Lateral Capital, which has invested in a number of countries including Appzone, Asoko Insight, Koko Networks, Sparkmeter, Workstyle, Medsaf among others has invested into Kenya’s Lynk, a blue-collar jobs marketplace for local growth.
The investment was led by Lateral Capital’s Samakab Hashi, with participation by Kenyan Cornerstone Group.
“We are excited to continue on our journey with Lynk as they expand beyond Kenya. We are thrilled to announce our 9th portfolio addition with our investment in Kenya’s Lynk. The informal economy represents ~80% of Kenya’s GDP. Lynk’s founding team have deployed a technology solution to gigify the informal economy by rolling out a “trust” platform that unlocks the services and products of informal workers,” said Rob Eloff, Managing Partner at Lateral Capital.
Launched in 2016, Lynk has built a marketplace matching blue-collar workers to gigs according to their experiences and skills. The marketplace, which recently introduced a shop section to promote artisans wares on its platform, has not had a huge reach and impact as expected due to the reach of social media platforms like Facebook Marketplace and Instagram which have a wider and trusted reach than Lynk.
A similar platform, Mercy Corps-backed KibaruaNow shut down after a tough run. The firm unsuccessfully tried to be a TaskRabbit for Kenya and eventually East Africa.
Its closure was followed by a closure of Naspers-backed general classifieds marketplace OLX a few years later which has been replaced by Jiji. Ringier’s PigiaMe hasn’t done much to venture into the gigs section but has remained steady in its general marketplaces market.
Craiglist hasn’t done much either in Kenya and was only popular for its personals section. People seem to go to Facebook Groups to ask for recommendations instead of gigs marketplaces that do very little to vet members or gigs so that they build metrics for competitions and investors.
Another promising player Kisafi has not had much inroad into the Kenyan market since launching. And TaskGuru stopped at launching. Though Kenya’s internet penetration is growing, internet services, especially which require ratings or reviews have failed to pick in the market as word of mouth referrals are still king.
Otherwise, with the investments, Lynk has raised from competitions, angels and grants, its impacts would have been felt already. In the short-run, Lynk’s return to investments will not be as attractive as the gig economy promises or seems to look, profitability might be harder to come by.
Kenyan startup Taskwetu also shut operations a few months after launch. KibaruaNow also had a B2C and B2B focus and had big-name clients in the Kenyan corporate sector but death is not ashamed to go for the mighty. Lynk is likely to see the wrath of Facebook Marketplace when it launches fully locally.
Lateral Capital invests in early and growth-stage technology startups in sub-Saharan Africa in financial services, energy, healthcare, and education.
“Our aim is to partner with visionary entrepreneurs with a demonstrated commitment to our mission and first-principles thinking in profitably solving these pressing challenges,” said the firm. “We make debt and equity investments ranging from $250k-$5m in high-growth, revenue-generating ventures while targeting yield and capital appreciation for our investors. As entrepreneurs ourselves we know that success requires more than capital alone. The people we invest in are the single most important factor in our combined prosperity,” the firm added.