A Kenya-based entrepreneurial studio with a focus on tourism, Purple Elephant Ventures (PEV), has raised $1 million in pre-seed funding to build the next generation of startups using technology to modernize the tourism industry.
Investors participating in this round include Klister Credit Corp., a Canadian investment firm, The Untours Foundation, and a number of lenders, including Fede Pirzio-Biroli, founder of Playfair Capital; Ian McCaig, former CEO of lastminute.com and board member of M-Kopa; Anthony Rock, Chairman of Rock Impact Capital; Rich Hoops, Executive Director at Impact Capital; Jim Villanueva, director of Global Partnerships Social Venture Fund, and Helena Riese Harstad, co-founder and president of the Optimizer Foundation.
The venture studio plans to build about four startups each year at the intersection of tourism, climate and technology.
“I think the exciting thing for the team is all the possibilities to digitize tourism for a greener future. And one of the great advantages of working in a studio is that we can play with new innovative ideas all the time. We have what we call ideation sessions, where we have very structured conversations about examining the tourism industry from the perspective of building companies that will help reduce the environmental footprint of the African tourism industry,” said CEO, Ben Petersonwho co-founded the startup with Mikul Shahand Jan Van der Does de Willeboisearly 2020 – just before Covid hit.
Despite the uncertainty in the tourism sector from the Covid pandemic, the PEV team did not slow down, but instead launched two startups: Elephant Bookings, a software-as-a-service (SaaS) product, and Nomad.Africa. , a content-to-commerce magazine.
Elephant Bookings is a B2B product that brings hospitality providers online and helps them increase their occupancy rate by allowing direct bookings. Nomad.Africa was originally founded by Shah, who is also the founder of the restaurant discovery site EatOut Africa. The venture studio is currently seeking co-founders and CEOs for the two startups.
But why the focus on tourism?
“There are thousands of start-ups in agriculture, fintech, energy and health – all major sectors of the African economy, but very few in tourism, and only a handful have raised capital. This is despite tourism being one of the largest sectors in the world. the continent,” said Peterson, also the former senior partner at AHL Venture Partners, a fledgling VC in Africa.
“It seemed a little odd to me, so I started investigating why that’s the case, and at the end of the day I came to the conclusion that it’s a huge industry with real margins, but it’s completely stuck in the 1970s in the way it works. Most tourist organizations have hardly any online presence. You even go to the websites of the most expensive Safari lodges and you can’t even book a room. You have to email or call an agent and it takes several steps to actually make a booking,” he said, adding that Elephant Bookings is the solution to the first gap that PEV saw in the market.
Perterson said further research at PEV revealed the industry in Africa was ripe for disruption, especially as the industry is among the fastest growing in the world.
“I realized there is a problem with the modernization of this industry and we started to look a little further. And I quickly came to the conclusion that there was not one business opportunity to modernize the tourism industry. There were dozens of possible ways to do it.”
The African tourism sector is expected to grow at 6.8%, double the continent’s total economy, to $279 billion over the next decade as the industry recovers strongly from the effects of the covid pandemic. This is evident from data from the World Travel & Tourism Council (WTTC), which also shows that 14 million new jobs will be created during that period.