88mph, a startup funder and accelerator whose model is along the lines of Silicon Valley’s Y Combinator, was founded with much enthusiasm in 2011 (paywall) by Kresten Buch, a Danish entrepreneur. Now it’s putting on the brakes.
Buch made the announcement in a blogpost published yesterday, June 10:
88mph have invested in 36 companies during 2011 – 2014 in Kenya and South Africa and have fully invested our funds. In the next 18-24 months, we will focus on working with the companies we have all ready funded to get some good return for our investors and founders.
Since 2011, 88mph has invested between $4 million and $4.5 million in startups across Africa, investing in Nairobi, Lagos, and Cape Town. Now, says Nikolai Barnwell, who runs the Nairobi operation, it is time to focus on the companies the group has already invested in. People have “this idea that you as a venture capitalist will go and flip a company in a year and a half,” he says. But “this is a seven- to 10-year timeline. We don’t expect these companies [that we have invested in] to be sold for tens of million of dollars in two years.”
Buch’s announcement caused some consternation amongst startups in Kenya specifically and in Africa more generally. 88mph is one of the better known locally based pan-African funders, and any sign that it is halting its operations is bad for sentiment in Africa. Barnwell, who stresses that 88mph is merely taking a break, says there is no reason for alarm. That 88mph will take a break has been known more than year now, he says.
Buch last year started a collaboration with Level 5 Labs in Lagos, teaming up to start 440ng, an accelerator that works in a similar fashion to 88mph, investing between $20,000 and $100,000 in local startups. That effort, says Chika Nwobi of Level 5 Labs, is still very much on track.