This startup could be doing to Shell/Total what Mobile money did to banks

Companies that make it in Africa are those that do it for the long haul. Total, Shell, MTN Group and Safaricom have proved it. A decentralized model that employs some sort of agent network that’s part of big franchise model have proved to be most successful in Africa.

Look at Total or Shell petrol stations all over most countries in Africa for instance. The big corporations don’t actually own any of the petrol stations, but small individual businessmen do. The big catch is that they have to operate with strict guidelines set by the parent corporation. This creates uniformity and brand presence across wide geographies without the corporations spending a lot of operational costs.

As a result, scale has been a no-brainer even for highly regulated and sophisticated industries such as finance. MTN Group and Safaricom both have employed similar roadmap to scale their Mobile money operations nationwide.

But this strategy requires a lot of patience and commitment to do it for a long haul.

One company am particularly proud of is Payway. They started by deploying a small number of distributed digital Kiosks across major shopping malls in Kla. These Kiosks are digital transaction end-points for users to pay for goods and services. When I first reported about them about 5years ago in 2012(, I knew the startup was a game changer. They had massive potential.

5 years later they have further streamlined their mega sleek digital Kiosks to more portable Point-Of-Sale(POS) hand-held terminals given hundreds of agents across town. They now command transactions worth billions of Shillings per month according to insider information.

However, Payway is still playing in digital transactions space which is highly competitive given a number of insurgents that are preying the same market including the big telecoms themselves. They have not yet leveraged the “physically” that their distributed kiosks gives them over similar digital-only networks or smartphone apps such as these. And they are slacking on riding on the mobile wave which should is a dangerous thing to do for any startup playing in the African market.

This brings me to a new cool startup called Koko network in Kenya. These guys have been in R&D phase for the last 3 if not 4 years am told and they have something interesting…something different even though they are employing the same model that made Total, shell, M-Pesa scale — distributed agent network to sell their myriad of both digital and physical(being the differentiator) products and services. They are using thousands of already existing micro small-scale enterprises or shops as end-points for their products and services.

Koko might be doing to Total/Shell what Mobile money did to traditional banks.

Via a growing network of distributed agents connected via the cloud and powered by mobile, they are bringing utilities such as energy to the last mile cheaply and affordably. This is unlike Petrol stations that require strategic locations usually along major busy roads, 24/7 security, rent, approval from city council etc — similar stringent bureaucratic requirements that thwarted traditional banks from scaling.

Imagine refueling your cooking stove from Mama Frank’s shop just next door? They convenient, how fast. Proximity and trust both of which are accelerated offline are the key drivers of transactions in Africa and these guys are nailing it.

It’s one of the startups am definitely kin following now and since they have plans of scaling to Uganda, that makes it even exciting.

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