TechCabal: How is Klasha’s plan to solve the biggest problems in African ecommerce paying off?
Before now, Africans preferred to make payments with cash and physically go to retail shops to get their goods themselves. Many of them did not possess bank accounts or have debit or credit cards. Mobile phone ownership and internet access were also not commonplace. In fact, it took a lot of trust to get them to shop online. Businesses that wanted consumers to pay online struggled to make bank in African markets.
But this is fast changing as this historical infrastructure deficit gets corrected and COVID-19 pushes consumers to adopt online commerce.
Today, there are an estimated 495 million (or 46%) of the continent’s population owning a mobile phone and 303 million subscribed to mobile internet. These numbers are expected to grow to 615 million and 74 million by 2025 respectively, per GSMA data. According to reports, 86% of adults in Kenya, 48% in Nigeria, and 79% in South Africa have access to bank accounts. Africans are also getting comfortable with moving money on their mobile phones, with Africa accounting for $701.4 million (or 70%) of the world’s $1 trillion worth in mobile money transactions.
While online shopping is still nascent on the continent, African tech startups are jumping in to solve the hard problems of making ecommerce work in Africa. One of them is Nigerian ecommerce company Klasha which, since its launch in May last year, has raised a $4.5 million seed round, over 2 tranches last October and June, with investors such AMEX Ventures, Global Ventures, Greycroft, and Seedcamp participating.
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