The site, which crowdsourced stories from citizen reporters paid KSh100 (US$1.1) per article, received funding from accelerator programme 88mph in 2011, and is the second of the fund’s online media investments to close in the last few months after personal finance site PesaTalk shut earlier this year.
HiviSasa had been hoping to sign up a major Kenyan bank as an advertising partner, providing funds that would have allowed the company to survive, but the bank pulled out of the prospective deal, preferring to wait until after the elections.
“After saying all was OK and ready to go for a month and a half, they suddenly pulled the plug, saying that they wanted to wait till after the elections in April,” said 88mph programme manager Nikolai Barnwell. “This came with no warning and was of course a big shock to the entire HiviSasa team. Unfortunately, the staff and writers can't wait to after the elections to get paid, so we had to close shop and let people go.”
Barnwell says though 88mph has had several success stories from its investments so far - which include Ghafla, Futaa.com, Movas and Manyatta Rent - failure in some instances is unavoidable.
"Getting a startup off the ground is incredibly tough,” he says. “Most of the time startups fail. That's part of the system and there's nothing inherently bad about that. Of course, it can be really tough on the people who pour their hearts and souls into the startup, but I think everyone walks away from a failure with tons of valuable experience and lessons learned. Hopefully failure won't deter people from trying again.”
Barnwell says the failure of HiviSasa and PesaTalk is not a reflection on the ideas or quality of work of those involved.
Both HiviSasa and PesaTalk were started by 88mph. We set aside certain amounts to test concepts and try to raise money on the results,” he said. “In these two cases, we failed to gain the momentum necessary.
“With HiviSasa, the results of the pilot was great and the team did an amazing job of proving their truly disruptive media model can actually work. Nonetheless, we haven't manage to raise enough money to keep the site going, so we are forced to put it on hold while we look for an investor who believes in the potential.”
Pierre Vendelboe, HiviSasa chief executive officer, agreed with Barnwell that the concept had not been a total failure, with the site at the time of closure having 32,000 unique readers and 115,000 page views a month.
“HiviSasa did work,” he said. “It worked very well. We produced a lot of quality content, at a price no other media house could beat. But we failed, when it comes to funding. We were not good enough to sell the idea to investors. It is our own fault. The product itself was very exciting, and the concept will for sure work at one point or the other. Unfortunately, we did not raise the funds to be the ones that could make it work.”
Barnwell says these two failures will not discourage 88mph from investing further funds in Kenyan startups.
Part of our model is that many of the startups we invest in will fail,” he said. “Overall, however, we see a much higher rate of startups that look likely to succeed than what we expected, so we are still very happy about what we see in Kenya.”