Venture Capitalists Invests $1.2m In Kenya’s Tech Firm BRCK That Assembles Modems
A Kenyan tech firm dubbed BRCK, has landed a Ksh.105.5 million ($1.2 m) funding from foreign investors in a bid to expand its operation on both the local and international scene. BRCK tech firm is a manufacturer of routers and modems that are retailing by the brand name BRCKs.
The BRCKs routers and modems enable users in remote areas get internet connection via Wi-Fi. The company’s top organs include Juliana Rotich and Erik Hersman, both of whom are founders of iHub and Ushahidi; the two serve as Chairperson and Chief Executive respectively at BRCK.
BRCK said that the funds from the VCs will go towards catering for labour and production costs. Hersman said, “Production will begin next week, and we will ship the BRCKs to 45 destinations globally.”
The high cost of doing business in Kenya had forced BRCK to assemble its routers and modems in the United States, despite the fact that the company is based in iHub, Nairobi. The tech firm received the seed funding from Urban.us, Synergy Growth, Invested Development Investors, Omvestments, Cheryl Heller and Gary Scheft of CommonWise LLC.
According to Invested Development, what attracted the VCs to the Kenyan startup was its target market of users in regions being serviced by intermittent internet connectivity; which has become to be the accepted norm in a lot of developing markets.
Miguel Granier, Managing Director of Invested Development, said, “The potential impact and scale of this company made it an easy investment decision. BRCK uses technology to solve problems where there is a significant market gap.”
According to statistics held by the Communications Authority of Kenya (CAK), there are about 21.2 million internet users in Kenya. This figure represents a 52.3% penetration, a strong indication that there is still plenty of room for growth. This figure has moved upwards from last year’s figure of 16.2 million internet users, or 41.1% penetrations. The regulator attributes this growth to the reduction of internet connection prices by the service providers.
During the tabling of CAK’s last quarter report, it said, “This growth could have been as a result of increased uptake of ICTs that have catered to both social and economic needs and activities of the users.”
It has also emerged that a lot of these users rely on wireless connections to access the internet, and this is the main target market for BRCK. Invested Development also acknowledged that about 65% of internet access in the emerging markets rely on wireless networks. Hence this provides a ready market for BRCK’s products.
There are also other reports that indicate that Invested Development has invested in another Kenyan tech company dubbed iProcure. But as to how much is the worth of that investment is yet to be disclosed.