African superapp in making

Bootstrapped, Profitable & Scaling: The ‘Little’ Big Dream That Took Off In Kenya

By  |  May 12, 2022

In a time when the African tech ecosystem is flooded with venture capital money, there’s a bootstrapped Kenya-based startup that has, against the odds, managed to match and even outpace some VC-funded businesses. And it continues to find a way, often against the run of play.

Little App, which was built as a side project by the founder of East Africa’s renowned IT company CraftSilicon, is today valued at around USD 100 M (based on revenues as mentioned by the team). With confidence and a smile, Kamal Budhabhatti (founder of Little App) says that Little App has the potential to become a billion-dollar company.

The Beginning

As the backend service provider to many financial institutions, microfinancing companies and banks at Craft Silicon, Kamal noticed that there were many business opportunities waiting to be explored by local entrepreneurs, but nothing much moved. His work allowed him to deal with just one part of the problem for the customers. Kamal was sitting on piles of insights but could not own that information. His initial idea was to solve the lack of more options in payments and transfers, but he could not pursue the idea as it clashed with his clients’ interests.

From a heap of similar data at the backend and market gap analysis, Kamal laid the foundation of Little Cab. The ride-hailing company entered a seemingly crowded market with Uber and Bolt throwing discounts at people to onboard them. Apart from the cabs, boda-boda (bike-hailing) operators like Safeboda too were in the competition to make mobility more affordable to the masses by giving heavy discounts to end riders.

In the midst of all the competition to win over customers with huge, ultimately unsustainable discounts, Little Cab was trying to find a profitable segment of customers, which it found in the corporates. Nairobi is perhaps one of the most cosmopolitan countries in Africa. The growing corporate population carved out a unique need for mobility within the city, where reliability precedes discounts.

“Burning cash to acquire customers was never and will never be a sustainable way to grow business. We always strived to create value for the pricing rather than give discounts”. The strategy for Little App has been to onboard the regular users first, primarily the corporate crowd. “Our corporate mobility business has always been our strength, so far the best in Kenya,” Kamal tells WeeTracker.

LittleApp’s team at their Waiyaki Way office

Core Strategy

From being only a ride-hailing app upon launching in 2017, Little Cab kept innovating until it became Little App. The vision has been clear from the start, it is to become a pan-African billion-dollar company, according to the Founder. The other features that Little App offers are payments, on-demand services and “little features” here and there. With a team of 80, Little’s ambitions are expanding its footprints across regions and services.

Kamal’s team relaunched its payments solutions via its superapp, but this time with an experience around it. He quips: “We did not want to create a vanilla money transfer solution, so we created experiences around payments”. He adds, “if a user wants to book a movie ticket, he or she can view the trailer, movie review, book tickets and order snacks via the app today. Also, the user can book a cab to the movie hall while being in the same app. Payment is an integrated feature, not a stand-alone feature. It has worked well for us, so far,” he says.

The period of the pandemic was an opportune time for Little App to launch its on-demand food delivery services. Without offering discounts, Little’s team focussed on its core customers again – the corporate users. The superapp company has created special programs for its corporate users. It extensively serves this category of customers to be sustainable and profitable. The other customer segments are also equally important to Little.

Kamal reiterates, “It’s probably easy to get customers by burning cash, but not sustainable to retain them. We did not want to put ourselves in such a loop. So far, we have only incentivised our driver partners to stay online”. As per Kamal, the total customer base of Little is about a million and MAU (monthly active users) ranges between 350,000 to 400,000 users. Mobility or ride-hailing still enjoys as much as 70 percent share of overall revenues of Little App today followed by food delivery.

The team feels that it is better to serve the existing users and provide them with more opportunities to transact than always being on the lookout for new customers. Kamal adds, “in order to grow, we had to remain profitable and not simply sink our hard-earned cash. So, we moved into newer segments to serve our regular customers”. This ideology helped them transition from being just a ride-hailing app to a superapp.

The same strategy is deployed by Little App’s team in the neighbouring countries of Tanzania, Uganda, Ethiopia and Somalia. Kamal claims making Little Cab profitable in Kenya took the team about 18 months. Plus, it gave them a clear road map of strategy deployment. They only move to a new country when they can sustain the cash burn with their revenues.

The business model of Little App is greatly inspired by Southeast Asian superapp companies – Gojek and Grab. The Indonesian company, Gojek, has reportedly raised more than USD 5 B to date. It has made 13 investments and 13 acquisitions so far. One of Gojek’s investments is in Uganda-based Safeboda, which is advancing on the path of becoming an on-demand, multi-service app.

Grab, on the other hand, is listed on NASDAQ and was valued at around USD 40 B at the time of its IPO. Both superapp companies grew on the back of heavy venture capital money and many acquisitions, speeding up the entire scaling up process.

Looking at the movement in the African ride-hailing sector, in the last 2 years, not many new names have popped up. This could be a signal that relying only on the ride-hailing model may not be sustainable by itself for local companies.

Kamal Budhabhatti- Founder & CEO LittleApp

Going Forward

Little App’s story almost seems a fairy-tale story for the African business landscape but it’s not all smooth-sailing, as Kamal implies. “The speed at which we are scaling up could be better,” he says.

The company waits out between 6 to 8 months in attempting to expand to a new region since they have to generate cash by operations. To fuel his passion for driving Little App to become a pan-African name, Kamal has actively started fundraising; something that he has not done before, even with CraftSilicon, which he founded in the early-2000s. CraftSilicon is one of the most recognised IT firms in the East African markets today, catering to many local banks in the region.

After running CraftSilicon profitably for almost 15 years, Kamal decided to turn his focus completely to Little App. At the time of this conversation between me and Kamal, he was in India to pilot Little’s offerings to see if it appeals to the local users.

When I asked, why he named the superapp ‘Little’, Kamal volunteered: “It’s those little-little things in our daily lives, that if get sorted, makes our lives easier. He adds, “Also, I find the name very cute.”

Edited by: Nzekwe Henry

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