UAE-based firm offers hope to capital starved Kenyan startups

Tito Mutai paces about his seventh floor office in the upmarket Westlands Estate, Nairobi eager to talk about his favourite subject: Bridging access to finance for capital-starved Kenyan startups.

Mutai, the executive director of Investera Plus Africa notes in an interview that while Kenyan firms have some of the best business ideas on the globe, they lack access to investment opportunities.

His is a firm that targets to bridge the capital gap and provide investment opportunities for Kenyan startups which lack collateral.

Thanks to the agency he now heads, Mutai believes Kenyan firms are able to get unhindered access to foreign investors seeking to invest locally while foreign entities are equally able to link with local companies for foreign opportunities.

His platform, he says, is addressing challenges associated with raising start-up capital and access to markets, which are some of the biggest hurdles for budding Kenyan entrepreneurs.

“Investera Plus Africa has come with a platform that will provide information on companies that are offering themselves up for investment,” Mutai told Smart Business Friday afternoon.

Investera Plus Africa

“Lack of mechanisms to establish the credibility of the companies and startups has made it difficult for investors to find the right idea to fund in Africa.”

The Investera platform was borne out of partnership between United Arabs Emirates-based business intelligence and investment firm - Investera – and their local counterpart, Investera Plus Africa.

The duo provides market research, due diligence, investment advisory and financial intelligence services to investors, businesses and entrepreneurs.

Through their platform, Mutai says, they carry out due diligence for investors who are interested in particular companies or start-ups.

“We do a very rigorous due diligence to establish that this company conforms to the legal requirements and that the products or services they say they are offering are indeed true,” he said.

“We go an extra mile to review facts under consideration and provide them with a report which includes financials and customer ratings among others,” said Mutai.

Primary due diligence is conducted before the company or start-up is accessible by the investor while secondary audit will be upon the request of an investor.

Investera Plus Africa can also propose to firms the parameters needed to provide in terms of a report.

Amid concern from investors about the predictability of the business environment, Mr Mutai says they also offer consultancy services for investment opportunities so that startups and naive first-time entrepreneurs are not exploited by foreign suitors.

 “While we do not have control of the investment opportunities, the government can come in to offer regulation but it should at the same time not stifle potential investments,” he said.

Businessman Jimi Wanjigi during a recent function highlighted this worrying trend.

Mr Wanjigi for instance observed that Kenya has suffered from an intellectual brain-drain for too long noting it was time to create an environment that favours equity between those who develop ideas and innovation and those that invest.

According to Imad Smail, a FinTech Solution Advisor at Investera all due diligence is conducted to ensure the pitches presented to investors protect the business ideas and opportunities of the local startups.

Mutai said their technology provides information across 11 sectors and it will be upon individual investors to pick the sectors they are interested in.

The companies and startups have been categorised using Global Industry Classification Standard and divided into so many sub industry groups.

Investors

“We provide investors with the necessary information and it is upon them to look at the sub-industry group which has a niche,” Mr Mutua said.

He noted that the number of deals they are targeting will depend on the pitches that they are going to get and investors who will be signed up.

“It is not something that we can be able to predict. It depends on the startups and how much the investor wants to invest,” he pointed out.

Mr Mutai says that investors can adapt to Kenya’s taxation system which he pointed out has been stable over the last five years.

“When you look at Kenya’s taxation system over the last five years, the difference is not that much.

“Of course investors want to get their money back within the shortest period of time. If it is a long term investment, it is something that they know they are capable of adapting,” he added.

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