Early-Stage Startups Courted By Fresh Backing From Kenya’s Top Telco

Months after it was hinted, Safaricom, Kenya’s top telecom company, has formally launched the Spark Accelerator program, a strategic move to back local startups in the fintech and content sectors. In collaboration with M-PESA Africa and global trading giant Sumitomo Corporation, Safaricom aims to propel early-stage ventures to scale and long-term success.

The accelerator, executed in partnership with iHUB, a subsidiary of Co-Creation Hub (CcHUB), offers selected startups a three-month program featuring training, mentorship, funding, and go-to-market support. The initiative, launched at an event that took place on January 12, represents Safaricom’s shift from its previous Spark Fund approach, now addressing the hurdles hindering early-stage startups’ growth.

Peter Ndegwa, Safaricom’s CEO, emphasized the program’s holistic approach, providing more than just capital injection. Leveraging an ecosystem-based strategy, the Spark Accelerator relies on a team of experts familiar with market dynamics and emerging tech to foster continuous innovation.

Participating startups gain access to technical support for developing mini-apps integrated into Safaricom’s M-PESA Super App. With M-PESA connecting over 60 million customers and 5 million businesses across eight countries, startups can tap into a vast user base.

Over the years, Safaricom, which dominates the telecom and mobile money markets in Kenya by a commanding margin, has backed a number of homegrown startups. Notable examples include mSurvey, a mobile-first consumer feedback platform; Sendy, an on-demand delivery platform; FarmDrive, a fintech startup providing credit scoring and financial services to smallholder farmers; and Eneza Education, a mobile learning platform.

Apart from Safaricom, several prominent African telcos have recognised the potential of the continent’s startup ecosystem and have dabbled into venture capital investments to support and invest in local startups. MTN Group has invested in startups such as Jumia, Africa’s leading e-commerce platform, and Flutterwave, a fintech company providing payment solutions. Orange Ventures has backed startups like Kobo360, a digital logistics platform, and PayJoy, a fintech company enabling smartphone financing.

As Safaricom’s latest foray into VC unfolds, it is poised to leverage its established brand, extensive infrastructure, and substantial resources to provide financial support, mentorship, networking opportunities, and market access to promising startups. 

Sitoyo Lopokoiyit, Managing Director of M-PESA Africa, highlighted the Spark Accelerator’s role in facilitating innovations that connect customers and businesses on M-PESA to more opportunities. Beyond the three-month program, startups receive ongoing support, tapping into M-PESA’s expansive network.

The accelerator program concludes with an investor demo day, providing startups with the opportunity to pitch for investment from Safaricom and partner venture capital firms. Vodacom and AWS join as supporting partners for the program, enhancing the ecosystem and prospects for participating startups.