Koa: Empowering African Consumers with Financial Tools

Koa: Revolutionizing Savings and Investment for Kenyans

Delila Kidanu, having grown up in Nairobi, Kenya, experienced firsthand the prevalence of M-Pesa as the primary fintech solution for many Kenyans.

While Safaricom's platform facilitates basic financial transactions like money transfers and airtime purchases, access to broader digital financial services – encompassing savings and investments – remains limited for a significant portion of the population.

Significant Savings Remain Untapped

Last year alone, Kenyans collectively saved approximately $13 billion. Remarkably, over 70% of these savings were managed through informal saving groups and cooperatives.

Recognizing this gap, Kidanu, alongside Alexis Roman and Bubunyo Nyavor, founded Koa. Their mission is to empower Kenyans with improved tools for saving and investing their funds.

Kidanu serves as the company’s COO, while Roman and Nyavor hold the positions of CEO and CTO, respectively.

Competing on the TechCrunch Disrupt Stage

Koa is currently one of 20 companies vying for $100,000 and the prestigious Disrupt Cup at this week’s TechCrunch Disrupt Startup Battlefield competition.

Identifying a Core Problem: Efficiency, Not Access

In a recent interview with TechCrunch, Roman explained that their market research revealed widespread dissatisfaction with existing traditional saving options among Kenyans.

These options, often offline-based, are characterized by manual, costly, and non-transparent processes within microfinance banks, cooperatives, and informal groups.

“We were surprised by the experiences people shared regarding their cooperatives and savings groups,” Roman stated. “It prompted us to question why better alternatives weren’t available.”

Roman emphasized that the core issue isn’t a lack of access to financial services, but rather the difficulty and inefficiency of utilizing them. This realization was the catalyst for the creation of Koa.

Addressing a Clear Market Opportunity

Although some Kenyan banks offer savings products, Koa perceives a significant opportunity. Banks generally aren’t the preferred savings destination for the average Kenyan, as demonstrated by the statistics regarding informal savings methods.

The founders are confident that Koa will disrupt this pattern.

Koa’s Innovative Savings App

Koa’s initial offering is a savings application that enables users to deposit funds, save, and earn interest.

The app allows users to create distinct savings goals within different “pockets,” mirroring the practice of allocating funds to various informal savings groups for specific purposes.

Overcoming Key Challenges

Despite the substantial opportunity, Koa has encountered two primary challenges.

The first is infrastructure, essential for processing deposits. In Kenya, fintech startups typically require a partnership with a financial institution, a process that can be complex and even more challenging than in Nigeria.

The second challenge is building trust, an area where informal savings groups and cooperatives have traditionally excelled through word-of-mouth referrals.

Scaling Past Obstacles

Koa has successfully navigated these hurdles. By securing strategic partnerships and engaging with regulatory bodies, the company now facilitates easy deposits without requiring the lengthy traditional KYC (Know Your Customer) procedures.

Early Traction and Future Plans

Since its beta launch in April 2021, Koa has onboarded approximately 5,000 customers utilizing its savings product.

Recognizing that savings represent the most accessible entry point for fintech applications, Roman outlined plans to expand Koa’s product suite.

The company intends to explore opportunities in embedded finance and banking-as-a-service, enabling other startups to launch fintech products more rapidly.

Leveraging its initial success in savings, Koa aims to establish the foundational infrastructure for digital financial services within the country.

Vision for a Digital Banking Platform

The ultimate goal is to evolve into a comprehensive digital banking platform offering services such as lending and investments.

“We can provide direct-to-consumer savings apps and simultaneously assist other companies in offering savings or other financial products to their customers,” Roman explained. “We can alleviate the regulatory burdens they face.”

“Our long-term vision is to become a fully-fledged digital financial institution.”

Alongside its core savings product, Koa also provides financial literacy and educational content to enhance user engagement.

Users have collectively saved over $40,000 on the platform, and the company is experiencing double-digit week-on-week growth in both users and deposits.

Koa recently secured an undisclosed pre-seed investment from angel investors across Africa, Europe, and the U.S.

Experienced Leadership Team

Prior to founding Koa, Roman led strategy at Helium Health, a prominent African health tech startup.

Kidanu previously worked with MEST Africa, a pan-African incubator and accelerator, in a business leadership role. Nyavor is a serial entrepreneur with a proven track record of leading engineering teams at various African tech companies.

“I have strong confidence in our team,” the CEO stated. “I’m incredibly excited to collaborate with individuals who are deeply committed to customer satisfaction and delivering an exceptional user experience. I believe this is a key differentiator for us in the market.”