AfCFTA creates the largest unrestricted trade region in the world, providing a major opportunity for Africa to become a thriving trading hub. Success will depend on how quickly infrastructure investments are made and market information circulates between traders, regulators and financiers – key stakeholders that need to be connected for intra-regional commerce to take off.
Xetova, a Kenyan startup, is leveraging technologies to make market opportunities accessible to traders. They’re building a network of large, medium and small enterprises that will provide insights on potential risks and opportunities.
Bramuel Mwalo, founder and CEO of Xetova, said the company is constructing a trust network that enables companies in Kenya to identify reliable partners in countries like Nigeria and South Africa. This network requires data collection capabilities for verification. Xetova is establishing the largest trade intelligence and supply chain support system worldwide.
Xetova, founded in 2019, positions its network on data from its insights service to ensure authenticity of trade trends, reports and highlights. Businesses use the service to interpret data on supply chains, spend, revenue and general management performance into actionable insights.
Xetova’s insights service is the first step in their suite of offerings, which also include trade financing and access to a variety of trade networks.
Mwalo’s research revealed that entrepreneurs are more likely to succeed when they can access large procurement contracts and less scattered distribution networks.
Mwalo was intrigued by B2B trade, large supply chains, and how entrepreneurs in Africa access big procurement opportunities. She believes data can significantly drive trade, helping businesses access opportunities, manage risk and build relationships.
“Then my PhD thesis explored ways of getting B2B data accessible in the sense that everybody in Africa who’s trying to do business should actually access data on opportunity, and risk and network. This information should be readily available to the market and where it is available, it significantly changes how trade is done, because at the end of the day, we perceive risk differently,” he said.
My PhD thesis looked into ways to make B2B data easily accessible to African businesses. This data on opportunity, risk and networks can greatly improve how trade is done by helping people better understand potential risks.
Mwalo studied and worked for Kountable, a financier that extended loans to SMEs unable to access formal institutions due to lack of collateral.
In two years as a Kountable executive, he helped finance $32 million worth of deals across several countries including Kenya and Rwanda – supporting 200 entrepreneurs. Unfortunately, they had difficulty scaling lending despite a $150 million line of credit due to lack of data on the operations of many enterprises.
Mwalo noted that business initially went well and uptake was fantastic, but scaling beyond the 200 proved challenging as money was lost when engaging outside their network due to the rapid growth of needs surpassing their ability to do due diligence.
“Realizing that information asymmetry – not capital – is the greatest challenge to African trade, in terms of value, security and returns,” he noted.
He launched Xetova to help businesses maximize the value of their data, create solutions for their challenges, and leverage trade intelligence for bigger markets. They can also access loans based on the insights from Xetova’s networks, which offer tailored financing.
Xetova helps government agencies increase efficiency in healthcare, providing insights on consumption, distribution, procurement spending, supplier and payment performance.
The company reported $2.45 million in revenues and facilitated $7 million in trade finance by December 2020.
Xetova aims to triple its large enterprise clientele in 18 months, increasing from 60 to 300.
The firm aims to sign 10 major distributors in Africa, expanding access from 7 to 10 countries and facilitating $20M in trade finance.
Xetova, which raised $4 million in an equity-debt seed round last year led by South Africa’s TRT Investments, is launching a fellowship program for potential investors.
