R3.5m for mobile ideas
Privately-backed start-up fund, 88mph, has put aside $300 000 to $400 000 to fund between five and 15 companies with smart ideas in the mobile Web space.
88mph, an early stage start-up fund and three-month accelerator programme recently launched in Cape Town, will run its first boot camp for successful applicants next February. 88mph's strategy in Africa is to fund strong teams and Web-mobile ideas that have the ability to scale across English-speaking Africa.
88mph founder Kresten Buch says the fund is specifically targeting entities that have developed ideas for use on the mobile Web, such as e-commerce. He adds that the fund is not looking at hardware concepts, as that would be more cash-intensive.
Each company that is successful can receive funding of between $10 000 and $100 000, although most investments are between $20 000 and $25 000, Buch notes. He says the fund invests at idea stage and seeks to get companies to the next level, where they can attract the attention of a venture fund.
In return for the funding, 88mph takes an equity stake in the companies, says Buch. He says the percentage will vary depending on the entity and the amount of funding.
In February, the first round will kick off and Buch hopes to invest as much as $400 000 into between five and 15 companies, although this will depend on the applications 88mph receives. He adds that a minimum of five or six entities are needed, otherwise the programme will not be a success.
"The start-ups we look at are often small teams who lack experience and the network necessary to quickly grow their businesses. They often struggle to focus on their product and customers due to the multitude of other things that need time and attention, like admin tasks, office-related issues and finding follow-on investment," says Buch.
The Cape Town team has also entered a partnership with Google, which provides Internet resources to build tech companies, as well as access to Google's experienced Web professionals who can mentor the start-ups.
Seven experienced entrepreneurs, specialising in sales, programming and Web design, are being brought in from Europe and the US to work side by side with the local start-ups during the three-month acceleration.
88mph is targeting one accelerator programme a year in Cape Town, and is also running one in Kenya, and another in West Africa, says Buch. He explains that the fund's model is based on shifting around resources to where they are required.
88mph is also arranging a "demo day" so that start-ups can access a group of investors and showcase what they have achieved so far.
Application deadline is midnight 15 December.