We have all been there. You are young and naive, barely out of high school. Your grandmother visits you and gives you some good money as ‘airtime money’ and you add it to your pile of cash under your mattress as you figure out what you will do with it. I’m sure if your parents were anything like mine, they kept telling you to save it for the future. Why should you? Its not like you can buy land with your few thousands. So what do you do? Well, spend it, that’s what! Use it on food, parties, clothes and maybe a phone and then to no one’s surprise (even you) you are broke once again. Well Valuraha wants to make you rich! (they’ll give you the tools, the rest is solely up to you).
“Many of us have grown in families that are living from pay cheque to pay cheque. We want to change that narrative. We want to change your way thinking. Maybe if you save more, if you invest, then at some point, you will not be living from hand to mouth thereby creating financial freedom.”, Wangechi Mwangi, CEO Valuraha. We got a chance to sit down with her and company CTO, Kevin Murani to find out how they plan on changing the way young people view money and ultimately become financially independent.
Virtual Trading Platform
Valuraha is a company that teaches young kids how to save and invest money. “With high school students as our main focus, we equip them with tools to learn how to manage personal finance and invest.”, says Wangechi. Valuraha provides a virtual trading platform that simulates the investment eco-system in Kenya. In high schools, the Valuraha program is implemented as an investment club. Once the students have subscribed for it, they get access to a digital and physical curriculum, training and access to the virtual trading platform. “At the end, we run a big competition to see who have emerged as the best investors, best company analysts and those who can best debate issues on finance and economics. The winners get cash rewards and lunches with CEOs.” she says.
They have also launched their product to be used in Strathmore University as part of the curriculum. ”If you are a student taking a unit in Asset Management for example, Valuraha has been incorporated in the curriculum to offer the student a sense practicability and also contributes to 30% of the course work.”, says Kevin Murani, CTO. They see this as a great service as students are able to use the knowledge they get from studying and apply that to a real market simulating platform. Many students even go to interviews with their Valuraha portfolio to display their experience in the financial market.
At the beginning, Valuraha piloted the program in three high schools, that is, Kenya High, Precious Blood and Alliance high school. Currently, they are up to 9 schools and are performing mass recruitment so that they can be in 100 schools by the beginning of the year 2016.
Online Trading Culture
“Dyer & Blair have an online trading platform, but only 2% of their market base transacts online…guys are generally not trading.”
At its inception, Valuraha started as just a virtual trading platform. Why? “Dyer & Blair have an online trading platform, but only 2% of their market base transacts online. This is one of the biggest brokerage firms in Kenya, and if only two percent are doing online, then guys are generally not trading. Roughly 30% of our NSE market is foreign investment with the larger percentage being firms and big corporates. Young people and those in retail generally do not trade. We thought that we could target this group of people and give them the tools to trade. Being in campus we knew that it would be easier for us to reach out to those in campus and in high schools, not so much for those people in retail, therefore we chose to focus on the former.”, she says.
This is a very smart move for Valuraha. With the investment clubs in schools, young people will get to learn how the market works and different ways of creating wealth, other than the usual buying of land and property that their few thousands can not possibly hack.
Angel Investors
At the start, Valuraha got very lucky to have an Angel Investor, Joseph Mucheru bank on them even before they had ‘figured things out’. “We are lucky. We had the privilege of having one of Kenya’s Angel Investors join us early on. He gave us convertible debt. Joseph Mucheru liked what we were doing and didn’t want to take equity to early as we were still trying to figure things out. This boosted us a lot. Also since we are incubated at iBiz, we get access to a small grants that help fund out startup. We also get revenue from the subscriptions done by schools. Additionally, we are also bringing on board corporate sponsors which we are excited about. UAP investments will be sponsoring our Value Investment Challenge happening on the 30th of September this year, something we are looking forward to”, Wangechi said.
Compulsory Program
“Our larger goal is to create so much value for our members and have it be a compulsory program for the students.”
What is in the cards for Valuraha in the future, well Wangechi is sure of where they will be by December, “I can tell you where we will be by December. We will be in 100 schools, which will be a big move for us. Further on, we are looking at Valuraha as a program that all high school students will go through. Currently we are using a club model that is exclusive for members, but our larger goal is to create so much value for our members and have it be a compulsory program for the students.”
With the Valuraha investment club program being widely adopted in school and many of its members choosing to renew their subscriptions frequently, it is evident that this is a something young people care about. Their view, I can imagine, of money and its potential use has changed. No longer will their few thousands lay motionless under the mattress waiting for the next spending spree, rather Valuraha will teach them how to save, invest and double their money and make smarter choices in the end.
