We live in a social media world where everyone has a perfect life. And for perfect lives to happen, one must be traveling and on holiday every two weeks, they must have the latest iPhone in the max size, they must have the latest sneakers and handbags and they must be popping bottles at the club every Friday and Saturday. Add this to the fact that the global economy has been struggling since the Covid pandemic caused havoc and job losses around the world and you will understand why it might be difficult for a lot of people to be saving. Especially young people. 

Now meet Delila Kidanu, an entrepreneur who Co-founded KOA Technology, an app-based platform that helps Kenyans save and grow their money. Born in Ethiopia and raised in Kenya, Delila grew up in the age of MPESA. At the time, MPESA was Kenya’s and most likely Africa’s only mobile money platform offering financial services. It did a good job helping customers send and receive money and purchase airtime. However, it did not provide other essential services such as savings and investment. And Delila always knew that this was a big gap that needed addressing, so amid the pandemic and a waning economy, she and her co-founder raised capital and launched KOA.

Today, KOA is on a mission to bridge the gap left by MPESA, cooperatives, SACCO’s, banks, and informal saving groups in the savings and investment sector. As things stand, most existing platforms scare away customers due to unattractive interest rates and complex manual systems. Moreover, these traditional systems have become less appealing to the digitally-savvy millennials and generation z, who would rather transact their money through mobile platforms. Despite infrastructure and trust challenges, the fintech startup has had a good start. It has already onboarded at least 5,000 customers. KOA seeks to expand across the continent in the future and to extend its product offerings along the line as the company grows.

We spoke with Delila about her interesting backstory, her career journey, African Fintech space, co-founding KOA, and her ambition to create a Pan-African company. Catch the full interview below:

Please introduce yourself to the TAP Fam

My name is Delila Kidanu and I'm one of the co-founders and Chief Operating Officer of Koa. Koa is a mobile goal-based savings platform where we encourage individuals to save for their future and invest that money and earn up to 10% interest. The idea behind KOA was really to help individuals with building wealth on their journey and making sure that they can get the discipline to save over a long period of time. 

Where did you grow up ? 

I'm originally Ethiopian but I grew up in Kenya although I moved around Africa a bit. I’ve lived in South Africa and Zimbabwe for example. I graduated high school here in Kenya and went to study in the UK. I started off thinking I wanted to be in the political science side, so I took a course in international relations and a bit in business. I later worked in the development space but quickly decided that I wanted to take the path down technology. I then went ahead and took a master’s course in Innovation Management and Entrepreneurship.

What did you want to do as a young child growing up? 

When I was little, I always wanted to be in a diplomatic or development space and having studied in international relations and going into Brussels and working there within legislation and policy, I was able to understand how outside of policy there are other ways that you can make a difference when it comes to development and pushing countries forward. Having been able to see all of that and seeing different types of economic situations in different countries, led me to really want to be in this innovative and technological space, because I think it can have a really big impact on how we want to drive our countries forward, especially on this continent.

What is the state of FinTech in Africa?

The FinTech space on the continent is booming right now. It's super innovative and there's a lot of companies that are coming up. I always say that on the African continent, you can't generalize the FinTech space because there are different markets. When you look at a market like Nigeria versus a market like Kenya, they’re different. Kenya is mobile first and Nigeria has a very deep infrastructure history that allows Fin Techs companies to develop diverse innovative products very quickly. Across every country on the continent, we see huge innovations coming about and it's very exciting to see what people are building, how it's coming about and the different approaches you can take to create a successful startup in the FinTech space that has longevity. 

The Global Venture Capital community looks to have their eyes set on FinTech in Africa. What makes this sector more lucrative than others?

When it comes to the VC space, it's very important to understand that there are cycles of funding. At some point, we were looking at the gig economy and that was the biggest, you know, that was the biggest piece of the pie! In the last couple of years, it's been FinTech. I believe because FinTech is really democratizing access. We are building the rails for payments. We are providing access to people in rural areas to access formal investment products, for example. I think there's a lot of work that needs to be done in the financial space, that FinTech’s are plugging the gap there and so that's why funding has really gone deep into FinTech in the last couple of years. 

I think a lot of other sectors are also getting a lot of funding, but ultimately whether you're selling a product, whether you are creating something afresh, you're selling a good, you need to be paid somehow and if you can't be paid, then that’s an issue. And I think a lot of these ecosystems and a lot of these companies need the core infrastructure for payments, for banking, for business banking, all of those needs to be solid for us to build a really big and robust startup ecosystem. This is why we have to get FinTech right first.

When and how did KOA come about?

