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Main article: Kenya

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Topics from 1 to 10 | in all: 15

Uber launches a new lower-priced service called Chap Chap in Nairobi

17:06 | 13 February

Uber has launched a new, lower-cost service in Nairobi called Uber Chap Chap. Made possible by using a fleet of fuel-efficient budget sedans, Uber Chap Chap (Swahili slang for “hurry, hurry”) is currently available in several areas of the Kenyan capital, including its central business district.

Uber, which began testing the service at the end of January, may launch it throughout the rest of Nairobi and in the capital cities of Uganda and Tanzania if it proves successful, the company’s East Africa general manager Loic Amado told Reuters.

To make Uber Chap Chap possible, Uber worked out a deal with CMC Motors, a car importer based in Nairobi, to import 300 Suzuki Altos. An unglamorous but inexpensive and fuel-efficient hatchback sedan, the Suzuki Altos were offered to highly-rated Uber drivers with financing by Stanbic, a Kenyan bank, that allows them to own the vehicle in three years.

Since the Suzuki Alto can travel further on less fuel, Uber is able to offer Uber Chap Chap’s lower prices. The minimum cost for a ride on the service is 100 Kenyan shillings (about 99 cents), compared to 150 shillings ($1.48) for UberX.

In Kenya, Uber faces competition from ride-hailing services like Little and Taxify. Uber Chap Chap gives it another way to differentiate, though Uber’s Nairobi drivers have complained that launching lower-priced services undercuts their earnings.

Featured Image: Jacek_Sopotnicki/Getty Images

 


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Africa’s SureRemit joins the tokenized race to win the global remittance market

10:30 | 12 December

Nigerian based SureRemit has launched a crypto token aimed at money sent home by global immigrants.

The startup — which is incorporated in Mauritius — offered pre-sales of its remittance focused tokens this week, before a January 2018 ICO. SureRemit will use blockchain partner Stellar’s platform.

The company is connecting its crypto product — which is not redeemable by consumers for cash — to a network of pre-approved merchants in Nigeria, Kenya, and Rwanda. SureRemit plans to launch in India and the Middle East in the second quarter of 2018.

Clients can use SureRemit’s app to present tokens as payment for things such as utility bills, student tuition, and online consumer goods. African e-commerce giant Jumia is among its merchant partners.

There’ll be no purchase or transfer fees for the tokens above face value. SureRemit will generate revenue from businesses, who pay a percentage on each token transaction, and then redeem the tokens (less fees) for cash from SureRemit. 

SureRemit’s merchant network — according to co-founder Samuel-Biyi — views the fees as the cost of accessing a new pool of customers. “We’re a big channel to connecting them to the multi-billion dollar market of remittance inflows,” he said “So our model is transferring costs of remittances to the merchant side away from the sender side.”    

Remittances — and the high fees charged by money transmitters such as Western Union and MoneyGram — represent an enormous pool of global capital. According to World Bank stats, roughly 250 million global migrants transferred $601 billion to their home countries in 2016. More than half, $441 billion, went to developing countries: $39 to Sub-Saharan Africa, $69 billion to India, and $20 billion to Nigeria.

On global remittance fees, Sub-Saharan Africa pays the highest fees — roughly 10 percent per $200 — of any other region.

One of SureRemit’s backers, 500 Startups, sees these high transfer costs as a disruptive opportunity for the venture. “The fees are horrible, and Western Union is ripping off people who can least afford it,” said 500 Startups Partner, Marvin Liao. “It’s a huge market…and a lot of these basic financial and commerce needs that people have are still not being addressed effectively,” Liao said of the potential for SureRemit’s crypto token product in Africa.

On the regulatory side, SureRemit’s Samuel-Biyi sees less risk of their crypto token product being used for money-laundering compared to other block-chain payments systems, such as Bitcoin. “Because it’s not cash redeemable and tied to particular merchants…one would not be able to transform tokens to cash that easily. This makes it an unattractive money laundering channel,” he said.

To the question of why consumers would use SureRemit’s crypto tokens versus other blockchain finance products, Biyi named “speed and cost” as competitive advantages. “Remit tokens ensure zero-cost, high-velocity cross-border transactions, which Bitcoin is not currently optimized for,” he said.

SureRemit has already proven market demand for cashless consumer payment and merchant programs through its predecessor, SureGifts product. SureGifts customers purchase digital shopping vouchers via e-mail or SMS, and use them for payment at 300 partner merchants in Rwanda, Nigeria, and Kenya. SureRemit plans to leverage this network for its new remittance focused crypto token.

 


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Safaricom launches innovation center to move beyond M-Pesa

09:30 | 19 October

Safaricom, Kenya’s largest telecom company and provider of the nation’s mobile money service, M-Pesa, has launched a new innovation center in Nairobi.

