<div>\n\n[caption id="attachment_21870" align="aligncenter" width="810"]<img class=" wp-image-21870 " src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/eric-scmidt-at-Kopo-Kopo-inc-900x595.jpg" alt="Google's Eric Scmidt, iHub's Eric Hersman with the Kopo Kopo team" width="810" height="536"\/> Google's Eric Scmidt, iHub's Eric Hersman with the Kopo Kopo team[\/caption]\n\nWhen <a href="http:\/\/www.safaricom.co.ke\/personal\/m-pesa\/m-pesa-services-tariffs\/relax-you-have-got-m-pesa" target="_blank" rel="noopener noreferrer">M-Pesa<\/a> launched in 2007, many Kenyans didn\u2019t give a fuss about it, it was just a convenient money transfer service, more convenient than the services of the day.\n\nSeven years since it launched, M-Pesa has recorded numerous deposits and withdrawals, <a href="http:\/\/nchinampesa.safaricom.co.ke\/#scroll" target="_blank" rel="noopener noreferrer">amounting to millions of dollars<\/a>. The mobile money service is now used by over 70% of Kenya's adult population and moving amounts of over 30% of Kenya's GDP. Merchants, banks, public service vehicles, restaurants, websites and companies see M-PESA as <a href="http:\/\/www.kopokopo.com\/mobile-payments-in-east-africa-the-world-is-watching\/" target="_blank" rel="noopener noreferrer">a golden goose<\/a>. That\u2019s Kopo Kopo\u2019s partner by the way!\n\n<\/div>\n\nKenya alone recorded over 25 million mobile transactions from just some 88,000 agents. With introduction of cashless payments, Kopo Kopo will be play a big role in many types of mobile money transactions, be it for school fees payments, hospital bills or for restaurants offline or online. M-Pesa remains significant, puts food on the table in hundreds of thousands of homes and will continue to do so and just like the launch of M-Pesa, Kopo Kopo's start wasn\u2019t glorious.\n\n[caption id="attachment_21871" align="aligncenter" width="259"]<img class="size-full wp-image-21871" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/images.jpg" alt="Lipa na M-Pesa" width="259" height="194"\/> Lipa na M-Pesa[\/caption]\n\n<b>Rooted in M-Pesa<\/b>\n\nFounded in the summer of 2010 by Dylan Higgins and Ben Lyon, Kopo Kopo enables SMEs to accept mobile money payments, a move that is set to drive East Africa\u2019s offline and online commerce. Kopo Kopo\u2019s first stride to success was when it emerged a finalist at the <a href="http:\/\/pivot25.com\/finalists-in-mobile-payments-and-mobile-commerce\/" target="_blank" rel="noopener noreferrer">Pivot25<\/a> in 2011 in the mobile commerce and mobile payments category, Kopo Kopo didn\u2019t win, Lyon knew his mission wasn\u2019t to win prizes but to change payments and eCommerce in Africa forever.\n\n<div>\n\nWhen I first sat down with Ben in late 2011, I had no idea if Kopo Kopo had a future but in his voice I could see a man out to do everything to succeed. Like young David facing Goliath, Lyon was already sure Kopo Kopo would be part of all our daily lives, on majorly all transactions, apart from just at restaurants and retail shops.\n\n<b>Media courtship or product development<\/b>\n<blockquote>Away from Nairobi, the global payments sector is not miniscule, according to global management consulting firm the <a href="http:\/\/www.google.com\/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.bcg.de%2Fdocuments%2Ffile144670.pdf&ei=JkrZUsTJGIWqhQe-hoDoDg&usg=AFQjCNE4c-gBtgU_p-FQnp6vvGKdboLacA&sig2=ST6gCNlpYZaVT9N5Os2pUA&bvm=bv.59568121,d.ZG4" target="_blank" rel="noopener noreferrer">Boston Consulting Group<\/a>, by 2022 payments and transaction-banking revenues will reach an estimated $1.1 billion, a compound annual growth rate (CAGR) of 8 percent. The revenue mix is expected to shift toward account-related revenues as yield curves steepen and as pressure on transaction fees persists. The value of noncash transactions will reach an estimated $712 trillion by 2012, a CGAR of 7 percent.<\/blockquote>\n<\/div>\n\nAs noncash transactions grow, so does Kopo Kopo\u2019s clientele, its technology and the team; plus the quality of their services. On its report card the firm passed 10,000+ retail merchants nationwide, making it Safaricom\u2019s largest merchant aggregator, and one of the largest merchant aggregators in Sub-Saharan Africa. Add to these school fees payments, Matatu and websites this year and the number is set to more than double.\n\nUnlike other businesses, Kopo Kopo has focused more on product development than having courtship with the media.\n\n<div>\n\n[caption id="attachment_21872" align="aligncenter" width="810"]<img class=" wp-image-21872 " src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/311364v1-900x476.png" alt="Lipa na M-Pesa" width="810" height="428"\/> Lipa na M-Pesa[\/caption]\n\n<b>Steady business growth than lifestyle entrepreneurship<\/b>\n\n<\/div>\n\nAs it becomes one of the largest merchant aggregators in Sub-Saharan Africa, Kopo Kopo recently raised $2.7 million from Javelin Venture Partners and launched in Rwanda and Tanzania. While most local entrepreneurs shy away from VCs due to strict accountability, Kopo Kopo\u2019s knows that building a living company means you answer to someone who has been there, done that and conquered than doing it all on their own.