A new technology-based trade platform, Kountable, is celebrating more than a year of success in Kenya, its second market place after Rwanda. The company has made a unique business of facilitating trade deals between SMEs, global suppliers and pay masters such as government agencies, NGOs or multi-national corporations.
Since the company has opened its doors, it has funded nearly 200 projects valued at $54 million and $23 million has gone to local SMEs in gross revenue.
“I think 2017 and 2018 were certainly proof of concept years,” says Kountable CEO Chris Hale. “It takes a while for people to understand what we do and why we do it the way we do it. We are not a lender; we’re not really a finance company at all.”
Instead of lending SME suppliers funds to procure goods, Kountable sources and purchases the goods for them, guaranteeing quality and insured product as well as help with trade logistics to get the goods to the paying end customer. They even manage currency risk.
“One of the things that a lot of our customers don’t think about is currency,” Hale explains, “when you’re doing a project that’s going to take six months, you can see currency decay, maybe even by 10-12%, and some of these suppliers’ margins are slightly more than that. So they’re working for free if they don’t think about this.”
Kountable is more than a trade partner though, it really is a trade network, with not only buying power to help complete big contracts but also the valued experience of knowing who to work with in these emerging markets and ICT verticals. Each deal is a collaboration with local SMEs, global suppliers and the organizations that are buying the ICT product.
Kountable has picked the right country to do it in as well.
Last week Kenya was re-elected to the Council of the International Telecommunications Union (ITU), the UN specialized agency for ICTs. More, the East African country earned the highest number of votes (140) for membership of any country in the continent. The overwhelming selection of Kenya on this platform is a vote of confidence from the global ICT community.
Confidence in Kenya’s markets wasn’t always there though. In fact, Kountable launched in Kenya during the controversial elections of 2017, a time when political uncertainty forebode economic trouble.
“Nobody knew who the Kenyan president was for a while,” says Hale, “so the macro environment has been a big education. When I talk to our customers and they tell me that last year was one of the most difficult years in their professional years given all that turmoil, and it was our first year, and it was a success, I’m pretty enthusiastic about our future in Kenya.”
Hale emphasizes the importance of relationship building in the country and that the talented team they’ve built there is excelling in it: “I think the human touch in East Africa, and specifically in Kenya, is an asset. And we’ve been lucky to build the team that we have there. We’re a new company with a very new idea, but we have an 80% return rate of our customers.”
Now that Kountable has established its position in the country, Hale says the company is looking to deepen its banking relationships, to build institutional partnerships with the Kenya ports and with the government getting involved in the new free trade zone.
“We want to really institutionalize the experience for the large end customers that are benefiting from the reseller community that’s powered by Kountable,” says Hale. “Because the more institutional grade the platform becomes, the more institutional grade the experience becomes. And the more money our customers make.”
This development of the company and its deepening relationship with all of its trade constituents seems like a natural next step.
“The most exciting thing in both [our] markets, but particularly in Kenya, is this partnership model that’s evolving. Businesses in general, but procurements departments of businesses and governments are witnessing the results that we deliver. They’re seeing how effective, efficient and high quality our supplier network is. And so they’re starting to come to us as large payers that procure large volumes of goods through resellers. The more of those partnerships that we can activate, the more effective we can be on behalf of our reseller community.
“One of the things that we’ve learned,” says Hale, “is that Kenya is really dynamic. There’s lots of change and at the highest levels.”
Recently, in an interview with CNN’s Richard Quest, Kenya President Kenyatta stated, “Our position is a very clear one. We have an infrastructure gap that we need to fill. And we are going to work with our partners across the globe who are willing to partner and to work with us to help us achieve our socio-economic agenda.”
The statement comes in the wake of the Kenya and United Nations housing initiative that was announced in September of this year. President Kenyatta has promised to build 500,000 housing units for low-income citizens before the conclusion of his second term in office. It’s estimated the project will require $13 billion in investment to complete.
In regards to the project, Hale says that Kountable has been talking to some of the major participants around that supply chain.
“One of the challenges that comes up when you set up a big goal and you circle the right people around it,” says Hale, “is when you get to the execution phase. You need to know how you will ultimately manage this project.
“When you say, ‘We’re gonna build 100,000 homes,’ that’s more than 100,000 doors, lighting fixtures and refrigerators. All of that needs to be coordinated and inbound and synchronized against a project plan. Not to mention the inputs to the houses themselves — the steel, stone, tile, etc. You need to make sure the product is high fidelity, that it’s corruption free, that the inputs are quality inputs and that they get there on time.
“When you have the will of the people and the will of the government to make something like this happen, Kountable wants to come in and be the platform on record to make sure that it’s run correctly.”
It appears that Kountable is in a position to do just that.
One question we get asked a lot is why did we choose to start our business in Rwanda? Kountable assesses market opportunities based on a balance...