Partnerships could be geographically specific, for example in Uganda, or they could provide solutions across the company’s operations, Steel says. Some discussions have already taken place, with Copia having some staff whose entire remit is payment partnerships.
Online payment solutions are top of the agenda for Africa’s e-commerce industry. According to the US International Trade Administration (ITA), Africa will have half a billion e-commerce users by 2025. Yet nearly half of adults lack a formal bank account, while debit card payment and credit card penetration rates stand at 10% and 2% respectively.
Copia has been extending its payments capabilities to increase the number of customers it can serve. In November, the company announced a partnership with Cellulant to simplify payments for diasporic and urban customers. In east Africa, solutions need to take account of widespread use of mobile money, Steel says. “There are a number of irons in the fire.”
The business in Uganda has grown rapidly since Copia entered in 2021, but the company is only serving a small part of the market on the eastern side of Kampala, Steel says. Copia is able to reach about 75% of the addressable market in Kenya. Steel aims to reach the same level of coverage in Uganda within two to three years, with the process likely to be faster than for Kenya because tried and tested techniques will be used.
- Copia’s investors include the US International Development Finance Corporation, Goodwell and the Sorenson Impact Foundation.
- The company in November opened a 24,000 square feet fulfillment centre in Kampala and added its 12th depot in Kenya.
- The company in future will need to raise funds for expansion, though the fact that the market is “now more stressed than it has been for some time” means that a public fundraising will likely have to wait.
Copia was founded in 2013 by Tracey Turner, who remains chairman, and Jonathan Lewis. It has a combined 50,000 agents in Kenya and Uganda, and has 500,000 unique customers each month.
Customers who do not have access to smartphones or the Internet can use Copia with a USSD short code which is used to send text messages. Copia says 81% of its agents are women, which gives them an advantage in serving a customer base which is 75% female. The company also has a farming unit which gives access to inputs, services and training.
Steel contrasts Copia’s model with that of Jumia, which, he says, targets only a small market of affluent urban consumers. Copia’s focus is a mass market of low to mid-income consumers, who were “previously unservable” he argues. Africa-wide, that amounts to a market of about 750m people, the company estimates.
- “The market is far from saturation,” Steel says. “There’s a huge opportunity for us to continue to grow.”
- The main aim in 2023 for the company will be profitable growth, Steel says. The company is “on the path to profitability” which will be reached “imminently”, he concludes. “Scale is important but profitable scale is more important.”
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