\n\nThe firm strategically occupies the corner of a modern office building on Ngong Road in Nairobi, a long way from the mere single room it had at <a href="http:\/\/www.infodev.org\/highlights\/kopo-kopo-grows-out-incubation-mlab-east-africa" target="_blank" rel="noopener noreferrer">m:lab<\/a> and the single table it had at the iHub. Next to it is a cafe, serving drinks, snacks and fast foods to the building\u2019s occupants. The cafe is a perfect meeting place for quick business meetings and that\u2019s where I meet Dylan for our interview.\n\n<div>\n\n<b>$2.7 million funding<\/b>\n\nJust behind the counter is a Lipa na M-Pesa notice allowing clients to pay for their orders by M-Pesa. I take out my recorder and order for an ice-cold Sprite as Higgins, the CEO Kopo Kopo, walks in. It\u2019s a few minutes past eleven and I have 45 minutes with a man running a firm that\u2019s already changing lives.\n\n<b>Awesome teamwork<\/b>\n\nImpressed by his friendliness and charisma, and his utmost simplicity, I put aside my notebook, forget about my recorder and like a student, literally digest every word from this man behind East Africa\u2019s fastest growing payments startup. The story of the launch begins, I nod to this. Nod to that. And half into his second sentence I note his love for the team.\n\n\u201cWe have over 40 fulltime staff members in our Nairobi office and a reasonable number in Rwanda and Tanzania. Kopo Kopo\u2019s success is not a Higgins or Lyon\u2019s doing,\u201d Dylan says. \u201cWe have entrusted the company\u2019s vision to each individual. Every one of our staff represents us and the company\u2019s success is our entire role as a team and not as individuals.\u201d\n\n\u201cOur various departments are passionate about what they are assigned to do. From our excellent developers, sales teams to account managers, we make up Kopo Kopo,\u201d he adds.\n\nHe emphasizes that the entire team is instrumental in the company\u2019s growth by saying growth would nearly be unachievable had it not been due to its great team.\n\n<\/div>\n\nKopo Kopo hasn\u2019t had a cozy rise to success and unlike the founders who have received grants and went on tour of the world; Dylan and Ben are frugal and have invested more into the firm than themselves. No fancy cars, no weird parties and no yacht or exclusive dinners, as is the custom with expat counterparts in the country.\n\n<div>\n\n<b>Focus on customer not competition<\/b>\n\nHiggins with his partner Lyon left the US after trying the product in their garage in the US. They piloted in it Sierra Leone before moving to Kenya where they settled.\n\n<\/div>\n\n<img class="aligncenter size-full wp-image-21873" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/KopoKopo.jpeg" alt="KopoKopo" width="620" height="151"\/>They began work on Kopo Kopo full-time at iHub and toiled with a team of three for nearly a year, sharing the iHub with hundreds of others. They then secured incubation at iHub\u2019s sister arm m-Lab East Africa, with an own office plus constant guidance from Mbwana Aliy and Erik Hersman, managing partners at <a href="http:\/\/www.google.com\/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CCwQFjAA&url=http%3A%2F%2Fwww.savannah.vc%2F&ei=GLjbUp77FIKEhQfll4CgBg&usg=AFQjCNFQQVstYdbfert4w2Z22o5scaQF1g&sig2=moZ0tIkRCL6_Kn0R3oGniw&bvm=bv.59568121,d.ZG4" target="_blank" rel="noopener noreferrer">Savannah Fund<\/a>. In the one roomed-office, Kopo Kopo grew until its team wouldn\u2019t fit in that space. The firm moved to a bigger office on the same building to accommodate its growing sales and IT team. They kept growing. After a few months, they moved to where they are now.\n\n<div>\n\nHiggins does not talk about the funding. Neither does he mention any competitors, the firm\u2019s focus is on customer satisfaction, he insists.\n\n\u201cWe focus on the customer not the competition. We know that if we satisfy our customers, they\u2019ll keep coming.\u201d\n\nSinking home the old saying that the customer is king, a statement which has become a clich\u00e9 among entrepreneurs but hasn\u2019t lost its power yet.\n\n<b><img class="aligncenter size-full wp-image-21874" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/savannah-fund1.jpg" alt="savannah-fund" width="500" height="186"\/>Local partnerships<\/b>\n\nWith a skilled team on board and money in hand, and a virgin market, anyone would want to go it alone. But Kopo Kopo still believes in friendships. And they have at times been bad mouthed for courting Safaricom too much. Safaricom is their lifeline.\n\n<\/div>\n\n\u201c Kopo Kopo did a good job of \u201ccoptitition\u201d with Safaricom, a deal that is helping it accumulate a lot of the value even up to today,\u201d says Mbana Alliy, a managing partner at Africa-focused Savannah Fund.\n\n\u201c Though \u201cdancing with Safaricom\u201d is risky, Kopo Kopo played correctly for a win-win.\u201d\n\nHiggins agrees. \u2018We are who we are because of our partnerships. Like a marriage we spend many hours on these relationships making than work for both parties.