FrontEnd Ventures, a Kenya-focused venture capital fund has closed its initial $1 million VC fund to provide funding for early-stage founders in the East African country.
"We are investing in Kenyan founders because we believe in our thesis that people who have lived experiences have a much better chance of creating products that address related nuances,” Njeri Muhia, FrontEnd's Partner and co-Founder said. "This means investing in local women founders too since they bring with them a different profile of experiences, solutions and ingenuity that is unmatched."
Founded by Njeri Muhia and Steven Wamathai in 2021, FrontEnd Ventures, is backed by a $5 million fund—likely to extend to $10 million. Aside from targeting Kenyan-led startups, FrontEnd is targeting impact-driven tech startups in various industries including agriculture, e-commerce, health and transport.
Prior to founding the firm, Muhia worked in London as a credit portfolio manager at Barclays Bank, where she also linked Kenyans in the diaspora with opportunities in Kenya. "After living abroad for a few years, I realized that there was little or no visibility on the existing early stage East-African ventures where members of the East-African diaspora could invest as angels. I became keen to explore the space and see if I could do anything about that," she said.
The VC firm is issuing a $100,000 cheque size but is open to making follow-on investments (up to $500,000 in series A) in startups under their portfolio. By the end of 2022, FrontEnd intends to make five more investments aside from the two startups in its portfolio.
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The $5 million fund is made up of local capital from high net worth individuals (HNWIs), institutional funds and family offices. "One notable mention about our current LP population is that we have a significant representation of Kenyan locals within the mix—a previously underrepresented cohort in the current African VC ecosystem, so we are proud to be able to drive more representation and inclusion throughout our fund structure," Wamathai.
Venture capital funding in Kenya.
In H1 2022, Kenyan startups raised 14.4% of the total funds raised by African startups, placing it ahead of South Africa and behind Nigeria and Egypt. In 2021, Kenya ranked 4th by the number of deals and 5th by the amount of funding across Africa in 2021.
The number of investors that backed Kenyan startups in 2021 was the highest ever in the ecosystem, 38% more than in 2020. A record number of five Kenyan startups announced exits in 2021.