HUGE FUNDING SPURRING THE GROWTH OF ON DEMAND INDUSTRY IN KENYA

The Kenyan on demand landscape is growing in leaps and bounds. Despite limited regulations to guide and control operations in the sector, it’s no doubt that the industry is set to become a significant contributor to the country’s GDP if its prospects are well harnessed. The industry is run and controlled  mainly by  startups, most of which are aggressively positioning themselves to be market leaders in their various circles.

Closing in on big funding from investment companies has further fueled the phenomenon that has led to the growth of these companies here in Kenya. Glovo, a technology company that links motorcycle riders to consumers wishing to buy and deliver products set up shop in Kenya last year.

Despite its short stay in the Kenyan market, the company has managed to claim stake and fight it out to control space in the courier and delivery landscape. With operations in Kenya, Ivory Coast and Morroco, Glovo has managed to employ a robust marketing strategy to effectively compete with players like Jumia foods, Uber eats, Numi and Dial a delivery, who have been in the delivery space in the country for a long time.

 Last year, the Spanish start up closed a Kshs. 16 billion funding to scale up its business operations in Africa, Europe and Latin America. The capital raise followed a Kshs. 17 billion funding it received in May 2019.

Next level

“Glovo is committed to taking its tech capabilities and systems to the next level. We will use this opportunity to grow our team of tech experts to create a smarter and more efficient experience for customers and reduce waiting time for Glovers,” said Priscilla Muhiu, Glovo’s regional head of marketing for sub Saharan Africa in a press statement.

Another player in the sector, Sendy, an on-demand platform that connects clients to drivers and vehicles for goods delivery raised a Kshs. 2 billion in its latest round of funding.  The company just like its competitors, Lori Systems and Kobo is seeking to harness technology to overcome challenges for African businesses facing a fickle and inaccessible logistics, which has in turn significantly lowered the costs of goods and services. Sendy expanded into Uganda and launched operations last year and plans to expand into other African markets.

Ride hailing firm Bolt (formerly Taxify) also received a 5.6 billion venture debt facility from The European Investment Bank (EIB) in January this year to support its research and development strategies.

The on-demand transportation platform has said that their main focus is on improving safety, reliability and sustainability of their services while maintaining the high efficiency of its operations. This includes investments in existing services like ride-hailing as well as personalized mobility services like food delivery.

Benefits

Ola Akinnusi, Bolt Kenya country manager emphasized that mobility is one of the areas that the firm will continue to grow and innovate for the benefit of its customers.

“We will invest in improving and expanding our ride-hailing technology as well as personalized mobility services like food delivery.  We are thrilled to have the European Investment Bank join the ranks of our backers as this enables us to move faster towards serving many more people in Kenya and across the world,” he said.

Egyptian shuttle hailing firm SWVL also bagged a Kshs. 4.2 billion funding in June  last year considered to be the largest funding to be ever received by any Egyptian tech firm. The firm allocated Kshs. 1.5 billion of the financial injection to support its Kenya operations through scaling up the business into launching other towns and routes.

The Series B-2 funding led by BECO Capital and Sweden’s Vostok New Ventures increased the start-up’s valuation to $150 million.

The systematic funding of these startups has helped to grow their operations in the country and thus leading to creation of jobs opportunities and the growth of the on demand market in the country. This is also further deepening the country’s dependence on tech to run its activities and grow its economy hence positioning itself as the continent’s tech and innovation hub.