A Little app growth lesson for start-ups

The World Intellectual Property Organisation in its 2019 Global Innovation Index (GII) ranked Kenya the second leading innovation hub in sub-Saharan Africa, just behind South Africa.

Whenever I talk to people at conferences outside the country about the burgeoning innovations in Kenya, they often ask if there is M-Pesa-like innovation in the offing. Indeed, we are beginning to see a number of start-ups with great potential to become big enterprises.

Among the top start-ups in Kenya to watch in 2020 list by StartupHRtoolkit is Little, a ride hailing app that has exponentially grown to become a Super App. Founded in 2016 by Kamal Budhabhatti in partnership with Safaricom, Little was given $10 million (Sh1.05 billion) from the parent company Craft Silicon in equity and debt. Its revenue in 2020 stands at $12 million.

The company has overcome many challenges it faced when starting. Like every great entrepreneur, it started operations before perfecting its product and as such had several issues, including miscalculations and wrong global positioning system (GPS). It also struggled to fight heavily capitalised global competitors.

One of the top start-ups in Kenya, it offers cab services that are so far safe, friendly, clean, and affordable. They are engaged in individual as well as corporate transportation.

Little’s passion for customer care paid off by enabling them to effectively compete with global giants. Realising that the customer needed more than just rides from point A to B, they started innovating complementary products.

Covid-19 came as blessing in disguise. Although its rides dropped significantly, customers were holed up in their homes making online orders. A new line of business of making deliveries was born. They quickly altered their strategy to focus on deliveries, especially food products, then groceries, drinks, gas and other critical items.

With the number of customers surpassing one million, Little introduced a series of products, including micro-financial products in multiple wallets, bill payments, airtime sales and more. The company moved to appoint restaurants as merchants, paving the way into merchant payments.

Soon, they started supporting aggregation of micro enterprises and artisanal service providers to enable them attain economies of scale.

The development of a Super App is within their long-term strategy of enabling the developer community to leverage on their Application Programming Interface (API) — a software intermediary that allows two applications to talk to each other — to for example, use services of third-party merchants without downloading separate apps.

Other advantages of the Super App are storing volumes of customer data, development of a strong ecosystem and build a market place capability to scale, saving of phone memory and a variety of services under one umbrella. In other words, this agile local innovation is building up to take on larger and well-established technology companies.

Little’s intentions with the chaotic but lucrative micro, small and medium enterprises (MSMEs) are to reveal the treasure trove that lies underneath them. They are close to figuring out how to productively digitalise these MSMEs to reveal the hidden value and create wealth not just for themselves but for the entrepreneurs in the sector.

So far other startups — to be featured later — are in the race to leverage emerging technologies and to positively disrupt the informality that has characterised MSMEs in Kenya before scaling the solution throughout the continent.

Innovation in Kenya is flourishing. If Kenya is to move to position one in Africa, we need a supportive policy environment that encourages research, embraces the fourth industrial revolution technologies, provides incentives to local investors supporting startups, supports the new curriculum and nurtures applied sciences in institutions of higher learning.