Kenafric Group, the Kenyan consumer goods company, has launched Kenafric Ventures, a US$ 10 million corporate venture fund to invest in promising African consumer businesses. It will invest between US$ 100,000 and US$ 2 million in early-stage companies that have shown product-market fit and are ready to grow.
Alongside capital, founders will tap the manufacturing, distribution and market know-how Kenafric has built since 1987. This fund is managed by S2E Africa and designed with support from FSD Africa. Kenafric Ventures will focus on consumer businesses in food and beverage, and beauty and personal care, particularly those with a sustainable business model, as well as consumer-facing retail platforms. These include direct-to-consumer (D2C) brands, experiential consumer companies and adjacent categories.
The programme has been designed on the basis that access to capital is only one of the challenges facing consumer businesses looking to scale across African markets. Other challenges include having to deal with different regulatory regimes and uneven infrastructure as well as complex distribution channels. Alongside investment, selected companies will be able to access relevant capabilities and networks across the Kenafric ecosystem.
“Building a great product is only the beginning,” said Mr Mikul Shah, CEO of Kenafric Group. “We have spent nearly four decades learning how to get a product from a factory in Nairobi onto shelves in shops across East Africa. That knowledge can be as valuable to a young consumer business as the cheque itself. Our ambition is to become the scaling partner of choice for Africa’s most promising consumer businesses.”
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The relationship can also go further than a first investment according to Pulkit Srivastava, Founder and CEO, S2E Africa. “For consumer founders, the right corporate partner brings capabilities that are hard to replicate through capital alone. A relationship that begins with an investment can grow into distribution, manufacturing, expansion into new markets and, potentially, a future acquisition,” he said.
Kenafric Ventures builds on a programme of work undertaken by FSD Africa with S2E Africa earlier this year designed to test ways to attract corporate capital into the Small and Growing Businesses (SGB) market.
“Corporate capital in Africa is abundant, but very little of it reaches startups,” said Juliet Munro, Director of Early Stage Finance at FSD Africa. “Where large companies do engage with entrepreneurs, it tends to be through CSR. That work matters, but investing in businesses built to last belongs alongside it. Kenafric Ventures demonstrates the willingness of African corporate capital to provide both the financing and the operational know-how that will help the continent’s entrepreneurial talent to thrive. We hope many more African corporations follow.”
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