iHub Limited which was the company formed by Erik Hersman to take the management of the innovation and startup lounge iHub away from the initial founders – Ushahidi Group, was sold to BSP Fund LLC for a measly $1million after the debts of the company mounted to unmanageable levels.
According to sources aware of the happenings, the company owed KRA, the previous and current landlords as well as suppliers more than Ksh 150million.
The company had also received more than $12 million (approximately Ksh 1.3billion) as investments from BSP Fund LLC while the man behind the investment firm was sitting on the board of iHub associated entities like Ushahidi and getting involved in all manner of dealings with Erik and his crew.
Miguel Granier is the same man who teamed up with Erik to disinherit Phares Kariuki and Brian Muita their cloud hosting solutions provider, Angani.
The shareholders of iHub Limited were Josiah Mugambi and Erik Hersman. Both owned equal stake of 49.5% while the rest were nominally owned by the legal firm handling the transaction.
A group of investors led by the now Minister for Information and Communications Joe Mucheru tried to buy out Erik and Josiah from the company but the deal flopped at some stage because Erik was demanding so much money because of the debts which were mounting while the Miguel Granier group were also not willing to let the company go without recovering anything from company.
According to one long time tech investor, “the problem with iHub is that it is poorly managed. It’s surprising that the tech platform which was supposed to give many Kenyans opportunity to scale their ideas turned into a real estate and is now offering accommodation to every Tom, Dick and Harry with no tech idea.”
iHub relocated to Senteu Plaza from the Bishop Magua place after getting into trouble with the landlords. The turnover of employees at the company has also been high with many blaming mismanagement and issues like sexual exploitation as the reasons for their departure.
At some point, Erik Hersman was investing most of the money he was getting to fund iHub operations on his coffee restaurant startup, Pete’s Coffee.