Kenyan-based enterprise software company gets Sh860 million funding

A Kenyan-based start-up that works with developers to create solution focused APIs across SMS, voice, payment, and airtime services, has received Sh860m funding. PHOTO | FOTOSEARCH.

What you need to know:

  • Part of the money will be used to hire and build capacity at the company’s Nairobi headquarters, expand its presence in other geographies around Africa, and invest in research and development.
  • The company works with developers to create solution focused APIs across SMS, voice, payment, and airtime services.
  • The company gets paid through mobile wallets, earning fees on a portion of the transactional business its solutions generate.

A Kenyan-based start-up last week got funding from IFC, a member of the World Bank Group, to expand its footprint across the continent.

The new financing of Sh860 million was led by IFC Venture Capital, with participation from Orange Digital Ventures and Social Capital, led by former Facebook executive Chamath Palihapitiya.

Africa’s Talking is a Kenyan-based communication-platform-as-a-service (cPAAS) application programming platform.

As part of the deal, Wale Ayeni, who leads IFC’s venture capital activities in Africa, will join the board of the enterprise software company.

EXPANSION

The capital will be used to hire and build capacity at the company’s Nairobi headquarters, expand its presence in other geographies around Africa, and invest in research and development in IoT, analytics, payments, and cloud offerings, according to chief executive Samuel Gikandi.

The company will open a tech studio for “engineers and developers to collocate with Africa’s Talking for 12-18 months…to build new products and companies,” added Gikandi.

Africa’s Talking operates in Kenya, Uganda, Rwanda, Malawi, Nigeria, Ethiopia, and Tanzania, and maintains a private cloud space in London through Rackspace.

The company works with developers to create solution focused APIs across SMS, voice, payment, and airtime services.

“We’re helping software developers in Africa connect to local infrastructure,” said Gikandi.

“We find companies that have local infrastructure, whether its mobile operators, banks, or data centres, then we partner with them and build a platform that simplifies access to that local infrastructure and open it up to software developers.”

Africa’s Talking has a network of 20,000 software developers and 1,000 clients, including Fintech lending start-up Tala, solar power financier M-Kopa, and financial services giant Ecobank, according to Gikandi.

HOW IT WORKS

The company gets paid through mobile wallets, earning fees on a portion of the transactional business its solutions generate.

Founded in 2010, the Series A round represents the company’s first significant venture capital investment.

“We’ve primarily bootstrapped the business and became profitable in 2012,” said Gikandi.

The private company does not release financials or confirm net revenues, but Gikandi said that the company’s profitability was a stipulation for investment from its new backers (unlike the requirements for start-ups coming from Silicon Valley).

As the company looks to expand geographically in the African continent, observers can likely expect Africa’s Talking services to begin cropping up in francophone countries, otherwise, why else would Orange Digital Ventures invest in the round? Orange has a presence in more than 20 French-speaking African nations.

IFC Ventures will be an active investor, with Africa Regional Head Wale Ayeni joining the board.

“The calibre of the tech team was a reason [to invest],” says Ayeni.

“They’ve been able to build a cloud based digital platform and produce a product that people are willing to pay for. It’s rare to see that kind of high calibre tech talent create something that can scale that rapidly…and we’re looking forward to what they’ll build in the future.”