Named Safaricom Alpha, a priority of the incubator is to identify spending patterns on mPesa and turn those insights into additional Safaricom products — according to Chief Innovation Officer, Kamal Bhattacharya.

“Safaricom’s unique in that we have telco services and a financial services platform that connect nearly every household in Kenya largely on the basis of trade,” he told TechCrunch at Startup Battlefield Africa.

Safaricom Chief Innovation Officer, Kamal Bhattacharya

“We’d actually like to move beyond M-Pesa by leveraging its power as a social network to connect people to other product solutions,” said Bhattacharya.

Safaricom has 73 percent of the Kenya’s mobile subscribers. Its M-Pesa fintech app―which generated $525 million of the telco’s $2 billion annual revenues―boasts 27 million customers across a network of 136,000 agents.

Through in-house development and partnerships, the company has been adding consumer and small business-based products to its mobile and fintech network. These include digital TV, the M-Kopa solar-powered lighting kit, Lipa-Na bill pay service, and Little ride-hail app―now going head to head with Uber Kenya. Safaricom will launch an e-commerce platform in coming months dubbed Masoko.

Noting Safaricom’s current customer driven product view, Bhattacharya hopes the new Alpha innovation center can find ways to “better adapt to our customer needs by taking a timeline view of a customer’s journey from when they join Safaricom to the present to offer commercial solutions for them.”

He sees the Kenyan company in a better position to do this than some of the social networking giants. “Facebook and others have connected people well on a social level, but are still at a fairly nascent stage in digital monetary transactions,” he said. “Safaricom already has an extensive network of people, merchants, and governments all connected through monetary transactions.”

He sees one of the innovation center’s first products “as a messenger solution with full payment integration to better support the kind of social patterns that our customers are already using informally.”

Safaricom’s innovation center will be located in Nairobi’s Kilimani neighborhood,  outside the company’s main office.

Some leadership positions have already been named. Former African Development Bank technology lead, Dr. Shikoh Gitua, will be Head of Products Innovation. Safaricom’s Veronica Ogeto-Tchoketch will head the innovation center’s Strategic Partnerships unit and David Nyamai will manage a Business Intelligence and Big Data team.

While still under construction, Safaricom’s innovation center is now operational. The product incubator will eventually connect to a VC function, including Safaricom’s Spark Venture Fund, to support investments and partnerships. “We haven’t formalized those kinds of things yet, but it will happen over time,” said Bhattacharya.

 


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Kenyan startup BRCK launches SupaBRCK device to solve Africa’s internet equation

19:59 | 8 March

Kenyan communications hardware company BRCK unveiled its SupaBRCK this week — a waterproof, solar-powered Wi-Fi box that operates as a 3G hotspot and off-grid server.

SupaBRCK is the sequel to BRCK’s eponymous debut product, launched in 2013 to tackle two common African IT challenges: reliable power and viable internet options.

BRCK version 1 delivered connectivity and USB charging for up to 20 devices. The new SupaBRCK — with its dual core processor and a 5 terabyte hard drive — can be plopped down in just about any environment to provide up to 100 internet connections, streaming video for 50 devices and enough server capacity to run a Linux stack.

Accompanying BRCK’s hardware product is the startup’s new Moja service, which will provide ad-supported free public internet access and a content delivery network (CDN) service through SupaBRCK devices.

“We are moving from just being a hardware company to becoming a platform company, as we connect SupaBRCK to Moja and start having a network that covers entire countries,” BRCK chief executive Erik Hersman told TechCrunch.

As a startup, BRCK’s central focus has been delivering internet to Africa’s masses. Despite progress on mobile phone ownership and ICT infrastructure over the last decade, the continent remains one of the world’s most digitally disconnected. Though some countries, such as Kenya and South Africa, have attained high usage, internet penetration for the continent lingers at less than one- third of Africa’s estimated 1.2 billion people.

Improving those numbers, according to Hersman, is as much about cost as actual internet availability. “The demand on internet in Africa is largely driven by the 10 to 15 percent who can afford it. The real massive opportunity is trying to connect the 70 to 80 percent of the people who can’t. That’s where the internet race really is,” Hersman said.

BRCK’s revenue strategy, according to Hersman, includes not just generating sales from hardware, but “figuring out a business model that allows internet to work for those who can’t pay for it, while still generating a profit.”

Achieving this is a work in progress, he explained. Hersman noted possibilities to connect BRCK’s CDN network to greater advertising partners. There are also opportunities for partnerships with blue chip tech firms moving into Africa. “Most of the big companies — Google, satellite companies — are all doing transmission, they are not doing distribution,” said Hersman. “That’s where BRCK has a real competitive advantage and it makes us good partners with those companies. They provide the transmission end and we provide the transition out — that last meter between your phone and the Wi-Fi.”

