Heva Fund is an investment fund for creative businesses in East Africa. Their investment support aims to help businesses increase their production capacities, launch new product lines, invest in new technology and expand their distribution networks.

Since September 2013, HEVA Fund has invested in 20 creative businesses. The businesses include; Katungulu MwendwaItikadiMambo Pambo,  OgakePeperukaAprelle Duany and WazawaziVictor Peace and Thomson Photography.

We sat down with Heva Fund’s Managing Partner George Gachara to understand more about the fund’s activities.

What inspired you and your partners to set up Heva Fund?

Since our inception, we have been exploring ways to unlock the potential for artistic and creative livelihoods in Kenya and in the East African region. In the wake of the catalytic policies of the NARC government, in the first decade of the 21st century, Kenya’s economy was expanding and modernizing. This transformation was establishing a new economic order built on knowledge and innovation.

Unlike any other time, this new economy would require artistic output. This output would include innovations in design, marketing, branding, innovation and communication. This, without any meaningful engagement with the domestic creative value-chains and an over-reliance on international supply chains for domestic opportunities. The growth of the private sector, driven by small and medium-sized businesses increased demand for artistic outputs, communication and innovation, for business. This, along with the demand for artists goods and services – fashion, furniture, music, design etc., as a result of an increase in household incomes.

We explored numerous support strategies, with varying degrees of success which included our first online store, an attempt to build a savings cooperative scheme, a guarantee fund to provide partial security. We were finally convinced that a private equity fund and a business support facility would best provide support for creative enterprises to meet consumer and business needs, therefore unlocking one path to creative sector livelihoods.

What are some of the key achievements that Heva Fund has had since inception?

Since 2013, HEVA has developed 5 different financial models which are specifically tailored for East African creative enterprises. We have also directly supported about 400 creative entrepreneurs and further invested in more than 20 creative businesses. These businesses are in the fashion, digital content, crafts and decor value chains. This, along with the support for public policy reforms and alignment.

We have invested in businesses through the start-up fund which supports businesses to test their market, build team experience and create adequate internal controls.

From Nairobi, Kampala, Kigali, Arusha, Lamu to Dar es Salaam, the creative sector is where the creation of new products and new cultural experiences is happening. We want to be in the forefront of helping producers of cultural goods and services to build high-value, profitable businesses where new ideas will come to life, and where the highest potential for great profits, great jobs and happy people will be found.

What kind of businesses does Heva Fund support and what requirements do you usually ask for?

HEVA’s 2018/2022 strategy has identified the highest growth potential in live music, fashion manufacturing & retail, film and digital content, gaming & entertainment as well as beauty and cosmetics cluster groups. We seek to deepen our investment and support interventions in these sectors.

In this new period, we are looking to support the growth potential of young businesses, through our early stage fund, as well as help scale mature businesses through our growth fund. The criteria for each of these funds is often published when we open the call for investment application.

We are always looking for dynamic businesses which have a great creative product, a professional team and financial records and are driven by a vision.

What do you plan to do with the new funding from Agence Française de Développement (AFD)?

The cooperation with AFD is the first in a series of partnerships with private equity and development sector investors. We intend to establish our Growth fund capital of Ksh. 500 Million for our investment operation between 2018/2022. We are looking to open our call for investments in September 2018.

Those interested in applying for investment, should subscribe to our newsletter and stay tuned for news on our call for applications. Institutional or individual investors should reach out to our office for investment information.

Tell us a bit about your 4 year strategy in supporting the creative sector?

In the next four years, we are looking to deepen the focus of our facilities to four sectors, namely; live music and events, fashion retail, gaming and e-sports, as well as Film, TV and Digital.

To support these sectors we have recently established the growth fund. The fund is a complementary facility alongside the existing early stage finance fund looking to address the next level challenges for growing enterprises. The growth fund is a mixed model facility for SMEs which are in their rapid growth stage and looking to scale.

Which sectors within the creative industry do you see promise but are unable to fund at this time?

We are always building our knowledge and exploring new opportunities. At present we are interested in developing a pseudo-commercial facility targeted at visual arts along with the beauty, grooming and cosmetics cluster, but we are still in the research phase.

What support systems do you see as important to the success of the Kenyan creative sector?

From the public sector perspective, there is a need to focus on creating a fair, if not supportive, business environment. I would suggest that policy makers to focus on unlocking the question of the cost burden on practitioners, regulatory red-tape, skills gaps and markets.

As currently set up, creative sector practitioners carry a disproportionately high production cost burden compared to other sectors. The regulatory environment suffers burdensome and sometimes overlapping fees, licences and permissions. There is also the question of unavailability of critical technical and management skill and low market integration due to low forward investment. These challenges provide immense opportunities for public-private collaborations.

From a private sector perspective, there is an unpararelled opportunity for those who will get over the anxieties and build a first mover advantage on the provision of supply side solutions for equipment, logistics, professional services, insurance, education and finance for film, music, fashion and gaming. This will start to build the confidence among consumers who as starting to appreciate locally made goods and services.

What do you see as the future of the creative industry and also for Heva Fund?

By investing and growing dynamic companies and creative circuits, we are hopeful that we can help establish Kenya, and the East African region, as a global destination for arts and entertainment and as the creative hub for Africa. In the next four years, it is our hope to scale HEVA Fund to be able to support specific value chains across Kenya, Ethiopia, Rwanda, Tanzania, and Uganda.