Kenyan startup Digiduka has launched its platform, which helps bring informal retailers into the digital economy by empowering them to start selling online.
Formed and funded during the inaugural cohort of the Antler programme in Nairobi, Digiduka is initially focused on building up the underlying digital payments rails that are needed as a first step to getting informal stores online.
The startup provides a wallet that allows retailers to collect mobile money and bank payments via mobile app or USSD shortcode, eliminating the high mobile money transaction fees and encouraging both merchants and end users to stop using cash.
Roy Njoka, who co-founded the business alongside Lovell Larbie, told Disrupt Africa that once Digiduka has put those rails in place it will move on to creating new revenue streams for the merchants it serves.
Firstly, it will help them resell digital services.
“Most shops in Africa already sell prepaid scratch cards in physical format, and our platform turns these into digital vouchers. We are also introducing new digital inventory such as bill payments, and bus ticketing,” he said.
The end goal is to provide them with an online storefront.
“This is a social commerce platform that allows shops to automatically launch a digital storefront on multiple social platforms such as Facebook Shop, Instagram Shop or WhatsApp Chatbot where they can sell their products. This is an end-to-end Shopify-like solution that handles inventory management, payments and deliveries,” Njoka said.
Despite the seeming runaway success of mobile money in Kenya, a huge 92 per cent of retail payments for daily expenses are still made in cash, among informal retailers and low-income consumers. While services like M-Pesa have been unable to tackle this, startups like Digiduka are attempting to do so, and Njoka said the startup has competition from a host of other young companies distributing digital services through the informal retail trade, such as Tanda, PesaKit, PesaPoint and OpenFloat.
Nonetheless, Digiduka has seen strong uptake.
“We have had an amazing reception in the months since our launch, with over 3,500 merchants and small businesses transacting on our platform,” Njoka said.
“We are currently active in Kenya, with 80 per cent of our users in Nairobi, and we have plans to recruit users across other counties in Kenya. We also have plans to expand to other African countries where we see a similar opportunity, such as Ghana – where Lovell is from – as well as Tanzania, Uganda, Rwanda and Ethiopia, in the next three years.”
The startup, which got its start through a pre-seed investment of US$100,000 from Antler, has been applying for various accelerators and competitions to boost its funding pot, and is making money from transaction fees as well as commission payments from digital services distributors.
“We share this revenue with our kiosk partners who render digital financial services to their customers. We have transacted over US$200,000 so far on our platform, and the monthly growth rate continues to increase,” Njoka said.
