Exclusive: Kenyan Online Artisan Marketplace Lynk Secures Funding To Transform Africa’s Informal Economy
Lynk, a Kenyan online marketplace that specializes in partnering the East African country’s artisans and promote their products and services, has disclosed that it has raised a funding round led by Lateral Capital.
Just now, the startup disclosed to WeeTracker that the investment will be used to deepen and broaden its category offerings as well as expand its B2B products. Lynk also revealed that Lateral Capital was financially assisted in the round by local family offices such as the Cornerstone Group.
Lynk, a technology platform that was launched in 2016, matches informal workers with work, depending on their skillset. The company says its innovation is revolutionizing the way Kenyans access traditional services, from day labor to home care and beauty services.
Lynk was one of the four African startups that emerged as regional winners of 2018 MIT Inclusive Innovation Challenge. It was also one of the eight African startups that made it to the second cohort of the GSMA Accelerator Innovation Fund in 2018.
Lynk’s technology bears a semblance with what is employed in platforms such as TaskRabbit. It has a more hands-on approach to “gigification” and has the potential to increase its income with consistent work, providing job training and serves as a medium through which informality and lack of trust can be reduced in the local economy. The initiative claims to have connected 1,588 unique workers with employment opportunities in more than 50 categories.
In the African continent, the informal economy makes up an estimated 45 percent of the GDP and nearly 80 percent of the region’s workforce. An estimate says 125 million new jobs must be created in the next two years to keep pace with population growth. The lack of formal sector jobs means that most Africans turn to the informal sector for work.
According to Adam Grunewald, CEO, and co-founder, Lynk was founded on the idea that marketplace can be both a highly scalable businesses and a source of dignified labor, particularly in a country like Kenya where the majority of the population is currently working in the informal sector.
He said: “Our platform has quickly grown into Kenya’s largest local service marketplace by delivering consistently high-quality experiences to our customers while ensuring that our workers receive more work, higher pay, and opportunities for career growth. With a strong foundation in place, we’re thrilled to be taking on board a highly strategic group of investors that are aligned with our goal to become Africa’s largest local services marketplace.”
Johannes Degn, CTO and Co-founder, said: “As Africa’s population continues to grow, the informal sector has a large part to play in providing dignified work opportunities for hundreds of millions of people. Our technology platform provides a layer of organization that unlocks our ability to distribute services and support in a highly scalable way. Over the coming years, we’re excited to provide millions of job opportunities across the continent.”
“We are delighted to lead this fundraising round in Lynk,” said Samakab Hashi, Principal at Lateral Capital. “We are strong believers that formalizing the informal African labor market is one of the best paths to both generating returns and social impact.
What made an investment in Lynk so attractive for us was the fact that the firm was able to run their operations in a manner that allows them to create over 100,000 jobs, double the earnings of their laborers, while simultaneously offer market leading service quality at competitive rates. With over 83 percent of Kenya’s workers working in the informal space, the opportunity that Lynk has in both the B2B and B2C space is almost unparalleled.”
“The company operates in an environment where nearly 50 percent of engagements between service workers and their clients fail due to poor service quality, trust, time delays, and price mismatches. Lynk has built a trusted platform which reduces these frictions by using automated processes to match supply and demand and ensure high-quality work consistently,” said Steven Grin Managing Partner at Lateral Capital.
He added: “There has been a presumption that deepening the formal economy is the only approach to economic development. We now see that this is a fallacy – 8the future of work is changing, and Lynk is poised to serve as a steward of that change.”