Sokotext Summary 4 Sept

Transcript

1. SOKOTEXT Fresh, affordable food - today.
2. We tackle food insecurity in urban slums.
3. Slum dwellers struggle to get safe, affordable and easily accessible food POVERTY Insufficient funds to buy food Not enough (good food) Disease or illness Lost time from school or work The problem
4. Key Trends 3.9 million Kenyans live in urban slums Including 65% of Nairobi’s population. Nairobi’s population is projected to grow by almost 80% by 2025 The second highest growth rate for cities in Africa.
5. Key Trends Mobile phone penetration in Kenya is at 78% and rising
6. Key Trends Organisations working with producers are in need of viable market linkages ? ;   =  
7. This is Evelyn •  35 years old, married with 4 children •  Has been living in Mathare for 20 years •  Sells common vegetables and some FMCGs such as washing powder •  Serves 15 customers a day •  Daily revenue: 300KShs •  Owns a simple Nokia phone
8. Our Customers’ challenges •  Matatu fare (60KSh) •  Transport charge (40KSh) •  Someone to watch kiosk (50KSh) Low Capital Low trust Can’t buy in bulk Has to travel to the market every day Unwilling to form buyer co-operative
9. OUR SOlution We make food cheaper for people living in the slums by aggregating orders of fresh produce through the simple medium of SMS.
10. How it works Kiosk   1.  Kiosk owners pre-order fresh produce in person or using their mobile phones. 2.  SokoText aggregates their orders and manages the distribution through wholesale outlets located on the edge of the slums. 3.  We work directly with farmer co-operatives to get the cheapest prices for our customers. 4.  Savings get passed down to end consumers. ;  N  =   <  
11. THE TECHNOLOGY 1. SMS or USSD-based platform 2. Native Android or web app 3. Admin panel •  For our Kiosk customers •  Place order through the system •  For our outlets •  Manage orders and collect data •  For HQ •  Organise distribution and analyse data 4. Advertising & Education app •  For end-consumers •  Find nearest SokoText kiosk and receive special offers & nutritional information
12. Slum Kiosk owners Farmer Co-operatives Cheaper Produce, Access to more goods Training, Access to microfinance Mobile phone, personal Slum outlets NGOs, MFIs, government Margins on sales Handle orders, manage food distribution Technology, Relationships, Brand Access to BoP markets/ data Sunk costs: Development, outlets Fixed & Variable eg Rent, wages Grants, CSR, investment Datamining & cross selling, Ethical sms adverts Government, Companies, NGOs Business Model
13. Our Progress MVP Pilot Partnerships Hult Prize Spark Kenya Advisors
14. Our pilot MARKET VALIDATION – USER CENTRIC DESIGN – SOCIAL IMPACT •  Manual prototyping of later automated processes •  Location: Mathare, Mabatini •  Local manager Isaac runs operations •  Hosted by local community based organisation Community Transformers •  25 participants to date
15. Our pilot
16. Our pilot
17. Key Metrics Acquisition Activation Retention Revenue Referral 80% conversion among first 2 cohorts Total orders: 82 3 referred customers despite no encouragement or incentives 25 users signed up overall Week 1 cohort: 6 ; Week 2 cohort: 10 Week 3 cohort: 9 (just started) 3 inbound customers despite no marketing and no brand visibility 14/16 repeat orders (C1 + C2), daily or every two days ARPU: 180Sh/day Total revenue over last 2 weeks: 8500KSh
18. SCALING STRATEGY Kiosk   Vegetable   Seller   1 Outlet Each SokoText outlet serves 7500 people 100 Kiosk owners 15 customers with 5 family members
19. Scaling Strategy •  Set-up cost of each outlet: $200 •  Getting USSD code: $1000 •  Technology development cost: $2000 •  2-year work permits for 4 people: $16,000 •  Lorry: $20,000 Set-up Costs Ongoing Costs •  Monthly running cost of each outlet: $700 •  Salary of 1 full-time local tech person: $600/month •  SMS costs per month per outlet: $250 •  Salary of 1 full-time local tech person: $600/month •  Co-founder salaries: 3 x $600/month •  Maintaining USSD code: 300/month •  Maintaining Lorry: $2600/month
20. Scaling Strategy The population of Mathare is approximately 200,000 We can reach 30% market penetration with 8 outlets
21. Our TEAM Jonah Brotman CEO   Verena Liedgens COO   Suraj Gudka CFO   Sofia Zabolotskih CMO   Carolina Medina CCO  
22. Thank you! Appendices…
23. WHY isn’t this happening already? 1. Aggregate demand in the slums unknown 2. Slums not seen as opportunity for business 3. Slums not seen as opportunity for NGOS We de-risk the business of selling perishable goods to slum-dwellers by aggregating pre-orders and building up data over time. Most of the funding and focus for interventions targeted at food security and poverty goes to rural and producer-focused initiatives. Perception of low economic value in the slums leads to businesses investing in higher-income areas.
