When you meet George Gachui at Lavington, Nairobi, you will have met two people in one. There is George the ‘data’ guy, trained in finance and information systems. Then there is the creative entrepreneur ‘Porgie’, as the Kenyan entertainment industry loves to call him. He is the pulse of the party, one who handles the barbeque and ensures everyone has a good time.
It is an industry he has served diligently for 17 years now, starting as a talent manager for the once successful deejays collective Code Red (before it fizzled out), to an event organiser.
At its prime, Code Red had transitioned from just being a house of Deejays hired to entertain to events organising. So big was Code Red that when American rapper Jay Z visited Tanzania in October 2013, the Kenyan outfit was flown to Dar es Salaam to organise the event and entertain.
Later, he fully ventured into the e-ticketing business, focusing on entertainment events, an industry he says generates over Sh1 billion ($7.7 million) a year in Kenya. Tickets are the paycheque of showbiz. They are major revenue streams for all sub-sectors involved in concerts.
In 2015, Mr Gachui and Erick Thimba co-founded Mookh Africa, an online ticketing platform that caters to the needs of the entertainment industry in East Africa.
“We came up with an idea to sell brands on Facebook, the problem was that from 2013 to 2015, nobody had a way to collect M-Pesa from the internet and so we spent a lot of time trying to figure out how to get the money from the internet. That’s how Mookh platform came to be two years later, when we met a software developer and found investors to build the platform," he says.
With his experience in events and Information Systems background, Mr Gachui had noticed an opportunity in the ticketing space that needed to be explored.
“There were still many events happening... but efficient ticketing was a problem. I saw a problem that presented an opportunity.” With a pitch idea in mind, his next move was to find a partner.
“What I have learnt in business, when you have an idea there are two people you will need or must have. The money guy (investor) who doesn’t really need to buy into your idea but believes in you to get their money back. The second, is the guy with the right connections, the plug,” Mr Gachui advises.
“What actually got us into ticketing resulted from a pitch we came up with for clients to sell products and services on Facebook. The problem was that there was no mechanism of how to collect money from the platform.”
The duo would then meet an investor Andrew White.
“He was our money guy but also gave us space and we moved from a mom-and-pop with one developer to a team of 14 people building the tech start-up," he says. The team is now double and might get bigger with our expansion especially in Uganda.”
Up until this point, Mr Gachui says he and his partners have spent well over $60,000 (Sh7.7 million) building the Mookh platform.
“It’s a capital-intensive process that doesn’t stop because every day there is a new problem and you need the developers to keep refining the systems with new features and updates. The software developers make up the biggest chunk of our wage bill,” Mr Gachui says.
By December 2019, five years after the startup was formed, Mookh had gotten into the e-book programme of the Nairobi Securities Exchange (NSE). The programme was an incubator of selected start-ups before they could be enlisted in the bourse.
“By 2019, we were doing quite well and were going to break even in 2021 with plans of going public at the NSE in 2021, then the Covid-19 pandemic hit and everything we had built came crumbling,” he says.
With no events, money taps dried up. For three months, the platform struggled to stay afloat by building solutions for live streams that became the new normal during the pandemic.
“After three months we realised we were not making any money. In October 2020, we shut the whole business down, it was heartbreaking. This is why I feel we are a new start-up again but now with a little better understanding, knowledge and experience," he says.
One of the harshest entrepreneur lessons Mr Gachui says he learnt was having an emergency fund for bad days: “...This was a wake-up call. We were so used to money flowing in and out and a thought of something like the pandemic disrupting everything, never crossed our mind,” he says.
When Mookh was launched, at the time there was Ticketsasa, one of the earliest pioneers of e-ticketing in Kenya.
“They were serving more corporate type of events clients like banks and not the typical event organiser who needs the money immediately the tickets are purchased, to channel it back towards organising the event. We saw the need and wanted to offer the solution that spoke to this small event organiser,” he says.
Mookh, a delegatory of Muk (Mukwanja - Kenyan street slang for money) so far has more than 1,000 small to medium merchants in Kenya, Uganda, Rwanda and Tanzania. The company has now expanded to Kampala and is moving its headquarters there, where "there is more money."
He says in Uganda, there are more events than in Kenya. There is less competition for online ticketing too.
