Venture financed Kopo Kopo paves the way for African based startups

Last month the Kopo Kopo team moved into their new office to accommodate their growing number of employees. From this space, situated on the second floor of the Bishop Magua building in Kenya’s capital Nairobi, founders Ben Lyon and Dylan Higgins are determined to change the mobile money game in the developing world. “Everything what we do is helping small and medium businesses grow.”

Kopo Kopo has partnered with Kenya’s leading mobile operator Safaricom to connect SMEs to the mobile money network ‘M-Pesa’ (M for mobile, ‘pesa’ is Swahili for money). “Businesses in Kenya are processing a lot of cash payments and there’s a lot of room for leakage, accounting errors and the large cost to handling cash money. We are helping the SME’s to move to electronic payments. In the Kenyan context that means helping merchants to accept M-Pesa.”

Over the past two years Kopo Kopo, with currently 12 employees, has created a web-based interface to access statements at any time, to analyze costumer payment trends and to integrate the transaction details of payments with back-office systems of their customers. Ben Lyon explains: “It is twofold what we do: First, we give merchants the means to accept mobile money and second, we are using the information to give them business intelligence tools so they can make better informed business decisions.”

Hard to secure funding

Both American entrepreneurs are very articulate about their idea. But it still took them about more than a year to secure the funding they needed to scale up. Dylan Higgins (right on the photo, Ben Lyon left): “We had to leave Africa to raise funding and we have literally spoken to over 100 potential investors in the US and Europe. What we heard was that we were ‘too early, too small’ and the fact that we are focusing on Africa unfortunately scared many people away.”

Dylan continues: “The post-election violence in Kenya the beginning of 2008 also still influences peoples perceptions and distance is often a problem for investors. As Naval Ravikant, the founder of Angel List, once said, ‘capital is mobile but capitalists are lazy’.”

In October 2011, Dylan and Ben finally found the right parties to invest: Khosla Impact and Blue Orchard. “These two organisations complement each other: Khosla has a long history of investing in disruptive start-ups and Blue Orchard has a long history of investing in emerging markets, including East Africa”, Dylan said.

Paving the way

With more and more foreign investors opening offices in Kenya, and local investors entering the technology-startup market, Ben and Dylan sometimes feel that indeed they were ‘too early’ when they were looking for funding. Dylan: “Of course I was pitching our idea to all these investors, but I had to convince them to invest in Africa first. With more and more investors coming to the continent, it sometimes feels that we, in our small way, paved the way for other Africa-based start-ups to get funding.”


Kopo Kopo came into existence in West Africa in 2010 when Ben Lyon was based in Freetown, Sierra Leone (Kopo Kopo comes from ‘kobboh kobboh’, the Krio word for money). At that time Ben was focusing on setting up a mobile microcredit system as an NGO. “Looking back we were way too early as mobile money isn’t common in Sierra Leone even today. One of the big lessons is that we didn’t look at the model from the user perspective at that time. We’ve learned that a system has to be used on a domestic level by a large share of the population in order to succeed.”


Since 2010 the Kopo Kopo team has gone through two major pivots. “An organisational change from a non-profit to a for-profit and from servicing micro-finance institutions to servicing all businesses with our proposition. To scale this to the level we want it to be we need to be a commercial enterprise. For making deals with mobile operators and to raise the kind of money we needed to grow.”

All start-ups make mistakes and according to Dylan this is a good thing: “Entrepreneurs should embrace failures and learn from them! The biggest mistake people make is holding on to their original idea and that it becomes an ego-trip. Instead you have to be able to pivot and adjust the idea.”


The path the founders of Kopo Kopo took went from Freetown, Sierra Leone to Boulder, Colorado. From there they went to Seattle, Washington and finally to Nairobi, Kenya. ‘We knew we have to be here where mobile money is used more than anywhere else.” Ben and Dylan started talking to Safaricom, the mobile money market leader (98%) with their mobile money service M-Pesa.

M-Pesa has only a small team within Safaricom and they choose to outsource elements of their operations to third parties. “Safaricom’s focus is not on servicing the long-tail of SME’s as it is a niche business and not the core of their operations. Our vision is to deliver on the long-tail and they see us as one of the partners that will help them to drive their services down the value chain..”


As the Nairobi-based team of Kopo Kopo is working hard to secure their position in Kenya, the team is already looking across the borders into the rest of East Africa. “It is our intention to make this a global company. We are focusing on emerging markets as mobile money will play a big role there.” Ben and Dylan are very clear about their goal: “In five years from now, we want mobile money to be the dominant cash-alternative payment scheme in East Africa.”