Africa is seen as the next trading frontier, following the entry into force of the African Continental Free Trade Area (AfCFTA), which created the world’s largest unrestricted trading region. However, while trade liberalization is intended to stimulate intra-regional trade, its takeoff depends on investments in key infrastructure to ensure supply chain efficiency. Further progress is related to the speed with which market information circulates among key stakeholders, including traders, regulators and financiers.
Noticing emerging opportunities, Xetova, a Kenyan startup, is implementing technologies that make information about market opportunities accessible to traders. Now it is building a network of large, medium and small companies, which will be used to obtain information and forecasts on market opportunities and risks.
“We are building a network of trust that, for example, allows a company in Kenya to know who to work with in a country like Nigeria, South Africa. This network of trust can only be built with the ability to collect verifiable data,” he said. bramuel mwalofounder and CEO of Xetova, adding that his company is working on the largest business intelligence and supply chain support network.
To ensure business trends, reports and highlights are authentic, Xetova, which was founded in 2019, is positioning its network on data from its insights service, which companies use to interpret data about supply chains, spend, revenue and overall management performance into actionable insights.
The information service is the first in Xetova’s suite in which clients register before signing up for others that include commercial financing and links to extensive commercial networks.
Mwalo’s interest in African trade was fueled by research he was part of that showed entrepreneurs have a high chance of success if they gain access to large procurement deals and less fragmented distribution channels.
“That finding made me curious about B2B commerce, large supply chains, and how entrepreneurs in Africa access great procurement opportunities. I developed this theory that data can significantly drive commerce and how companies access opportunities, manage risk and engage with each other,” Mwalo said.
“Then my PhD thesis explored ways to make B2B data accessible in the sense that everyone trying to do business in Africa should have access to data on opportunities, risks and networks. This information should be readily available to the market and where it is available, it significantly changes the way trading is done, because at the end of the day, we perceive risk differently,” he said.
Halfway through her studies, Mwalo took time off to join Kountable, a financier that provided loans to SMEs unable to access formal institutions due to lack of collateral.
In his two years as a Kountable executive, he says, they funded $32 million worth of deals, supporting 200 entrepreneurs in various countries, including Kenya and Rwanda. However, they found it difficult to scale the loans, even with a $150 million credit line, due to a lack of verifiable data on the operations of many companies.
“In the beginning, the business was very good and the acceptance was fantastic. The challenge came when we needed to scale beyond 200. Every time we started hiring businesses outside of our network, we lost money. Their needs were growing too fast, faster than our ability to do due diligence,” Mwalo said.
“I realized at that moment that the biggest problem in intra-African trade is not capital, it is information asymmetry in terms of where the value, security and returns are,” he said.
This experience led him to launch Xetova to ensure companies understand and discover the value of the data they hold, use it to inform solutions to their challenges, and demonstrate how it can be harnessed at scale for business intelligence that can open up new partnerships and markets. bigger. This is in addition to enabling businesses to access loans based on their own data and insights, which are used by lenders within Xetova’s networks to offer tailored loans.
In addition to serving companies, Xetova counts among its clients government agencies, with which it works to improve efficiency in health care. For such entities, it provides information on consumption, distribution, procurement spending, supplier, and payment performance.
The company claims to have recorded $2.45 million in revenue in December last year and facilitated trade financing to the tune of $7 million.
Xetova seeks to increase its customer base from the current 60 large companies to 300 in the next 18 months.
The company aims to recruit 10 major distributors in Africa, increase access to more than 10 countries from the current seven, and facilitate $20 million in trade financing.
Xetova, which raised $4 million in a seed equity and debt round last year led by South Africa’s TRT Investments, is also launching a scholarship program for potential investors.
