Insights on Doing Business in Kenya from serial entrepreneur Grant Brooke

Anaïs Tadlaoui

Grant Brooke is a serial entrepreneur who is revolutionizing the agtech and fintech industries in Africa. He co-founded Twiga in 2015, a B2B food marketplace that is reshaping the distribution of fresh fruit and vegetables in Africa’s urban markets by employing scaled logistics, IT solutions, and fair farmer-relationship practices. Today, Twiga makes over 250,000 deliveries a month to retailers across Kenya, employs over 1,200 people and operates in Eastern Africa.

Since then, he has created Shara, a business that offers a digital last-mile CRM to merchants and suppliers in Africa, as this was a big pain point for Twiga when buying and selling products.

Grant has spent years living between Kenya and Washington D.C. and provides a unique perspective into the opportunities and challenges of operating and expanding businesses across the African continent.

How did you end up in Africa in the first place?

I first ended up in Kenya as a grad student. I needed a place to go do field research, and already had a good friend doing an internship in Nairobi. My field research was on how religion impacts economic choices within an open-air market right outside Nairobi. That work lasted for five years. Many members of my research group were food vendors, and over the years I came to working on the problem of how they got their stock, and the market failures leading to high food costs. We started by just trying to solve the problem of bananas distribution in one estate, by delivering them first in my car. And 6 years later, that’s now Twiga which is a major B2B food marketplace, making over 250,000 deliveries a month to retailers across Kenya.

What did you notice on the African continent that made you start Shara?

There’s been a bit of a boom in FinTech over the past 5–6 years across the continent, due to the growing amount of smartphones and mobile money operators. But too often those fintech products have led to high defaults and exploitative rates. This isn’t necessarily due to these companies just printing money, but some sacrifices made on the move from Microfinance to FinTech. Namely, Microfinance is largely managed in communities, while FinTech is managed by you just downloading an app from a mobile app store. Community based finance has peer-selection and peer-monitoring, while FinTech is trying to create all kinds of new ways to judge quality of payer and compel repayment. What Shara is all about is combining these communal, or social, elements of finance with FinTech, so that it’s a finance driven social network.

How did you go from creating Twiga, a food distribution business, to Shara?

A few aspects led me from Twiga to Shara. First, Twiga had grown so large as a team, I wasn’t really working on products anymore, and that’s what I find most interesting. I wasn’t having fun. Second, Twiga made several efforts to integrate with FinTech providers, but I always found their rates exploitative and our data was showing that because of our relationships defaults were low. So, when I looked back on my experience in a community as a grad school researcher, and with the clients that Twiga worked with, what I was seeing is that finance works best when it’s in a community. Where it doesn’t work is when it’s private, when it’s just another lending app out of 2000 in the app stores.

How did you start to determine a new commercial area of focus for Shara?

While very early, Shara’s sweet spot is with SMEs who maybe have some banking relationship, whose core clients are people they know, and whose turnover puts them in the middle to upper-middle class brackets. What that means geographically is the natural starting point is the booming peri-urban suburbs around Africa’s cities. But there’s hardly any data about these new settlements popping up all over.

What has been your experience looking for the right data for you to expand your business in new areas?

I can speak from Twiga’s perspective, the data just doesn’t exist. Often we’d establish distribution in an area and just be shocked at the amount of orders we saw coming through. Or put it in another area and it was far less than the hype. There simply isn’t good population counts, population density or spending data out there, and it makes it a real challenge to plan commercial operations efficiently.

Are there patterns you’ve noticed for when a vendor, village or town is best positioned to adopt your services?

For Twiga, we require a certain density of retailers to make an area viable. It doesn’t make sense to send out a Lori for only 10 drops in a given day. For Shara, while not so physical, the social aspects tell us a lot. There’s a lot more transaction volume in peri-urban and tier-2 cities than GDP numbers suggest. There seems to be a lot more peri-urban and urban people than the rural vs. urban numbers suggest. So anything that can help us question common wisdom is helpful.

What kind of information would you like to see be made available that isn’t easy to source today, but could greatly help most entrepreneurs on the continent?

Population numbers. The fact that there’s not a solid answer for how many people actually live in the Kibera part of Nairobi, for instance, is just silly. Once you understand those numbers and how they change over time, you can more easily set expectations. The next category is accurate household income information. The statistics bureau datasets are way outdated and not set up to capture the dynamism of many of these urbanizing households.

Lastly, what are your thoughts on Africa’s comeback post-COVID? Would certain regions bounce back faster than others?

By the numbers Africa has handled COVID-19 fairly well. Though, if I just take the number of people I’ve known impacted it seems like the numbers are wrong. I expect the growth to continue to be where it was in 2018–2019, but some countries will be much slower to come back on-line, while others will be setting record growth numbers in the 2nd half of 2021. Another major consideration is the poor fiscal health in which COVID-19 has left many governments, and whether that will have a negative impact on economic recoveries.

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