Naspers-backed instant messaging platform WeChat on Wednesday announced the launch of a R50-million seed fund specifically for startups working in the mobile space.
The fund will support startups identified as promising by WeChat South Africa. The company plans to identify these startups through an application and selection process and will also assist startups in launching dedicated WeChat offerings.
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The idea for the fund apparently came about after WeChat saw how successfully the likes of M4JAM (which it invested in earlier this year), PicUp, and Order In have used it as a launch platform for their own offerings.
“Our fund aims to provide financial support to businesses so that they can effectively get on the WeChat platform,” says WeChat SA head Brett Loubser. “This will include technical integration and communications tactics across the Naspers’ stable and other suited channels.”
WeChat also reckons its platform can provide startups with easy access to a national audience, which it says helps to bridge the gap between the tech startups and their customers.
To coordinate the initiative, tech strategy practice firm, Batstone, has been appointed by WeChat Africa to source and coordinate early stage investment opportunities among tech startups in Africa.
Thanks largely to that partnership, the application process will be a little different from what the South African startup space is used to.
Startups that make it though the initial online applications will be invited to participate in a series of workshops hosted by Batstone. The idea is that while some will receive investment from WeChat, everyone who participates will get value out of the competition.
“Our experience in the past two years has demonstrated that many companies have huge potential but are unable to communicate what they do clearly,” says Alexandra Fraser, who heads up Batstone Ventures. “We don’t want to miss the chance to work with smart businesses just because they can’t succinctly tell us what they can do in an online form so our process will include a face-to-face workshop element to mitigate this risk.”
“There are some amazing startups with incredible ideas out there,” Batstone strategy lead Sarah Rice told Ventureburn, “but many of them are short on experience. The hope is that the way running the application process will help us discover which ones have real value propositions.
According to Loubser, the initiative helps cement a partnership that’s already more than a year old.
“We have been working with Batstone since mid-2014 and in that time have come to trust their purpose-led approach to understanding and supporting tech businesses,” he says. “This approach, coupled with their networks, means our partnership is well placed to identify and vet the best possible investment opportunities for WeChat.” .
In addition to identifying potential partners for WeChat Africa, Batstone will provide strategic consulting services to effectively support these businesses through their growth phases and entrances to the market.
“This fund fits beautifully into the local VC landscape,” says Fraser, who believes that the fund complements existing VC offerings in the market. “Ideally we, and WeChat Africa, can partner with great businesses as well as VC funds looking for a platform with large market reach to test their investments’ potential.”
Applications via Batstone’s website will open in mid January 2016.