Fundis LLC is the Kenya Country Winner of the MEST Africa Challenge!
Written by Brandason, Strategic Communications Firm for the MEST Africa Challenge
In the second week of the MEST Africa Challenge, Kenya has proven itself to be a formidable contributor of quality and inspired tech talent to the African continent. Presenting 9 (nine) finalists to the competition, viewers and judges alike witnessed a sensational display of solutions to varied problems in the country, by Kenya’s finest in the two-hour virtual event.
Each company had four minutes to pitch their business, followed by a four-minute question and answer session. The startups were judged on a variety of different elements which included value proposition, impact, size of the target market, customer identification, revenue model, competitor analysis, growth strategy, traction-to-date and expertise of the founding team, and a host of other metrics.
On the deciding panel for the Kenya Country finals were, Lawrence Muthoga, Azure Developer Audience Lead — Microsoft; Mark Kurai, Head — Kuria Capital; Jim Chu; CEO of Untapped and Co-Founder of The Nest; Annie Njenga, Start Path Partnerships Manager — Mastercard; Melalite Ayenew, Partner — Antler.
Kicking off the country finals was Dawapay, a startup going the last mile to deliver medicine to remote places. Daniel Mutambi, the founder and CEO, who holds a Bachelor of Science in MicroBiology from Kenyatta University pitched on behalf of his company. The problem they were trying to solve, according to Daniel, is the high pricing of medicines for urban poor and rural folks which causes a lot of premature deaths. He stated,
“no way exists for retail pharmacies to order medicine because the supply of essential medicine ends in the city while 70% of the Kenyan population lives in rural areas.”
Their solution is a platform were retail pharmacies can make orders for medicines anytime, pay through digital e-wallet both online through a mobile app, and offline through SMS. As a result, they save money (as the prices are low), make money (because they have a constant stock of medicines), and save lives. They have a market size of $20m with a total available market of $200million.
Following their pitch, judge, Jim Chu followed up with a question on their traction and number of customers to date. Daniel answered by saying that they have 128 retail pharmacies with an annual growth rate of 26%. Lawrence then asked how they intended on tackling competition, as it could become a risk as to who offers pharmacies the lowest price. Daniel explained that they were among the first to the market, dealing with retailers early and building solid partnerships, including Pharmaccess, who has officers in over 9 countries in Africa and are working to provide working capital to the pharmacies. They are also aggregating products, buying in bulk from the manufacturers which allows them to offer products at a much lower price.
Mark Kuria was interested in knowing about their team and staffing strategy. Daniel proceeded to introduce the rest of their team, Timothy Kalila, Head Pharmacist, David Ramuri, Head of ICT, Hosea Emaase, Accountant, and Peter Bwina, Head of Logistics. They are planning to grow their team gradually and are seeking a partnership with Village Captial to provide them with pro-bono incubation support.
The second pitch for the day was given by DawaSwift, a patient-centric healthcare solutions provider. Their co-founder and CEO, Odero Otieno, introduced the business, with its offices in Kenya and Toronto. DawaSwift originally began as a medical delivery company, much like Dawapay, when they realized that there are reasons beyond delivery why the healthcare system in Africa is struggling. So they set out to solve the much bigger problem which is inefficiency in the system due to lack of data and the manual processes hospitals and pharmacies still use. Their solution provides virtual healthcare consultations, in-person appointments, chronic conditions, and mental health care. They also deliver medicine in minutes using trained drivers.
DawaSwift has made over 14,000 deliveries since launching, with a presence in 5 countries and a connection with 105 pharmacies. They plan to release their business solutions in Q3 in 2020. Their pitch ended right on time with a few seconds to spare, and Melalite was eager to understand their product. She asked about how they handle the issue of liability on their platform. To this, Odero said, they are providing solutions to existing businesses, and connect only doctors and pharmacies that are legally allowed to work. So, issues that may arise are liable on the part of the healthcare provider. They also remove any providers from the platform who have been found to malpractice.
Melalite also wanted to know the feedback they’ve received from the different categories of clients they have. “Patients so far love us,” expressed Odero excitedly. “but, we are just getting started so there more to do yet.”
