Kenafric Group, the Kenyan consumer goods manufacturer whose brands range from chewing gum to energy drinks, has launched a $10 million corporate venture fund to back early-stage African consumer businesses, joining a small but growing cohort of African corporates seeking strategic exposure to the continent’s startup economy.
The fund, Kenafric Ventures, will deploy cheques of between $100,000 and $2 million into companies that have moved past product development and demonstrated demand, with a focus on food and beverage, beauty and personal care, consumer-facing retail platforms and direct-to-consumer brands. It is managed by S2E Africa, a corporate venture studio led by Pulkit Srivastava, and was designed with support from FSD Africa, the Nairobi-based financial sector development organisation funded by British aid.
The initiative is modest in absolute terms, but its significance lies in its architecture. Rather than merely writing cheques, Kenafric is offering portfolio companies access to the manufacturing, distribution and market knowledge it has accumulated since its founding in 1987 — capabilities that are often harder for young consumer businesses to acquire than capital itself.
“Building a great product is only the beginning,” Mikul Shah, Kenafric’s chief executive, said. “We have spent nearly four decades learning how to get a product from a factory in Nairobi onto shelves in shops across East Africa. That knowledge can be as valuable to a young consumer business as the cheque itself”.
A corporate venture wave, from a low base
Kenafric’s move places it among a handful of African corporations experimenting with venture investing. Globally, corporate venture capital has expanded rapidly: the number of corporate investors has tripled over the past decade, and CVC funding reached $130 billion in 2024, up from $70 billion in 2017, according to a 2025 report by the Kenya-UK Tech Hub and ViKtoria Ventures. In Kenya, however, corporate investment in startups remains confined to a few early initiatives, including Safaricom’s Spark Fund and Chandaria Capital.
The broader African venture market has cooled sharply from its 2021–2022 peak. Venture capital funding on the continent fell to $2.2 billion in 2024, a 25 per cent decline from the previous year, as global investors retreated from riskier emerging-market bets. Deals in Africa fell roughly 52 per cent between 2022 and 2024, a steeper contraction than in any other region, according to Pitchbook data cited by the International Finance Corporation.
Against that backdrop, domestic and corporate capital has become more consequential. “Corporate capital in Africa is abundant, but very little of it reaches startups,” said Juliet Munro, FSD Africa’s director of early-stage finance. “Where large companies do engage with entrepreneurs, it tends to be through CSR. That work matters, but investing in businesses built to last belongs alongside it”.
The problem the fund is designed to solve
The gap Kenafric Ventures aims to address is not simply a shortage of money. African early-stage businesses collectively face an estimated $194 billion annual funding shortfall, equivalent to roughly 7 per cent of the continent’s GDP, according to the African Development Bank. But even when capital is available, consumer businesses encounter structural obstacles that financing alone cannot resolve: fragmented retail channels, overlapping distribution networks, divergent regulatory regimes and uneven infrastructure across markets.
Kenya’s consumer goods landscape illustrates the challenge. Traditional trade — small dukas, kiosks and informal retailers — still accounts for 58.2 per cent of retail sales, despite the country’s relatively advanced digital infrastructure. Across Africa, up to 80 per cent of fast-moving consumer goods sales flow through informal channels in some regions. For a young brand, reaching those outlets efficiently requires relationships, route-to-market knowledge and working-capital discipline that are difficult to build from scratch.
That is where Kenafric’s operational footprint becomes relevant. The group manufactures confectionery, beverages, culinary products and stationery, and has expanded through acquisitions — including the 2024 purchase of Economic Industries, which made it Kenya’s second-largest stationery manufacturer. Its distribution network reaches formal and informal retail across East Africa, a capability that portfolio companies can potentially plug into.
S2E Africa’s Srivastava framed the proposition in explicitly strategic terms. “For consumer founders, the right corporate partner brings capabilities that are hard to replicate through capital alone,” he said. “A relationship that begins with an investment can grow into distribution, manufacturing, expansion into new markets and, potentially, a future acquisition”.
That last point — acquisition — is central to the model. S2E Africa was established with FSD Africa’s backing precisely to cultivate a domestic acquisitions pipeline for African startups, at a time when foreign acquirers have pulled back and venture funds are nearing the end of their lifecycles without clear exit routes. Secondaries accounted for 23 per cent of African startup exits in 2025, the highest share on record, as investors sold stakes to one another rather than securing trade sales.
What the fund signals
Kenafric Ventures is not a venture capital fund in the conventional sense. Its $10 million corpus is small relative to the scale of the African consumer opportunity — the continent’s FMCG market grew from $428.5 billion in 2021 to approximately $628 billion in 2025 and is projected to exceed $1 trillion by 2033. But the fund’s value may lie less in the capital it deploys than in the template it establishes: a listed or family-owned African corporate using its balance sheet and operational assets to invest in, rather than merely sponsor, the next generation of consumer businesses.
Consumer staples have been a rare bright spot in Africa’s venture landscape, with 35 deals recorded in 2025 even as overall deal volume declined. Several specialist funds have moved into the space, including Chui Ventures, which closed a $17.3 million debut fund focused on everyday consumer products and micro, small and medium enterprises, and Aruwa Capital, which has raised $35 million for early-stage consumer and healthcare investments in West Africa. Kenafric’s entry adds a strategic, operator-led model to that mix.
Whether it works will depend on governance and execution. Corporate venture programmes in Africa have historically struggled to reconcile the patience required for early-stage investing with the return expectations and decision-making rhythms of an operating company. FSD Africa’s involvement — through S2E Africa’s management mandate — is intended in part to provide that discipline and to document lessons that can be replicated by other corporates.
“Our ambition is to become the scaling partner of choice for Africa’s most promising consumer businesses,” Shah said. For now, that ambition is backed by a fund that is small enough to be credible as a pilot and structured enough to be instructive as a model. Its progress will be watched by African corporates that have so far preferred brand-building and corporate social responsibility to the messier business of backing founders.
Kenafric Ventures is open to founders and co-investors across Africa, with applications handled through S2E Africa’s website at https://s2eafrica.com/.