Eight Kenyan startups netted a sifgnicant share of the Sh1.8bn startup fund led by the USAid helping to raise the amount of money small businesses in Kenya are getting from venture funds.
The rise in startup boom has been witnessed largely in Europe and US and Asia but Africa has been receiving little which has seen startups suffocate on the continent due to lack of seedstage funding.
Most of the local awardees are using technology to address agriculture and energy challenges.
Companies picked for the Development Innovation Ventures (DIV) programme include FarmDrive, an IT firm that gathers information from small-scale farmers and uses it to build credit scoring models that financial institutions can use to provide loans to farmers.
FarmDrive is also a recipient of investment from Safaricom through its Spark fund. PayGo Energy, a fuel-stove distribution company that uses mobile money and smart meter technology to sell cooking gas on a pay-as-you-go basis also qualified for the DIV programme.
“DIV supports innovative ideas, pilots and tests them using cutting-edge analytical methods, and scales solutions that demonstrate widespread impact and cost-effectiveness,” says a statement from USAid.
Under the programme, USAid provides grants of up to $15 million to startups. The value of funding is based on the grantee’s track record and growth stage.
The funding is provided in three stages — proof of concept; testing and positioning; and transitioning to scale. USAid says 80 African companies have benefited from the programme since it was launched.