Mark Kuria wanted a clearer picture of what their cost structure and expenditure looked like. ‘DawaSift is currently connecting hospitals which already provide services and have a customer base’ explained Odero ‘so the provider costs the price of their service, and we only have a surcharge for medicines and consultations’.
With that, the Q & A session for DawaSwift came to a close.
Tibu Health was next in line. They are focused on democratizing healthcare in Africa by using technology to connect and deliver healthcare services and professionals to clients when and where needed. They are bringing the clinic, and the lab to the patient, presenting a new healthcare experience to Kenyans. As the third health-based company to pitch in a row, their energy, enthusiasm, and strong business model carried them through, differentiating them from the others.
Jason Carmicheal the founder of Tibu Health, explained that instead of losing time in traffic, waiting rooms, they offer patients patented medical kits that bring the lab and clinic to their doorstep. The medical kits were also engineered by healthcare workers in Kenya. He highlighted how important their solution has become following the COVID-19 spread as patients fear to go to the hospital due to contamination risks, overcrowding, etc.
Since they launched two months ago, Tibu Health has seen 650 users on the platform. They also recently partnered with kenbright insurance and are onboarding APA insurance which means that patients don’t have to pay cash before receiving medical attention. They also partnered with LANCET laboratories for COVID-19 testing at home.
At the conclusion of their pitch, Melalite commented on how apt their solution was in this time of COVID-19 and followed up with two questions; (a) how do they deal with patient data, and (b) how do they deal with referrals. Jason explained that they built their platform on the five protocols for data interoperability so all their data is encrypted and secured, ‘even we don’t have access to it, even we wanted to’.
Up next was Alex Mativo, a winner of the Queen’s Young Leader Award. He presented Nanasi, a B2B social commerce platform for merchants with zero technical and business experience to enable sales via social media and messaging platforms.
The problem they’re trying to solve is two-fold. 0.5 billion Africans have internet access and use social media platforms to research and shop for goods and services with 95% of all online sales currently coming from social platforms. Meanwhile, 180 million SME’s still operate offline and are trapped in micro-economies because they lack access to markets beyond their borders.
The problem with selling from social media is that chats are messy, selling from new platforms doubles the workload and buyers lack sellers protections and fulfillment solutions. So what Nansi is doing is bridging this gap. Their single dashboard allows merchants to sell, manage inventory and accept payments across all their social media channels and messaging while eliminating manual work from their retail back-end. Businesses can now leverage the fastest-growing segment of online retail. Alex concluded his pitch by highlighting the strengths of his team who he claims has vast experience in building start-ups. They recently built one of the 50 most innovative companies called The Ethnic Brand and are back at it again with Nanasi.
Mark Kuria kicked off with the question and answer wanting to clarify exactly how they differentiate themselves from traditional e-commerce platforms. Alex explained that it’s easier for a business to sell from a platform that already has all of their followers and customers engaging than to redirect them to an e-commerce platform. Jim Chu asked a follow-up on how they were acquiring customers, to begin with. ‘The good thing’, answered Mativo, ‘is that we are a social commerce business, and almost every business has a social media page. It is easier to pitch to businesses with social media pages who have products or services to sell, even if they already have an e-commerce platform’.
Right after Nanasi came Marketforce360, who were presenting an end to end solution for the entire sales and distribution life cycle. Lucrezia, their Head of business development, handled their pitch. She explained that the idea of developing Marketforce was inspired by observing two major factors that influenced the way distribution was managed in Africa:
(a) the African market is highly informal
(b) the African market is highly fragmented.
This means that manufacturers, distributors, and service providers have to rely on troops of sales agents to provide consumer goods and services to the 50miilion informal retailers in Africa. To solve this, their solution provides a mobile-based app for field agents to take orders in real-time, optimize field sales and distribution through customer and sales agent mapping, and offer real-time market intelligence which can forecast sales and revenue. Their solution is tailored for the African market and leverages the existing ecosystem by simply providing the tech. This makes them low capital intensive and easy to scale.
