A new venture fund called Mara Launch Uganda Fund has opened its doors to Uganda’s technology community complete with a community working space and business mentorship programmes.
Mara Launch Uganda Fund primarily invests in innovative, high growth enterprises in Uganda.
Speaking to HumanIPO, the fund’s programme associate Beyamba Gilbert said Mara Launch Uganda Fund will provide risk capital between US$2,000 and US$4,000 to high-growth enterprises in various sectors which show good growth in return for an equity share in the business as a minority partner.
The fund will consider a number of investment vehicles including risk capital in the form of debt, which would later be converted into equity.
Beyamba explained to HumanIPO that despite existing policies on financial support for small businesses, very few entrepreneurs receive financial help when they need it.
“Though the Entrepreneur Launchpad Mentorship Programme, our interactions with these entrepreneurs have indicated many young entrepreneurs considered lack of financial support as the number one constraint in developing their business, which is why we came up with the Mara Launch Uganda Fund,” he said.
Beyamba said: “The fund is designed to respond to the challenges faced in raising capital by Africa-based young entrepreneurs and their small-scale enterprises in the different economic sectors.”
The fund focuses on investing in companies and ideas that have high-growth potential across different economic sectors.
“The youth lack office space and credibility, they also have limited capital and inadequate access to business mentorship and networks. Supporting them to overcome these challenges is our driving force,” said Ashish J. Thakkar, Founder and Managing Director of the Mara Group of companies.
Thakar says the future lies in the youth. In Uganda alone, with over 50 percent of the population below 15 years, empowering them is key. The main challenge however is the youth’s inadequate knowledge about equity financing as an alternative source of capital.
Thakar says most entrepreneurs in Uganda are accustomed to loan financing, whereby they are given a loan that is repayable over a given period with a set interest rate, and the financier has no say in the businesses.
“Venture capital is very different – you are getting a partner who also has ‘skin in the game’, an incentive to see the business succeed. Not all entrepreneurs immediately see the benefits in this partnership mentality,” he said.
The founders are now structuring the fund and sensitising the entrepreneurs about venture capital.They plan to invest at least five ventures by the end of this year before moving to cover the East African region as they eye the entire continent.
Mara Launch Uganda Fund was founded and is managed by Quantum Capital, WE-KANI Ltd and Mara Group (Mara Foundation) as the joint investors and general partners. The investment committee consists of Ashish J. Thakkar, Peter Mukiza and Alex Rezida.
