MoKo, a home furniture startup with its headquarters in Kenya, was recently successful in raising $6.5 million in a series B debt-equity capital round. The American investment fund Talanton and the Swiss investor AlphaMundi Group co-led the round. MoKo is currently planning its next stage of expansion.
Novastar Ventures co-led the company’s Series A round, and Blink CV also made follow-on investments. Kenya’s Victoria Commercial Bank provided $3 million in debt funding, $1 million of which is mezzanine financing, which is debt that can be converted into equity.
MoKo, formerly known as Watervale Investment Limited, was founded in 2014 to resolve raw material supply issues faced by furniture manufacturers.
In order to serve the mainstream market, it shifted course in 2017 and began testing its first consumer product (a mattress). MoKo Home + Living was introduced a year later.
The startup says that it has grown five times in the last three years, and its products are now in more than 370,000 homes in Kenya.
It hopes to sell to millions of homes in the coming years as it expands its product portfolio and scales up production. One of its current offerings is its best-selling MoKo mattress.
MoKo also plans to use the money to grow and expand in Kenya. It will do this by using its online platforms and developing its partnerships with merchants and stores to boost offline sales. It also has plans to buy more equipment.
MoKo has already invested in “equipment that can take complex woodworking designs programmed by our engineers and execute them accurately in seconds,” showing that it uses digital technology in its production lines . They claim that, as a result, the team has become more productive. They have also reduced waste by utilizing “automated recycling technologies and software that determines the best raw resource utilization.”
MoKo wants to grow its customer base and enter three new markets by 2025. The need for furniture on the continent is growing because more people are moving to cities, and their incomes are rising.
Tech build take
Kenya has the biggest and most successful furniture market in East Africa. However, the sector’s capacity is limited by several problems, such as a lack of manufacturing and issues with quality, which force most large merchants to rely on imports.
Kenyan omnichannel retailer and home furniture maker MoKo Home + Living saw this gap and, over several years, worked to fill it with quality and guarantees.
In the early days of e-commerce, not many people bought furniture online. Direct-to-consumer companies have become the modern, digitally-native replacement for home and furniture stores from the last century.
Several retailers in the industry have found the right balance in recent years, allowing them to increase both online and offline sales. The adoption of an omnichannel strategy has made this possible.
The business world is constantly changing. Big retailers realize that the market has been very competitive, partly because of new technologies, picky customers, and changing shopping habits.
Retailers who don’t change and deal with these problems find it hard to grow and stay in business, but this isn’t the case for MoKo because investors pay attention to the company.