In only two years since Marketforce360 was founded, they have customers in three countries — Kenya, Uganda, and Tanzania with clients including Letshego, Heineken, Coca Cola, and Clorox, and a corporate partnership with Kenya’s telco giant: Safaricom.
Jim Chu was first to comment after Lucrezia’s pitch, complimenting them on their traction so far. He also wanted to know what scale they needed in order to break even. She explained that their main challenges were in the capacity of their technical team which required capital to build. ‘We need to double our revenue to break even’, she concluded. Mark Kuria also wanted to know about their scaling plan. ‘We are experimenting with different strategies’, answered Lucrezia. ‘We are building another product which is a step forward and presents a great opportunity for growth for us. We are also doing this in partnership with Safaricom, and they have most retailers as clients already.’ In the next five years, Marketforce is also looking to expand into 10 emerging markets in East Africa.
Lighting up the competition next, with their innovative name, slide deck, and concept, was Mango Solar. The clean-tech start-up is bringing stand-alone solar energy to African homes far away from the power grid.
‘Out of the 1 billion people in the world living with no electricity, 50% live in rural communities in Sub-Saharan Africa and they depend on kerosine which is expensive, dangerous and toxic’ began Rebecca Bregant, co-founder and CEO of Mango Solar. Mango Solar’s home systems are engineered in Germany and made in Kenya. They dock onto existing ecosystems offering full electrification with stand-alone IoT solar home systems and digitization as a service with software platforms for emerging markets.
Their pitch was short, precise, and thorough, which probably explains why they had the least questions thrown at them from the judges. They were however asked to talk more about their B2B customer segments. Rebecca explained that they had two; mini-grid providers (operating 5–20 mini-grids with 25,000–1000,000 customers), and distributors (who have sales agents who go out to sell Mango Solar).
The seventh start-up to pitch was Smart Matatu, an app to help PSV (matatu) owners in Nairobi public transport sector increase their revenue using mobile money and monitoring of operations in real-time. Their presentation was led by Edwin Keverenge. The problem they are dealing with is revenue pilferage by conductors and lack of passenger confidence for matatu owners in Kenya. They are also dealing with a lack of data collection among drivers, inconsistent fares for commuters, no proof of payment or receipts issued, and no reporting mechanisms in case of abuse or harassment from the matatu crew.
Smart Matutu is solving the problem by placing P.O.S machines in each bus, issued to the drivers. Data is transmitted to the dashboard and to the mobile app in real-time, for bus owners to view sales. The P.O.S machines are also integrated with MPESA (mobile money) or airtel money and offer business intelligence through reports based on activities, profitable routes, and how to allocate buses to different routes at certain times of the day. This has the additional benefit of helping governments have accurate revenue data for taxation, eliminates corruption, and regulates fares.
With 20,000 privately owned mini-buses (Matatus) daily, they made a case for the scalability and profitability of their business. They currently have four SACCOs and over 300 busses signed up and over 30,000 commuters using Tap ’n’ Move.
When it came time for questions, Mark wanted to know what the unit economics for P.O.S. Edwin explained that they developed the software themselves, ordered the P.O.S parts, assembled and customized for their business, which was very innovative.
The penultimate start-up in the #MESTAfricaChallenge — Kenya country finals was Snarkhealth, a start-up partnering people with their doctors to create health and earn money. They have developed a Hippocratic Coin alternative payment model that helps members earn money through their shared savings program, dividends, and monetizing their data built on a solid blockchain.
Snarkhealth is built around the doctor-patient relationship, and their alternative payment model helps members earn money. Patients can access the solution via USSD or the internet.
On their team is Hank Selke, a physician with decades of experience and a successful NGO of over 10 years in Kenya; and Edwin Lubanga, a telecommunications engineering graduate from the Polytechnic University in Turin.
When it was time for Q&A, Jim Chu wanted to know how they calculate savings since it was a large part of their business model. Hank answered this, saying that ‘we calculate based on the historical cost of care using a two-face process’. Mark Kuria wanted to deep-dive into their consumer behaviors and how they generate data on how the local user would want to use this product. Edwin explained that this would be a discovery process by working closely with patients, clinical officers, and incorporating community health workers into the system design.
