Purple Elephant Ventures, Kenya’s tourism-focused startup studio, raises $1m pre-seed funding

A Kenya-based venture capital studio focused on tourism, Purple Elephant Ventures (PEV), has raised $1 million in pre-seed funding to create the next generation of startups that are using technology to modernize the sector tourism.

Investors participating in this round include Klister Credit Corp., a Canadian investment firm, The Untours Foundation, and a number of angel funders, including Fede Pirzio-Biroli, founder of Playfair Capital; Ian McCaig, former CEO of and board member of M-Kopa; Anthony Rock, Chairman of Rock Impact Capital; Rich Hoops, Executive Director at Impact Capital; Jim Villanueva, Managing Director of Global Partnerships Social Venture Fund, and Helena Riese Harstad, Co-Founder and President of Optimizer Foundation.

The venture capital studio plans to create about four startups at the intersection of tourism, climate and technology, each year.

“I think what’s exciting for the team are all the possibilities of digitizing tourism for a greener future. And one of the great things about working in a studio is that we can constantly play with new ideas. We have what we call ideation sessions, where we have very structured conversations about looking at the tourism industry from the perspective of building businesses that will help reduce the carbon footprint of tourism industry in Africa,” said CEO Ben Peterson, who co-founded the startup with Mikul Shah and Jan Van der Does de Willebois, in early 2020 – just before Covid hit.

Despite the uncertainty in the tourism sector due to the Covid pandemic, the ENP team did not slow down but instead launched two startups – Elephant Bookings, a software as a service (SaaS) product, and Nomad. Africa, a trade content-magazine.

Elephant Bookings is a B2B product that brings hospitality providers online, helping them increase their occupancy rates by enabling direct bookings. Nomad.Africa was originally founded by Shah, who is also the founder of restaurant discovery site EatOut Africa. The venture capital studio is currently looking for co-founders and CEOs for both startups.

But why focus on tourism?

“There are thousands of startups in agriculture, FinTech, energy and healthcare – all major sectors of the African economy, but very few in tourism, and only a handful have raised capital. the fact that tourism is one of the most important sectors on the continent,” said Peterson, also a former senior partner at AHL Venture Partners, an early-stage VC in Africa.

“It seemed strange to me, so I started looking into why it was, and at the end of the day, I came to the conclusion that it was a massive industry with real margins but that it was completely stuck in the 1970s the way it works most tourist organizations barely have an online presence you even go to the websites of the most expensive safari lodges and you can’t even not book a room. You have to email or call an agent and it takes several steps to make a reservation,” he said, adding that Elephant Bookings is the solution to the first gap that PEV saw on the market.

Perterson said further investigation told PEV that the industry in Africa was ripe for disruption, particularly because the sector is among the fastest growing in the world.

“I realized there was a problem with the modernization of this industry and we started to look at it a little further. And I quickly came to the conclusion that there was not just one business opportunity to modernize the tourism sector. There were dozens of potential ways to do this.

Africa’s tourism sector is expected to grow at 6.8%, twice the rate of the continent’s overall economy, to $279 billion over the next decade as the industry recovers strongly from the effects of the covid pandemic. This is according to data from the World Travel & Tourism Council (WTTC), which also shows that 14 million new jobs will be created during this period.

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