The construction industry in Kenya is so big that it is among the few globally that expanded amidst the COVID lockdowns of 2020. And it is not showing any signs of slowdown with the country’s data agency — the Kenya National Bureau of Statistics — projecting it to grow at an average rate of 6.1% over the next three years.
And while most of this growth is attributable to planned mega projects by the government, the growth of real estate, buoyed by an ever-increasing demand for housing, is another precursor for transformation. Yet Kenya’s construction sector remains vastly rudimentary, with nearly all supplies, even by resellers, being purchased physically.
Jumba, a B2B construction technology platform launched in April this year, is out to bridge this gap through an online platform that allows operators of hardware stores (construction materials retailers), which are found on almost every block, to seamlessly restock.
The startup is now set for great growth after securing $1 million pre-seed funding to fine-tune its technology and expand its reach to capture markets in major cities across Kenya.
“We have started to expand our products according to regional demands and the needs of hardware stores. The idea is to make Jumba the source of all construction materials in Kenya and, when we eventually grow, beyond its borders,” Jumba CEO Kagure Wamunyu, who co-founded the startup with Miano Njoka (CTO) told TechCrunch.
The pre-seed round was led by Enza Capital with participation from Seedstars International Ventures, Chandaria Capital, Future Africa, Logos Ventures, First Check Africa and a number of angel investors.
Enza Capital’s managing partner Mike Mompi said, “Africa’s populations are rapidly growing and increasingly urbanizing, and the construction industry is a core economic engine supporting sustainable growth Across Africa. In a $10 trillion industry yet to be reshaped by technology, we are thrilled to be backing Kagure and the exceptional team building Jumba.”
Wamunyu said the launch of Jumba was inspired by her experiences as a real estate entrepreneur, where she always faced inefficiencies in the purchases of building supplies due to fluctuating prices and random stockouts. Wamunyu, a civil engineer and contractor, who helped Uber roll out its services in Kenya, was also on the team that propelled Kobo360, a logistics tech startup to Africawide expansion. Njoka, her co-founder, is a software engineer who had previously co-invested with her in real estate projects.
As Jumba connects manufacturers with retailers, Wamunyu said the startup will also ensure that the small hardware stores (which don’t have sufficient storage) will be connected to medium-sized ones near their regions from where they can easily update their inventories, taking away the pressure for spatial expansion.
“We will partner with different retailers in different neighborhoods who then can support the smaller ones, as opposed to working with a warehouse model. We will be supplying these big players and the smaller hardware stores will be picking their stock from these locations,” she said.
Jumba negotiates prices (including their markup) of products with manufacturers. It also allows resellers to pay for orders on delivery. Wamunyu says that they are also considering introducing the buy now, pay later option (BNPL) to allow their best-performing clients to broaden their stock and increase their earnings.
“BNPL can be used to help them stock more, and it is a product that will be introduced but it will be built on the back of the reseller’s order history,” said Wamunyu.
For a rapid take-off, Jumba has hired Peace Osangir to lead the startup’s finance and risk component as its CFO. Osangir previously worked as the COO of Kopo Kopo, a payments company, and was the initial financial manager of Kenya’s first mobile lender, Mshwari, which is backed by East Africa’s biggest telecom Safaricom and regional bank NCBA.
Wamunyu told TechCrunch that the startup is currently onboarding manufacturers and hardware stores outside Nairobi too to grow its pool of suppliers and resellers.
The article was first published by TechCrunch, an American online newspaper focusing on high tech and startup companies.