M-Kazi: Mobile job-search on basic phones in Kenya

Finding seed funding is one of the major problems African entrepreneurs face when they want to start a company. Nancy Wang and Lino Carcoforo are in a unique position where they founded a seed-investment fund called ‘Innovation 4 Africa’. Serial entrepreneurs at heart, their most recent project is a mobile job-search application called ‘M-Kazi’. As M-Kazi was selected as one of the ventures in the VC4Africa Booster Program, it’s time to talk to Nancy and Lino.

Why did you start ‘Innovation for Africa’?

Nancy Wang: “VC funds mostly look for companies that have proven themselves in the market, but few players have the capital to ever reach that point in sub-Saharan Africa. Existing funds struggle with deal flow at the growth or expansion stage, but they find it too risky and labor intensive to invest at the seed stage. We fill what we observe to be a funding gap in Kenya by providing seed capital and heavy structural support for tech entrepreneurs to bring their ideas to market and provide hands-on mentorship to ensure the success of our ventures.”

Lino Carcoforo: “Innovation for Africa invests in early stage start-ups with injections of  $30.000 to $50.000 dollars to launch the product to market, gain traction, then help the ventures attract further rounds of funding if needed. There are so many bright developers with brilliant ideas but many lack understanding of the market and how to monetize their product. A common assumption is a good idea will automatically give you an easy ride to success. Well… that is almost never the case, and we challenge our entrepreneurs to be diligent and agile when observing how the market responds to their product.”

What are the kinds of companies you invest in?

Nancy: “We primarily focus on mass-market ‘need-driven’ mobile technology. Kenya has the fastest growing middle class in Africa and we believe the market is in the masses. When you are creating products for middle to low-income customers you need to offer solutions to problems faced every day. In the West, where people have a lot of disposable income, Steve Jobs experienced unprecedented success by telling people what they want instead of asking them what they want. In Kenya, disposable income is limited for many and essential needs are often not met. People will spend money on things they really need. This is why mobile money products like M-Pesa have 14 million users, because people need it.”

Lino: “We look at real problems Kenyans experience and strive to provide solutions using relevant technology. All ventures we invest in have to meet these criteria and fit into our long-term strategy. Apart from M-Kazi, one of the other start-ups we’ve invested in, M-Changa, offers a mobile solution for pooling money for weddings, funerals, hospital bills, school fees, etc. Fund raising among family and friends is very common practice in the Kenyan culture and now this will be possible through the use of mobile money and overcome geographical barriers.”

Tell us about M-Kazi?

M-Kazi is a mobile application targeted at low to middle income Kenyans who make up about 80 percent of the working population. M-Kazi allows job-seekers to access valuable job information through basic mobile phones via USSD and SMS and directly apply for jobs. In Kenya the unemployment rate is at 40 percent and this totals to about 8 million people.

Today, 50% of the population is under 15 years of age and they will enter the job market in the next few years. ” While most employers are going online to post job adverts and search for qualified candidates, most job-seekers lack consistent access to the internet. There are only 4 million internet users in Kenya compared to 25 million mobile phone subscribers- a 67% mobile penetration.”

Lino: “We are not trying to re-invent the wheel as there are existing job-search websites already. What we are doing is bridging the gap between job-seekers and employers. Many Africa countries, Kenya included, are very centralized. Everything is focused on the capital Nairobi and two or three smaller cities, but with M-Kazi we will eliminate the geographical barrier, as we will match profiles to jobs and alert job-seekers through SMS or USSD.

Take for example a solar lighting manufacturer who is looking for sales representatives in rural Kenya. Often they struggle to hire the right people local to these areas as there’s a disconnect between the employers in the cities and the job-seekers in the rural areas. We will fix this with M-Kazi which will be launched March 26th, 2012.”

What is the business model behind M-Kazi?

Nancy: “We are removing the costs and time ordinary Kenyans normally spend on finding a job. Job-seekers typically take public transport to get to an internet-cafe where he or she also has to pay for internet access. We are offering our mobile service for 20 Ksh (0,18 Euro) per week, less than half the amount a job-seeker has to spend on a single trip to the cybercafe. A job-seeker only needs to access the internet once to load his/her CV onto our website. But after that, he/she can apply for jobs by simply sending an SMS to email their CV to an employer, anywhere and anytime.”

What is the main advantage of investing your own money in M-Kazi?

Lino: “We’ve invested $50.000 of our money in M-Kazi for start-up capital because we strongly believe in the success of this solution. Twenty percent of Kenya’s GDP already moves through M-Pesa. Kenyans are literally in love with their mobile phone and it is very much a symbol of social status. Given the high mobile penetration in Kenya, cell phones are the best way for information to reach the masses. Offering this opportunity will change the way jobs are being searched and bring information and opportunities for people who previously had very limited access.”

What are you looking for?

Nancy: “At the moment we are looking for $100.000 to scale up in Q2. This investment can be equity, convertible debt or a hybrid. We want to prove the success of this model in Kenya, then expand M-Kazi regionally and across Africa to countries with similar demographic landscapes and mobile penetration.” We have already started to identify potential partners in Uganda, Tanzania and Ghana for expansion in 2013.

Please tell us about your backgrounds?

Nancy: “I arrived to East Africa in 2006 and raised over 2 million dollars to start up Fulda Group Ltd., which became one of the largest suppliers of essential drugs and providers of supply chain solutions to the government of South Sudan. I went on to expand Fulda Group’s work to construction to address the country’s housing crisis and to kick start its reconstruction efforts after 20 years of civil war. I bring extensive operational experience in Africa to the team.”

Lino: “I am an international recruiter and entrepreneur and spent 15 years in Kenya. I designed and implemented pragmatic resourcing and recruitment processes while developing talent management analytics, including benchmarking, best practices and metrics for Coca- Cola and USAID development project partnerships with the private sector with the aim of streamlining workforce development. My strategies have provided seamless identification, assessment, on boarding, development, promotion and exit strategies.”

Nancy: “Nicholas J Dear is also part of the founders team. Nicholas has worked in the IT sector for over 17 years, having founded one of the first corporate web hosting companies in the UK, Areti. After successfully completing an equity sale of the business to an overseas competitor, he moved to Kenya where he founded a national ethical investment exchange. He has become a shareholder in some of the country’s most successful IT businesses and has worked as an advisor to both start-ups and established businesses.”

How did you find out about VC4Africa and how did participating in the Booster Program help you so far?

Nancy: I heard about VC4Africa via Twitter! Some time back Saskia Reus was conducting an online ‘Free Feedback Friday‘ Business Plan critique and I decided to contact her. VC4A through the Booster Program has provided extensive support and guidance in every step of the startup. Saskia and Arnout have been so generous with their time and input, we hope to continue working with VC4A in the years to come.”

How can people who are interested in what you do reach you?

Lino: “We can be reached by email nwang [at] i4a.co.ke or linoc [at] i4a.co.ke, or by phone +254(0)734621636 or +254(0)718771015. You can also visit Nancy’s VC4Africa profile, our website www.i4a.co.ke or our offices in Nairobi.”