Mdundo CEO and co-founder Martin Nielsen. Mdundo is one of the tech start-ups set to get capital injection. FILE
By John Gachiri, jgachiri@ke.nationmedia.com
In Summary
- 88mph to inject capital into three of its investments, Mdundo, BookNow and Movas.
88mph, a Nairobi-based firm that invests in
start-ups, has attracted nearly half a million dollars in capital
injection for three of its Kenyan investments.
The company said Mdundo, a mobile platform for
downloading music by local artistes, BookNow, an online bus booking
site, and Movas, an emergency airtime business, are set to get funding
of at least Sh34.3 million from a mix of local and foreign investors.
Details on how much stakes the investors will buy
and their identities will be known once the deals are finalised,
programme director for 88mph in Nairobi Nikolai Barnwell said in an
interview.
“(We) cannot disclose how much has been committed
or by whom until official closure. I can say that it looks like the
88mph companies have collectively secured commitments of $400,000 (Sh34
million) already from a mix of local and international investors. All is
equity. But we look forward to announcing the deals in the coming weeks
as they close,” Mr Barnwell told the Business Daily.
Negotiations for cash injections into 88mph are
ongoing, said Mr Barnwell. Yum, an online food ordering service, Tourist
Link, a social marketplace which matches travellers with local travel
services and mBet, an online sports betting bookmaker, in Uganda, are in
talks with investors.
The start-ups were chosen from 400 entries submitted at an investment forum by 88mph held last month in Nairobi.
Gamsole, a mobile game developer, and Ghafla, a
popular celebrity news site, are other investors of the South African
firm. 88mph made a $25,000 equity acquisition in Ghafla in September
2011.
The firm says its criteria is to invest up to
$100,000 (Sh8.7 million) in start-ups that can design products that will
take advantage of the rapid uptake of mobile phones, Internet use and
have the ability to be scaled in other markets.
“What we do understand is that African mobile/web
is hands down one of the fastest growing markets in the world and 88mph
has reached out to entrepreneurs that build products and services for
hundreds of millions mobile/web users that are rapidly popping up on the
continent,” said Mr Barnwell.
Data from the Communications Commission of Kenya
(CCK), the industry regulator, shows that as at September 2013 the
number of Internet users stood at 19.16 million from 14.6 million a year
earlier, a 32 percentage points increase.
The CCK said that the jump in users has been, in
part, due to increased roll out of fibre optic network and competition
among service providers.
International investors are buying into such
start-ups on the reality that more Kenyans are beginning to buy goods
and services over the Internet.
Ringier, a Swiss media conglomerate, has invested
in Ringier Kenya which runs rupu.co.ke, pigiame.co.ke, and
rupushops.co.ke platforms.
Similar to 88mph, the firm said that it expects
that these investments will pay off in Kenya and major markets in Africa
as more users access the Internet.
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