Kenyan startup Uhasibu, which provides an online accounting system aimed at SMEs, is seeking funding as it looks to roll out across the whole of Kenya and into other countries in the East African region.
Uhasibu was founded in 2011 by Michael Pedersen, and offers an online accounting system assisting SMEs with improving efficiency when it comes to aspects of their business such as invoicing and petty cash management.
Angela Nzioki, sales and marketing manager, told Disrupt Africa the startup, self-funded thus far, had 700 companies signed up to its platform and was looking to persuade SMEs to move away from more established payroll services with an offering deliberately tailored to the local market.
“We are very locally relevant,” she said.
“Some of the features we have included, like petty cash management, are very Kenyan ways of doing business, because a lot of Kenyan businesses run from petty cash. Plus the whole proforma business is a very Kenyan thing. We also have a payroll system which is integrated with local stakeholders, like Kenya Revenue Authority. Most of the local payroll systems only help people prepare the payroll, but they don’t go to the extra level.”
Uhasibu also supports all East African currencies, enabling businesses to easily pay cross-border invoices, with the platform available at a monthly subscription cost of KES1,000 per month (US$10).
Nzioki said business was slow at the start, but companies are now starting to open up. Uhasibu, she said, had previously had problems competing with well established competitors. This is changing, however.
“A lot of the smaller businesses are seeing the benefits of getting professional help,” she said.
“It is a lot more expensive for them to do it the traditional way. A lot of people see the value of the system when they see it and see how it works.”
To roll out its product, Uhasibu has had to rely on door-to-door sales, cold calls and social media, given its lack of resources.
“We don’t have the human resource to send 100 people out to different people, so we use the little that we have,” Nzioki said.
The startup is seeking funding to address this issue, and is looking for US$200,000 in return for a 20 per cent equity stake in the business.
“It will help with the marketing aspect, with the human resource aspect, and launching in new markets,” she said, adding Uhasibu would prefer a local investor.
“Specifically somebody with a foothold in the market, because we’re not just looking for the money, we’re also looking for the network and expertise,” Nzioki said.
This expertise and network will be important when it comes to arranging the necessary partnerships with banks and local revenue authorities in new markets, with Rwanda and Uganda top of the list.
“Rwanda has a very good record with the uptake of technology and Uganda is a bigger market of course, Nzioki said, adding Uhasibu was targeting seven per cent market share in East Africa and expansion across Kenyan counties.
These ambitions are based on what the startup sees as a hugely addressable market in the form of the region’s SMEs.
“They are the ones that have been neglected by the other providers. SMEs are a larger market and they have really been neglected, and they are starting to open their eyes to the solutions that are in the market,” Nzioki said.
“They have a lot of challenges that nobody has focused on. That’s why we have about 70 per cent of SMEs not getting to their third birthday. They have a lot of need, a lot of challenges, and they are open to the idea of paying for the solutions if they are affordable, helpful and relevant.”