NAIROBI (Reuters) – Kenyan telecoms operator Safaricom and Japan’s Sumitomo Corp. have created a platform for supporting start-up companies, they said on Wednesday.
Although African economies like Kenya were in the past seen as the next frontier for start-ups especially in the technology sector, entrepreneurs faced issues including lack of financing and proper market strategies.
“Studies show that entrepreneurs in Kenya face major challenges, with a 30% lifetime survival rate for startups,” Safaricom said in a statement.
Both companies have been joined by M-Pesa Africa in the venture that is called Spark Accelerator, they said. M-Pesa Africa manages Safaricom’s M-Pesa mobile financial services platform.
M-Pesa, which allows customers to send and receive money on their phones, make payments for goods and services, save and even borrow small loans, is used by 60 million individuals and 3 million businesses on the continent.
“We trust this acceleration program will enable startups to create value within this ecosystem,” said Sitoyo Lopokoiyit, the managing director of M-Pesa Africa.
The platform aims to improve key sectors in Africa, said Katsuya Kashiki, general manager for Sumitomo’s smart communications platform division.
The companies did not disclose how much they would invest in the platform.
(Reporting by Duncan Miriri; Editing by George Obulutsa and Bernadette Baum)