Dealflow | October 2, 2023

Kua Ventures expands investments in East Africa’s social impact businesses

Lucy Ngige
Guest Author

Lucy Ngige

ImpactAlpha, Oct. 2 – Nairobi-based Kua Ventures was launched in 2020 by the non-profit endPoverty to help African startups build long-term resilience. The venture capital firm has clocked $1 million in investments in 20 enterprises that have created over 200 jobs in Kenya.

“We’ve gone through the pandemic, the election cycle, the depreciating Kenya shilling,” Kua’s Peter Fry tells ImpactAlpha. “We continue to have the same focus of finding resilient companies that are positioned to grow,” and to take advantage of investment capital flowing to Africa.

Half of Kua’s capital is deployed as revenue-based financing so that businesses aren’t stuck with fixed payments in the face of economic downturns.

Growth Capital

Many early stage African enterprises lack expansion capital. Kua invests between $50,000 to $100,000 (KSh 5 million to 15 million) in the form of loans, convertible notes and revenue-based financing, to Kenyan ventures creating jobs and alleviating poverty. Kua also provides mentoring and connections.

It plans to deploy $4 million in Kenya and $3 million in a neighboring country. Its portfolio includes digital training solutions provider Zydii, online grocery and delivery platform Soko Kijiji Groceries, pathology services provider The Pathology Network and other ventures in education, manufacturing, recycling, waste management and media.

 “A huge challenge for SMEs is having working capital and we want to share the risk with them, but get a bigger return at the same time and succeed when they succeed,” Fry says. Kua seeks companies with “the management team, the infrastructure, the product market fit” in place that are poised to expand their reach and gain more customers capital, he adds.