Around the world, especially across the African continent, people in underserved communities rely on local agents and merchants for basic financial services like cash-in-cash-out payments, airtime top-ups for mobile phones, and bill payments. Though these agents and merchants are the primary way people in these communities make essential financial transactions, up to 20 percent of these transactions fail due to a lack of electronic float (the digital money agents have available to conduct transactions). This is inconvenient for both parties: It means that agents face massive liquidity gaps, limiting their ability to extend financial services to communities, and customers are left without an immediate liquidity option.

This is where Kuunda comes in, and today, Accion Venture Lab is excited to announce our participation in their seed funding round.

Kuunda, an API-based lender, aims to provide liquidity services to agents, micro-merchants, and consumers across the world. There are currently over 300 mobile money platforms globally, half of which are active in Africa, which host approximately 6 million agents who provide financial services on behalf of larger institutions. Working as an agent can significantly impact the income of families. One study from 2019 found that within a subset of 1.4 million agents, $1.1 billion in commissions was paid to agents, resulting in an average of $841 in additional annual income for each agent.

In addition to supporting mobile money agents, Kuunda’s lending model also supports micro, small, and medium-sized enterprises (MSMEs), primarily focusing on reaching micro–merchants. MSMEs in emerging economies, especially microbusiness owners, struggle to get the financing they need to operate and grow their businesses. Kuunda aims to help close the gap in funding for MSMEs — an estimated $5 trillion in unmet financing needs — by providing financial services to underserved microbusinesses.  

Finally, Kuunda’s flexibility and ease of implementation has been applied at an individual customer level: In perhaps its greatest testament to this aspiration, Kuunda’s consumer overdraft product now serves over one million individual customers on the M-Pesa Tanzania network.

Andrew Milne, Sam Brawerman, and Morne van der Westhuizen — all veterans of the African mobile money sector — founded Kuunda in 2018 to reimagine liquidity management for underserved agents and micro-merchants. Kuunda’s solutions, including overdraft for airtime, mobile money, bill payment float, and credit products, address a critical pain point. Kuunda’s APIs simplify access to capital by allowing agents to top up their e-float with exact amounts needed for specific transactions, all seamlessly done at the push of a button within apps they already use to manage their businesses. Kuunda’s technology can also predict when an agent or merchant will need additional liquidity and can pre-determine their ability to repay or transact based on the agent’s credit score.

After initially launching in Tanzania, Kuunda has since expanded into Pakistan and plans to launch in Malawi, Zambia, Uganda, Kenya, DRC, Mozambique, Nigeria, and Egypt in the next 18 months. Kuunda’s model is well-positioned to succeed as the global economy pushes toward digitization and financial inclusion while leveraging the existing networks of mobile money agents and MSMEs in their communities. Accion Venture Lab is excited to invest in Kuunda for several reasons:

Partnerships that reach agents and MSMEs with critical financing at scale

Through their partnership model, Kuunda connects to large platforms that reach hundreds of thousands of agents and merchants. Kuunda’s seamless integration allows these MSMEs to gain access to credit and thus better serve their community. These corporate partners are trusted entities that agents interact with daily, so using a white-labeled lending service that sits on their own platform allows Kuunda to leverage preexisting tools that agents already use in a meaningful way. The ability for Kuunda to serve both telco-based agents as well as MSMEs is a key aspect of their growth in Pakistan. While the telecom sector is deeply fragmented in the country, Kuunda is building partnerships with several MSME service providers to build seamless and accessible financial services.

Superior technology that opens access to financing

We’ve seen several telcos and platforms attempt to launch their own lending product for agents or merchants and fail due to poor product design, ultimately leading to agent churn and a large loss of capital. With Kuunda’s deep experience in this space and nimble API plug-ins, they can help partners quickly and efficiently embed financing, cutting out the need for new product development on the partner’s side. This approach has helped reduce the time to launch a lending product from years down to a few months, and hopefully soon, it will be done in weeks. Through Kuunda, we’re excited to see embedded financial products managed at scale that ultimately increase retention of MSMEs on partner platforms. So far, we’ve seen that by increasing the number of transactions agents can process (and therefore, increasing the commissions they make), Kuunda increases agent retention and usage on partner platforms, offering a clear value proposition to all stakeholders in its ecosystem.

Unique, data-driven approach to design, price, and distribution

Kuunda sits between these B2B corporate partners and lending partners, allowing them to request, capture, and interpret unique data to better design, price, and distribute lending offerings. During the contracting phase, Kuunda works closely with their B2B partners to ensure they are gathering the right kind of data from that client’s platform to design credit offerings for either agents or merchants. From there, Kuunda liaises with the lending partners to ensure that portfolio quality will remain high. Once the product launches, Kuunda feeds data and insights back to their B2B and lending partners for ongoing project management and any future enhancements to the products.

In many communities around the world, MSMEs are the primary way for people to purchase food and essentials, withdraw cash, pay their bills, and purchase airtime for their phones. Solving MSMEs’ liquidity challenges means that more community members can reliably access to these critical financial products and services. We’re proud to support Kuunda’s journey as they leverage technology — and existing, robust networks of mobile money agents and partners — to help agents and MSMEs become more resilient, earn more income, and grow their businesses.