Technology has always been Nikolai Barnwell’s first love, even when he was a music student at Colby College in the US. Today, he leads a more challenging task of looking for technology opportunities to fund and get back a percentage for the investors.
“88mph was founded in 2011 by Danish investor Kresten Buch with the aim of supporting tech entrepreneurs from sub-Saharan Africa to build products and businesses that positively impact business and consumers across the geographic and socio-economic spectrum,’’ said Mr Barnwell who is the programme manager at 88mph in an interview with the Business Daily in Nairobi on Monday.
“At 88mph Company, we provide early-stage web and mobile companies with up to $100 in funding through our three-month start-up accelerator programme,’’ says Mr Barnwell, 29.
88mph is a private seed fund with vibrant work spaces in Nairobi and Cape Town in South Africa. It has a network of start-up founders, investors, corporate partners and local business professionals.
“We add value to start-ups during the accelerator programme by providing advice on products, go-to-market, sales, company structure, hiring, funding options and scalability, as well as bringing in experienced individuals from around the world to fill in the gaps,’’ he added.
Inside their vast offices at Piedmont Plaza in Nairobi, start-up groups of two or three huddle together, either discussing or working on something.
“This is an open centre where mentoring is done, including conceptualisation of the potential products for the market, it’s more of a brainstorming sector that plays host to numerous people,’’ he says.
“We basically invite investors to sample the budding entrepreneurs’ ideas and if they are interested, they can offer the resources to start operations,’’ added Mr Barnwell
At the far end of the vast office there is an area where investors and local business people converge on to offer advice to upcoming tech-lovers on how to fully exploit their innovations. He says this has been key in motivating the participants.
The participation is open to everyone including upcoming innovators who may want advice on how to bring their ideas to fruition. The facility which looks like a classroom is a meeting place for innovators with a nose for business. It also houses a canteen.
The funding comes from investors who pump in the resources to 88mph for allocation to the start-ups. No security is demanded for funding except an agreement that acts as proof of commitment.
Investors are invited to scrutinise the ideas and if viable, they can start negotiations for possible partnerships on revenue-sharing.
88MPH made a foray into Kenya in 2011 in a move the founders say was influenced by the country’s position in the East African region as a business hub.
‘‘Kenya has good Internet service, including high mobile penetration which is a key contributor to business growth,’’ noted Mr Barnwell.
Kenya’s position as an ICT hub on the continent has attracted several technology firms, including IBM and Microsoft who have set up offices in Nairobi.
Mr Barnwell says the pool fund does not invest in individuals but in groups of two or three people and that the recipients have to give a detailed account of how their idea or innovation can be commercialised to reach a bigger audience and at the same time earn profit.
“For every startup we fund, we get 10 to 25 per cent from the business as shareholders. This mainly helps in strengthening the running of the enterprise and in creating linkages that can yield more partnerships from strategic investors,’’ he said.
So far the initiative has funded 19 tech firms in Kenya among them Ghafla, a local entertainment site, Mdundo.com, Young.co.ke, Futa.com, Movas Group and Apex Peak.
“Currently we have 20 investors and three directors. The investors pump in their resources and get shares from the business. If the start-up business thrives and the founders feel like selling their business, the investors are always given the first priority,’’ says Mr Barnwell.
“The reception has been positive, with enquiries coming in every day,’’ says Mr Barnwell. He notes that there is a lot of entrepreneurship spirit in the country and that the number of people seeking funding is overwhelming.
He, however, says the challenge lies in identifying genuine entrepreneurs who are driven by passion and not just the money.
During the three-month programme, the start-ups receive mentoring, access to networks, technical infrastructure and work space.
Some of the partners 88mph have collaborated with are Samsung, Microsoft and Google.
88mph is set to expand its operations to Lagos, Nigeria, in the first quarter of 2014, adding to the programmes it has in Kenya and South Africa.