- Early stage startups in East Africa are set to benefit from the launch of a new accelerator programme by tech giant Safaricom.
- Safaricom is partnering with M-PESA Africa and Sumitomo Corporation, a leading Fortune 500 global trading and business investment company.
- The accelerator plan dubbed Spark Accelerator is aimed at supporting early stage startups to grow and scale their businesses.
Early stage startups in East Africa are set to benefit from an accelerator programme by Safaricom in partnership with M-PESA Africa and Sumitomo Corporation, a leading Fortune 500 global trading and business investment company.
The accelerator dubbed Spark Accelerator is aimed at supporting early stage startups to grow and scale their businesses. The program will provide target startups with access to market, access to capital, technology and product development support. Previously, Spark Fund only offered capital injection.
Early stage startups to get mentorship
Safaricom CEO Peter Ndegwa says the move comes after the Safaricom board and shareholders approved the restructure of the Spark Fund in July this year adding that the three partners will work together to identify quality startups and provide a blend of mentorship, funding and go to market support.
“Anchored around our purpose of transforming lives and in line with our ambition to be a purpose led technology company, our goal is simple yet powerful, to empower startups with the access they need to succeed. We are taking an ecosystem-based approach to provide a platform for bold and visionary founders to grow and scale their businesses,” said Ndegwa.
Studies show that entrepreneurs in Kenya face major challenges, with a 30 per cent lifetime survival rate for startups. The key hindrances being the inability to secure funding for growth, limited access to market and a gap in knowledge and skills required to scale a business.
Sitoyo Lopokoiyit, Managing Director, M-PESA Africa, added, “We are keen to see startups grow and we are happy to open our technology to facilitate this growth. M-PESA is a massive ecosystem with over sixty million customers and three million businesses across Africa, and we trust this acceleration program will enable startups to create value within this ecosystem.”
Growth of startup ecosystem
“With the synergy of our extensive business expertise and the products and services offered by emerging start-ups we connect with via this initiative, we are committed to fostering the growth of the start-up ecosystem. In doing so, we aim to drive innovation, and further the reach of digital financial services, enriching sectors like e-commerce, insurance, and entertainment in Africa,” said Katsuya Kashiki, Corporate Officer, General Manager of Smart Communications Platform Business Division, Sumitomo Corporation.
The Spark Accelerator, to be launched within this financial year, will leverage a team of founders and experts to accelerate product innovation across different industry verticals. The move comes as Kenya led African funding in the first Half of 2023 with $520 million followed by Egypt, South Africa and Rwanda according to the latest data from Briter Bridges.
Nigerian startups ranked fifth in funding but topped the continent with 101 deals. According to the report, African Startup funding fell to $1 billion in the first Half of 2023, as investors shift focus from growth stage startups to late and early stage startups.