Improving internet availability and affordability in Africa had become central to the continent’s burgeoning IT ecosystem. Pan-African e-commerce startups like Jumia need it to create a customer base. For global tech companies such as Facebook, Google, and Netflix — all of which increased their presence in Africa in 2016 — viable net access underpins growth possibilities on the continent.

BRCK, which is an outgrowth of Kenya’s iHub and Ushahidi crowdsourcing company, has been developing a suite of products to meet public and private internet needs.

Founded by Hersman with a leadership team that includes tech leader Juliana Rotich, the Kenyan startup is backed by $4.2 million from investors, including Steve Case and TED. BRCK moved into education in 2016 with its KIO classroom tablets. It also will offer a new PicoBRCK — an ultra-rugged device designed for Internet of Things applications — later this year. Retail sales for the $700 SupaBRCK begin this summer. The mini-server and Moja network are being deployed in Kenya and Rwanda this month.

Hersman sees global application for the company’s products “anywhere there are internet connectivity challenges.”

He notes the first BRCK shipped to more than 50 countries and views potential in markets where people have low disposable income. “The adjustable market for internet in Africa alone is 800 million people. The adjustable market throughout all frontier markets is about 3 billion. Most of those people live on less than $2 a day,” he said.

 


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Safaricom and mSurvey launch Consumer Wallet to map Africa’s cash economy

09:30 | 7 March

Kenya’s leading mobile provider, Safaricom, is teaming up with data collection startup, mSurvey, to launch Consumer Wallet―an online platform using mobile and SMS to map Africa’s cash-based economy.

A beta version of the product goes live in Kenya this month. Safaricom and mSurvey are testing the app with potential clients and corporate partners, including McKinsey Consulting, mSurvey CEO Kenfield Griffith told TechCrunch.

Consumer Wallet will be available on a subscription and license basis as early as August 2017. “We are refining the product with a group of potential clients to design the pricing model,” said Griffith. “We are scaling it along Kenya, but also looking beyond because we are not just solving a Kenyan problem, we are solving an African problem.”

Griffith was referring to the challenge many business face of quantifying consumer spending habits and trends on the continent, where over 50 percent of economic activity and employment occurs in informal sectors, according to the African Development Bank.

Based in Kenya and operating since 2012, mSurvey harnesses Africa’s shift to digital to better track consumer preferences. The startup employs mobile phone based surveys to gather data on various topics and market segments. mSurvey has received seed and venture funds  from backers including Cross Culture Ventures and Alpha Angels. It also counts Safaricom’s Spark Venture Fund as an investor.

The Consumer Wallet partnership pairs mSurvey’s data research function to Safaricom’s internal resources and distribution network. Safaricom is Kenya’s largest telco, with 25 million (65 percent) of the country’s mobile subscribers.

In addition to its M-Pesa mobile money product―used by 16.6 million Kenyans through a 100,744 agent network―the company has been adding consumer and small business based products to its mobile network. These include digital TV, the M-Kopa solar powered lighting kit, Lipa-Na bill pay service, and Little ride-hail app, which is now going head to head with Uber.

For the Consumer Wallet beta test, mSurvey will use daily SMS and text messages to track the cash-based spending of a 1000 person sample drawn from Safaricom mobile subscribers. This will feed into the Consumer Wallet database tracking preferences and expenditures on items such as food, transport, education, and housing.

The Consumer Wallet launch follows a trend of consumer research in Africa becoming a formalized sector. A decade of growth and reform in many of the continent’s core economies along with expansion in retail sectors has driven demand for more detailed customer data.

Several global consumer-focused companies have expanded in Africa over the last decade, from Wal-Mart in 2011 to Netflix and e-Bay in 2016.

Big global research firms such as Nielsen and Euromonitor have been upping their African consumer research offerings. An American company, GeoPoll, has also built out a digital survey service and database in 20 African countries.

mSurvey expanded its core consumer research platform into South Africa in 2016 and is looking at moving into countries such as Zambia, Ghana, and Nigeria, according to CEO Kenfield Griffith. Though neither would name countries, both mSurvey and Safaricom plan to take the new Consumer Wallet beyond test market Kenya to other nations on the continent.

“To invest in Africa, you have to understand its consumers,” said Safaricom CEO Bob Collymore on the value of the new platform to businesses looking to tap the continent’s cash-based economy.

 


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Africa Roundup: Zuckerberg’s visit, IBM’s new research center

13:30 | 29 September

Jake Bright Crunch Network Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

More posts by this contributor:
  • McKinsey says digital finance adoption could add trillions to high growth economies
  • Iroko launches IrokoX online network to showcase Africa’s creative talent
How to join the network

Facebook CEO Mark Zuckerberg’s surprise August/September trip to Nigeria and Kenya put the global spotlight on Africa’s emerging IT ecosystem. Unsurprisingly, when one of the world’s most recognized tech entrepreneurs pops up at startups and tech hubs few have heard of it draws attention.

