Nairobi-based manufacturer Kenafric Group has launched a $10 million (about Sh1.3 billion) corporate venture fund that will put money into young African consumer businesses, offering them not only capital but also access to the factories, warehouses and distribution routes the company has built over nearly 40 years.

The fund, named Kenafric Ventures, will be managed by corporate venture studio S2E Africa with support from FSD Africa, the Nairobi-based financial sector development agency. It will write individual cheques of between $100,000 and $2 million, roughly Sh13 million to Sh260 million at current exchange rates.

Who can apply

Kenafric says the fund is aimed at businesses that have moved past the idea stage and have proven that customers want their products. The target sectors are:

  • Food and beverages
  • Beauty and personal care
  • Consumer-facing retail platforms and direct-to-consumer brands
  • Experiential consumer businesses with sustainable models

Founders will apply through S2E Africa's website, and the fund is also open to other investors who want to put money in alongside it. Companies that are selected can tap Kenafric's manufacturing capacity, distribution channels and knowledge of how to get products onto shop shelves across East Africa. Over time, the partners say, a relationship that starts with an investment could grow into manufacturing and distribution deals, entry into new markets or even an acquisition.

Distribution as the missing piece

Kenafric chief executive Mikul Shah said the company's experience in moving goods from a factory floor to retail shelves could be worth as much to founders as the cash. "Building a great product is only the beginning," he said, adding that the group wants to become "the scaling partner of choice for Africa's most promising consumer businesses."

Consumer start-ups across the continent often struggle to raise growth money and face scattered distribution networks, different rules in each market and uneven infrastructure, problems that make expanding beyond a home city expensive.

S2E Africa founder and chief executive Pulkit Srivastava said the right corporate partner brings "capabilities that are hard to replicate through capital alone."

Pushing corporates beyond CSR

FSD Africa, which has worked with S2E Africa on channelling more corporate money into small and growing firms, sees the fund as a model for other large companies. Juliet Munro, the agency's director of early-stage finance, said big firms often engage entrepreneurs through corporate social responsibility programmes rather than by investing directly. "Corporate capital in Africa is abundant, but very little of it reaches startups," she said.

Kenafric, founded in 1987, is best known for confectionery and other fast-moving consumer goods sold across the region. The launch adds to a small but growing list of Kenyan corporates using venture funds to find new growth areas and products for their distribution networks.

The partners did not say how many businesses the fund expects to back or when its first investments will be made.

Photos: Kenafric Group handout via The Star; Queen Asali / Wikimedia Commons (CC0). Thumbnail design: HAMASTA MEDIA.