Chinese messaging platform WeChat has announced that it plans to invest R50m (£2.3m) in early-stage African startups, working with Cape Town tech strategy firm Batstone to search out promising companies worthy of funding.
The fund will be used to identify and support tech-enabled businesses by assisting with rapid market growth through the WeChat platform, which enables messaging, mCommerce, taxi booking and more. With access to markets listed as one of the biggest inhibitors to growth for tech-enabled businesses, gaining the keys to the WeChat ecosystem could have a huge impact for any companies selected.
WeChat, which is owned by Chinese internet titan Tencent and boasts over 600m users, has already made investments in African firms in the past, providing an undisclosed amount of funding to microjobs marketplace Money For Jams earlier this year, as well as making investments in apps like PicUp and Order In.
As smartphone adoption increases and messaging apps become more popular across Africa, several prominent messaging services have identified the continent as a potential growth market. Currently, WhatsApp, Facebook, WeChat and several others are all competing to gain a foothold in various markets, along with a number of homegrown platforms that are aiming to expand to neighbouring countries. By teaming with local startups, WeChat could well gain an advantage in this battle.
"Our fund aims to provide financial support to businesses so that they can effectively get on the WeChat platform," said Brett Loubser, head of WeChat Africa. "This will include technical integration and communication tactics across the Naspers' stable and other suited channels.
"We have been working with Batstone since mid-2014 and in that time have come to trust their purpose-led approach to understanding and supporting tech businesses. This approach, coupled with the networks, means our partnership is well placed to identify and vet the best possible investment opportunities for WeChat."