News of Zuckerberg’s unannounced visit broke with social media photos of him visiting Nigeria’s Co-Creation Hub (Cchub) innovation center in Lagos’s Yaba District.

Zuckerberg met with coders in the co-working space and visited the incubation unit, where he talked with startup reps from Hotels.ng andLifeBank App, Cchub CEO Bosun Tijani told TechCrunch. Zuckerberg dropped in at Andela — a software developer accelerator he and his wife’s foundation invested $24 million in earlier this year — and caught some creative industry tech, touring digital media startup Afrinolly’s offices.

Zuck also hosted a Facebook town hall and Q&A session and swapped his grey t-shirt for a suit to meet with Nigeria’s President Muhammadu Buhari.

The Facebook CEO’s Africa trip extended to Kenya, where he visited the iHub innovation space, checked out solar innovation at the Gearbox prototyping startup, reviewed the BRCK mobile Wi-Fi device, had lunch with Kenyan ICT Cabinet Secretary Joseph Mucheru, and met with local tech leaders including Juliana Rotich, Erik Hersman, and Kamau Gachigi.

So what brought Zuckerberg to Nigeria and Kenya? “I’ll be meeting with developers and entrepreneurs, and learning about the startup ecosystem…” he said in a Facebook post. On company commitments, none had been planned, Facebook spokesperson Sally Aldous told TechCrunch. “This is a trip about listening and learning and understanding the challenges,” she said.

From a tech perspective, there are compelling reasons to do both in each country. Nigeria has its share of well publicized challenges, but the continent’s most populous nation has also become a hotbed for tech activity and investment.

Lagos’s Yaba district, where Zuckerberg first visited, is a magnet for IT entrepreneurs, incubators, and startups. Three of the continent’s best funded/well known e-commerce ventures, including newly minted unicorn Jumia Group, are all headquarted in Lagos. In June eBay named Nigeria as the opening country for its Africa expansion.

In East Africa, Kenya has become a regional tech capital, dubbed “Silicon Savannah”, for its advances in digital finance, tech incubators, and local IT innovations such as BRCK and the Ushahidi crowdsourcing platform. The success of local telco Safaricom’s M-Pesa mobile money product is alsoglobally recognized.

Facebook has 84 million users in Sub-Saharan Africa, 17 million in Nigeria, 14 million in South Africa, and 5.7 million in Kenya. In 2016 Facebook launched its Free Basics program, which allows users limited internet services free on mobile in 17 African countries.

Since it is unlikely Mark Zuckerberg blocks big parts of his formal schedule for anything that’s not strategic, expect to hear about new Facebook Africa initiatives post-trip. A particular play could include updated partnerships to increase internet connectivity across the continent. Though improving, penetration still lingers low at around 30 percent.

Better connectivity and more users set Facebook up to  tap Africa’s online advertising market, which is  growing with the continent’s shift to digital commerce—expected to reach $75 billion by 2025. Unfortunately for Facebook, its global connectivity drive suffered a setback during Zuckerberg’s Africa visit when the SpaceX rocket carrying the company’s Amos-6 satellite crashed pre-launch.

McKinsey’s Global Institute, working closely with the Gates Foundation, released a new emerging markets fintech report. Among other wow statistics, it projects digital finance adoption could add $103 billion to the economies of Ethiopia and Nigeria, while creating $66 billion in new business and personal loans.

Kenyan mobile data collection startup mSurvey raised new seed capital from Safaricom’s VC fund, Cross Culture Ventures, and Virgin Group’s Alpha Angels. The four year old company will expand its mobile phone based survey business that captures and sells value-add African consumer data.

Nigerian digital entertainment startup Iroko launched IrokoX, a multi-platform Pan-African network for filmmakers, musicians, and other creative aspirants to produce, distribute, and monetize short-form content. The new medium will provide select artists production assistance and the opportunity to show their work on global partner networks such as Youtube, iTunes, and Google Play.

Some updates on past TC Africa coverage. Kenya’s Safaricom rebranded its recently launched ride hail app (and Uber competitor) Little Cab to Little, confirmed Sales and Marketing Head Maureen Chege. Safaricom has bigger plans for the service than “just cabs” and dropped the word to be less restrictive, she explained.

We reported in May on IBM Research Africa’s project to create a cognitive computing Africa equivalent to Watson, dubbed Lucy, from its Nairobi lab. The U.S. blue chip giant expanded that effort in August, opening a second research lab in Johannesburg, South Africa.

San Francisco based robotics company Zipline, covered here on its UPS partnered program for drone delivery of medical supplies in Rwanda, plans to publicly launch the service in October, confirmed co-founder Keller Rinaudo.  The company’s drones and flight kit arrived in country by UPS and Zipline is completing diagnostic testing.

And finally, former CNN anchor Zaine Verjee launched a new Africa focused digital media platform, Akoma. Writers can land a paid fellowship through the site’s Amplify initiative, in partnership with the MasterCard Foundation.

