Are you a mid-sized firm in Kenya looking to go global?

A large number of international funds have been investing in start-ups in Kenya and the region in recent years, looking to cash in on the SME boom that has been driving the economy forward.

Few, however, are investing time or resources into those firms that have survived the initial start-up phase and moved into the next stage of growth.

Endeavor, a New-York based organisation that partners with businesses looking to scale up, recently opened its first sub-Sahara Africa office in Nairobi (outside of South Africa), targeting the mid-sized companies in Kenya looking to go global.

Enterprise sat down with Endeavor Kenya’s managing director, 30-year-old Fiona Mungai, for insights on their approach to the local market.

Who is Endeavor and why have you chosen to open an office in Kenya?

Endeavor started 20 years ago in Latin America, and has now been able to expand to 50 cities across the world in the Middle East, North America, Asia and Africa. We have an office in South Africa that has been there for 12 years, and five years ago Egypt came along, and Morocco.

Kenya’s is the first sub-Sahara Africa office to be opened. We have been here for slightly under a year, having operationally began in February this year.

In a lot of the emerging markets where Endeavor operates, unemployment is a big issue. We therefore support high impact entrepreneurs who are building large businesses that are able to create hundreds of jobs.

Nairobi has a very vibrant start-up ecosystem and they thought it would be very well positioned for us to come into the market to support these businesses in their next phase of growth.

Which Kenyan companies have been selected into Endeavor?

The firms selected are Twiga Foods and Cellulant and Eclectics International Kenya. We have committed to another firm which is currently fundraising, though we cannot disclose their identity at this moment. We have also committed some funds to them.

How are you different from all these organisations supporting young businesses?

We are not supporting start-ups. We are supporting businesses that have gone through the start-up phase, have a proven business model and are now aligned for the next phase of growth. Very few organisations are helping entrepreneurs who are looking to scale up.

Once you are over the start-up curve, you are on your own, and it becomes a very lonely journey. That niche is where we are focusing on.

What is the nature of your partnership with a business?

We are very big on mentorship—a part of the role that the local board plays— and also form advisory boards for these entrepreneurs to help with their governance structure.

We also help in talent, where we run two programmes on leadership and scale-up strategy at Harvard and Stanford Universities in the US specifically tailored for our entrepreneurs.

Endeavor is not a venture capital fund. That said, we do have a unit that does investments, as one of a number of services we offer our entrepreneurs. Where we do invest, it is pure equity and we are passive investors.

If a business wants to be absorbed into the Endeavor network, what do they need to do?

We look at three facets, from the business point of view, the entrepreneur point of view and timing.

From a business angle, we look at growth potential for the next 10 years and ability to create hundreds or thousands of jobs. One metric is your revenue growth and the number of jobs that you are creating.

From a timing perspective, we are looking for businesses on the cusp of the next phase or leap of growth. Typically we look at companies that are over $1 million (Sh103 million) in annual revenue.

There are however some who are under a $1 million who are very interesting for us.

The local board has prominent business leaders, including Tabitha Karanja of Keroche, Isaac Awuondo of CBA, Darshan Chandaria of Chandaria Industries and Benson Wairegi of Britam.  What are they bringing to the table?

These leaders realise that there are high inequality and unemployment rates, and the best way to solve it is to empower entrepreneurs who are creating jobs.