Last month, Mookh partnered with a financier PataFlow in Kenya to offer event organisers upfront event funding of upto Sh10 million ($77,000) with no collateral attached.
“When we started 10 years ago, there wasn’t much data showing events trends, consumer trends and money flow. What we are doing now is also giving clients access to the data we have collected to help them determine the right price point and understand consumer behaviour.
This sharing of data models with event organisers is what Mr Gachui says has greatly contributed to Mookh’s growth over the years.
Traditionally event organisers would print advance tickets and hire salespeople to distribute them. This was tedious and risky as salespersons were known to disappear with the money or work at their convenience. Selling tickets at the gate was also another tradition which was risky because it meant handling large sums of liquid cash, in a sometimes volatile environment.
“When we started we pushed to move tickets online as opposed to selling tickets at the door, which was the trend then. With that, we were able to gather data but also make the process seamless and the money available to the organiser in advance because online tickets go on sale months before the event.”
The shift of culture wasn’t easy because many people don’t like new things, according to Mr Gachui.
“But there was also the fear by the consumers of being conned by purchasing tickets online and or in advance because this was the first time this was happening in Kenya.”
“What we did was go to the top, instead of convincing many small gigs we went for the big organisers and then offered alternatives of what they were not getting, like access to their events data, availability of immediate funds from already sold tickets and a backend to be able to set an account, generate a ticket link you can share and also decide when to open their ticket sales and how much to charge. “So we removed the control aspect that other platforms do and this worked to our advantage,” he says.
A majority of the money generated from tickets is what pays everybody from suppliers to artistes and even the e-ticketing platform.
“The game has always been that when billing a client, there have always been different rates charged depending on how much they make. We came in with a different approach. First of all, we don’t charge anything if a client hasn’t made any sales and because we offer you a backend to set up your e-ticketing and data for free, we charge you eight percent per transaction," he says.
Mr Gachui says that, in Kenya, more than 80 percent of collected ticket sales revenue is spent on meeting the costs of running the event. On the flipside, the entertainment scene in Kenya is changing because he can make more money.
"People no longer have to wait for big events. Nowadays you wake up to small events like a picnic in the bush, a white party by the lake and things like that and they attract a decent crowd (1,000-2,500) because in most cases the tickets are cheaper (between Sh1,500 and Sh3,000) than the big event."
“There are a lot of these kinds of events these days and what we see from the data is that these kinds of events attract mostly the new generation. Gen Z is the biggest consumer of events today. They love not only concerts, but also art and fashion, so a lot of mini gigs are curated around that.”
In attempts to increase profits further, Mr Gachui says his company has come up with a funding programme launched last month, for the event organisers using Mookh.
“With the data insights from merchants on our platform, we know how much they generate from tickets, so we have now partnered with a financier to offer upfront funding with no collateral to the over 1,000 small merchants who use our platforms."
How the funding programme works is that it offers between Sh500,000 to Sh10 million capped at 50 percent of projected ticket sales.
The merchant will receive upfront funding which is settled through ticket revenue within one to six months with a factor rate ranging from 1.05x to 1.42x applied.
Away from the Kenyan market, Mr Gachui says Mookh struck gold in 2020 when they entered the Ugandan market which is now the company’s headquarters.
“The Ugandan market is excellent, it's 2.5 times bigger than ours in terms of value so if in Kenya we are moving Sh200 million a year, you can see how much that would be in Uganda. This is why more than half of our staff, including our CEO, now operate in Kampala.”
Mr Gachui says several factors make Uganda a lucrative market for the ticketing business compared to Kenya.
“In Uganda, it feels like going back in time to where Kenya was ten years ago as far adoption of money technology is concerned. So what we are doing now in Uganda is offering solutions we offered in Kenya back in 2015 and because we already have a head start,” he says.
“The thing Uganda have that we don’t have is that Kenya is still a very segregated market because of our bar culture and classism. In Uganda there is no classism when it comes to partying, the rich and poor will show up at one event for an experience and that contributes to volumes of attendees.”
Another comparison is that unlike Kenya where for a big event to attract large volumes of attendees there has to be an international artiste, in Uganda it’s the opposite.
"Ugandans don’t need an international act to turn up in large numbers for an event," he said.
