Kenyan startup Taz Technologies, the company behind, MPost technology has announced plans to invest Sh200 million to expand to new markets in the region.
Co – Founder and Chief Executive Officer Twahir Mohamed revealed the company plans to seek to finalise Series A funding to help them expand in a bid to increase its presence in the region.
Mohamed said in the next one year the company plans to enter Rwanda and Tanzania and is also eyeing Democratic Republic of Congo the following year.
In 2019, the company closed a Sh190 million Series A funding but got Sh150 million.
“We tested the product, and it’s ready to be exported to other markets. That’s why we are going to the market to source for more funds in a bid to accelerate the development of our product functionalities and create other value-added service offerings,” said Mohammed.
The company’s flagship product MPost is a platform that enables the conversion of mobile numbers into official virtual addresses, which allows notifications to be sent to clients whenever they get mail through their postal addresses.
Taz partnered with the Postal Corporation of Kenya (PCK) to provide virtual postal addresses that allows MPost customers to collect their parcels or letters at any of the 623 postal offices countrywide.
This is the first patented virtual addressing system in the world. It has over 200, 000 registered users and about 50, 000 active users in Kenya.
“We are working on increasing our active users to one million users in Kenya even as we eye entering other countries. Kenya has over 50 million people, with just about 400, 000 post office boxes. There is a huge market for us, and now we are ready to take it,” Mohammed explained.
The companys annual turnover is at Sh15 million largely supported by parcels as online shopping continues to grow in Kenya.
According to Statista, Kenya’s E-Commerce penetration is projected to be at 34.6 per cent and is expected to hit 53.6 per cent by 2025. Currently Market largest segment is electronics and media.
On the other hand, traditional mail volumes have been declining in the last years.
For instance 2019/2020 statistics from the Communication Authority of Kenya (CA) indicate that the total number of letters sent in the 2019/20 Financial Year dropped to 32.2 million from 47.1 million recorded in the 2018/2019 Financial year.
“The decline is attributed to the COVID-19 pandemic, which impacted on economic activities thus limiting letter postage as a means of communication among corporates, SMEs and individuals. In addition, some public institutions adopted online services especially during the COVID-19 pandemic, affecting postage of letters as well,” the report states.
The report further indicates that digitization of government services is expected to impact the postal subsector immensely, particularly the letter post, as communication moves to the digital platforms.