Led by Equity Investment Bank as the lead transactional advisor and other transaction advisors, Kenya’s Empire Microsystems is set become the first ICT firm to list on the GEMS counter of the Nairobi Securities Exchange (NSE). This move, the firm says, will prepare it for the increasing ICT, Oil and Gas opportunities in the country.
The listing, set to be achieved in a few weeks, will see Empire embark on the journey to become Kenya’s foremost ICT platform. This has been the vision of the company since its inception. The listing will also make it a high impact, high growth firm ripe for external investments into its targeted projects.
Speaking exclusively to TechMoran, Empire Microsystems founder and CEO James Mworia said, “Empire Microsystems has been a financially stable company and the capital raising facility will allow it to successfully carry out larger ICT projects countrywide and maintain them. Investors who will put in funds in these projects together with Empire will contribute greatly to the success of these projects.”
The firm says it has already put in its application at the NSE and is looking forward to approval within the coming weeks. The firm prepared its first application in December 2014 and due to time constraints, postponed it in order to conduct an audit in addition to the 2014 projections it had initially used. The application also needed to be subjected to the Empire board of directors, which has since been done. What remains now is the listing approval from the NSE.
Empire Microsystems says it is undertaking the listing because there is currently no ICT platform for people to invest in in the market. Mworia wants to build a similar model to Centum with as many ICT projects as possible and with as many people investing in them. He says there’s a huge opportunity in ICT especially in infrastructure, oil and gas.
“We are listing Empire as an ICT platform so local investors and those from as far afield as Japan can come and invest in one of our projects and make money out of it. The opportunity is huge in both hardware and software in Kenya and that is why whenever Safaricom innovates it becomes successful. The data tsunami is here. There’s room in telecommunications, software and financial solutions for entrepreneurs,” Mworia says. “The trend in the market is getting more and more mainstream. The government took to technology to solve the security problem and turned to M-Pesa to solve the financial inclusion problem.”
But the journey has not been easy.
Empire Microsystems began as a software development house developing software for cooperative societies (Saccos). In January 2006 Mworia developed a Sacco Management Information System (MIS) as his final year undergraduate project, he immediately converted it into a business deal with a leading Sacco where he chose to do the job as an entrepreneur rather than take it as fulltime employee. With Kshs. 100,000 in cash after building the Sacco MIS, he set up his own office. By the end of 2006, Mworia had 3 customers for his Sacco MIS. Later the same year, his co-director joined him and they hired 2 more staff to support the deployment and implementation of the systems.
In 2007, they began reaching out to SMEs and Saccos which had never been computerized before. In 2008, the firm was approached by the ministry of co-operative societies to train Saccos on automation. The firm generously gave out its product to Saccos for free and saw it grow its customer base from 5 to 20.
In 2009, Empire realized that the company could grow as there was opportunity in the IT industry and it just needed to be smart and offer more solutions in the ICT sector. “In 2009, we adopted our first diversification and expansion strategy, moved into our new and bigger offices to accommodate more employees as part of this expansion drive. In 2008/09 fibre optic cables had landed in Mombasa and the first people to launch the fibre to the home were the Wananchi Group. We hired more engineers, bought more vehicles and did more training to take up this task.” As it took up the new outsourcing business, Empire continued with the automation of Saccos.
By 2012, fiber was becoming mainstream and Safaricom approached Empire to rollout their fiber services followed by Jamii Telecom, Orange Telecom, MTN Business, Huawei, Ericson and Liquid Telecom. But as more customers were jetting in, the firm realized there was a gap in project management of all ICT projects. They then began managing fiber projects for these firms and the business took off very fast as there was a real gap.
In 2014 the firm had become well positioned in the market, but realized the future of the business was data driven and they needed to transform themselves into a corporate entity. Mworia then set up a corporate governance structure for Empire. He approached Equity Bank’s Chief Operating Officer, Julius Kipng’etich, and four more directors with various expertise to form Empire Microsystems board of directors.
Consequently, the firm realized it needed to profile itself to increase corporate awareness within the ICT industry, raise capital and create joint partnerships. Listing on the GEMS counter of the NSE provides the avenue to meet these needs.
“The listing will assist in a number of ways. Profiling Empire for visibility, attract new business, as well as partners and investors. It will strategically position us in the market and give us a strong brand value to capture more projects,” Mworia told TechMoran.
As he had said earlier, Mworia insists the listing and the capital raise is not for money to run the company but to propel the ICT projects the firm has planned countrywide and continue rolling out many others with its current partners. It would also be a way to value the company for its own price discovery which would help the firm attract more investors.
“People seek growth in different ways. There are those who go up to the ages of sixty or seventy before they list. We want to show the market that you can start small,” he said. “Empire will be a case study for Kenya just like Google, Facebook and WhatsApp are for Silicon Valley.”
Though the journey looks smooth, Mworia says there have been challenges such as limited IT skills in the country and high employee turnover in the ICT sector. He also says access to capital and the constant changes in technology means every day is a training day and brand visibility requires a lot of input.
There was a time when signing a deal in his early 20’s was a hindrance but now things are different.
Mworia works 14 hours a day and spend the rest of his time with his family.