MPost, Kenyan Tech Pioneer, Moves HQ To Rwanda Seeking Greener Pastures

MPost, a Kenyan startup celebrated for its transformation of mobile numbers into virtual addresses, has announced a pivotal shift in its operational landscape. In a move that further fuels recent narratives around Kenyan startups beginning to look elsewhere, MPost is relocating its headquarters from Nairobi to Kigali, the Rwandan capital, effective November 2023, citing a more conducive business environment in the East African nation.

This strategic move, as revealed in a statement cited by TechTrends Media, marks a significant transition for MPost. The decision also aligns with Rwanda’s advantageous business climate, particularly for tech startups, signifying a bold step for the company in its expansion journey.

Founded in 2016 by Abdulaziz Omar and Twahir Mohamed, MPost’s platform revolutionizes conventional postal systems by converting mobile numbers into official virtual addresses. This innovation facilitates real-time notifications for individuals receiving mail through their virtual addresses. Operating in Kenya, Rwanda, and Burundi, MPost has been a trailblazer in the digital addressing, postal, logistics, and e-commerce sectors.

The startup’s relocation to Rwanda includes setting up base at Norrsken, a Swedish coworking space and investment fund established in the country in 2019; Norrsken’s debut fund, focused on backing African growth-stage startups, closed at USD 205 M, as announced earlier this month. Mohamed, Founder of MPost, expressed excitement about the move, emphasizing its significance as a launchpad for the company across Africa.

“This decision serves as our launchpad into Africa, and we look forward to contributing to Kigali’s thriving business community while leveraging the support and resources available at Norrsken to propel MPost to new heights,” stated Mohamed.

MPost attributes its relocation to Rwanda to the government’s commitment to fostering innovation and creating an enabling environment for tech entrepreneurs. Rwanda, emerging as a coveted destination for its growing vibrant tech ecosystem and startup community, emerges as an ideal landscape for MPost’s ambitious expansion plans.

In contrast, concerns have arisen within Kenya’s tech business landscape due to increased taxes targeting digital economy players. Recent tax increments, including a doubling of the digital service tax and heightened corporate tax rates, have stirred discontent among tech firms in Kenya.

The startup community in Kenya has experienced pressure from the imposition of various perceived disincentoves, with notable instances such as the payments services startup Pesapal facing a staggering tax bill, sparking unease in the industry.

Reflecting on the shifting tax landscape, industry players, including Jumia and Multichoice, have voiced concerns over potential double taxation and the impact of new taxes on e-commerce, mobile money transfers, and digital services.

There are other references, conveyed in a Quartz Africa interview, suggesting that Wasoko, a notable player in Africa’s B2B growing e-commerce scene, moved its HQ from Kenya to Zanzibar having found the former to be unfavourable and the latter’s fiscal policies more supportive to Wasoko’s expansion plan across Africa. However, Wasoko reiterates that its headquarters remain in Kenya and the company has only set up an Innovation Hub in Zanzibar. The company also maintains that despite what was stated in the Quartz Africa article, Daniel Yu, its CEO, never made any references to ballooning taxes in Kenya or the Finance Bill in the original interview, adding that Yu and Wasoko were misrepresented in the publication.

The Kenyan government’s move to widen the tax net to encompass e-book sales, movie streaming, online dating, gaming, and subscription-based media has intensified apprehensions among tech-based businesses.

While MPost embraces a future of sustained growth and technological innovation in Rwanda, the apparently brewing tech exodus from Kenya signals a growing trend where startups seek more favourable environments amid uncertainties. This shift raises pertinent questions about the balance between regulatory demands and fostering a conducive ecosystem for technological innovation in Africa.

Featured Image Credits: Tuko