Kenyan e-commerce startup, CashBackApp has raised $475,000 in pre-seed funding round to scale its services in Kenya and also to prepare for expansion into neighbouring countries.
Investors that contributed to the round include Lofty Inc, Sherpa Ventures and Loyal VC, while the round also had participation from several angel investors based in the US, UK, Nigeria and Kenya.
Founded in 2019 by Simon Ngigi, and later joined by Allan Thiga, CashBackApp helps fast-moving consumer goods (FMCG) companies to build loyalty amongst customers by allowing them to earn cashback rewards on their everyday shopping through Kenya’s biggest mobile money company, M-Pesa.
When people purchase products whose promotions are featured on the app from supermarkets, they receive CashBack rewards. The startup has achieved significant traction after 2 years in operation. It currently has 45,000 downloads on app stores after its user base grew at a monthly compounded rate of 38 per cent in the first half of 2021.
On the Business-to-Business (B2B) side, CashBackApp has signed up major international FMCGs as customers, including Coca-Cola, Colgate and Ajab. Also, its retailer network consists of eight of the largest multi-chain retailers in Kenya including Khetias, Eastmatt, Mulleys and Jamaa.
With this latest investment, the startup hopes to scale its Kenyan operations while preparing for expansion to neighbouring countries. CashBackApp plans to reach more than one million shoppers by December 2022.
Speaking on the investment, Managing Partner of LoftyInc Capital Management, Idris Ayodeji Bello, said the company is excited to invest in the CashBackApp team as they are solving the problem of reducing the ever-increasing food and shopping budget that affects most middle to low-income households in Africa.
“Apart from helping consumers save money, they are also helping FMCGs understand their markets and customers better through quality data and actionable insights. This is in line with our investment thesis of backing world‐class teams of local Africans who are leveraging innovation to solve significant problems.”
Idris Ayodeji Bello
Kenyan startups have continued to pull their weight on the funding landscape of the African tech space. While they haven’t quite measured up with their Nigerian and South African counterparts who pulled in 56% of total funding into Africa in H1 2020, they have nonetheless attracted their fair share.
One of the three biggest African fundraisings in 2021 includes an $85 million funding into Kenyan AI-Powered insights company, Gro Intelligence. Nigeria’s Flutterwave ($170 million) and South Africa’s TymeBank ($109 million) make up the top 3.
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