African Originals, a Kenyan startup using local ingredients to make world-class beverages is seeking to raise $700,000 to scale its operations.
Launched three and a half years ago by Alexandra Chappatte, the firm has been crafting beverages using ingredients sourced from local farmers. It is based in Nairobi’s Baba Ndogo area and has three brands under the umbrella Africa Originals including Kenyan Originals, African Originals and 58.
African Originals intends to raise this funding through a crowdfunding campaign through Crowdcube, a British investment crowdfunding platform. The crowdfunding is expected to go live on 7th June.
Kenyan Originals was started with a mixture of seed funding from Alex and Chandaria Capital as the first investors. The company then brought on board more investors to advise and support them in the industry.
‘’We really wanted to have them (Chandaria Capital) on board, because they understand distribution here. They understand manufacturing here and they’ve been here a long time.’’ Chappatte told me in an interview.
‘’They were one of the first seed investors. Since then we have also brought in, a number of individuals who have much more beer industry experience’’ she says.
Why the beverage space? I ask. According to Alex, the beverage space in Kenya is ripe for disruption, just like any other industry.
‘’You know, you have a pretty significant monopoly in this space and there are very few markets in the world where it’s still at that kind of level. And what that means is there isn’t actually a real choice for the consumer because if you only have one key player in that space, there’s no one really challenging what that player is offering’’ she says.
‘’And so I think it’s important to be able to give consumers choice and particularly choice that is relevant to the locals. And that’s what we are able to adapt here and tailor for the local people because we have our production here and we have our innovation here and we speak to our consumer every day.’’
Alex notes that there’s a big gap in quality beverage products with local ingredients. For example, she says nothing in the spirit space is being distilled with real ingredients. It will be a spirit base and then flavouring added or some are actually imported. ‘’And obviously, that means like it’s much more expensive, so there’s a sweet spot in the middle on pricing against the quality of that product that we think we can play that role’’
Chappate says the firm is running the crowdfunding campaign to raise enough money to invest in the brand to get it to a higher level.
Once the crowdfunding goes live in June, interested investors can go to the Crowdcube site and pay. They can do a minimum ticket of 10 Pounds which is almost the equivalent of Ksh1,500 or a maximum ticket of 50,000 Pounds.’’ In return, you will get shares in the company at the equivalent of our valuation. You’ll be able to get dividends once we start making money and break even in 12 months,” Chappatte says.
‘’We’ve got great momentum on our beverages specifically tonics and Ciders and we’re about to do a new pack change as well. We need to invest in the brand to get it to a higher level. We’ve got good-ish availability now, so we wanna invest in wider awareness for the brand,” she says.
The company has launched these beverages and plans to use the money raised to invest in them as well as in capacity.
‘’We’ve got plenty of capacity and we want to continue to invest as we are growing. We are here to create a strong manufacturing site in Kenya and we want to create a world-class beverage production facility across alcohol and soft drinks,‘’ she concludes.