Nine East African Startups to Watch in 2016

Between July and August of 2016, nine startups will convene in Kampala, Uganda, for the third annual Unreasonable East Africa Institute. Meticulously vetted from across the region, these standout companies will work alongside over 80 mentors and plug into a network of over 500 funders. By the end of the five-week program, the goal is for each company to leave with the tools and connections to scale and meaningfully meet the needs of over 1 million lives. With nine ventures in this cohort, that means nine million lives impacted.

In 2015, Uganda was named the most entrepreneurial country in the world. Tweet This Quote

In prior programs, the most represented sectors were energy (2014) and agriculture (2015); this year, it’s financial inclusion. Additionally, 2016 builds on one of the most exciting years for East Africa—in 2015 Uganda was named the most entrepreneurial country in the world, and the Global Entrepreneurship Summit was hosted in Kenya (and attended by President Obama). With yet another strong class of fellows, Unreasonable East Africa is set to build on this momentum.

Introduced below, with information compiled by Kate Hanford, co-founder and COO of Unreasonable East Africa, the five companies from Kenya, three from Uganda and one from Tanzania are poised to tackle the region’s most pressing problems.

Bidhaa Sasa

Although infrastructure in Kenya’s cities continuously improves, the rural lifestyle remains a chore. Families use nauseating kerosene for a little light at night, cook on smoky open wood fires, and rely on unsafe water. Products to address these problems exist but are only accessible in towns for cash up-front, making them unattainable.

Bidhaa Sasa was founded to serve rural families, combining last-mile distribution with credit for rural customers in a one-stop-shop. They offer a wide range of products that have strong potential to increase quality of life, including clean cooking solutions, solar lamps/systems, and appliances. To date, Bidhaa Sasa has reached over 600 customers since they started in 2014.

Too many families still use nauseating kerosene, cook on smoky open wood fires, and rely on unsafe water. Tweet This Quote

Credit Factory

Kenya’s social development and economic growth is crippled by exorbitant interest rates and financial practices offered by the formal sector (banks and MFIs) that stifle the hopes and potential of the country’s citizens—80 percent of the country’s population. Credit Factory is unlocking economic inequality for millions of Kenya’s hardworking citizens by customizing transparent, low-interest financial products for them. Since 2014, Credit Factory has worked with over 1,800 customers.

Farm Drive

Almost 75 percent of Kenyans, nearly 34 million people, are farmers. Most of them are struggling to make a living due to lack of capital to improve their farming activities. Meanwhile, less than 1 percent of loans from financial institutions goes to smallholder farmers. Lenders cannot manage the associated risks since traditional credit assessment tools do not apply to smallholder farmers.

Almost 75 percent of Kenyans, nearly 34 million people, are farmers and most are struggling to make a living. Tweet This Quote

Farm Drive uses a mobile app to track data, creating credit profiles for smallholder farmers. It then provides lenders with pre-vetted smallholder clients, thus reducing their risk. In four months, 837 farmers have signed up, received training, and are actively using FarmDrive. To date, 100 of these farmers have accessed credit.

Inagape

Coastal farmers in Kenya receive below-market prices for their coconuts due to inaccessibility to better markets. Without sufficient income, farmers remain subsistence farmers and therefore cannot fulfill their basic needs. Inagape purchases coconuts directly from farmers at fair market rates, dehydrates the coconut and packages it into snack packs, which are currently sold throughout Kenya.

This value-add processing increases the margins that Inagape can earn on the sales of its coconut products, making it easy to pay farmers a fair market price. Inagape successfully brought its first product to market in late 2015 and has already sold over 1,500 USD worth of product in the first four months through 17 retail outlet partnerships.

Kyaninga Child Development Centre

In Uganda, approximately 12 percent of children live with a disability. Many cultural and social stigmas exclude them and their families from educational institutions and their communities in general. Additionally, treatment options are limited by the low number of therapists in Uganda.

In Uganda, 74 percent of micro, small and medium enterprises identify access to finance as the greatest constraint to their growth. Tweet This Quote

Kyaninga Child Development Centre (KCDC) provides specialist rehabilitation for children, including physiotherapy, occupational and speech therapy, and runs community outreach programs. Because many of the families supported by KCDC are subsistence living, they do not currently charge for their services. However, the team is developing training programs on income-generating activities specifically for families with disabilities, so they are able to generate revenue in the future. KCDC has already worked with over 250 children and is met with increasing demand for their services almost daily.

Numida

In Uganda, 74 percent of micro, small and medium enterprises (MSME) identify access to and the cost of finance as the greatest constraint to their growth. Since most MSMEs don’t have financial records to convey their creditworthiness, financial institutions pass on risk costs through high interest rates, application fees and high collateral requirements. Loans become prohibitively expensive, depriving even creditworthy small businesses of capital.

Numida developed TrackApp, a smartphone application that helps entrepreneurs build reliable financial records to improve their business decisions and demonstrate their creditworthiness to formal lenders. So far, 500 traders in Kampala have signed up to trial TrackApp. Numida will begin facilitating loans for TrackApp users in mid-2016.

Simusolar

A shortage persists of affordable, productive tools available to individuals living and operating in developing markets, where electricity is unavailable or unreliable. The absence of these tools results in health hazards, missed income opportunities, and educational challenges. Simusolar sells complete electric home and business packages. These include solar panels to generate electricity, high-quality battery storage for nighttime use, plus energy efficient appliances. These products come with a built-in, automatic payment processor for pre-pay functionality, allowing customers to easily pay in small increments over time at a price they can afford. Since 2014, over 50 people have purchased their products.

Social Impact Institute

Kenyan smallholder farmers who live adjacent to forests are extremely vulnerable to poverty because they rely on subsistence farming, firewood and seed collection as their key sources of income. They have no access to financial and non-financial business development services to help improve their livelihoods.

Less than 1 percent of loans from financial institutions go to smallholder farmers. Tweet This Quote

Social Impact Institute (SII) offers an integrated business skills training that enables farmers living near forests to participate in the market and transform agriculture from a subsistence activity to a profitable enterprise. Since 2014, SII has worked with 25 Community Forest Associations (CFAs) to build their capacity to implement participatory forest management, focusing specifically on how to establish forests-based enterprises to improve livelihoods.

SoLight

Over 30 million Ugandans are not connected to the electricity grid. Unsafe and inefficient kerosene lamps and candles are used, which are expensive, provide poor light, produce toxic fumes, and are a major cause of household fires. While high-quality solar lamps and home systems exist, market penetration of these products is estimated at just 5 percent due to unaffordable financing, limited trust in solar products, and insufficient rural access to quality solar products.

SoLight partners with small rural shopkeepers to address these barriers with a low-cost, sustainable model that’s built to scale. They use flexible payments (including short-term rental), incentivized agents, low-cost motorcycle transportation, exceptional after sales support and local shopkeepers to facilitate sales.

Over 30 million Ugandans are not connected to the grid, and solar product market penetration is only 5 percent. Tweet This Quote

“We have learned a lot over the past programs about what it takes to support the growth of early stage companies, significantly improving our support from year one to year two,” said Hanford. “Now, we are excited to apply our lessons learned from the past two programs, and we think this year is positioned to be our best program yet.”

You, too, can play a role in supporting these startups by checking out the Unreasonable Marketplace—a crowdfunding platform through which the public can learn more about each company and choose to donate. With enough support, these nine Unreasonable fellows will gain access to an “unreasonable advantage.”

Want to Visit the Unreasonable Marketplace?

Learn More & Support Here!