Naspers backs Kenyan launch of Mocality to get into services and apps sector

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Whether on mobile or PC, online businesses begin to thrive when cheap Internet access create a sufficiently large “critical mass” of users. Large numbers of users allow service and app start-ups the opportunity to craft a business model. South African media giant Naspers, which already has an extensive portfolio of global Internet businesses, has decided the time has come to get its feet wet in the services and apps sector in Sub-Saharan Africa. Russell Southwood spoke to the CEO of its Kenyan start-up Mocality, Stefan Magdalinski.

Stefan Magdalinski had been running Internet businesses in the UK since 1994, long before anyone had really realised the significance of the Internet. He had worked on and and had also worked for Virgin Mobile. But he was head-hunted for Mocality:”I was approached by a search firm and the opportunity seemed somewhat amazing.”

The business idea behind Mocality is extremely simple: it is an online business directory for Kenya that is available both on the web and on mobiles. The traditional print directories like Yellow Pages have a presence but have not got the level of in-depth listings that Mocality has carefully put together.

Furthermore, when the information is collected all the businesses are geo-coded:” Again this is unique in our marketplace. It means we can plot them on a map.” Whilst geo-location is not currently offered, it’s not too hard to see that it will be possible in the future and it’s also working to collect businesses like coffee shops that you might want to know where they were locally.

Why start in Kenya?:”Our parent company (Naspers) is based in South Africa but it decided that Kenya had the most advanced mobile tech landscape in Africa. It was easy to do business there. There was a good size SME community and it had MPesa to pay the agents who gather the information.”

The business model will contain several different elements. According to Magdalinski:”When you look around the world, there are as many business models as there are these kinds of services.” So it will get businesses listed to pay for premium services like bigger advertising boxes to make them more prominent amongst the listings. For a fee, it will allow them to use SMS to contact users. And there is a range of other value-added services further down the line.

“We have to demonstrate to businesses that they will make more money using us. The service is completely free to businesses and the consumer and existing services will remain free.”

Information on quite how many businesses there are of this kind in Kenya is sketchy:”We’ve had different answers when we ask about the number of businesses capable of taking advantage of the service, ranging between 100,000-200,000. That’s quite a range. As you get down to the informal sector, the base widens considerably. The question is then: how far down the pyramid can you go?” Currently it has listed around 70,000 businesses, considerably more than others who it might compete with.

He also has another business he’s responsible for developing which has just launched called Dealfish:”It will work alongside Mocality. It’s a B2B and B2C classified ads platform, listing things like jobs and properties. It’s a fairly new concept in Kenya. We’ve started advertising it already and we’re planning to move ahead quite quickly.”

Will these services be rolled out in other African countries?:”Anywhere there’s a sizeable market. There’s a whole bunch of countries including Nigeria, Tanzania, Uganda and some of the francophone countries.”

Naspers has made a number of canny start-ups and acquisitions in the Internet space, both in Africa and globally. And it has had both considerable successes and failures in Sub-Saharan Africa so it’s no stranger to the pitfalls and joys. However, its interest in the online services and apps sector in Sub-Saharan Africa may mark the beginning of the serious development of locally generated content services. All it needs now is a “critical mass” of users.