African startups have until the end of this month to submit their applications for a place in the fourth class of the Savannah Fund accelerator programme, which will make investments of up to US$30,000 in up to five startups.
Aside from the investment, successful startups stand a chance to have their applications fast-tracked for the accelerator run in Silicon Valley by Savannah Fund partner 500Startups, which offers US$100,000 investment and US re-incorporation. This feat has already been achieved by former accelerator participant CardPlanet.
Savannah Fund, which has previously invested in the likes of BabyGroup, ACE and WyzeTalk, believes a key part of its overall strategy is to address the gaps in skills and experience of entrepreneurs in the region through the accelerator.
“An accelerator programme is designed to help emerging entrepreneurs build a company and launch a product,” Savannah Fund said.
“Early-stage companies participate in “cohorts” and be exposed to a programme to learn from experienced local and high value and reputable mentors that have built global technology brands that are also very hands-on as would be expected by angel investors.”
The programme will deploy funds of between US$25,000 and US$30,000 to each company in exchange for a 12 per cent equity stake, with a US$2,500 programme fee coming out of the investment to cover expenses such as legal and office space.
This equity stake is lower than that taken for the first three cohorts – 15 per cent – and that of most other accelerator programmes, with Savannah Fund saying it was “commensurate with the risk we are taking, we also put in significantly more work and provide a number of advantages to comparable accelerators in Africa”.
Applicants will be chosen through an online application and interview process, but Savannah Fund said teams should apply with not just an idea but an initial prototype, early customers and revenue.
Erik Hersman and managing partner Mbwana Alliy work with startups during the accelerator in Nairobi, while co-founder Paul Bragiel provides advice and introductions from Silicon Valley.
