Silicon Valley VCs Launch Fund in Africa
Savannah Fund hopes to bring the Silicon Valley accelerator model to Africa.
Savannah Fund, a seed capital fund focusing on mobile technology start-ups in Africa, launched Wednesday in Nairobi, Kenya, with $10 million in its cache.
The start-up accelerator was founded by Erik Hersman, Paul Bragiel, and Mbwana Alliy. Bragiel, managing partner and co-founder of Silicon Valley firm i/o ventures, says he thinks this type of fund is much needed and long overdue in Africa. According to Bragiel any start-up funding that has happened on the continent thus far has been through either angel investors or family and friends. He aims to change that with Savannah Fund.
“There has been an explosion of talent [in Africa],” Bragiel told Inc.com in an email. “The growth of mobile penetration in the continent is amazing and growing.”
Funding for the project is coming from Silicon Valley notables, including Dave McClure (500 Startups), Russ Simmons (Yelp co-founder), and Dali Kilani and Roger Dickey (Zynga).
The Savannah Fund is hoping to capitalize on what it calls a “mobile revolution” looming on the African horizon. According to GSMA African Mobile Observatory, mobile services revenue in Africa is forecasted to grow from $12 billion in 2012 to $30 billion in 2016. Currently, there are more than 40 million people in kenya who use their mobile devices for banking and the number is steadily growing. Savannah Fund hopes to nurture prototype ideas and turn them into functional business.
“The idea is to bring the Silicon Valley-style accelerator model to Africa,” co-founder Erik Hersman wrote on his blog. “It’s a small fund at $10 million, with most of the activity focused on classes of five start-ups at a time being brought on board and invested in.”
For now, Savannah Fund will focus on companies in Kenya and East Africa. All of the participating start-ups will be paired with mentors experienced in the African tech scene. Although the fund is small, Braigel says the Savannah Fund will help spur more international entrepreneurial growth.
“As the world gets smaller and everyone has access to the same blogs and open source developer tools, it has made for a level playing field,” Braigel wrote. “I hang out with an entrepreneur in Kenya and if I close my eyes to the surroundings it’s as if I am having a conversation with someone in the Valley.”–Maeghan Ouimet