Savannah Fund is an East African-focused accelerator fund, aims to find and invest in early stage, high growth web and mobile startups addressing the Sub-Saharan Africa market. The new fund will typically make investments in the region of $25,000 to $500,000.
The fund launched this week in Nairobi, Kenya, with $10 million in its cache, is looking to invest in high-potential East African “pre-revenue” startups. That region includes Rwanda, Tanzania, Uganda, Kenya, and South Sudan
The fund was founded by Erik Hersman, Paul Bragiel and Mbwana Alliy and funded by several limited partners from Kenya and Silicon Valley, including folks from Zynga and Draper, Fisher, Jurvetson.
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.
Co-founder of the fund Erik Hersman explained Savannah Fund’s model in his blog:
“The idea is to bring the Silicon Valley-style accelerator model to Africa, seeing what needs to be tweaked to make it work for our region. It’s a small fund at $10m, with most of the activity focused on classes of 5 startups at a time being brought on board and invested in. They’ll get $25,000 for 15% equity, and have 3-6 months to prove themselves. Those who fail either pivot or leave, those who gain traction have a chance at follow-on funding. A portion of the fund will be invested at the $100-200k range where we’ll look at follow-on funding for the startups in our program, and also at other high-growth tech companies in the region.”
At $10 million, it’s a relatively small fund- and the partners have only succeeded in raising half of it so far. Some of the Fund’s investors include Silicon Valley venture capitalist Tim Draper, Yelp co-founder Russ Simmons, Dali Kilani and Roger Dickey of Zynga, Dave McClure of 500 Startups and Kenyan mobile software entrepreneur Karanja Macharia, founder of Mobile Planet, a wireless application service provider. Most of the fund’s investors will equally act as hands on mentors and will spend decent amounts of time with the fund startups.
Savannah’s accelerator program is open for the first class of 5 startups later this year. East African entrepreneurs can apply at www.savannah.vc/accelerator