Cloud human resource management firm ElevateHR Africa is seeking to raise up to Sh40 million through the crowdfunding model from local investors as part of their pre-seed round after successfully obtaining $100,000 (Sh14.8 million in current exchange rates) from local venture fund From Here Ventures in July last year.
Crowdfunding refers to the practice of funding a project by raising money from a large number of people who each contribute a relatively small amount, typically via the internet.
Though not common in Kenya, the crowdfunding practice is extensively used in advanced economies such as in the US and in European countries.
ElevateHR in a statement said local investors will have an opportunity to invest a minimum of Sh200,000 with a 14 percent interest rate per year compounded on principal.
The firm’s chairman and founder Mark Karake said the funds will be used to help it increase its customer base. “We also want to hire key staff and increase our sales and marketing activities in a bid to grow our customer base to a triple-digit,” said Karake.
“Our team has a combined over 30 years’ experience in startups, software as a service (SaaS) sales and engineering, they are experienced industry leaders of high quality and will deliver on the promises we have made today.”
ElevateHR, which was founded in 2021 and which has its African hub in Nairobi, provides seamless platforms that integrate human resource functions for both business administrators and employees.
The move to source for funding locally, the startup said, has been informed by a decline in capital inflows from foreign investors as the sector begins to feel the bite from the global economic drought.
A recent Business Daily analysis shows that at least eight Kenyan start-ups have collapsed in the last two years, with most of the founders and executive managers blaming the woes on a global funding drought that has been engineered by the raising of lending rates in developed economies in a bid to tame inflation.
