Startups in Rwanda
Many will be familiar with the prevalence of motorcycle taxis across Africa, particularly in East Africa where they are commonly called ‘boda bodas’. Their prevalence is fuelled by, amongst other factors, an ever-increasing demand for public transit and the relative affordability of motorcycles. However, the increase in the use of motorcycle taxis has resulted in an increase in life threatening road accidents. A need to make this indispensable mode of transit safer is where SafeMotos comes in. Launched in 2015 by Barrett Nash and Peter Kariuki, SafeMotos is basically an on-demand ride-hailing app akin to Uber/Taxify but primarily for motorcycle taxis. This company is one of many startups in Africa created with the determination to better the lives of the local population without dramatically changing the way people go about their daily lives. By monitoring the moto-drivers’ vehicle using telematics, the system weeds bad moto-drivers out of the industry – ensuring users order safe and professional motorcycles. Users select their pick-up point, destination and the quality star rating of driver they want – payment is then done through their SafeMotos wallet which is connected to mobile money/credit cards or using cash. In a commendable drive to empower women, SuperMotos marked 2018’s International Women’s Day with the addition of the first female moto-drivers to its network. Through SafeMotos Institute, a charity it launched in 2017, this principled startup crowdsources funding for recruiting and training female moto-drivers. The company has since begun developing a product that can match female users to female moto-drivers. Having logged over 400 000 trips in Kigali, SafeMotos will be expanding and launching in Africa’s third largest city, Kinshasa. It is likely, this immensely innovative startup will continue to grow – reaching a lot of cities across the continent.
Founded in 2017, winner of 2018’s Rwandan leg of the Seedstars World startup competition, Benefactors is a factoring startup offering specialised financial services to help businesses shorten their cash cycles. In the absence of formal mitigating solutions, businesses all over the world fail because of cash flow issues. Founder and CEO of Benefactors, Olivia Zank identified a ‘solutions deficit’ to these issues and subsequently took on the task of providing Rwandan firms quick and flexible short-term liquidity products. The company supports firms by advancing them working capital against confirmed invoices from reputable buyers and charging a small commission on the advance. For small and medium enterprises (SMEs), cash flow stability can be affected by a wide range of factors – Benefactors’ support allows SMEs to honour their urgent commitments, avoid resorting to illegal money lenders and to take advantage of growth opportunities. Although each deal is tailored to the needs of the individual firm, a uniform and transparent application process involving due diligence is required. The service has unsurprisingly proven to be very popular with high demand resulting in Benefactors reaching break-even point in June 2018. Considering its early success, Benefactors looks set to have a relatively easy ride on the road to find investors. Africa has benefitted from more funding in 2018 compared to the previous year, particularly for microfinance companies. Benefactors has raised $150 000 in a pre-seed funding round, money to be used for operations and technology. Benefactors envisions a future where it is operating across all East Africa by 2025.
Yubeyi is one of many e-commerce platforms sprouting across Africa. Launched in late 2014, Yubeyi.com is like Alibaba and Amazon though unlike these two giants who have warehouses, this startup relies on suppliers to ensure product availability. Although initially designed to cater for a wide range of products, Yubeyi has since moved to specialise in electronics. The startup company has since acquired more than 20 suppliers. Supposedly high withdrawal charges and low online payment usage influenced Yubeyi.com to ditch online card payments, with founder, Christophe Nkurinziza stating, “Mobile money can work here but card payments are a far-fetched idea because there aren’t many people using them and in addition banks charge a lot of money.” – Customers can order products and only pay upon delivery using either cash, mobile money, bank transfer or cheque. The idea of payment on delivery is to generate trust in a society which is sceptical of up-front payments. Although e-commerce is being implemented in various forms by many startups in the country, it is a new concept for the people of Rwanda. For e-commerce startups like Yubeyi to grow, there’s a need to invest in teaching the market how to effectively make use of the e-commerce platforms while highlighting the inherent benefits of it. “People’s mindset is the biggest challenge, but on the other hand, suppliers equally don’t understand these new technologies. For instance, we have to do all the work of facilitating suppliers to list their products on the platform and managing inventory,” Christophe bemoans To compliment the proposed investments in education, a strong effort to address the fear of online fraud among many Rwandans would go a long way in laying a solid foundation upon which startups like Yubeyi can grow.