More Africa Related Stories @TechCrunch

  • Andela’s Christina Sass at Disrupt SF on Growing Tech Talent in Africa
  • Here’s What We Know About the SpaceX Explosion
  • Ousta, Egypt’s Ride Hailing App, Lands $1.25 Million Investment
  • Shine Signs Africa’s Econet to its Network Level Mobile Ad-Blocking

African Tech Around the Net     

  • Uber to Launch Chopper Services in Nairobi and Mombasa—@AllAfrica
  • innovateAFRICA Fund to Invest $1 Million into Digital Media Startups—@Techmoran
  • Regulator Restores WorldRemit, 10 Other Money Transfer Operators—@AFK Insider
  • Nigerian Regulator Restores WorldRemit, 10 Other Money Transfer Operators—@AFK Insider
  • Iyinoluwa Aboyeji Has Left Andela To Start A Payments Company—@Techloy
  • Jumia unveils online payment platform, Jumia Pay—@BizTechAfrica
  • Here Are The DEMO Africa 2016 Winners—@TechCabal

 


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Mark Zuckerberg’s Africa tour tracks tech’s growing interests on the continent

19:30 | 3 September

Jake Bright Crunch Network Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

More posts by this contributor:
  • Mark Zuckerberg meets with African tech leaders on Nigerian tour
  • Responding to the demand for reliable data collection in Africa, mSurvey raises seed funding
How to join the network

After a surprise Nigeria visit to meet with techies in Lagos, Mark Zuckerberg took his Africa tour to Kenya this Thursday. There the Facebook CEO visited the iHub innovation space, reviewed the BRCK mobile Wi-Fi device, had lunch with Kenyan ICT Cabinet Secretary Joseph Mucheru, and met with tech leaders Juliana Rotich and Erik Hersman.

Like the Lagos expedition, the trip was unannounced. “Originally, we knew that Facebook’s Ime Archibong was coming in,” said Hersman (a co-founder of iHub), “but we didn’t know about Mark’s visit until the last minute.” Archibong is Facebook’s Strategic Partnerships Director.

Though no formal business commitments are planned on Zuckerberg’s first Kenya visit (something Facebook reps confirmed to TechCrunch), Hersman believes it is likely a precursor.

“Look, these meetings in Nigeria and Kenya, it’s largely PR for everybody right now,” he said. “However, from the interactions I saw…between Facebook’s team and different people within the tech community, I think there’s going to be some real stuff happening soon.”

While Zuckberg’s Nigeria visit was less anticipated—given the country only recently registered in global tech news—his dropping in on Kenya is less of a surprise.

The East African nation of 44 million has become the continent’s unofficial tech capital, dubbed “Silicon Savannah” for its advances in digital finance, tech incubators, and local IT innovations such as BRCK and the Ushahidi crowdsourcing platform.

Local telco Safaricom’s M-Pesa mobile money product is globally recognized. The company has used its mobile infrastructure to innovate a number of digital products including solar electricity (M-Kopa), online TV, and the recent launch of its M-Pesa integrated ride-hail app (Little), an Uber competitor.

The Kenyan government, which established an ICT authority, is one of the continent’s more proactive in supporting its tech ecosystem. And iHub helped spur Africa’s tech incubator movement, which now includes over 300 innovation spaces across the continent, according to a recent GSMA survey.

From a tech perspective, Zuckberberg’s decision to visit Nairobi is relatively straight forward. Two initiatives he focused on were the BRCK venture and digital prototype startup Gearbox, both outgrowths of the iHub infrastructure Erik Hersman and Juliana Rotich established in 2010. BRCK developed in response to local IT challenges of poor net connectivity and electricity.

The solar powered BRCK Wi-Fi product (about the size of an actual brick) provides device charging capabilities, 3g and 4g internet for up to 20 connections, and now ships to over 60 countries. “He got a demo of the next generation BRCK device, and was pretty intrigued by our Kio devices,” said Hersman, referring to BRCK’s educational tablet for primary school students.

Zuckerberg also reviewed the Gearbox supported Strauss solar energy panel and PayGo Energy home cooking product. “He was really interested in the integration of M-Pesa into other services,” said Hersman, noting the PayGo product allows Kenyans to finance the kit using mobile phones and M-Pesa mobile payments.

Zuckerberg’s Nigeria and Kenya trips coincide with Facebook’s expanding Africa presence and the continent’s growing digital profile. Facebook has 84 million users in Sub-Saharan Africa, 17 million in Nigeria, 14 million in South Africa, and 5.7 million in Kenya, according to spokesperson Sally Aldous.

As previously reported, a particular Facebook Africa play will be tapping the online advertising market that’s rising with the continent’s shift to digital commerce, expected to reach $75 billion by 2025.

