideas will be
hijacked

Back to the reasons why I
think that the Safaricom
Venture Fund is a game
changer. When Savannah
Fund was launched
sometime back, we said the
same thing, but much did
not change for the local
start-ups. The reason being
that Savannah Fund look at
itself as Africa Venture Fund
instead of Kenya centric
Fund. With such big
outlook, it is hard to get in
and get the Funding. It also
did not change the
dominant narrative in
Kenya, that unless you have
a white partner, the
chances of getting funding
is next to nil. And those
who are able to get it don’t
get as much as those with
white partners or ventures
run by whites. My view on
this is simple. I do
understand why someone in
Silicon Valley will not just
walk in and fund any Tom
Dick and Harry he/she finds
on the streets of Nairobi.
Bring it back home and
think of any Kenyan who
will go to South Sudan and
invest in any young South
Sudanese, regardless how
good they think they are
doing. Very few or none at
all. But many Kenyans
would be willing to invest in
a business run by another
Kenyan in South Sudan. The
reason is simple, people
trust what they know or who
they feel they know.

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