Safaricoms Nairobi-based Alpha innovation incubator may have an uncertain future, according to sources.With two high-level departures, and the passing of Safaricoms CEO Bob Collymore, there are questions on how or if Alpha will continue to operate.The space was established in 2017 to spur new product development for Safaricom, which is Kenyas largest mobile operator and the provider of M-Pesa East Africas most used mobile-money product.As TechCrunch reported, one of the first objectives of Alpha was to build upon the success of M-Pesa.As a telco, Safaricom has 69% of the Kenyas mobile subscribers and generates around one-fourth ($531 million) of its $2.2 billion annual revenues (2018) from M-Pesa.
The fintech product has 20.5 million customers across a network of 176,000 agents.While these stats have put Safaricom in a coveted position, the companys former CEO Bob Collymore expressed concerns over the risk of too many eggs in one basket.
For years, Collymore pressed his company to diversify product and revenue streams.Through in-house development and partnerships, Safaricom added to its mobile and fintech network consumer and small business-based products, such as ride-hail app Little and website services.In 2017, Safaricoms chief innovation officer and first head of Alpha, Kamal Bhattacharya, echoed Collymores mission to diversify the companys offerings.Wed actually like to move beyond M-Pesa by leveraging its power as a social network to connect people to other product solutions, he told TechCrunch.Bhattacharya whod come to Safaricom after senior positions at IBM Research Africa and a stint restructuring Kenyan innovation center iHub recruited a team for Alpha, led by founder and computer scientist Shikoh Gitau.From a market perspective, Alpha was something to watch, as corporate incubators in Africa were (and continue to be) a relatively new component across the continents tech ecosystem.Alpha staff in 2018In a space purposely established away from Safaricoms HQ, Alphas team of innovators set to shaping new digital offerings.In 2018, the incubator rolled out its first product, a social networking platform called Bonga, to augment M-Pesa.Because M-Pesa was already established as a commercial network, the idea was to amplify that by creating more social media-type transactions around it channeling Facebook, YouTube, iTunes, PayPal andeBay in one platform.With Bonga, Alpha appeared to have some momentum into 2018, before the innovation incubator lost two of its biggest backers.First, Kamal Bhattacharya exited Safaricom and his position of lead of Alpha in October 2018.
The reason given by the company was a bit of corporate say-nothing-speak: leaving to pursue other interests.The real reasons for Bhattacharyas sudden exit were unclear.
There was, however, plenty of scuttlebutt about powers within Safaricom resistant to the brand of bureaucracy rattling change Alpha could bring conspiring to push him out.After losing its head, Alpha lost another key ally in Bob Collymore when he passed away in July of this year after a fight with cancer.Alpha said farewell to another senior figure in August when Huston Malande left.
It also rebranded Bonga to Zwuup this year though Safaricoms last two annual reports dont indicate how the product has fared under either name, with no mention of Bonga, Zwuup or Alpha.Whats next for Alpha?Several sources close to Safaricom (speaking on background) expressed doubt that it would have the support within the company to continue after Collymores passing.One source suggested Alpha would more likely be morphed into the larger Safaricom bureaucracy rather than shut down completely, to avoid negative news that an abrupt closure would bring.TechCrunch asked Safaricom directly on the future of Alpha, and specifically if it would confirm or deny reports the innovation incubator could shut down.
A Safaricom spokesperson said it could not comment on anything related to Alphas products or performance before Safaricoms next earnings reporting, scheduled for November 1.So Kenyas tech community will have to wait a couple more weeks to see if Safaricom sticks to its experiment to spur inside innovation by creating an outside incubator or not.