Aggregation Construct is a very powerful business system. It can shape any industry. The best players are those that create the ecosystems upon which others use or build upon. U.S.-based Intuit has been known to build technologies and then allow even competitors to use them. But over time, they make those competitors irrelevant as their products become so dominant that no one cares for what the competitors offer (I explained that further in the Fish Bait Acquisition Construct).
One company that has done that very well is Intuit, an American company that is known for selling tax software. A key attribute of Intuit is giving most things free. You can accuse the firm that it hates revenue. You see competitors building products and solutions on its platforms. But there is a catch: after few years, the competitors become invisible. They become folded into Intuit business in the eyes of customers.
So, for decades Intuit continues to swallow competitors without buying them. I have called its model: Fish Bait Acquisition Construct. It is a model where you give things free to competitors. As they come to enjoy the freebies, you trap them, and over time, they become weak. The end game is that over time, they beg you to take over their assets.
One Kenyan company has raised $8.6 million to expand something fascinating: create and distribute mobile communication and payment APIs to developers. Yes, they make APIs (application programmable interfaces) which can help website developers to integrate energy, financial, health etc companies to receive payments digitally.
Orange Digital Ventures Africa, the Orange investment fund’s new initiative for Africa launched last June, is proud to announce its first investment, helping Africa’s Talking to raise $8.6 million alongside the IFC World Bank and Social Capital.
Based in Nairobi, Kenya, Africa’s Talking is currently the leading company providing access to telecom operators’ communication and payment APIs (programming interfaces) for developers. It is now the favourite solution of many Kenyan startups and over 15,000 developers, many of which rely on these APIs including SMS, voice and USSD to design services that are revolutionising financial, energy, health and insurance services among others.
The transaction is subject to the usual conditions precedent, including the approval of Kenya’s competent authorities.
Upon completion, Africa’s Talking plans to accelerate its internationalisation to support its clients’ expansion strategies. Beyond Kenya, the company has started working in Uganda, Rwanda, Tanzania, Malawi, Nigeria and Ethiopia.
Read critically, this is a fintech but packaged as a software company. Yes, it makes the APIs for payments and asks developers to use them. Developers pay for the APIs. I expect subscriptions where it would take a cut from all transactions in its platforms to evolve. For the very fact that it is focusing on making sure anyone can use its APIs without looking at end-customers, it will scale faster [not encroaching into customer businesses, so everyone will like it]. In other words, provided the developers are doing well, it will do well. The APIs are not engineered to consolidate power to its ecosystems. Rather, to help the developers do what they have to do without doing the hard work of making APIs. This is an operating system, at scale.
Africa’s Talking Ltd is a mobile technology company with its head quarters in Nairobi, Kenya. Our goal is to unlock the potential of mobile communication networks across Africa by simplifying the process and technologies required to exploit them.
The Africa’s Talking SMS/ USSD / Voice and Airtime APIs has more than 1000 active developers spanning corporates, tech start-ups, SMEs and even budding techies. Our deep involvement with developers ensures that we provide excellent service for any technical solution over mobile.
Africa’s Talking Ltd aims to build the best mobile technology systems that are scalable, robust, reliable, and cloud-based, enabling end users to interface directly with telecommunication service providers across the continent.
This is in line with the objective to provide high quality connections that are cost effective for both small and large enterprises
Simply, every major organization would like to provide the specs so that Africa’s Talking can make APIs which developers can integrate to create services on their platforms. No bank will see Africa’s Talking as a competitor because to many it is a software company that can help a company expand the tentacles to help developers adopt its platform. The platform supports the following: Bulk SMS, Short Codes, Sender ID’s, Airtime, Voice, USSD and Payments.
Africa’s Talking is building to become the aggregator of payment integration by becoming the clearing house where entities converge. It looks promising – to become the WordPress of Africa’s payment integration across industrial sectors by simplifying the works of developers. In the pinnacle of financial systems, the guy that makes APIs will have many fans and that means Africa’s Talking will have power. Someone in Nigeria should consider this framework over pursuing a pure play fintech business.