Facebook opened its first Africa office in South Africa in 2015, appointing Ogilvy and Mather advertising executive Nunu Ntshingila as Head of Africa. In Kenya, the company has provided financial support to iHub events and workshops (Erik Hersman confirmed).

Kenya is also one of Facebook’s Internet.org Free Basics countries, a program that allows users on Airtel networks to access limited internet services free on mobile. Facebook’s commitment to connect more Africans to the internet suffered a bit of a setback Thursday when the SpaceX rocket carrying the company’s Amos-6 satellite crashed pre-launch.

As for what to expect from Facebook in Africa after Zuckerberg’s trip, company reps would not provide detail. iHub, Gearbox, and BRCK co-founder Erik Hersman sees possibilities to upgrade Facebook’s connectivity efforts, “Free Basics is growing but it’s still not the open internet,” he said. “There could be an opportunity to open it up around a business model that works.”

Hersman also believes the Facebook CEO’s will also draw more attention to Africa from Silicon Valley. “He could have just visited South Africa, which is what more people would have expected,” he said. “Visiting Nigeria and Kenya sends a message that could get other global tech players off the sidelines. If Facebook is putting so time, interest, and money into these markets other will definitely pay attention.”

 


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Responding to the demand for reliable data collection in Africa, mSurvey raises seed funding

17:30 | 26 August

Jake Bright Crunch Network Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

More posts by this contributor:
  • Backed by White House, Zipline to test U.S. medical drone delivery
  • Africa Roundup: Kenya’s Safaricom takes on Uber, Orange expands Pan-African profile
How to join the network

mSurvey, a Kenya based startup specializing in mobile data collection, has raised seed capital as it looks to expand its survey business in partnership with retailers in sub-Saharan Africa.

Safaricom, Cross Culture Ventures, and the Virgin Group’s Alpha Angels joined an investment round in the four year old business.

“It’s a seed round. I can’t disclose the amount, but part of it comes from the $1 million Spark Venture Fund Safaricom set up to invest in high growth startups,” said mSurvey CEO Kenfield Griffith. “We’ll use the funds to drive value add to merchants using Safaricom’s Lipa Na M-Pesa [bill pay and digital payments] service and to further fuel growth in Africa and other emerging markets,” he added.

mSurvey’s business model entails employing mobile phone based surveys to fill a gap in key African markets for personal and consumer data.

Griffith, an MIT alum originally from the Caribbean nation of Montserrat, saw an opportunity to service this void while completing his dissertation in Kenya. “I was looking for research input from individuals that was hard to find or collect… At the same time I noticed nearly everyone walking around had a mobile phone. That’s when I realized here’s a way to ask people questions and collect data in emerging markets at scale,” said Griffith.

He teamed up with Kenyan software developer, Louis Majana, to flesh out the code, and they co-founded mSurvey around a proprietary application to canvas digital information through mobile phones and SMS.

The startup raised its first angel investment from names such as The Abraaj Group and Salesforce CTO Steven Tamm. In addition to several Caribbean countries, mSurvey now tailors market research in Kenya, Tanzania, and Uganda. Clients have spanned corporates (Airtel, McKinsey, and Kenya’s Java House coffee chain), governments, and academic institutions such as Harvard Medical School.

Griffith would not divulge mSurvey’s revenue but noted they’d “started booking it almost immediately after launching.” He also elaborated on the startup’s business model. The market research service maintains a database of registered (not spammed) respondents and an algorithmic means to segment and poll them digitally.

In Kenya, for example, individuals who respond to a survey receive 50 shillings (about 50 cents). mSurvey’s primary revenue source comes through an annual subscription structure, used mainly by companies, who gain different research capabilities by price. There’s the basic package (around $6K a year), the mid-tier package, and the enterprise package ($18K), according to Griffith.

During a conversation in NYC, Griffith offered a live mSurvey demo from his laptop. He created a survey of perceptions of Kenya’s Rio Olympic performance. Griffith created a population and questionnaire through mSurvey’s interface and within about 10 minutes he was reviewing results gathered from Kenyan respondents on their mobile phones.

The potential in Africa for value-add data as commodity has become a common refrain.

A decade of growth and reform in the continent’s core economies and business expansion fueled by double digit FDI increases have exposed a dearth of reliable market stats. This became evident when recent GDP revisions in several African countries revealed outdated statistical methods were missing billions of dollars in economic activity.

The African Development Bank has estimated roughly 55 percent of Africa’s economic activity occurs in the informal sector, which creates a large blind spot when it comes to consumer markets. The growth of consumer spending, e-commerce, mobile penetration, and Africa’s improving broadband landscape are changing this while creating opportunities for data services.

“Consumer research in Africa is emerging as a formalized professional industry, which is a great thing for businesses and investors,” said Aubrey Hruby, an Africa consumer goods consultant and senior Africa fellow at the Atlantic Council.

