Kenya’s little-known firms earning billions revealed

The new Kenyan bank notes. AFP PHOTO

By CONSTANT MUNDA
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Little-known Kenyan firms using technology to reach underserved markets have emerged as

the fastest-growing businesses in Africa, according to a new report that ranks Nairobi as the third-largest home for the quickest expanding companies on the continent.

The inaugural FT annual ranking of Africa’s fastest-growing companies shows that 10 of 75 such firms are located in Kenya.

Except for retailer Quick Mart and agricultural inputs distributor East African Business Company Ltd, the Kenyan fastest-expanding firms on the FT list, including two which topped the continent, leverage technology in offering products.

Wasoko, the platform, which delivers fast-moving consumer goods to kiosks and shops in Kenya’s fragmented informal markets, has been ranked the fastest-growing business on the continent in the FT’s inaugural survey.

The firm, which in March rebranded from Sokowatch after raising $125 million (Sh14.37 billion) for first-phase expansion (series B funding ), had the highest compounded annual growth (CAGR) in revenues of 346.2 percent in four years through 2020.

Wasoko — which also offers a line of credit for retailers — grew revenue to about $27.4 million (Sh3.15 billion) in 2020 from $0.3 million (Sh34.5 million) in 2017, raising the number of its employees to 372 from 57 in the review period.

“Wasoko… is one of several on the continent seeking to cut the cost of doing business in the massive informal commerce sector, by helping to deliver goods to traders more efficiently,” the UK daily said.

“Many of the fastest-growing companies, especially in the fintech sector, are those seeking to tap Africa’s unbanked population or markets that have previously been underserved or ignored,” FT wrote in Africa’s Fastest Growing Companies 2022 report.

Kenya’s fintech startup, Flocash emerged second in Africa after its annual revenue growth averaged 274.70 percent, climbing to $6.4 million (Sh736 million) in 2020 from $0.1 million (Sh11.5 million) four years earlier.

The e-commerce platform, which allows merchants to make payments between Africa and the Middle East, has a staff count of 82 from 20 in 2017.

Lori Systems, which provides real-time information on long-haul transport services (e-logistics solutions), was the third Kenyan company in the top 10 fastest-growing firms on the continent after ranking seventh.

Lori’s revenue climbed to $25 million (Sh2.87 billion) from $2.9 million (Sh333.5 million) in the review period, posting a CAGR of 105.10 percent and raising the staff count to 142 from 20 employees in 2017.

Kenya’s growth-hungry retailer Quick Mart is, perhaps, the most easily recognisable firm on the list, ranking 11th on the continent. The retailer’s turnover climbed three-fold in the review period to $162.1 million (Sh18.64 billion) from $40.4 million (Sh4.64 billion), with employees increasing to 3,265 from 708.

Quick Mart’s CAGR of 60.2 percent came amid a majority stake acquisition by Africa-focused Adenia Partners, which has largely seen its stores increase to 46 last year from 11 in September 2019 when the deal was closed.

The supermarket chain opened the largest number of stores (six) last year, beating the market leader, Naivas, which added five more outlets to its network.

“There was PE [private equity] funds entry into two of the large players and those PE funds were part of what was fuelling that expansion,” Wambui Mabrire, the chief executive of Retail Trade Association of Kenya, told the Business Daily.

Kenya’s other fastest-growing firms are communications solutions company Africa’s Talking which ranked 13th, e-commerce platform Copia Kenya (20th), non-deposit taking microfincier ASA International Kenya (32nd) and farm inputs distributor East African Business Company.

Others are asset financier M-Kopa (51st) and information systems consultancy Impax Business Solutions (67th).

Kenya is the third most represented country in the ranking, with nine companies, behind South Africa (24) and Nigeria (20), and ahead of Egypt (six).

cmunda@ke.nationmedia.com