After spending years in London, matching people in the diaspora with investment opportunities back home, and later as a credit portfolio manager at a bank, Njeri Muhia wanted a bigger challenge.
She and Steven Wamathai, who has vast experience in the investment management industry, decided to start an early-stage venture capital firm, FrontEnd Ventures, to focus on Kenyan startups.
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Despite the country being one of the top four investment destinations in Africa, the take-off for the fund has been rapid and it has just closed its initial $1 million.
FrontEnd believes that people with experience have a better chance of creating products that address related nuances.
Local women entrepreneurs bring with them a different profile of experiences, solutions, and ingenuity that is unparalleled.
FrontEnd is trying to find impact-driven tech companies in various industries.
The first tickets of up to $100,000 have already been issued by the VC, but they want to make more investments in the future.
She said that they are de-risking them by depositing small checks at the early stage, but that they intend to have follow-on investments where they can invest up to $500,000 in series A.
Steven Wamathai is a co- founder and partner.
In a sector where startup relationships are formal, they hope to have relaxed connections.
We want to have a good relationship with them. Being open to their calls means more than just when they want to talk about their companies. She said that they need support as individuals because they are the ones who are going to keep this business alive.
A tech-as-a-service arm that can extend services to startups is being considered.
We envision this tech as a service function, where it can be used to fix problems quickly and cheaply. She said that they are developing a rolodex of service providers who can work with them.
The records of the people of the country of Kenya.
FrontEnd is in talks with a number of institutions and high-net-worth individuals in order to join its current list of investors that include executives in the banking, real estate and manufacturing industries.
The fund is backed by a group of people who understand the need to support local businesses.
The need for more HNWIs to be educated on the potential of investing in startup is noted by her. She says demystifying the system is important for getting more funding.
Foreign investment in venture capital funds in the US, Europe and Asia is driving the growth of startup businesses in Africa.
Big Deal data shows that the amount raised in the first half of the year has more than doubled compared to a year ago. It is likely that Africa will have a new record.
Last year, startups in Africa raised close to $5 billion, double the previous year and nine times the amount raised five years ago. In particular, this amount favors North American and European creators.
FrontEnd would like to be part of a drive to channel more funds to local entrepreneurs.
Local entrepreneurs are going to change the face of our country and continent and we need to support them. We want them to be comfortable with math and economics. I am pretty sure that once we get a few more investments done, and have something more tangible to offer them, there will be a lot more people joining us.
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