Kenyan consumer-goods maker Kenafric Group announced the creation of a new fund called Kenafric Ventures, valued at $10 million (KSh1.3 billion), to support young African businesses that sell directly to consumers.
The fund will provide between $100,000 (about KSh12.9 million) and $2 million (about KSh258 million) to companies that have already secured a customer base and are ready to scale.
Targeted sectors include food and beverage, beauty and personal care, as well as retail platforms and direct-to-consumer brands that operate with sustainable models.
Management of Kenafric Ventures will be handled by S2E Africa, with additional backing from the financial-sector development organisation FSD Africa.
Kenafric Group chief executive Mikul Shah said the firm intends to draw on its almost four decades of experience in manufacturing and distribution to help emerging firms overcome growth hurdles, adding that “building a great product is only the beginning” and that the aim is to become “the scaling partner of choice for Africa’s most promising consumer businesses.”
The initiative also gives start-ups access to corporate partnerships that could assist with manufacturing, distribution, market entry and potentially lead to future acquisitions.
S2E Africa founder and chief executive Pulkit Srivastava explained that the right corporate investor can supply capabilities that capital alone cannot, noting that an investment relationship may evolve into distribution, manufacturing, expansion into new markets and possibly a later acquisition.
Juliet Munro, director of early-stage finance at FSD Africa, said the programme could motivate established African firms to invest directly in growing companies rather than limiting support to corporate-social-responsibility programmes, observing that “corporate capital in Africa is abundant, but very little of it reaches startups, corporate investment could provide both financing and operational expertise to help businesses grow.”