We started KOA about a year ago, well we launched in the market about a year ago and the aim of KOA was really to be the antithesis to the kind of credit market that we see, especially here in Kenya. My co-founder and I did a lot of work in West Africa and really got to see how the Nigerian ecosystem was building up FinTech’s for fractionalized investing, for savings and all these pieces. And when we looked at Kenya, we specifically saw that MPESA had a huge piece of the pie. But what we saw was that the offering when it came to building wealth and building financial products that help you build wealth, was lacking. So, when we started KOA, our aim was really to help people build a habit of saving and to allow them to do that easily, without understanding what to invest in, when and how to buy a stock or whatever. To just set up a goal, invest their money and build the habit of doing that and earn interest while doing it.

We really wanted to tap into the behavioral side of savings so that we reward you for saving. If you log into the app today, you can go in and you can decide that, okay, I want to save for my child's birthday, or I want to save for my birthday and you'll set the duration, you'll set how much you want to save every day, week or month and we will encourage you regular and remind you at each point to keep saving. So if you choose daily, then every day we will communicate with you. Hey, have you saved today? You said you wanted to save, what are you doing? Or how are you spending the money? It should come here. That's really the idea and I think we don't really have a product like that in the market. And even when we look at banks, we see that they have savings accounts, but we are not encouraged to save, right? It's on us to really determine whether we want to save and how much we want to save.

When we came into the market, we also wanted to be innovative, of course, and so when you look at, for example, trying to open a bank account, you still need to go into the branch. If you want to open an asset management account at Britam or Sanlam, you still have to go there and you have to sign papers.  With KOA you can download the app, log in, start saving all within two minutes, and it's fully digital, so you never have to come into the branch. 

Saving can be hard; what have you seen from the activities on KOA? 

People always say that savings is not sexy, and it really isn't, because, if I spend on whatever I'm buying, it's going to give me so much joy. But our philosophy is that – can you delay that gratification that you're getting from that initial purchase? Can we make sure that okay, today, even though you're paying into KOA, you're not going to feel that big excitement or thing, but tomorrow when you buy that car, when you buy that phone that you wanted, or you take that trip that you've been dreaming about for a year, that's when you get the gratification. This requires that the people who are working with us and coming onto KOA have a completely different mindset. You need to commit to your savings journey, and that's what we're helping people do –by helping them change their behaviors. 

Money is a very personal matter and there’s a lot of distrust around that, what have you done to address that? 

When it comes to customers and the mobile app, it's really about trust. In this first year, we needed to make sure that our customers know that Koa is not going anywhere. We're here with you. We're walking this journey with you, and we did that in different ways. For example, we partnered with the likes of Britam, who've been in the market for over 20 years. Then we got admitted into the Capital Markets Authority (CMA) of Kenya Sandbox, which is a national regulator that really puts a stamp on what we’re doing – that we are a trustworthy institution. That really supported us in our trust building and securing our initial customers and growing our platform. 

Do you guarantee that people will not lose the money they save with you?

Hmm, guarantee is a very strong word, but yes, it will be there. No regulator, bank or asset manager can guarantee you anything, right? Because everything is based on market dynamics. So even today, if you went and you invested in a product at an asset manager, it's also dependent on how the market is going.

Will the money that you invested be returned to you when you want it returned to you? Yes, always. That is our ambition. Unless you tell us that you want to lock the money up and you know, in that case, we're doing what you told us to do. But, yes, for us, it's very much about, okay, you have given us these instructions, we are executing on those and in the long term, we are doing it to benefit you.

When it comes to saving, when is the best time to start?

I think when it comes to saving, you can never start too early. I have vivid memories of going to visit my cousins and they had massive piggy banks since they were like eight. So, they're learning how to keep cash. But today, because we are a mobile app and we are tech first, we are looking at digital natives. 

We're looking at people who are at the beginning of their careers and are starting to save, people who are looking for things that they want to save towards. If we can support you early on in your career, then we can walk the full journey with you. We can buy your first phone with you. We can buy your first laptop with you. We can buy your first car with you all the way until your first house.

What is the best saving tip you can give? 

Saving requires commitment. You need to be committed and you need to have a goal you’re saving toward. I’m I saving towards financial freedom? I’m I saving towards a house that I want to buy? I’m I saving towards enjoyment on Friday? Whatever it is, you need to have a reason for why you're saving. 

Saving also requires consistency. Once you decide to save, you just build that habit. Once you get into the habit of it, it's really not difficult. It's something that becomes your routine and you'll always make it happen. I think when it comes to saving it's almost like a decision that you have to make and often times people think that it means that you need to do huge lump sums, when actually you can start with 10 Bob, 20 Bob, a hundred shillings, whatever it is, that is still savings and maybe it doesn't get you to where you want to go as fast, but ultimately you still have more than you had initially. And so, for us, it's really about that consistency, having the goal and starting small.  