Hruby highlighted how rudimentary data collection has been for global businesses in Africa, “For too long African markets have been data deserts. When KFC moved in they had to use a hybrid of low tech  people with clipboards estimating foot traffic — and high level satellite imagery to decide where to locate their restaurants and what to offer.”

While Hruby was unaware of a reliable revenue projection for Africa’s survey research market, she noted actors are moving into the consumer data space. Big global firms such as Nielsen and Euromonitor have upped their African consumer research offerings. An American company, GeoPoll, has also built out a digital survey service and database in 20 African countries.

Aided by its new investment, mSurvey plans to expand into Nigeria, Ghana, and Zambia by the end of 2016. Griffith sees its product partnership with Safaricom — Kenya’s largest telco offering a range of digital products — as a selling point for new alliances. “They are the leaders in mobile money [through M-Pesa] and we’ve attached what we call conversational commerce to that. This should offer leverage in other markets,” he said.

 


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In Kenya, Safaricom’s Little Cab app goes head to head with Uber

09:00 | 1 August

Jake Bright Crunch Network Contributor

Jake Bright is a writer and author in New York City. He is co-author of The Next Africa.

More posts by this contributor:
  • Africa Roundup: eBay expands, Ushahidi upgrades, Africa Internet Group rebrands
  • Expanding in Africa, eBay partners with MallForAfrica.com
How to join the network

Even as a deal is imminent and its closest competitor Didi Chuxing in the immense Chinese market, competition continues to intensify around the globe.

Africa is one region where entrants continue to pile in. In Kenya’s tech transit market, which already includes Uber and several other startups, Safaricom, the country’s largest telecom and fintech firm, has recently launched its first ride-hailing app called Little Cab.

The product comes via a partnership with Craft Silicon, a Nairobi based software company.

Little Cab runs on iOS, Android, and Windows devices and will soon be available for USSD (non-smartphone) users. The new app accepts cash, card, and Safaricom’s M-Pesa mobile money for payment. It provides live GPS enabled maps for pickups and offers free Safaricom Wi-Fi to passengers.

In addition to its unique features, Little Cab could become a homegrown competitor in Kenya’s burgeoning ride-booking market. Uber launched in country in 2015. Other outside transit apps include Dubai owned MondoRide and recent Estonian entrant, Taxify.

Locally there’s Dandia and Maramoja, a social media based transit startup. The market has already seen some attrition, with Jumia Group (formerly AIG) backed Easy Taxi Kenya shutting down this spring.

What significantly differentiates Little Cab as a ride-hail app is its connection to Safaricom, which has one of Kenya’s most powerful brands and extensive product networks. Little Cab’s media release indicates the Safaricom/Craft Silicon venture has come out swinging against Uber and other competitors. On price it touts itself as “the most affordable option in the market” at 55 Kenyan Schillings (KES) per kilometer (about .50 cents) compared to Uber’s KES 60.

Safaricom also zeros in on driver wages, a sensitive aspect of Kenya’s online taxi market. “Little Cab will take no more than 15 percent off driver’s earnings, compared to other players in the market; Uber’s 25 percent…,” states the release. While Uber has been relatively well received in Kenya, its entry has brought some protests and even violence connected to disruption of local taxi operators.

On goals, “Little Cab aims to achieve one million rides in the next six months by entrenching and differentiating ourselves as a homegrown taxi app,” said Craft Silicon CEO Kamal Budhabhatti.

Led by Little Cab and Uber, the race for market share in Kenya’s ride-hailing space is set. While formal data on the country’s online transit market is sparse, broader factors offer a compelling backdrop. Kenya is Sub-Saharan Africa’s eighth largest economy ($63bn GDP), sixth most populous country (46 million), and one of the continent’s more tech savvy nations—dubbed Silicon Savannah for its IT achievements.

In the innovation space, Kenya is perhaps best known for the success of Safaricom’s M-Pesa fintech app. Launched in 2007, the mobile phone based payments product is used by 20 million customers, has a network of 85,000 agents, and generated $309 million of Safaricom’s $1.5 billion 2015 revenues.

As ride-hail apps compete for Kenyan clients, much will come down to what each can offer around cost and features. On price, Little Cab may have already sparked a war.

Last week Uber announced a 35 percent fare cut on its UberX cars, confirmed Uber Africa spokesperson Samantha Allenberg. The new plan will lower cost per minute charges, minimum fare charges, and cost per kilometer charges from KES 60 to KES 35.

In addition to price, players in Kenya’s ride-booking market (namely Little Cab and Uber) are facing pressure to extend more product options. “Both of them will have to look at what they are offering with bundled services in their vehicles,” said Bitange Ndemo, a professor of entrepreneurship at the University of Nairobi and former national minister of technology and information.

