Illustration of how a fintech start-up leverages all kinds of financial data and smartphone technology
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Start-up founders nowadays are looking to make meaningful impact on society from every industry—including fintech. But while tech founders may be tempted to launch in the more developed regions of the world, there’s incredible potential in emerging markets. The US has seen an 89% rise in fintech start-ups since 2018—but that number is 118% in APAC and a whopping 160% in EMEA. Clearly, fintech isn’t just for rich countries—but it does take tweaking to make it in emerging markets.

Is it worth it? If impact is your guiding star, then absolutely.

Career Anchors

What drives you to be good at your job?

Career anchors are based on your values, desires, motivations, and abilities. They are the immovable parts of your professional self-image that guide you throughout your career journey.

Try this short GLOBIS Unlimited course to identify which of the eight career anchors is yours!

Koa, a Kenya-based fintech start-up, is rising fast to offer financial services in Africa. In less than two months after launch, they acquired 6,000 users and over USD$50,000 in deposits. Since then, they have been growing exponentially week on week. Koa’s success is not just about being good with numbers. It’s not even about bringing Western banking ideals to the African market.

It’s about a much simpler formula: prioritizing user feedback and remaining agile to face the unexpected.

Fintech start-up Koa founders Delila Kidanu and Alexis Roman
Koa CEO Alexis Roman (right) and COO Delila Kidanu (left) | ©Koa

The Origins of Koa

Koa (taken from the Swahili word “okoa,” meaning “to save”), was founded by a trio of young, international entrepreneurs: CEO Alexis Roman, COO Delila Kidanu, and CTO Bubunyo Nyavor. The three met while working in Ghana for an early stage fund that was investing in a company Nyavor was cofounding. Upon discovering a shared passion for financial technology, they began toying with the idea of starting their own fintech venture. Eventually, they settled on Kenya, where their flagship product would address a widespread problem—or rather, an opportunity.

Credit is easy for Kenyans—you can get approval in as little as ten minutes. Getting a savings or investment account, on the other hand, generally takes exponentially more time and effort.

“That dynamic was really interesting for us,” says Kidanu. “A lot of people actually have access to payments and being able to move money, but additional financial services were left to larger financial service providers.”

What would happen, the three wondered, if people were empowered with the ability to manage their own money?

“People are hungry for [financial] information.”

Delila Kidanu, COO of Koa

Developing Fintech Opportunities: Financial Literacy as a Service

When Koa started, the three founders were confident in their concept, from market need to app delivery. But before the product even launched, they hit a wall. Beta user feedback quickly proved they were making assumptions about financial literacy that ended up being wildly off base.

Luckily, user feedback was an integral part of Koa from the start. This involved roundtable discussions with prepared questions from the team, followed by a Q&A. When they gave the floor to users, they quickly noticed a pattern.

“The questions were always around the what,” explains Kidanu. “What does this mean? What is an asset manager? What is a fixed deposit? What does it mean if my interest is ‘per annum’? We recognized that there was a fundamental lack of understanding.”

The problem turned out to be systemic: schools in Kenya didn’t prepare young people for personal financing. Most people went to family and friends for advice, or perhaps searched for answers online. Koa’s research further showed that over USD$80 billion was being saved annually “under the mattress” across Africa. In Kenya alone, 60% of people relied on informal savings to grow their money. There wasn’t a go-to place for simple answers or financial guidance. As a result, Koa’s prospective users struggled with financial literacy and, by extension, an understanding of what Koa was offering.

The solution? Education.

Koa began holding webinars in collaboration with universities and other partners. Their approach rested on three pillars of financial literacy: savings, budgeting, and investment. “We help people understand what these are,” explains Kidanu, “what products are in the market, if you are a high risk, low risk, medium risk, etc.”

In this way, thanks to critical user feedback, Koa’s service evolved, first empowering users, then supporting them with the service itself. The approach has proven wildly successful. “People are hungry for this information,” says Kidanu, a claim proven by the 61% of Koa users who access the financial literacy support provided through the app.

Looking ahead, the team is eager to evolve its education services to build user trust and add value.

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“It’s our role as founders to adapt to curveballs.”

Alexis Roman, CEO of Koa

Obstacles in Emerging Markets: Infrastructure, Regulators, and COVID-19

Ask any entrepreneur to reflect on the early days of their start-up, and you’ll likely hear a story about how things didn’t go according to plan.

Roman remembers learning this lesson with an exasperated laugh: “When we got together, it looked so straightforward. We thought, ‘Yeah, let’s go into the market. Let’s partner with this partner or that partner, and just launch!’ And then we realized that none of what we expected existed. We had to build everything from scratch.”

Specifically, what was missing was tech infrastructure. Though there has been a recent push in some regions to catch up to the rest of the world, support for technology solutions remains woefully behind the global standard. To complicate things further, Koa launched in the midst of the COVID-19 pandemic, rolling out its beta product in April 2021. That meant building relationships with regulators and other bureaucrats (most of whom were far more familiar with paper than Zoom) was that much more difficult.

But as Roman puts it, “It’s our role as founders to adapt to curveballs and just make sure that we can respond quickly enough to build properly.”

Among these adaptations was the decision to embed Koa’s financial services with established distribution partners in Kenya, in addition to pushing for a direct-to-consumer service. This choice to work with affiliate partners has paid off, providing access to an additional 500,000 potential users and positioning Koa for expansion into seven other African markets. What’s more, the partnerships Koa has formed with trusted entities has helped build fast trust in a market especially wary of scammers.

COVID-19, too, came with some unexpected positives for the fintech start-up. Most importantly, people realized how financially unprepared they were to deal with the disruption of something like a pandemic. And that gave Koa the perfect opening to offer help.

Despite these benefits, Kidanu and Roman agree that it wasn’t easy. Getting Koa off the ground came down to a lot of demoing (remotely), explaining the product vision (thoroughly), and knocking on doors (constantly). Among all the asset managers, banks, and other institutions they approached, Kidanu says finding the right partner “came down to explaining what we are trying to build, what capabilities Koa has, and really demonstrating that. The right partner came with timing and aligning our vision.”

“Every time you solve a problem as an entrepreneur, you are creating an impact.”

Alexis Roman, CEO of Koa

Making “Impact” an Entrepreneurial Buzzword

Empowered by financial literacy education, thousands of users have signed up for Koa to take charge of their financial futures. Like their brothers and sisters across the global entrepreneurial fintech space, Roman and Kidanu are most pleased with Koa’s positive impact—despite the stigma that word sometimes carries.

“When you speak to venture capital investors on the continent,” says Roman, “they feel very strongly that if you use the word ‘impact,’ you’re a non-profit, or you need to get money from a non-profit. But for us, every time you solve a problem as an entrepreneur, you are creating an impact.”

An Investor's Lesson to Entrepreneurs

Entrepreneurs have the power to transform societies for the better. But how do you attract investors to start or grow a business? Or to sell one? Check out this seminar for the answers to these and more, straight from a master venture capitalist!

Kidanu, who grew up in Kenya, Ethiopia, and Sweden, has witnessed the wide spectrum of economic, social, and business realities among different markets. “For me,” she says, “it’s always been, ‘How do you create a platform that allows people to walk up to their next level more easily?’ Everything I’ve worked on has been about education, empowerment, and bringing skills that haven’t been there before.”

Roman agrees: “Being able to see people grow as individuals because of what we built is very rewarding. It’s the intersection of impact and profit.”

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