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What we gained from Lion's Den investment

By Mona Ombogo | Published Wed, March 14th 2018 at 10:10, Updated March 14th 2018 at 10:16 GMT +3
Michael Nduati who received Sh1 million in exchange for 49 percent of his M-Kura business

NAIROBI, KENYA: Almost a year ago, Hustle spoke to two entrepreneurs who featured in KCB’s Lion’s Den and managed to get investment for their companies, Kora Edibles and M-Kura. Today, Hustle revisits Coretta Kai, 27, and Michael Nduati, 38, to see how the investment and mentorship transformed their brands.

Michael Nduati: M-Kura

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Tell us about the investment that was pumped into your company.

I received an investment of Sh1 million in exchange for 49 per cent of my business.

M-Kura is a mobile voting system that allows people to cast their ballot without leaving the comfort of their home. Since partnering with my investor, Kris Senanu, we have now formed a holding company called Internetix Company Limited, which will deal with a vast array of voting applications and systems.

When we talked last year, you were in the process of developing the software for M-Kura, is it now complete?

It was completed a few weeks ago. We are going into Beta-testing and have secured a mock election with two top universities who are interested in using our system.

Take us through how M-Kura works again.

M-Kura uses an application which is downloaded onto any phone that has access to the Internet. The application gives the user an option to participate in a specific election for which they would already have registered.

Take a university, for example. We would work closely with their election board, who would give us the complete lists of all the students or faculty eligible to vote. These details would include two forms of identification; one from the government and one from the university.

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We would also get the details of the people vying for various positions and, as an added benefit, their mini-manifesto.

A link to the app would be sent to all voters and once downloaded would take them to the voting page. Voting would be done within a pre-arranged time slot. Once results were in, we would hand them over to the election board.

How foolproof is the system, given the suspicion Kenyans in particular have for any voting system?

The system is very secure. Once a vote is cast it cannot be tampered with because the only access is via the back office. The back office has fail safes to prevent anyone from changing details.

If, however, the system is breached, we would be able to trace where and when that happened.

Are you still aiming for the 2022 elections, as per our discussion last year?

Absolutely. Initially our focus will be the Diaspora and political party nominations. At the moment, there are a few challenges as far as a General Election is concerned. For example, only 60 per cent of Kenyans have Internet access on their phones, which means the rest would have to use feature phones to vote.

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While this is possible through the USSB coding system, they would not be able to see the pictures of the people they are voting for, which is a requirement in Kenya’s voting rules and regulations.  

So there is still a long way to go before this innovation can be used in a  General Election?

Yes and no. Technology transforms very quickly. I strongly believe mobile voting is the future, the same way mobile banking has taken over the world. In last year’s elections, many Kenyans in the Diaspora couldn’t vote; M-Kura would make this possible. Some sick and elderly people didn’t make it to polling stations; some people couldn’t travel to their constituencies. M-Kura would change all this with the touch of a button.

Apart from universities, who else have you gotten interested in your product?

We have talked to a number of Saccos with over 100,000 members, which also face the challenge of ensuring everyone can get to a voting station. M-Kura would allow them to carry out elections without the headache of transporting members to venues, and all the added expenses attached to that.

We have approached other bodies including the Law Society of Kenya. Any organisation, from corporate to a small chama, can benefit from M-Kura.

What are your charges?

We have not locked those down completely at this stage, since we are set to launch in May-June. But the cost would depend on the size of the organisation. Below 500 members would cost about Sh25,000 or less. For 1,000 members it would cost about Sh50,000 while for 100,000 members it would cost about Sh1 million.

What’s the biggest lesson you’ve learned in the past year?

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You can have a great product but without the correct partners, it might never reach the heights it’s capable of. One of the things we are focused on right now is getting a strategic partner who already has inbuilt infrastructure to help us push this product forward. A telecommunications partner would be ideal.

Correta Kai: Kora Edibles

You got a promise of investment for Sh2 million in exchange for 30 per cent equity in your company. How did that go?

I gained a lot of knowledge on how to streamline my company especially when it came to keeping the books and making future projections on where we are going.

That went well. In the end, however, I didn’t secure the funding, though I did get a mentor who has helped me a lot with my company.

What were some of the challenges in acquiring the actual investment?

I think it’s a challenge almost all small businesses go through. Kora Edibles started in my house because I was interested in doing unique, fruit and chocolate-based gift baskets.

When I started, I hadn’t anticipated going large scale. For an investor to come on board, that is crucial because they must get their money back and make a profit.

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I soon discovered that as far as scalability was concerned, perhaps my business had been too young to take in that much investment and satisfy the investor. After many conversations, we decided it might be best if my investor stayed on in the capacity of a mentor rather than pumping in money.

Despite this set-back, how did Kora Edibles perform last year?

In the beginning of the year business was booming. But towards the middle as the elections drew nearer, many clients were not willing to spend money on luxuries, which is the nature of my business.

In June I was forced to take a part-time job to sustain myself without draining the business.

When business was good we were doing about 150 baskets per month. During the election months we dropped to 50 baskets on some months.

Did business pick up again?

Yes. In December things started stabilising. We did 500 baskets that month; most of them were from corporate clients gifting their customers or employees. On Valentine’s Day, we did 100 baskets. We would have done more but we ran out of supplies and had to turn customers away. This is something we are looking to rectify in the future through better planning and starting our campaigns early for the big dates.

Who are your target customers now?

Corporates are always a plus because they make big orders and we tend to get many referrals from them. We have done baskets for a UN conference, which was so satisfying because there were presidents and many VIPs present for the occasion.

We are also doing weddings now and have three lined up for April and May. The baskets make great centre pieces, especially because they are edible and guests love that.

What are your charges?

They range from Sh1,700 to Sh10,000 per basket. It all depends on the number of fruit wedges per basket. The standard one has roughly 40 skewers of chocolate-covered fruit wedges, the one that goes for Sh10,000 has 500 skewers. This is the one used in most weddings or company parties. I am now designing a basket with up to 1,000 skewers.  

What’s your ultimate dream job for Kora Edibles?

When we supplied baskets to the UN I remember thinking: Wouldn’t it be great if we could supply State House? So, that’s my ultimate dream.

Is the business currently paying for itself?

I still don’t take a salary but other than that, yes. We have four full-time staff members and an office off Thika Road. We are in profit and can reinvest into the company for growth.