“Already for Little Cab, offering Safaricom’s free Wi-Fi will be a pull. It gives people the option to pick up their laptop and do work in our traffic jams,” said Ndemo. “I would not be surprised if Uber ends up deploying Wi-Fi on their vehicles in Kenya too.” Dr. Ndemo also pointed to Little Cab’s advantage in allowing Kenya’s non smartphone users—more than 50 percent of the country’s mobile market—to hail taxis via SMS.

Whatever product options find traction with Little Cab (and other apps), expect Uber to counter, and vice versa.

Uber has given its Africa managers notable flexibility to adapt service models to local markets (see our June feature). Africa is one of the few places in the world Uber is testing cash payments. Uber Africa is also experimenting with unique passenger location services, vehicle security features, and commercial delivery options for small businesses. In Kenya, Uber has logged over 1 million trips and claims 100,000 monthly app openings in Nairobi.

For the time being, the biggest winner in the rivalry between ride-booking operators such as Little Cab and Uber could be Kenya’s citizens. Safaricom has a range of additional products, including tablets, mobile phones, its M-Kopa solar electricity kits, and digital TVs. Competition in African consumer based tech is bringing all kinds of new promos and product offerings around online retail, mobile devices, digital payments, and logistics services.

The online taxi could become Africa’s 21st century mini-mall for extending these things to broadening markets. Safaricom Business Director Rita Okuthe confirmed that Little Cab’s free Wi-Fi interface “will serve as a platform for our services and our 22 million subscribers.”

And if Safaricom can demonstrate significant revenue by directly entering the online taxi market, expect Africa’s other big mobile operators to take notice. Rather than simply partnering with ride-booking apps on payments or mobile services, big telecoms firms such as MTN could simply acquire or create their own.

 


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The opportunities Silicon Valley doesn’t see

01:00 | 27 June

Sebastiaan Vaessen Crunch Network Contributor

Sebastiaan Vaessen is head of strategy at Naspers Group.

How to join the network

Silicon Valley is justifiably seen as the geographical center of digital innovation. From Google and Facebook to Uber and Netflix, the Valley is home to many global technology leaders. However, when searching for the next big startup, the time has come to look beyond Silicon Valley.

The opportunity

It seems that most Western startups are focused on “assisted living for rich hipsters” rather than solving some of the “big” needs the world is facing.

In the next five years, 2.5 billion new smartphone users will come online — 80 percent from emerging markets. This will inevitably lead to growing numbers of local entrepreneurs creating innovative solutions bespoke to the needs of their region and, in the process, building highly successful businesses. It’s highly likely that, in the future, some of the biggest digital innovations will come from markets outside of the West.

The proof

This trend has already started; an example can be found in our portfolio company redBus in India. Before redBus, travellers in India had to negotiate myriad bus companies with conflicting timetables, resulting in immense confusion when working out the various connections needed for cross-country trips. redBus aggregated this complex market onto one simple bus ticketing platform for all of India. It is now being rolled out to Malaysia, Singapore and other international markets.

GO-JEK is another shining example. This company has mobilized more than 200,000 motorbike riders in 10 major Indonesian cities to solve a number of logistics requirements, from couriering to food delivery.

The stage is now set for new digital innovation hubs to rise up in high-growth markets across the globe.

Similarly, TruckPad, another Naspers investment, began as a small venture that displaced physical advert boards at petrol stations using a mobile app. Now, more than 350,000 Brazilian truck drivers bid for more than a million truck loads on TruckPad every month.

These businesses would never have been created in Silicon Valley because they address problems that simply do not exist there. But they did solve problems that billions of people in high-growth markets face every day.

Where next?

Opportunities to solve local challenges in high-growth markets are abundant across a range of industries.

Globally, 1.2 billion people still do not have access to electricity. More than one-third of the world’s population doesn’t have proper access to healthcare or education. There are around 2.5 billion unbanked people in the world and 2.2 billion live in high-growth markets such as Africa, Asia, Latin America and the Middle East.

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How The Digital Economy Can Help End Extreme Poverty Pricey Data Is A Barrier To Internet Access In Developing Countries Zidisha Launches A Kickstarter-Style Micro-Lending Platform For Low-Income Entrepreneurs In Developing Countries

These are profound social issues, but also large commercial opportunities. The 2.5 billion new smartphone users in emerging markets offer a powerful platform for local tech entrepreneurs and their businesses. Businesses like Jumo and M-KOPA.

Jumo is a money marketplace offering mobile users in Sub-Saharan Africa access to loans, by-passing the traditional banking system. Meanwhile, M-KOPA offers Kenyan households an affordable solar energy solution enabled by a pay-as-you-go mobile billing solution.

The world still faces some enormous challenges when it comes to social mobility and economic prosperity, and necessity is the mother of invention. The stage is now set for new digital innovation hubs to rise up in high-growth markets across the globe. The next billion-dollar entrepreneurs will likely come from São Paulo, Bengaluru or Shenzhen, and they won’t be serving rich hipsters.

Featured Image: Dimas Ardian/Getty Images

 


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