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Independent early-stage VC fund, 4Di Capital is investing in 88mph, the African seed accelerator.
Details of the deal remain under wraps, but CEO and founder of 4Di, Justin Stanford, tells Ventureburn that the investment deal will see 4Di share a stake in 88mph graduates.
In addition to funding, the investment from the Cape Town-based 4Di will provide 88mph startups greater access to a network of local investors and enhances the possibility for follow-on funding.
Stanford says that the deal is part of building a credible ecosystem, one he hopes will draw more angel investment and move the “Silicon Cape” concept forward. He says that accelerators such as 88mph deserve broad ecosystem support as VCs stand to benefit from their alumni.
Kresten Buch, 88mph founder says that the technology space in Africa is picking up.
“We’re seeing a lot of activity and opportunity. Investors are watching this and beginning to look outside of developed markets like the United States for growth, because those markets aren’t expected to grow as fast as they have in the past,” he says.
Despite positive growth in Africa, funding for startups continues to be a major hurdle in South Africa and Africa in general.
“88mph is unique in that they provide startups with actual funds, which is very rare for an accelerator in emerging markets and Africa especially,” says Stanford. “They have spent over one million dollars on investing and supporting startups Africa—far more than any other accelerator here. We have chosen to back this accelerator as a part of our desire to help foster and develop the nascent early-stage startup ecosystem in South Africa.”
88mph brand strategist, Katie Sarro told Venturebeat that 88mph’s startups have serviced 100 000 customers and have generated over 100 jobs in Africa.
Stanford says that the selection of startups in residence at 88mph is diverse and reckons accelerators are indicators for what works in a particular environment, and what doesn’t. As an example, Stanford pointed to Zapacab, one of the nine startups currently in the 88mph programme. The mobile taxi hailing service is similar to Uber, developed in the US.
88mph is partnered with Google for Entrepreneurs and is also funded by private investors including Hannes van Renburg, Fundamo CEO and Ranjith Cherickel, Head of Sales and Business Development, Africa at Nokia Siemens Networks.
“We’re very excited to have taken a concept from Kenya to South Africa with Google’s support and are now able to bring 4Di on board as well,” says Buch. “The more experienced companies and individuals involved, who inspire trust by attaching their name to this endeavor, the easier it is for these startups to get customers, investors and ultimately succeed.”
88mph opened in Nairobi, Kenya in 2011 and has since made 24 startup investments. The seed accelerator started operations in Cape Town, South Africa in February 2013 and plans to expand to Nigeria.