24 May 2013

Africa: Kenya's Sleepout.com Raises Seed Funding to Expand Its Offer Across Africa and Into the Middle East

London — The seed fund sum is a modest US$200,000 but it marks the slow but steady march of business going online in Africa.

Sleepout.com attracted this seed funding from Amsterdam-based Africa Media Ventures Fund. It has already invested in EatOut.com and its founder Mikul Shah is a co-founder of this new venture. Russell Southwood spoke to its other co-founder Johan Jenson.

Johan Jenson had an accommodation booking site for the Kenyan island of Lamu and comes from a family with a history in hospitality and accommodation. However, the beta version of the site in its current incarnation launched in June last year.

Jenson describes its key task as "connecting empty rooms with guests" and it is targeted both at visitors and at local Kenyans. The site has two kinds customers, those he describes as "amateur hosts" who operate bed and breakfasts and lodges and "commercial hosts" who are the more traditional hotels.

With the latter, you can online upfront or with others pay on arrival. With the amateur hosts, they use SMS to confirm the booking ahead of arrival. There is a listing wizard for those wanting to sign up their hotel or bedrooms.

The site draws its inspiration from AirBnB which focuses on bed and breakfast in private homes and more traditional hotel booking sites like Booking.com. The market is currently too small to support something as niche as AirBnB.

In Kenya, 1000 properties have signed up and 60% are traditional hotels and 40% are what he describes as "amateur hosts". They piloted in Kenya because there is a good supply of less traditional places to stay like safari lodges, holiday homes and apartments in the city:"However, as we expand into East Africa there are countries where this kind of accommodation is not available like Rwanda."

Currently the site has around 100,000 unique visits per month"We were surprised when we launched but as the number of properties grows so the traffic grows. In terms of the local market in Kenya, I have never seen the speed of take-up of the internet that has happened here locally."

The site is available both on laptop and mobile as the design of the site is responsive to the device accessing it. Current use is about 85% laptop and 15% mobile.

It has ambitious expansion plans which have started with a re-launch of the platform so that it can handle more properties easily. It wants to be in more countries in East Africa, North Africa (Morocco and Egypt) and the Gulf States by the end of 2013:"There are 10 times as many visitors to Egypt as there are to Kenya."

"We hope with this investment from Africa Media Ventures to create an improved product and to get better reach into Europe. There will be an A round of funding in the Autumn."

The competitors - the "hippos" as Jenson calls them - are not yet the large hotel booking sites as they have not really yet focused on the continent. They are more likely companies like SafariNow.com (another Tiger Global investment):"We believe that there is room in the region for 2-3 players and we want to be in the top position in the region."

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