Wrapping up the pitching session of the Kenya country finals was Fundis LLC, a fast, simple, and transparent way to book a repairman. Even though they pitched last, the energy of the co-founder and team leader, Alex Kamanga, was infectious and very high, drawing viewers in with their enthusiasm and preparedness. Fundis means ‘repairman’ in Kenya, and they have had over 1000 orders with 700 completed since they launched 18 months ago. Their ‘Fundis’ have been trained and equipped to deliver professional services. Alex also mentioned that Fundis has been named one of Kenya’s ‘Start-Ups to watch in 2020’.
“How do you intend to scale as this app is supposed to be used by average citizens?” asked Mark after Alex had completed pitching. He explained that the need for trustworthy repairmen is a Kenyan and continental issue which makes it easy to scale. Acquiring new customers is also seamless, and they often use social media, influencers, etc. ‘We want to piggyback on a network that is already working and make sure that we scale it bit by bit’, added Alex.
Melalite wanted to know how they certify their ‘Fundis’. ‘We do not certify Fundis perse, but use a comprehensive onboarding process which includes checking for criminal records, previous work done, recommendations, how they acquired their skills, etc’ answered Alex.
Chu concluded the Q&A session by stating that their barriers to entry would be relatively low, but how did they compare today and intend to stay ahead of the competition and grow. Alex highlighted that their team is strong, and rallying around the common vision. They know the industry well, why it hasn’t worked well in the past, and have a good relationship with the various ‘fundis’ on the platform and understand the problem from both sides. ‘By the time that anyone ventures onto our space, we would have worked out all the bottlenecks and figured out how to incentify the ‘Fundis’ and customers to keep using our platform’, said Alex confidently.
After the final pitch, the judges went off to a private chat room to deliberate on the winner. It was quite obvious that it would not be an easy deliberation as each finalist was incredibly good, presenting their businesses in a crisp easy to understand way.
The judges returned a few minutes later, to much anticipation. Jim Chu was delegated to make the announcement. He said that ‘we did have a lot of good discussions about the companies and one of the things we noted was that there were a lot of healthcare companies pitching. ‘One of the judges actually said it would be worthwhile to explore working together, as there was a lot of complementarity between the things that they do’ he said with a chuckle. He further explained that there were also discussions around Marketforce and the fact they had recently secured a good investment which was impressive. They were impressed with the concept of Nanasi and social e-commerce.
However, the company that they liked the best was Fundis. ‘Why?’, Jim asked viewers,
‘Because there was a lot of thought and experience put into creating the solution and the experience of the founders coming together and marking this work, trying to find a solution for the informal sector who really need a digitalized way to generate business is inspired’.
He expressed that the format of the virtual pitch competition comes with its own challenges so each finalist deserved a huge Congratulations! For making it this far and for making it happen despite the challenges. He also congratulated Rebeca of Mango Solar who he said had a strong presentation.
The second country final was a success thanks to the kind support of Lead Partner and technology giant, Microsoft, as well as Kenyan ecosystem partners Nairobi Garage, NaiLab, and SwahiliBox and key partners, VC4A, Levers In Heels, Royal Work Club, 250 Startups, Movemeback, Klab, Afrilabs.
Competing next week, on the next on June 17th is Cote D’Ivoire! Watch live and find out who wins the country finals by registering to watch here: https://bit.ly/3cRrJwm
More about the MEST Africa Challenge:
Now in its third year, the MEST Africa Challenge is an Africa-wide tech startup pitch competition offering up to $50,000 in equity investment and a chance to join MEST’s incubator and start-up community to talented entrepreneurs as they build and scale successful businesses that add value to African economies. It has become an establishment in the start-up technology industry, giving an unprecedented global platform to hundreds of local tech entrepreneurs in Africa. This year, the Challenge expanded from five markets to nine, embracing early-stage companies in Ghana, Nigeria, Kenya, South Africa, Côte d’Ivoire, Sénégal, Rwanda, Ethiopia, and Tanzania, and providing the opportunity for the Challenge organizers — MEST and lead partner — Microsoft, together with other ecosystem partners the opportunity to support even more startups through funding and resources.