Kenyan Xetova explores market data gaps in Africa to improve access to trade insights

by Ana Lopez

Africa is seen as the next trade frontier, following the enactment of the African Continental Free Trade Area (AfCFTA), which created the largest unrestricted trade region in the world. However, while trade liberalization is intended to boost intra-regional trade, its launch depends on major infrastructure investments to ensure supply chain efficiency. More progress is related to how quickly market information circulates to key stakeholders, including traders, regulators and financiers.

Realize emerging opportunities, Xetova, a Kenyan start-up, deploys technologies that make market opportunity information accessible to traders. It is now building a network of large, medium and small companies, which will be tapped to gain insights and forecasts on market opportunities and risks.

“We are building a network of trust so that, for example, a company in Kenya knows who to work with in a country like Nigeria, South Africa. This trust network can only be built with the ability to collect verifiable data,” he said Bramuel Mwalofounder and CEO of Xetova, adding that his company is building the world’s largest trade information and supply chain support network.

To ensure trade trends, reports and highlights are authentic, Xetova, which was founded in 2019, positions its network on data from its insights service, which companies use to interpret supply chain, spend, revenue and overall management performance data into actionable insights.

The insights service is the first in Xetova’s suite where customers sign up before subscribing to others, including trade finance and links to broad trade networks.

Mwalo’s interest in African trade was driven by research he was a part of which showed that entrepreneurs have a high chance of success when they have access to large sourcing deals and less fragmented distribution channels.

“That finding made me curious about B2B commerce, major supply chains and how entrepreneurs in Africa are accessing major sourcing opportunities. I developed this theory that data can significantly boost trade and how companies exploit opportunities, manage risk and interact with each other,” said Mwalo.

“I then explored ways to make B2B data accessible in my dissertation, in the sense that everyone in Africa trying to do business should actually have access to data about opportunities, risks and networks. This information should be readily available to the market and where it is available it significantly changes the way trading is done because we ultimately perceive risk differently,” he said.

Halfway through his studies, Mwalo took time off to join Kountable, a financier that provided loans to SMEs that had lost access to formal institutions due to a lack of collateral.

In his two years as Kountable manager, he says, they funded $32 million in deals, supporting 200 entrepreneurs in several countries, including Kenya and Rwanda. However, it proved difficult for them to scale lending, even with a $150 million line of credit, due to a lack of verifiable data on many companies’ activities.

“Initially, things went really well and the acceptance was fantastic. The challenge came when we had to scale beyond 200. Every time we started to attract companies outside of our network, we lost money. Their needs grew too fast, faster than our ability to do due diligence,” Mwalo said.

“It was then that I realized that the biggest problem in intra-Africa trade is not capital, but information asymmetry in terms of where value, security and returns are,” he said.

This experience led him to launch Xetova to ensure companies understand and unlock the value of the data they own, use it to deliver solutions to their challenges and demonstrate how it can be widely deployed for trade intelligence those new partnerships and larger markets. This is in addition to companies being able to access loans based on their own data and insights, which are used by lenders within Xetova’s networks to offer tailored loans.

In addition to serving businesses, Xetova also counts government agencies among its clients, with whom it collaborates to improve efficiency in healthcare. For such entities, it provides insight into consumption, distribution, procurement spend, supplier and payment performance.

The company claims to have posted $2.45 million in revenue in December last year and facilitated trade finance to the tune of $7 million.

Xetova aims to expand its customer base from the current 60 large companies to 300 in the next 18 months.

The company plans to attract 10 major distributors in Africa, increase access to more than 10 countries from the current seven, and facilitate $20 million in trade financing.

Xetova, which raised $4 million last year in an equity debt seed round led by South African TRT Investments, is also launching a fellowship program for potential investors.

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