24. Partnership DISCUSSIONS Community Transformers M-Farm One Acre Fund Map Mathare Supply-Chain Local Corporate Standard Chartered Five Talents
25. Advisory Board Charles Kane is a Senior Lecturer in Finance at the MIT Sloan School of Management. Kane is the president of One Laptop per Child (OLPC), a nonprofit organization that provides technology to enhance education in less developed countries. Prior to OLPC, Kane was chief financial officer (CFO) of RSA Security (acquired by EMC); CFO of Aspen Technology; president and chief executive officer of Corechange Inc. (acquired by Open Text Corp.); and CFO of Informix Software (acquired by IBM). He also served in financial executive positions at Stratus Computer, Prime Computer, and Deloitte and Touche. Kane holds a BBA in accounting from University of Notre Dame and an MBA in international finance from Babson College. Charles Kane President, One Laptop Per Child Joel Rosen has more than 15 years of operating experience, including nearly 10 years at the senior management level. Most recently, he worked as a venture capitalist evaluating and helping fund new ventures at Charles River Ventures. Previously, he served as president and CEO of NaviSite where he led the company through a successful IPO and grew revenue tenfold to $100 million. Prior to NaviSite, Rosen spent 10 years at Aspen Technology, where he played a key role in growing revenues profitably from $6 million to $250 million. Earlier in his career, Rosen was a manager at Bain & Company and also worked in brand management at Procter & Gamble. Rosen earned an M.B.A. with high distinction from Harvard Business School and holds an A.B. in economics from Harvard University. Joel Rosen Principal, Landmark Associates
26. Scaling Strategy We want to expand to other slums in Nairobi… Huruma (40k) Kiambiu (40k) Mukuru (100k) Kibera (270k) Kangemi (240k) And Kenya… Kisumu (Manyatta, Nyalenda) Mombasa (Mnazi Mmoja, Kibarani, Kwa Punda, Bandlaesh)
27. Expansion to East Africa Urban Slum Populations Kenya:  3.9  million  /  39m       Tanzania:  6.2  million  /  44m     Uganda:  2.1  million  /  34m     Rwanda:  65%  /  10m     Burundi:  64%  /  8m   share  of  popula,on  living  in  slums  
28. The current system Slum  Entrepreneur   Farmer   Consumer   Wholesale  Market   Businessman   Broker   Picks up from farmer, sells to others along the chain •  Can only access lower tiers of wholesale prices •  Pays to go to market daily •  Low margins because selling to slum consumers Not best-grade quality due to transport & transit time Forced to accept very low price offers Pays high price
29. Sokotext Slum  Entrepreneur   Farmer   Consumer   Sokotext  Outlet   Co-­‐Opera>ve   1. Pre-orders produce 2. Aggregates orders 3. Delivers to outlet Pays cheaper price Gets fairer price Accesses true wholesale price
30.  Source:  hEp://esa.un.org/unup/Maps/maps_2011_2025.htm   Urbanisation will increase fastest in East and West Africa over the next 12 years, by 5% and more annually. Growth rate in Asia is 1-5%.