Kenya’s MoKo Secures $6.5 Million In Series B Debt-equity Round

MoKo Home + Living is a Kenyan home furniture manufacturer and retailer looking to mitigate the challenges such as production inefficiencies, quality of products, etc., that push retailers to import furniture products and leverage the opportunities that exist in the market. Kenya is filled with so much potential for furniture businesses like MoKo. This is because it has the largest and most thriving industry in East Africa.

MoKo, therefore, wants to provide home-based quality furniture products that can compete with imported furniture. The company has secured $6.5 million in a Series B debt-equity funding round which will help it embark on efforts for the next phase of its growth. The round was led by Swiss investor AlphaMundi Group and US-based investment fund Talanton.

Other participants in the funding round include one of its lead investors for its Series A round Novastar Ventures, and Blink CV. The company received $3 million in debt financing, out of which $1 million is mezzanine financing (which can be turned into equity). 

The company was founded in 2014 by Eric Kouskalis and Fiorenzo Conte. When it started it went as Watervale Investment Limited and was a company that wanted to fix raw material supply issues for furniture manufacturers. In 2017, it started to evolve and piloted its first consumer product – a mattress. In 2018, the company launched the Moko Home + Living brand with the aim of serving Kenya’s mass market. 

Explaining the company’s entry into this market, managing director and co-founder Eric Kouskalis said that “We entered this market because we saw a real opportunity to guarantee and deliver quality furniture. We also wanted to bring convenience to customers, by making it easy for them to buy home furniture, the largest asset for most families in Kenya.” 

The furniture startup claims to have experienced a five times growth over the last three years. It also mentioned that its products are currently in over 370,000 Kenyan homes, and hopes to take this number to millions in the next few years. 

MoKo wants to scale production and grow its product line. “We plan to have an offering for each major piece of furniture in a typical home – bed frame, TV stand, coffee table, carpet. We are also developing even more affordable products in existing product categories – sofas and mattresses,” said Eric Kouskalis. The MoKo mattress is the company’s most popular product.

With the newly-acquired funding, the company will also be working to strengthen its presence in Kenya via its online platforms. It will also be embarking on more strategic partnerships with retailers and outlets aimed at increasing sales and acquiring more pieces of equipment.

The company operates automated production lines thanks to digital technology. It has invested in “equipment that can take complex woodworking designs programmed by our engineers and execute them precisely in seconds.” Thanks to this, both efficiency and production have been successfully managed, and the “automated recycling technology and software that calculates optimal use of raw materials” has also helped MoKo drastically reduce waste.

Moko has plans to venture into three new markets by 2025 and reach more customers as it envisions the demand for furniture in Africa will continue to grow as the population, urbanization, and purchasing power of Africans continue to increase.

“The potential for growth is what excites us the most. There’s still so much room to better serve millions of families in Kenya. That’s just the beginning – MoKo’s model is relevant for most markets in Africa, where families face similar obstacles in making comfortable, welcoming homes,” Eric Kouskalis said.

“We were impressed by MoKo’s climate-friendly local production capabilities. The company is a leading innovator in the industry because they’ve turned sustainability into a remarkable commercial advantage. Every step they’ve taken on this front not only protects the environment, it also improves the durability or affordability of MoKo’s offering to its customers,” Miriam Atuya of co-lead investor AlphaMundi Group said.