NEWS: Our First Investment Cycle Has Begun!
We are so excited to announce that our inaugural business investment cycle has officially begun! On May 25, we announced the call for applications for our inaugural September 2015 investment cycle. We were looking to provide flexible financing and tailored business support for early-stage Kenyan creative economy ventures, falling within our primary value chains: Fashion, Crafts and Music Performance.
By 31st July, we had reviewed 95 eligible applications from creative ventures operating in Nairobi, Naivasha, Nakuru, Mombasa, Eldoret and Kisumu. Of these, there were 33 businesses in fashion and apparel, 33 in crafts and hand-made items and 29 in music and music performance value-chains. 58% of the total applications were made by men and 42% women. Disaggregated data showed that 52% of the applicants in fashion and 67% of applications in crafts were women, while 93% of applicants in music were men.
Total Applicant Distribution (by Value Chain)
Total Applicants (by Gender)
Fashion Value Chain Applications (by Gender)
Crafts Value Chain Applications (by Gender)
Music Value Chain Applications (by Gender)
The total investment request was about KES 55 Million, with an average application amount of KES 583,030. Most of these requests looked to finance improvement of production and technical capacities, development of product ranges, brands and online retail platforms, acquisition of new point-of-sale systems, and retail space expansions.
The Selection Process
During the months of August and September HEVA’s teams of consultants conducted a five-part short-listing process to select HEVA’s first cohort of high-potential creative businesses. First, the creative panel composed of practitioners and peers made the first recommendations based on the artistic merit of the entrepreneur, the quality of the product and the value proposition of the venture. A second shortlist was then developed by our team of business consultants who were particularly keen on business success indicators, such as the existing business models of the ventures and their financial viability.
The entrepreneurs were then invited to make a pitch to the investment team to explain their strategies as well as make their investment requests. Subsequently, the investment team conducted due diligence on these finalists - they visited their premises, evaluated their records and had further conversation with them. After that the preliminary investment offers were made. The final process was the most intense, as our investment team looked to develop, together with each entrepreneur, the best financial model for the each debt facility.
While this process took longer than we had initially anticipated, we are proud that the exercise has allowed us to identify six high potential creative ventures for our first investment cohort as well as providing a great learning experience for the creative, business and investment teams. From this experience, we are anticipating a much faster turn-around period for the March 2016 investment cycle.
HEVA Inaugural Portfolio
Here are the profiles of our first investment cohort:
Katungulu Mwendwa’s passion for African traditional cultures and how their essence can be showcased in fashion marks her as a pioneer in the renaissance of conscious cultural modernity. She uses these inspirations to create uniquely elegant pieces with unusual shapes and layers. HEVA's support for Katungulu is going towards increasing production and brand development.
Links: Website /Facebook
Mambo Pambo is a design house specialising in Afro-contemporary apparel for both bespoke and ready-to-wear collections, as well as in the production of interior décor items and soft furnishings. Mambo Pambo offer an array of statement pieces for all ages and spaces. HEVA's support for Mambo Pambo is going towards increasing production and retail space expansion.
Links: Website / Facebook
Katchy Kollection designs are inspired by various elements of traditional craftsmanship, skills and techniques. Using beads as an integral part of their pieces, Katchy re-imagine ancient styles of adornment for the modern day woman. Katchy Kollections is a parent company to Jiamini, a brand that expresses cultural pride in the construction of unique garments for people who are not afraid to be seen and heard. HEVA's support for Katchy is going towards garment manufacturing and retail expansion.
ZikoAfrika is a contemporary accessories brand inspired by eclectic aesthetics to reflect a modern take on traditional forms and materials. ZikoAfrika look to redefine how local fashion is perceived and consumed through the production of high-quality, edgy and affordable pieces that are 100% made in Kenya. HEVA's support to ZikoAfrika is going towards production support, online retail solutions, and distribution.
Pikham Management and Suppliers Limited
Pikham is a tailoring factory based in Eldoret. Its core market is in uniforms and protective wear. Pikham is looking to increase production capacity by opening a Nairobi branch to offer diverse garment manufacturing services to the growing fashion industry. HEVA's support for Pikham is going towards expansion of production space, as well as machinery and materials acquisitions.
Kepha Maina is a seasoned contemporary fashion designer with a distinct architectural signature in his garments. Kepha’s designs are known for their infusion of a distinct high-fashion aesthetic into ready-to-wear everyday pieces. HEVA's support for Kepha is going towards: Increasing production capacity and production support.
Links: Website / Facebook
These six creative ventures and the several that passed the business shortlist will also access exchange learning opportunities, guidance from industry experts who will be available by appointment to provide advice on product development, financing planning and forecasting, market creation synergies, intellectual property protection, and strategic business modelling. Upon the successful completion of this first debt facility, these six businesses will be eligible to apply for a second investment of up to KES 10 Million in equity, debt or convertibles, and matching facilities and/or guarantees, to help move their start-ups into market-scale profitability.
Music Value Chain
For the inaugural investment cycle, we were not able to consider investment requests from the music performance value chain. This industry has patently different bottlenecks than the fashion and crafts chains, affecting both the readiness for investment and the type of investment needed for maximum impact and effect. We are therefore currently developing a specific strategy for music performance entrepreneurs - that will focus on allowing the artists to acquire capacity to autonomously produce and publish creative content, make it available directly to consumers, and to increase available opportunities for dynamic, exciting live performances in the Kenya, Uganda, Tanzania and Rwanda. This will be informed by HEVA’s recent value chain analysis report, and further conversations with industry stakeholders. We are optimistic that we shall consider investment requests for this value chain in March 2016.
We are involved in on-going conversations with our applicants, investees and third parties who are looking to explore opportunities to resolve specific challenges within East Africa and elsewhere. Particularly sticky areas are in acquisition of strategic retail space, reliable sourcing for production and adaptation of new production information and technology. We have set up a finance facility available all year round looking to provide short-term financing to eligible business ventures with dynamic value propositions to our investees and for the sector.
March 2016 Investment Cycle
We would like to thank all applicants for expressing their interest in the fund, and would invite them to consider our March 2016 investment cycle. In the meantime, they are welcome to participate in our learning and exchange opportunities as presented by HEVA Forum, to be announced soon, to prepare them to become investor-ready.
We're very excited to be part of this dynamic industry and look forward to the continued learning and engagement with our investees, applicants, interested parties and all interested stakeholders!