Rapidly growing African startups ready for investment from Japan

Logistics via virtual address

MPost enables customers to register their virtual address through their mobile phone numbers, and this service is the main business of Taz Technologies.

Behind the launch of this business was the bitter experience of CEO Abdulaziz Mohamed Omar. Despite receiving a formal job offer from a government institution as a place of employment after completing a master’s program, he ended up not being able to get the job as the official letter never reached him.

Regarding the postal situation in Kenya, each household is not allocated one address; it is not uncommon to share one address across a whole village or use one address among relatives. The number of postal addresses is a mere 400,000 for a population of about 50 million.

In the case of Omar, the official letter addressed to him arrived at a mailbox shared among his relatives, but it was left unnoticed for three months.

In a bid to improve such a situation, his company collaborated with Kenya’s postal service. The company developed a system to automatically send a text message to the receiver’s virtual address after reading the QR code of the postal item. It succeeded in creating a system that increased the certainty for people to receive their mail.

A user can register their address for a yearly fee of $3 and choose the nearest post station among the 622 post offices in Kenya. They receive a text message to their cellphone once a postal item addressed to them reaches the designated post office.

Postal services in Kenya had remained unchanged for 124 years since the first post office created in the country in 1892, until 2016 when the MPost service was established. But such a situation has transformed drastically in just three years thanks to the power of information technology.

As of December 2018, the service had registered 40,000 users and a record of notifying them of about 22,000 mail items. The company has received an investment from Samurai Incubate Africa Inc., a Japanese venture capital focusing on Africa.

Convenience attracting users

As for the reasons behind the spread of the service mostly through word of mouth and rapid growth in the number of its users, Omar said, “Its business model is KISS,” which stands for “Keep it simple, stupid.” With a mobile phone, anyone can start the service easily. The simplicity proves popular among users and investors.

Positioning himself as a social entrepreneur, Omar described the role of MPost as a means to “realize social inclusion.” It aims to enable anyone to receive social services through accurately delivering various administrative letters to each receiver, which did not happen before due to the lack of an address for each household.

Regarding the e-commerce that saw rapid global growth of its users, Omar noted, “It would be really spread widely with the promise of surely receiving a product.”

He went on to say, “If Rakuten would like to send items to Africa, we have MPost in Kenya.” As a matter of fact, about one-third of parcels sent to Kenya was from Alibaba Group Holding Ltd., China’s largest e-commerce company, with most of the consumers being MPost users.

“There is Kenya-style infrastructure in Kenya. I wonder what Japanese companies are waiting for,” Omar noted. He hopes many Japanese firms turn their attention to the African market.