Scaling up in Kenya with develoPPP Ventures
Data Integrated Limited (DIL), a women-owned Kenyan Fintech company, used develoPPP Ventures funding to prepare the expansion of its digital solutions to Kenya’s public transport system. It first introduced a digital payment system, but then also provided bus companies with solutions for issues such as video surveillance, vehicle tracking and transparency regarding passenger numbers and ticket sales. Mary Mwangi, CEO of DIL, explains how the start-up has built its current success and how a develoPPP Ventures grant investment of 100,000 euros helped with their expansion plans.
AWE: You had developed digital solutions in various fields, before you used develoPPP Ventures funding to enter the public transport sector’s market. How did this come about?
Mary Mwangi: Before we started the project, our company had developed digitalisation solutions for small and medium enterprises. We then got into the public transport sector somehow by accident. There was a call for proposals for digital payment solutions in buses, we turned in our offer and won. At that time we did not know what it takes to digitalise the public transport system. We started with automated payment solutions, but then, the demands got bigger and bigger.
AWE: And you have developed your business further in that direction since then?
Mwangi: Yes, we saw several gaps and approached the bus companies and they also kept asking for more solutions. At the end, we created a full infrastructure system from end to end, including scheduling, fleet management, accounting and operations. We got the logistics into the vehicles and looked at the processes also from the bus companies’ point of view. We developed solutions such as the passenger counting system and a passenger app. The driver can see in the app, if a customer has paid, how many people are waiting at a bus stop and people can rate the driver. Now, we also work with the government on the sector’s regulatory side. We will develop a command centre including licensing and other applications which the public transport system requires.
AWE: How did you benefit from develoPPP Ventures and the cooperation with DEG - Deutsche Investitions- und Entwicklungsgesellschaft?
Mwangi: With the develoPPP Ventures funding, we were able to qualify for the initial tender in public transport and to gain the requested experience. We increased our staff, purchased infrastructure and were thus able to get into developing solutions. We were also able to obtain certification for building payment systems. In hindsight, our company really built on that project. Before the develoPPP Ventures project, we had offered four products and today, we have nine. And or team grew from 16 to 42 employees.
We will go back to DEG soon and hope that they will support us again for scaling up our current pilots and bringing them to the next stage. In addition, we want to expand our market to the East African region, including Ethiopia, Rwanda and Tanzania. Our advantage is that we build solutions which are needed everywhere. Our idea is to share our solutions on a platform with other companies in the region.
AWE: How did you hear about develoPPP Ventures?
Mwangi: I was at an investors’ social event and a friend introduced me to a DEG representative. She told me about the programme and said that DIL might be a fit.
AWE: Which opportunities and challenges do you see for start-ups in Kenya, particularly regarding information technologies?
Mwangi: There is a great demand for IT companies in East Africa, because many processes and systems are still not digitalised. The banking sector, the education and medical systems and the government are just a few examples, where many processes are still manual.
I think that one of the greatest challenges is that many people are quite comfortable with the status quo or they are intimidated by the fast-developing technology. We therefore have to educate people about the advantages of digital technologies.
It also needs the financial means for digitalisation, and finally, we need skilled IT specialists. Some estimates say that we only have 10 per cent of the skilled IT workforce needed in the region in the next years.
AWE: What would you suggest start-ups in Kenya and elsewhere, based on your experience?
Mwangi: My advice is: Tackle a problem that you are very passionate about and that you really want to solve. Use technology to make this happen!
AWE: What is your message for European investors who are interested in engaging in Kenyan IT start-ups?
Mwangi: I think that it is important that investors can relate to the start-ups’ ideas and try to listen to their stories from an African perspectives. Investors have to understand that things are not as straightforward here and they have to be culture-sensitive. It usually takes somewhat longer to implement projects here than in Europe. Investors therefore have to be a bit more patient.
AWE: Which changes in Kenya’s transport sector did the project initiate?
Mwangi: Since we have started to develop digital solutions for the public transport system, operations and services have improved. There is more security in the vehicles with cameras etc. and during the Covid-19 pandemic, it paid off that cashless payment systems had been installed. That reduced the risk of contagion. Drivers and conductors have been brought into secure employment and bus company owners have been able to increase their income. In addition, inclusive payment systems provide more transparency, which is important because there is a lot of corruption in Kenya’s transport sector.
So the entire sector has benefited and we have helped to improve the transport eco-system, which serves workers and commuters. With this, we hope that we have set standards for the traffic systems in the East African region.
Do you have a question about this topic? Your AWE contact:
Hans Joachim Hebgen
Financing, Fundamental Issues, develoPPP.de and the Textile Economy