A tech start-up is a company whose purpose is to bring technology products or services to market. These companies deliver new technology products or services or deliver existing technology products or services in new ways.
They are many of them but we will talk about; market force and OkHi.
MarketForce
Year Founded: 2018
HQ: Nairobi, Kenya
Size: 251-500
Founders: Beniamino Bruno, Mesongo Sibuti, Tesh Mbaabu
MarketForce is a Kenyan start-up that was founded in 2018 and is currently based in the capital, Nairobi. The company provides a digital platform for the retail distribution of various goods and financial services to consumers across the entire African continent. This allows for goods to be paid for digitally rather than with cash.
Since being founded, the company has gone through eight rounds of start-up funding, with the most recent funding round taking place in February 2022. These funding rounds have allowed MarketForce to agree to deals with 22 investors. These investors have invested a collective total of $42.7 million into MarketForce.
OkHi
Year Founded: 2014
HQ: Nairobi, Nairobi Area, Kenya
Size: 11-50
Founders: Timbo Drayson
OkHi is one of those Kenyan start-ups that claim to be “the world’s next generation addressing system”. It offers services to all sorts of industries including emergency services, ecommerce, mobile lending, banking and last mile delivery. Not knowing an exact address when making a delivery or visit can be costly. Time, fuel and money is wasted driving around trying to find the exact spot. OkHi is here to solve that issue. With verified addresses and GPS location, the software development kit is making finding the right spot easier. It can also improve the checkout speed and experience for ecommerce sites.
Timbo Drayson founded OkHi in 2014 and it now employs over eleven employees but fewer than fifty. The start-up has a headquarters in Nairobi, Nairobi Area, Kenya and has completed six funding rounds. With fifteen investors, the start-up has raised $4M in total funding to date.
So what factors are most impactful for existing start-ups looking to grow, as well as the factors most prevalent for start-ups yet to launch to be successful?
Regulation
Regulatory hurdles loom large for start-ups, especially those with revenues directly tied to consumer demand. Regulatory policies over the last two decades have made it difficult for start-ups and smaller firms to grow and expand. These policies are especially challenging for entrepreneurs with innovative business models—like Jim Koch’s Boston Beer Company—to get their foot in the door of new markets.
Influence of Social Capital
Start-ups often bring the heart of a city’s history and its potential technological future. The degree of their success is thus reliant on the collaboration between themselves and local universities, corporations, governments, and non-profits.
Social capital is made from the network of people and relationships living in a particular region, working in an industry, and communicating ideas with trust and openness. This transfer of information and ideas through people is one of, if not the most valuable asset a start-up can acquire. Selling yourself is just as important as selling a quality product, a lesson Jim Koch learned early on that he and his co-founder, Rhonda Kallman, had to do 2 things: make great beer consistently and sell themselves alongside their product.
One of the most impactful benefits start-ups have had in recent years has come through the expansion of Connected Spaces or Startup Hubs. Convening entrepreneurs in a high-density environment has allowed for a greater spread of resources and business expertise.
Startup hubs bring together smart innovative people, often working towards similar goals of building their businesses and improving their shared community. In these connected spaces, startups are generally able to increase productivity and learning by working ideas off similar consumers to which they intend to market. This rapid transmission of knowledge can enable faster and more dynamic growth.
Scaling Technology
Startups can be much more flexible than large firms, and typically have a greater ability to adapt to new technologies and systems. This strategic advantage affords them access to improved business models, increased productivity, and dynamism during uncertain business conditions.
The ability to function faster and more efficiently across many markets both domestic and international affords startups a unique opportunity to grow and expand where conditions are most profitable. As a report on “Global Flows in the Digital Age” from the McKinsey Global Institute states, “Today, digital technologies enable even the smallest company or solo entrepreneur to be a “micro multinational,” selling and sourcing products, services, and ideas across borders.”
Role of Startups in Economic Prosperity:
Startups may be small companies, but they can play a significant role in economic growth.
• Startups are the centres of innovation.
• Startups create jobs which means more employment, and more employment means an improved economy.
• Startups have a direct impact on the cities that they make their homes. Look at how Infosys has changed Bangalore, Alibaba impacted Hangzhou, Microsoft changed Redmond and Google transformed Mountain View, California. They improved employment patterns providing job opportunities to both experienced and young professionals. This led to surge in inflow of graduates and relocation of experienced professionals from different cities.
• The “dynamism gap” between the large cities and the rest of the country narrows down due to startups.
• Startups boost the economy with revolutionary technology and create new industries over time. When these startups go public, they truly become money-making engines for not just the owners but also for the employees and shareholders.
• Startups also contribute to changing the image of the country.
Compiled by Shally Ogweno