MPost is a Kenyan startup that is converting mobile numbers into physical addresses. At first glance the problem they are trying to solve is unclear, however, when looking at the state of most African countries it becomes more apparent.
There are so many residential areas both rural and local that don’t have an official address beyond the stand number. This raises an issue when you have to fill out KYC information either if you are trying to register a company, open a bank account or intend to receive parcels/packages.
According to MPost, in Kenya, many people share addresses or use addresses of places like churches in order to make applications and receive parcels. In the case study the startup mentioned on its site, someone actually lost a place at a University because they were using their local church’s address…
“A case study is an acquaintance who lost a university placement because he shared his address with the local church. When the university acceptance was sent one member of the family forgot to mention he had taken the letter to his house and had forgotten to ask him to get it from him. Some months later the deadline had passed and missed an opportunity to study at his dream university.“
MPost
To solve this issue the startup identified that 90% of the adult population have a sim card so they decided to turn mobile phone numbers into virtual addresses.
How does the MPost work?
MPost uses a USSD platform to onboard potential users and according to their website, it costs about Ksh 300 a year which is just under US$3.00. When onboarding, customers can select a post office that is closest to them and it will be used as a reference point for the mobile phone registration.
After completing the registration process, MPost will then generate a postal address for the user that looks like this “0700000000-00100, Kenya“. Your mobile device will then get notifications whenever you have physical mail and MPost says that you will get deliveries where you are.
The business use case
With remote work becoming a viable option for startups that want to cut down on overheads and employ foreign talent this solution makes a lot of sense. In essence, you don’t need to have a physical location in order to operate, MPost’s solution makes any startup’s mobile number the postal and virtual address.
It can also help them apply for company registration, open bank accounts, taxes and other things that need an address filled out on a form.
Additionally, this solution works really well for small “out of the home” e-commerce operations. In Kenya, MPost fortified its virtual address service with a delivery service that allows e-commerce shops to get goods to customers
“MPost has introduced an affordable and reliable delivery service that is helping online businesses deliver goods to their clients. We have successfully done this for over a year attracting businesses across diverse industries such as Clothing (Shopzetu), Food (Wok on Wheels), etc“
MPost
How much are they actually making?
It looks like MPost’s solution has traction. They have 230,000 registered users and 42,000 active users. In terms of money and at US3.00 per year, the company is making about US$126,000 in annual recurring revenue (ARR) just from its active users. It might be making considerably more from the logistics element it introduced for its e-commerce clients.
Those numbers could get significantly higher if it is able to tap into the African Continental Free Trade Area (AfCFTA). Last year, MPost said that it was in talks to expand its operations into Uganda, Tanzania, Rwanda and South Africa on the back of a US$1.9 million Series A MPost raised in 2019…
To aid in its efforts, MPost partnered up with Senegalese logistics startup Yobante Express earlier this year. The enterprise is moving about 2 million parcels every year with annual earnings of around US$8 million according to Venture Burn.
“This will complete our logistics corridor in that part of the continent, allowing local commerce and e-commerce to grow, and businesses and individuals to use our technology platform that enables complete track-ability, provides full customer service and reduces the prospect of loss or damage of the merchandise in this sub-region”
Oumar Basse, the co-founder and chief executive of Yobante Express (via Venture Burn)
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