Summary Bullets:

• Software-as-a-Service (SaaS) startup tappi teamed up with Safaricom’s mobile platform M-PESA to improve the digital presence of M-PESA’s small and medium business (SMB) users.
• The partnership provides SMBs with tools that scale their operations, enhance their customer engagement, and boost their online visibility in the digital space.

tappi, a Kenyan e-commerce SaaS startup, teamed up with Kenya incumbent and African operator group Safaricom to support its mobile payments platform M-PESA’s network of 650,000 Kenyan SMBs to improve their digital presence. The partnership provides SMBs with tools that scale their operations, enhance their customer engagement, and boost their online visibility to capitalize on the opportunity in the digital space.

Jointly operated by Safaricom and Vodacom (both of which are partially and effectively owned by Vodafone Group at 40% and 65.1%, respectively), M-PESA has over 65 million active users. It plays a key role in Safaricom’s digital payment and e-commerce ecosystem. It is considered an affordable way to send and receive money, top up airtime, pay recurring bills, dispense and receive salaries and pensions, to facilitate short-term loans, and offer a financial bridge to unbanked individuals. In the year ending March 2024, over 33 billion transactions totaling around $380 million were made using M-PESA, with over a million merchants accepting the platform’s payment mechanism.

tappi’s digital services are now located on the M-PESA For Business app. The deal between tappi and M-PESA means businesses who have M-PESA can now benefit from a webpage, WhatsApp and SMS integration, and bulk SMS marketing credits at a subsidized cost of KES1,350 ($11). The deal also introduces M-PESA Ratiba, an automated payment solution for business owners, to manage recurring payments.

The deal between Safaricom and tappi, a startup founded in November 2022, highlights some key issues. First, there is an inherent value and trust in local startups as they are attuned to the price-sensitive nature of their markets, which compels even established operators with significant shareholder backing from major European operators – Vodafone in this case – to turn to such startups to build their B2B product profile. Second, because of its early-stage status, deals like this one might spur tech startup activity in sub-Saharan Africa, bringing more tech outfits to the fore. Those with an interest in growth markets across Africa should be keenly tracking – and perhaps even investing so long as interests align – in these startups.

Highlighting how exciting and attractive a simple African tech start up can be, tappi raised $1.5 million in preseed capital to fund its expansion. Investors included Mercy Corps Ventures (Iowa), Chui Ventures (Delaware), Acasia Ventures (Cairo), as well as Google, Salesforce, Zendesk, and financial institution investors. Furthermore, tappi signed an MoU with the Kenya National Chamber of Commerce and Industry (KNCCI) to enhance digital services for 30,000 Kenyan SMBs. Other than Safaricom, the startup also expanded to the Ivory Coast and Nigeria through a partnership with MTN. tappi is expected to conduct further deals with other governmental and commercial institutions across Safaricom and Vodacom’s footprints.