\u201d\n\n\u201cI think there is misunderstanding in the market. We are not breaking up with Safaricom, they are not breaking up with us. We have a mutual partnership that will expect to deepen and widen in the months ahead.\u201d\n\n<div>\n\n<b>Look beyond Africa for Financing<\/b>\n\nWith reports that Nigeria\u2019s <a href="http:\/\/www.konga.com" target="_blank" rel="noopener noreferrer">Konga.com<\/a> has just raised $25 million, the biggest Series B on the continent to date from Sweden\u2019s Kinnevik and South Africa\u2019s Naspers. Higgins tells me startups in Africa can raise money anytime but the CEO\u2019s need to look beyond Africa. They should be prepared to travel out of the continent to raise substantial amounts of funding, as the (East)African market is not as fully grown.\n\n\u201cIt still is a matter of us finding those investors than them finding us as the marketing is still emerging here. There hasn\u2019t been that many traditional series A\u2019s. To all other startups in East Africa and sub Saharan Africa , be prepared for traveling and be prepared to have your CEO to spend a lot of time outside the continent, but that\u2019s gone to true for sometime but not forever.\u201d\n<p style="text-align: center;"><b><img class="aligncenter wp-image-21882" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/iROKO-Partners.jpg" alt="iROKO-Partners" width="444" height="277"\/>Some local examples<\/b><\/p>\nThough not close to what is happening in Silicon Valley, especially along series A and Series B financing, there\u2019s an increasing growth of funds in Africa, with beneficiaries doubling by the day.\n\n<\/div>\n\nRupu Kenya, SleepOut , EatOut, Nigeria\u2019s <a href="http:\/\/irokopartners.com\/" target="_blank" rel="noopener noreferrer">iRoko Partners<\/a> and One Africa Group of companies like Cheki, Jobberman and Private Property are some of the startups that have received funding from foreign investors. More angel investors are expected in this year. However, the funding does not validate that the continent\u2019s mobile payments sector is lucrative, says Mbwana, especially for startups vs those that control the platform, (but) it validates getting on a growth path in financial services in Africa is valued.\n\n<div>\n\n\u201cIroko is in Nigeria, serving a lucrative LARGE diaspora and local market that is driving the business with what people really want and willing to directly pay for \u2013 online African entertainment,\u201d Mbwana says adding that though, \u201cstartups in Africa can get funding anytime, it will only happen if they can prove to achieve scale in growth and\/or revenue. This means serving multiple markets if a country is small or competitive with other players, lots of users and growth traction.\u201d\n<p style="text-align: left;"><b><img class="aligncenter wp-image-21876" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/168843_395956997134117_1451596925_n.jpg" alt="168843_395956997134117_1451596925_n" width="767" height="284"\/>Influx of international players<\/b><\/p>\nAfrican startups are is also getting major financing from as far as Europe with renown players such as the Berlin-based Rocket Internet which has heavily invested (and exited to MTN) in Africa and Asia, majorly setting up ecommerce portals across the continent such as Jumia, Kaymu, Lamidu, Jovago among others.\n\nRocket Internet is working with Millicon, Swedish Kinnevik, Summit Partners, JP Morgan and recently South Africa\u2019s MTN Group. On the other hand is Tiger Global, Red Capital and South Africa\u2019s Naspers investing in the likes of Iroko, Konga, One Africa Media Group among others. The two camps seem to be fighting for e-commerce in Africa. Ringier and SCM Ventures are on their own and are majorly into classified portals doing deals, jobs, news and marketplaces competing with OLX.\n\nLocal players are also many, represented by EvaFund , 4Di capital, and seed funds such as Silvetree Capital, Savannah Fund and 88mph Africa with investment portfolio\u2019s in just about every field and country in Africa. French and Arabic-speaking Africa has also not been left behind with funds such as Wamda Capital among others.\n<p style="text-align: justify;"><b><img class="aligncenter wp-image-21878" src="http:\/\/techmoran.com\/wp-content\/uploads\/2014\/01\/538332_489043051158844_309410937_n.jpg" alt="538332_489043051158844_309410937_n" width="729" height="261"\/>Looking into the future<\/b><\/p>\nThe ecosystem improves every year on all fronts like most things in Africa, though in investing, caution ought to be taken as there are now corporate investors playing in the early stage (but) who are trying to tie in their own strategies or product\/platform goals that startups should be wary of, warns Savannah Fund. Being too one-sided and sticking to investors that add value to build their businesses will help them focus on growth and revenue.\n\n<\/div>\n\nLooking into the future, Kopo Kopo wants to simplify lives through partnerships with mobile operators and banks across the continent that will make it easy for merchants anywhere on the continent to accept electronic transactions, move their money to the account and institution of their choice and do it all on one easy-to-use and accessible interface - Kopo Kopo.