Fundraising: Pluspeople Kenya offers seamless accounting software for African SMEs
Today’s featured member of the VC4Africa platform is entrepreneur Michael Pedersen of Pluspeople Kenya, and their accounting system Uhasibu. The venture has already won many prizes and is now looking to raise a Series A round, most likely in an equity deal. Pluspeople Kenya is looking for investors with strong networks in East Africa to join its consortium.
Pluspeople Kenya is not starting from scratch, neither in terms of experience nor funding, and they have already secured a lead investor from the VC4Africa investor Network. Johnni Kjelsgaard is an angel investor, the founder and CEO of the Nairobi based startup accelerator GrowthAfrica. Johnni is leading the round and has committed USD 20.000 to the business. Asked why he is willing to support this venture he says, ‘Pluspeople Kenya (and their main product Uhasibu) is a perfect example of the type of B2B services needed in East Africa. Michael is a tremendously talented and visionary developer and a very capable entrepreneur. For me, he combines a strong value proposition with an ability to execute technically and managerially. These are the reasons we support Pluspeople Kenya, Michael and the team.’ VC4Africa followed up with Michael to find out more about current developments in the company and how they look to move the business forward.
What is the headache Plus People Kenya relieves for your customers?
“Uhasibu offers an accounting system that removes a lot of the manual paper-work that is required when using international alternatives, because Uhasibu is designed to comply with legislation in East Africa. The reality today in East Africa is that there is a very large portion of accounting that is done by hand, not because companies don’t have IT systems, but because the IT systems they have are not able to fully handle the legislative tasks that are required. The best example of this is petty cash management. No international package offers a system to manage petty cash, because they are designed for a market where this is not very relevant. But because in most SMEs petty cash management is hugely important, Uhasibu naturally has a complete management system for this.
Uhasibu lowers the barrier of entry for SME’s to doing accounting, while at the same time providing the business with feedback that can be used for improved decision making.”
Can you highlight the main milestones you have achieved to date?
“Uhasibu launched September 2011 in it’s initial version after a year of development. Since then we have been slowly growing the subscriber base, currently above 250 signed up clients, while at the same time building our internal organization and procedures to handle the client requests. For me personally, one of the more important milestones was when we got a really competent advisory board established, early 2012, that has helped me immensely when looking to focus on what’s important and what’s not. Externally, our more visible accomplishments have been the awards we have won, starting with winning our category at Pivot 25, the Top 100 CIO’s in Kenya, the Aitec Mobile Money and Banking Innovation Award, and as ICT Board Innovation Award runner up.”
Screenshot of Uhasibu
What has been your focus up until now? Key areas you are working on?
“Our biggest focus has been on establishing a secure foundation on which we can truly fulfil our vision of improving the way SME’s do business in East Africa though the user of IT systems. In practical terms the focus has been on building, launching and most importantly growing Uhasibu in Kenya so that we have a solid ground under our feet. Building a proven system for a critical function as accounting takes a surprising large amount of time. Hence, it requires some serious staying power to get off the ground.
Currently, our biggest thing is our second product ezPaySlip which is a payroll system tailor made to fit Kenyan legislation. It is due to launch any day now. Naturally ezPaySlip integrates completely with Uhasibu and other packages, to make the entire process as seamless as possible. Apart from this we are working hard on establishing partnerships to ensure Uhasibu’s continued growth.”
How did you end up in M:LAB? What do you think of the program and infrastructure and how has this helped you?
“I started out as a red member in iHub_ where I quietly worked on Uhasibu until Pivot25 in 2011. From being in the iHub_ daily, I naturally learned about M:LAB quite early in the process. After winning the business category at Pivot25, we were encouraged to seek incubation space in M:LAB, and decided to do so. Uhasibu organizes free hands on training sessions every month. For this we heavily use the M:LAB training room. Not having to setup and maintain our own training facility was the key argument for incubating at M:LAB instead of somewhere else.
M:LAB was a new organization just like the seven companies that were incubated within it. Like all ‘startups’, M:LAB had to find it’s feet before the program started showing it’s value. Within the last six months this has improved greatly and I am very happy about the entire program these days.”
The Uhasibu team
How have you financed the business to date?
“Due to my previous activities I have been in the fortunate position that I have been able to dedicate myself to the startup without having to worry about sustaining myself. In other words, I have been able to provide the seed funding myself, which I believe is very important for two reasons: first of all to ensure commitment from the (co-) founders, and also to avoid selling shares at a too early stage, at a price which would be too low. I believe it is important to wait with seeking investment until you have done everything that is possible using your means available.
With Uhasibu we are now at this point, and are now actively looking for investment. We have designed and launched a solid product, we are generating revenue and have grown an organization that can support the business, but this is as far as we can take it using our own resources. To accelerate growth we now need external investment.”
What kind of investor(s) are you looking for and for which amount?
“We are looking to raise a Series-A round of 200,000 USD from one or a consortium of investors, most likely in an equity deal. However, much more important is the profile of the investor! We are looking for someone who has a strong network in East Africa and who wants to engage actively in ensuring the required growth is achieved. Our dream investor has a strong local presence and is able and willing to help us gain access to new sales channels, and has an investment horizon of a minimum of five years. Finally, it would be great if there was any synergy possibilities within the investors existing portfolio.”
Moving forward, in addition to capital, what are the key challenges you will need to overcome?
“Growth! Everything comes back to ensuring the growth-rate. There is a number of product developments that have to happen so that we can grow the addressable market segment. There is a number of partnerships that need to be formed for us to add value and access the market. There is a number of recruitment challenges ahead of us which need to be solved before we have the ‘power’ to perform the product developments and enable the partnerships.
On a more concrete level, one of the obvious challenges ahead of us is to adapt our products to fit the legislation in the rest of East Africa so we can market the products outside of Kenya. This is not an issue right now, but it is coming in the next few years.”
What advice would you give to other ventures in the VC4Africa community?
“Think carefully about the timing of when you seek investment. Do you have enough to ‘show’ to attract an investor? And have you taken the project as far as you can on your own? And most importantly, be serious about seeking investment. Don’t venture into it with an attitude of ‘Lets just try and see if we can get some money to play with’. Be serious about it and about all the documentation and information you have to provide. It can be quite a lot. If you are not able to dedicate the time it takes, then wait until you can. And remember: people remember. So if you get a reputation of someone providing half baked ideas with no follow though, then you can be sure you will not find any investment at all.”
How can other VC4Africa members support you?
“By providing a network helping us with the right introductions. Do you know anyone who could benefit from working with us, then please get in touch.”
For more information, see the venture profile of Pluspeople Kenya on VC4Africa. Only registered investors can review the documents, see details for this deal, and express their interest to participate.