When mobile money means business

I recently interviewed the founders of Ugandan fintech venture Beyonic, a finalist at this year’s Sankalp Africa Awards for sustainable enterprises. Launched in 2013, they aim to eliminate dependency on cash by helping businesses quickly set up and manage mobile money payments.

Cash doesn’t allow people to become part of the formal economy; it’s also insecure and costly, explained cofounder Luke Kyohere. And while mobile money for person-to-person payments has massively taken off, businesses have yet to exploit their full potential. That’s where Beyonic comes in: making it easy for a business to pay people using existing mobile money systems. They’ve landed some big clients (including Save the Children), but also another social enterprise, Educate!. For them, paying wages and expenses with cash meant time and money spent on travel to/from Kampala, plus risk of muggings and holding huge amounts of cash on site. Educate!, when I met them in Uganda, said getting mobile payment systems in place is one of the things that’s helping them scale up.

Read more from Luke and his American cofounder Dan Kleinbaum below. Extracts of this interview were featured in this Pioneers Post article, What the world needs to know about African enterprise. 

What draws you to technology?

LK: I see technology as an enabler. Whether you’re trying to take vaccines to the field, or whether it’s about agriculture and giving farmers access to markets – the key issue [here] is access. Technology helps because with a mobile phone in someone’s hands suddenly you don’t have to go out to the last mile – the last mile is connected to you already.

What kind of person does it take to be an entrepreneur in Uganda?

DK: Unbelievably patient! It takes time to build something big and meaningful. And no matter how many times I was told that before we started this, I don’t think I realised that until recently. Building up trust and credibility, particularly when you’re dealing with financial services, takes longer than you think… Overnight success stories happen because you haven’t seen the first two years of grind and hustle.

LK: In Africa, almost everyone you speak to has more than one job…they’ve got their regular 9-5 job, they’ve got their farm, they’ve got a shop that their mother is running and they pay for. So the entrepreneurs are there, the question is: why aren’t more of them successful? It’s things like access to finance. In Africa, most investors are looking for brick and mortar businesses – they want to invest in something they can see and touch. A tech startup for a long time didn’t have many opportunities for raising finance. I think that’s changing. Access to global networks is one thing, I think, that will make entrepreneurship much more prolific in the coming years.

How are African entrepreneurs seen by investors and others in the west?

DK: We were [in Texas] pitching the idea, before Beyonic was a solid business… it was a room probably with 50 people, and after we got through our 10-minute pitch, this guy says: “Aren’t there people with guns and stuff over there trying to keep you from doing business?”

[But] it’s one of the reasons why there is so much opportunity – the level of ignorance in terms of how things operate. There are 700 million mobile handsets on the continent. If you’re talking about infrastructure to build any type of service on, it’s better than perhaps anywhere, with the exception of China and India – mind you, it’s 54 different markets. But 80% of Ugandans have mobile phones and 60% have mobile money accounts – that’s something that western investors are just starting to figure out.

What’s been the most difficult thing about getting to this point?

LK: Staying focused. Because you generally get a lot of opportunities to do things that aren’t part of the initial thing, and sometimes you need to do that to generate money. With Beyonic, it was one of the key things we decided at the beginning – that we wouldn’t do consulting – because then you become a consulting firm and you don’t build a product. That was a hard decision to make. [But] it’s been a pay off, I think.

Do you ever feel like giving up?

LK: We’ve definitely asked ourselves at some point: what would it take for us to stop now? But we tend to not be in that same place at same time…so we help each other in terms of – “well, I’m not going to settle for that”, or “I’m not going to stop there”.

DK: Our team in Uganda and Kenya are amazing – they’re hitting their stride, signing customers and building really awesome things. But the two years leading up to it… where you’re not taking a salary and trying to figure out a way to pay bills… because you think that there’s something there, and customers are telling you that they love what you’re doing – that’s hard.

What is the entrepreneur community like in Uganda/East Africa?

LK: There are some really great incubators and innovation centres and accelerators, all part of the Afrilabs network – that network’s helped a lot of young developers learn the business skills they need. There are also a lot of funds and organisations popping up – the Acumen Fund, Pivot East, the Unreasonable Institute – all that’s beginning to build up a sense of community that didn’t exist five or ten years ago. The support network’s way better now.

Is there a hierarchy? I don’t know – I think people are accessible. It’s very easy to talk to experts and people who’ve made it to that point. Everyone you want to talk to is in Kampala.

The hard part is government support [for entrepreneurship] in a concrete way. It’s starting to happen but it’s taken a while and has taken people to push for that.

DK: It’s unbelievably welcoming and interesting… everyone is working on something that matters. Pretty much no one is selling advertisements!

What are the most exciting developments or innovations in your sector?

DK: There are a couple of companies I really like – consumer finance companies, individual lenders of sorts. Three that stick out are Inventure, Branch, and Jumo. The model is very complementary to what we’re doing – that will really help unlock mobile money for people.

LK: You’re beginning to see mobile operators being more agile and more open in giving access to APIs [the code that allows software programs to connect with others] – Safaricom just released their API last year. That’s going to change a number of innovations we see happening in mobile money as smaller, more agile players are able to put their product out there.