While Delila Kidanu grew up in Nairobi, Kenya, the M-Pesa mobile money platform was the fintech platform for her and most Kenyans.
Safaricom’s proprietary product provides basic access to financial services such as sending and receiving money and buying airtime. Still, some Kenyans lack other digital financial services, from saving to investing.
Last year, people saved up to $ 13 billion in the country, and more than 70% of them used informal savings groups and cooperatives to do so.
Based on their experience, Kidanu teamed up with Alexis Roman and Bubunyo Nyavor last year to create Koa to help Kenyans save their money and invest better. She is the company’s COO, while Roman and Nyavor serve as CEO and CTO. respectively.
Koa is one of 20 companies competing in the TechCrunch Disrupt Startup Battlefield competition for $ 100,000 and the Disrupt Cup this week.
In an interview with TechCrunch, when the team started doing market research to understand how Kenyans are saving, Roman said they were were intrigued to discover that many people were dissatisfied with the current traditional savings options.
Saving with microfinance banks, cooperatives and informal saving groups not only has offline models, but also manual, expensive and opaque processes.
“It was shocking that when we talked to people and they told us about their experiences in their cooperatives and savings groups, we wondered why they weren’t better alternatives,” said Roman. “People often use access as a keyword when describing the problem behind the use of financial services. But for us we think access is not the problem; it’s how easy or efficient it is to access the service. It was this obvious observation that led us to start Koa. “
Digital, some banks offer savings products to Kenyans. But koa still sees an opportunity as banks in general are a less popular savings destination for the average Kenyan, as can be seen from the statistics above.
The founders assume that it will be different with Koa. The first product is a savings app that consumers can use to deposit, save and interest their money. When users log into the app, they can start creating savings goals in various pockets, a replica of what exists offline – where users would normally Save across different informal savings groups for a variety of reasons.
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But despite this huge opportunity, Koa faced two challenges.
First, the infrastructure necessary for the company to take deposits. In Kenya, a fintech startup would normally have to Partner of a financial institution. But the collaboration between banks and fintech in Kenya is quite annoying and even lags behind that of Nigeria, a country full of regulatory challenges.
The second problem Koa faced was trust, an area where informal savings groups and cooperatives have excelled through word of mouth.
Even so, Koa was able to overcome both challenges. After Koa has forged some partnerships and hired the necessary regulators to take deposits, Koa makes it easy for Kenyans to make deposits without going through the tedious traditional KYC process.
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Since the beta start in April 2021, the company has taken around 5,000 customers on board who use its savings product. But whyWith savings being the least hanging fruit for fintech apps, Roman plans to offer additional products for Koa.
For one, Roman sees great promise in offering embedded finance and banking-as-a-service tools that would enable other startups to bring fintech products to market faster. And given Koa’s entry point with savings, Roman believes the company will is ready build the tracks for digital financial services in the country.
Ultimately, the plan is to become a digital banking platform that offers other services like lending and investing.
“While we are offering savings apps directly to consumers, we can then turn around and go to other companies to help them offer savings or other financial products to their customers.”. They wouldn’t have to face all the struggles and burdens of regulatory hurdles if we can help them, “he said.” In the long term, we want to become a digital financial institution.
In addition to savings, Koa also provides users with financial and educational content to aid engagement. Users of the platform have now saved more than $ 40,000, and Roman says the company is heading for double-digit growth every week as well as Users and deposits. Koa also recently raised an undisclosed pre-seed investment from angel investors in Africa, Europe and the US
Before starting Koa, Roman before led strategy at Helium Health, one of the well-funded health technology start-ups in Africa. Kidanu worked with MEST Africa, a pan-African incubator and accelerator, and a general manager. Nyavor, on the other hand, is a serial founder and has led engineering teams at various African technology companies.
“I’m bullish on our team. I am Yes, really We love working with these people who are all very customer focused and how we can give them the best experience. I think for us that is a unique selling point in the market, “said the CEO.
