A Dutch-based venture capital firm has raised its stake in a Kenyan restaurant guide website, EatOut, in a transaction that values the online portal at Sh220 million.
The buyout of a further 7.9 per cent stake at a cost of Sh17 million ($200,000) will see Africa Media Venture (AMVF) raise its ownership in the Kenyan firm from 25 per cent to 32.9 per cent.
EatOut is the brainchild of owner and chief executive, Mikhul Shah, a Kenyan, who remains the majority shareholder.
The guide is now focused on rolling out its business model to more African countries.
“The plan is to explore several new revenue models in Kenya and at the same time gain market share in at least five to ten countries in Africa,” said Mr Shah in an e-mail interview.
AMVF bought a quarter of EatOut’s shares last year.
The announcement of the sale comes at a time EatOut has partnered with Hellofood.com, a leading online food ordering platform with a presence in 30 countries, including Kenya.
The website allows users to order food from any restaurants in their city, for delivery in about 45 minutes. The two businesses are expected to complement each other by giving EatOut users a platform to order food from listed restaurants.
“We’re extremely excited about this partnership, which we hope will dramatically improve convenience and variety for foodies in Nairobi and beyond. Online food delivery is expected to grow quickly and Hellofood are perfectly positioned to make a big impact in the market,” said Mr Shah.
In May, Mr Shah sold an undisclosed stake of SleepOut, an online accommodation guide that he founded 18 months ago, to AMVF for $200,000 (Sh17 million).
He spent part of the money on relaunching the website and financing expansion.
Mr Shah, who grew up in Mombasa, got the idea to start the business upon his return from the UK where he had used similar websites including Urbanspoon and Toptable restaurant guides. He registered a company, Websimba Limited, and rolled out the website.
EatOut makes money by charging restaurants a listing fee.
This saw the business turn a profit from the onset with minimal capital required to set up the website.
In three years, Mr Shah has diversified his business capitalising on the growth of Internet penetration in the country.
Restaurants and accommodation facilities pay to be listed on the website, which offers a booking option among other features.
Kenya has in recent years increasingly attracted international agencies and multinational staff while a growing middle class is proving a fertile investment ground for the hospitality industry. This has in turn seen an increase in restaurants and hotels opening to cater for the demand and different tastes.
E-commerce has also been rising, with more people opting to shop online for their holidays.
AMVF invests in technology firms that have the potential to become major players in their area of business and to expand in their regions. The company is mostly active in Kenya and Ghana, making capital investment ranges from $20,000 to $200,000 (Sh1.7 million to Sh17 million).
Other than EatOut and SleepOut, the company has mobile phone gaming site Jooist Platform, mobile app developer Shimba Technologies and web development company in Ghana Explainer DC in its portfolio.
It’s also a shareholder in online payment solution PayGate Limited.