Mara Launchpad is an entrepreneurship centre/ accelerator in Kampala, Uganda. It exists to provide young businesses in Kampala a professional office space at an affordable rate, startup support as well as fostering a community of like minds. The centre is located at Ham Towers in Kampala City Centre, adjacent to the campus of Makerere University, East Africa’s foremost higher education institution. The city centre location makes entrepreneurs easily accessible to partners and clients, as well as allowing them to conveniently reach any part of the city. Recently we had a chance to catch up with Nigel Ball, a principal behind the effort, to discuss this effort in more detail.
You have been in Kampala four years, how do you see the space changing?
“More and more young people are giving entrepreneurship a chance, and the amount of support available to them is also changing, improving in its scope and variety. In 2010 Kampala had no private incubation spaces, now it has 3. There is plenty of support available to young entrepreneurs and increasingly strong networks that investors can benefit from.”
Tell us about the Mara Foundation, why was it started and what does it do?
“The Entrepreneur Launchpad began with a mentorship programme in Uganda which was launched on 27th January 2011 by Mara Foundation at the Mara Group Headquarters in Kampala, Uganda. The launch involved a unique ‘business speed-dating’ event, where prominent business personalities in Uganda had a series of three minute timed conversations with young entrepreneurs. The event was an extremely valuable experience for young entrepreneurs and their mentors alike. 16 entrepreneurs were matched with formidable mentors for a mentorship period over 6 months. The second cycle of mentorship was launched in the same way on 24th October 2011, with a further 16 entrepreneurs being matched.”
Tell is more about the role of mentorship?
“At the heart of the initiative is the Mentorship Programme, which is designed to help young enterprises survive the cut-throat world of business by creating alliances with strong players who have already succeeded in running successful companies. Through this programme, young entrepreneurs will be able to position their businesses for sustainable growth through one-on-one sessions with mentors drawn from the top of the business world.”
What is the biggest hurdle moving forward?
“Many people in the region view ‘lack of start-up capital’ as an excuse used by would-be entrepreneurs for not getting started in business, to the extent that it has become something of a taboo to even mention it. This is unfortunate, because it is a legitimate barrier – would-be entrepreneurs are restricted to enterprises with low or non-existent barriers to entry, which leads to a profusion of service-based companies in a space too small to support them all, while the country continues to import almost all of its manufactured goods. Venture capital is needed, there is no other way to put it!”
Tell us about the Mara Launch Uganda Fund?
“As a young entrepreneur, raising funds for your idea or business can be challenging and it’s no secret that this is becoming harder as borrowing from banks is a nightmare for small entrepreneurs. One gets turned down for bank loans for a variety of reasons, including lack of assets, collateral and business experience. Don’t despair. It is because of these frustrations and discouragements like the amount of time it takes to secure capital, the rejections endured, and the lack of linearity and progress checkpoints over the course of the fundraising process, that entrepreneurs need to be creative in their search for alternative sources of financing.
Mara Launch Uganda Fund as an alternative source of financing is a Venture Capital firm designed to support entrepreneurs build high growth companies. With an emphasis on backing Ugandan youth with a talent for business. The fund provides risk capital in the form of debt but later converted into equity.
Although bank loans or debt financing seem to be the only source of financing on the Ugandan market, entrepreneurs need to know that there are several alternative sources of capital outside of the traditional debt financing, like venture capital. Venture capital is an option for enterprises that have a seasoned management team and very aggressive growth plans.
Mara Launch Uganda Fund provide risk capital between 5,000,000 UGX and 10,000,000 UGX to high-growth new and early-stage start-up, small and medium-sized Enterprises in various sectors which show good growth, in return for an equity share in the business. We believe it is the first locally owned venture capital firm in the country.”
Where does the money come from, how will it be invested?
“The small amount of starting capital is being put up by the three management partners – after some positive case studies have been presented, other capital providers both within and outside of Uganda will be approached. As the first locally owned Venture Capital firm in Uganda, established in 2012 with a base in Kampala, the Fund currently operates only in Uganda, with plans to expand to other African countries. Mara Launch Uganda Fund was founded and managed by Quantum Capital, WE-KANI Ltd and Mara Group as the joint investors and general partners.
The fund focuses on investing in companies and ideas that have high-growth potential, and we aim to run our operations to global best practice standards. The Fund is able to provide equity or loan financing, or a combination, depending on the circumstances of the investee company. There is a focus on companies that are able to generate cashflow returns as well as capital gains on exit. Mara Launch Uganda Fund not only provides capital but also supports the enterprise with close mentoring, monitoring and technical and managerial support through the Fund’s founders who have experience in starting up and growing their own businesses to fruition, and therefore understand the challenges faced by entrepreneurs throughout the business lifecycle from seed stage to maturity. The team also has experience in fund management, corporate advisory and specialized knowledge in the investment sectors.”
How is the fund different than what is already out there?
“There is huge demand for VC in the region, and the great strength amongst the providers is that each fund has its own preferences for who and what to invest in, which ensures a good spread of investments. Mara Launch Uganda Fund is a very open-minded fund which is looking at opportunities for their inherent value, rather than a specific sector or stage of growth. The level of capital invested per opportunity will initially be very small, however, meaning the fund will best suit start-up and early-stage companies run by young entrepreneurs. There is a huge demand for this type of financing, which is too risky for the banks or MFI’s but too small for ‘traditional’ VC.”
You also host sessions with VC’s. Can you tell us why you do this?
“Recently Mara Foundation hosted three venture capital providers at the Mara Launchpad to answer questions to 50 assembled entrepreneurs about what venture capital is, how it works, and whether all those rumours we’ve heard are true… Solomon King, founder of Node6 tweeted at the end of the event, “Great advice and insight into the mindset of Venture Capitalists,” so it seems it did the job. Here you can read the profiles of the speakers and some of the live tweets that were made throughout the event (have your dictionary of financial jargon at the ready).
What makes ventures in Kampala unique (USP) and what needs to be done to get more international interest?
“Unlike Nairobi, which is making a name for itself as a global tech innovation hub, Kampala has not yet found a niche to leverage off. Tech is also important here, but overall, there is quite a variety of ventures being attempted by adventurous entrepreneurs in Kampala and no shortage of enthusiasm and hard work. The ventures speak for themselves and that is what we would encourage international spectators to look more closely at.”
What do you think of VC4Africa?
“VC4Africa is a powerful platform and one that needs greater promotion both amongst entrepreneurs and investors. Through our own Mentorship programme, we have seen the power of ‘matchmaking’ to bring interested parties together, and the more forums that enable this, the better. By leveraging the power of the internet, VC4Africa can achieve global spread, and coupled with strong local communities in-country, the platform has a huge amount of untapped potential.”
Do you have a message for fellow members, entrepreneurs and investors?
“If you are an entrepreneur, investor or business support organisation in Uganda or Kenya, please get in touch with us and see how we can add value to what you do.”
We look forward to following your efforts and expect to see many new initiatives coming from the space.