Greenhouse Capital invests in Popote — a Kenyan Startup tackling the financial control problems threatening SMEs in Africa
Despite the adoption of mobile money and banking apps, there has been negligible change in how businesses operate when outbound payments are concerned. In fact, in both the formal and informal business sector in Africa, over 90% of expenses are still paid in cash and cheques, despite the risks, delays and other problems they present.
Greenhouse Capital has invested in Kenyan startup Popote which is solving the problem of Financial Control by leveraging technology. The company’s product, Popote Pay, is a platform that enables businesses to handle their outgoing payments digitally, supported by a best practice workflow: budgeting, payment initiation, authorizations, record keeping and accounting. This is all tied together with a best in class user interface that is easy to use.
According to Sam Wanjohi, the founder and CEO of Popote, making payments in the old-fashioned way wastes time, risks fraud, destroys productivity and suppresses growth.
“Popote Pay allows businesses to make payments digitally through a process such that upon completion, the transaction history includes explanation notes, attachments, authorization history, and accounting general ledger entry. The convenience of accounting at the moment of payment means businesses are always on top of their expenses and can more easily prepare management or audited accounts.’ The extra few seconds taken on each payment becomes a habit and saves hours a a week of tedious reconciliation and accounting data entry that conventional payment methods cause”, he explains.
Popote’s goal is to see businesses of all sizes making day-to-day payments with its solution, starting with petty cash then upgrading to suppliers, utilities, wages, payroll and taxes. The higher the adoption, the greater the benefits, with business owners, managers and accountants carving out time to work on impactful activities rather than drowning in mundane and repetitive administrative ones.
“The high rate of failure of African businesses is largely as a result of poor expense management or internal funds misappropriation. With Popote Pay employees can be empowered to use company money with strict limits, so when in the field they can pay via mobile money for taxi’s, fuel, lunch etc. The office has real-time visibility, and it is much safer than giving cash allowances and faster than processing expense reimbursements. ” says Wanjohi.
Wanjohi has a deep personal understanding of the impact of relying on conventional payment methods from managing expenditure in his past venture. It was there that he decided that stagnated growth and becoming a slave to the business, like happens to many owners, were both unacceptable options.
This game changing solution caught the attention of Greenhouse Capital, Africa’s largest fintech investment holding company by portfolio size.
“Sam is the epitome of an entrepreneur. Throughout his career he’s spotted gaps in the market and turned them into opportunities. PopotePay is no different. He built the Popote simply by trying to solve a challenge he faced in his own business. Through the undeniable quality of the products and value proposition, PopotePay has grown to serve hundreds of businesses throughout Kenya,” says Bunmi Akinyemiju, Partner at GreenHouse Capital.
Wanjohi says because Greenhouse Capital is founded by individuals who are entrepreneurs and Africans themselves, their level of support to entrepreneurs is different from what he has experienced when pitching to other investment firms.
“They aim to understand and give the entrepreneur adequate opportunity to explain their company and they acknowledge challenges are to be overcome where other investors run off at the hint of adversity. They are solution finders and this culture seems to have permeated into how the organization hires, and so the team that we work with every day is really a joy to engage with,” adds Wanjohi.
Having founded and run a successful business in Kenya for over 12 years, Wanjohi believes that Africa needs home-grown solutions to meet the peculiar challenges of emerging markets, their evolving culture and people. “The ubiquity of mobile money transfers made Kenya an ideal environment in which to develop a solution such as Popote Pay. We aim to expand into other markets with a proven and advanced product offering designed to plug into any country’s existing digital payment rails. In many countries, these rails will be provided by the banking sector. ”
No matter the challenges, Wanjohi is determined to use his vast experience and partnership with Greenhouse Capital to help African businesses take control of their finances.