Financial literacy in Africa is very low, is KOA doing anything to address this?

When we first started KOA, we realized that we are looking at a market where financial literacy is not taught in early education, in university or even in your first job. People are having to figure out these things as they go. We got a lot of questions of, okay, what is an interest? What is a money market fund? What is an asset manager, and so on and so forth? Thus, very early on we really decided that as part of what we're doing with KOA, we want to focus on educating our customer base. Even people who are not on KOA, we still want to make sure that you have good information so you can make good financial choices for yourself in the future. 

So we started doing webinars where we would host finance 101, or budgeting 101 and going through all of the topics that are very important for you to understand. The more that we run those sessions, the more we realized there's a lot of content that people enjoyed. Today, we have a team dedicated to developing in house content around financial literacy and different pieces that we thought were very important. This is now a core piece of our product. It is now embedded within our mobile app. 

What are some of the challenges you’ve faced thus far on this journey with KOA

Across the board, across the continent, you see that there are three key issues that come up. One is always building trust with your customers, especially when it has to do with money. Money is something that people really, really hold onto. So, building trust with them for you to be the middleman between them and their money, that takes a lot of time. The other piece is the growth mechanism. As a FinTech, you're competing against banks, here in Kenya you're competing against the likes of M-pesa. Then you're also competing against any financial providers, such as investment houses or asset managers. So, you really need to find that niche and make sure that you can present your value proposition and make sure that people understand why they would come to you. 

The last piece is always regulatory. In any market you go to, because you're operating in this middle ground between not needing to be regulated versus needing a full-on banking license. It's really difficult to find that gray area in the regulation where you fit. I think here in Kenya, they've done a great job in mapping out where FinTech’s can play and where they can't. And that's also why we decided to go into the CMA Sandbox, which has been a great experience for us and made sure that we can play around with our innovative technology, but also make sure that we keep our customers’ funds safe and that we play within the regulatory framework that exists.

What are the three things that Founders must be prepared for before going for funding rounds?

The three things a founder must be prepared for before going out to fundraise is one; have a plan, make sure that you know why you're raising and how much you're raising for. Two; get ready for a lot of nos. You’ll get a lot of them. It's part of the process, it'll happen, but it's okay. It doesn't mean that your business or idea is not good. And three; enjoy the process. There's a lot of feedback that you will get from the experienced investors you’ll speak to and that will only make your business better. 

Looking back, what are the two mistakes that you’ve made as an entrepreneur that you can share?

I think the life of an entrepreneur is all about making mistakes every day. If there was a playbook on how to do this, then everyone would get it right. I believe that the mistakes you make are what makes a strong company in the end. We've made a lot of mistakes in the past, from our hiring process, to how we document our processes, to how we go out and fundraise, to how we make sure that our valuation is correct. There's a lot of nuances in building a FinTech, especially, and so I think I can't even pinpoint two mistakes. I made a mistake this morning {Laughs}. 

What’s the best business advice you’ve received?

The best piece of advice that I've received is to trust yourself as a founder. Nobody knows your business as well as you do, and you need to trust that especially when you make decisions. The other piece is to also have fun along the process. It's a journey. And you need to enjoy every step of the journey, otherwise the process will be very difficult and tedious. Lastly, it's also to build a strong team. Your vision and what you aim to build is only going to get there if you have people around you who understand your vision, who want that vision as badly as you do.

What has been KOA’s biggest milestone thus far?

KOA is turning one this year. It’s been about a year since we've been in the market, and I think we've had a lot of milestones. Very exciting highs, but also a few lows. The most exciting thing that’s happened is the growth of our team. I think without a great team, the product wouldn't be what it is. Also, we've seen a few customers who have been lifelong customers of banks or lifelong customers of asset managers, decide to close their accounts at their traditional institutions and come onto KOA full time and I think that is really a testament to the product that we're building. 

Looking forward, how do you envision KOA in the next 10 years

We are only turning one in a few weeks, but we do have ambitions for the whole continent, really starting off in this region. We want to make sure that our product is at its core solving the problem for our customers and once we feel like we've gotten that in Kenya, then we will start our expansion outside of Kenya.

Beyond that, we're looking to be here for the next 10 years, we're really looking to take our customers with us on this long-term journey and make sure that we can be with them every step of their financial journey along the way. Today, we might be working with whomever on getting them a phone or getting them a flight ticket to their favorite destination and maybe in five years from now we'll be with them as they raise funds for their wedding or plan their honeymoon. That's really, our ambition – to walk that financial wealth creation journey with our customers.

Photos by Paul Kidero
Photo Edits byGathoni Matu
Interview and Production by Ras Mutabaruka