When David Kuria started Ikotoilet, under Ecotact in 2008, he was faced with a number of challenges. His biggest hurdle was having to convince financiers, donors and banks to believe in his idea of having decent sanitation facilities in the city and eventually across the country. But after a long search, Acumen Funds accepted his idea and gave him a $1million which he used to start a venture that has today transformed sanitation in the country. Kuria is one of the panelists in the Global Entrepreneurship Summit. He spoke to Lilian Kaivilu about his business model and how he landed the GES 2015 invite.
You are a panelist in the GES 2015. Tell us about it.
I will be on the Day One session on Saturday as a panelist focusing on different Business Models in the continent. The session is entitled “Focus on Africa: Different Business Models for Africa.”
This session will be facilitated by Deborah Magid from the IBM Capital Venture Group. We will focus on the entrepreneurial ecosystem in Kenya and Africa as a whole and the challenges and barriers that entrepreneurs face in their pursuit to make a difference in the society.
How did you get the invite?
In this panel, there is one more African. I never applied for this position but I got a direct invitation from Washington where I was asked to talk about social entrepreneurship. So I decided to focus more on the ecosystem.
What does this mean for your company Ecotact?
As a company, these are some of the issues that we have been confronted with for the last seven years. Before we started, Ikotoilet was purely a government affair as a social service and nobody thought this would be in private hands and still provide the social service as a social good. So it is that disruption process that we encountered so many barriers.
Originally, provision of toilet facilities was entirely a government service. How was it for you to come in as a private investor, bearing in mind that there was no existing legal framework to refer to or to benchmark with?
For us it was a model where we had to disrupt the system in terms of how things were done. This is because it was not a straight forward investment like most of the businesses today where the legal framework, financing and other aspects of the business operationalization are clear. It took us more than a year as there were no clear regulations on how this ‘disruption’ of systems would work.
You started Ikotoilet with a huge sum of money. How did you convince banks to lend money to an investment that had not worked before in the country?
In fact, there was no benchmark to convince banks to fund us. But in 2008 when I started, we raised $1 million from Acumen Funds. This was a long term capital which was to be repaid in five years. Later, local companies and banks gained confidence in us and we got grants and cash awards from East African Breweries Limited (EABL) Foundation, Global Water Challenge, UN Habitat and Safaricom Foundation among others.
What were your fears as you began Ikotoilet, especially imagining that you had to introduce pay-toilets in a society where flying toilets were a norm?
Initially, I thought that the culture of Kenyans would be a challenge but it was not the case. Surprisingly, they were willing to pay for the toilet services that we offered. We began by charging Sh5 in Nairobi and later modeled the Ikotoilet for a year before raising the charges to Sh10 for toilet use.
What is the progress of Ikotoilet today and how many people do you serve?
Today, we serve about 10 million people every year. We are now at the point of re-negotiating handing over the service to the government. So far, we have handed to the government, all the Ikotoilets in Nairobi Central Business District. We are, however, still manning some of the facilities.
What visible impact do you see, seven years after you founded Ikotoilet?
First, we have managed to demonstrate that a private investor can successfully transform a social service for the benefit of Kenyans. If we had waited for the government to provide toilets to Kenyans, where would we be today? We have also provided jobs to about 120 Kenyans across the country. We have also changed the hygiene infrastructure in the country. I am glad that we now have a clear framework of future investors who would want to delve into this industry.
You will be a panelist in the Global Entrepreneurship Summit this Saturday. What are your thoughts on Kenya hosting this global event and what is the challenge for us as a country?
Kenya and Africa are very ripe for entrepreneurship but we do not have a place to incubate these ideas. Without a Silicon Valley, there still remains a huge challenge to incubate enterprises and nurture them to maturity. While the government is to provide the needed infrastructure, there is need to realize that the private sector has got the innovations and the finances required to grow these enterprises.