Sandbox is a talent-matching platform built for product managers in the African tech ecosystem to find work locally and internationally. “It’s like Toptal, but for product managers,” Khadijah Atere, who works as product operations manager at Sandbox, told TechCabal over X (formerly Twitter) while trying to explain their unique offering.

Founded by Samuel Tobi, Princess Akari, and Ijaola David, the company started as a product within the People in Product (PIP) community, “a volunteer-driven community of product managers making a measurable impact and helping one another grow,” according to the PIP website. Ijaola David, Sandbox’s product lead, told TechCabal over a video call that a lot of the support for the company has come from the PIP community.

David, a project manager with over five years of experience, said he saw the need for Sandbox when he was starting professionally. “The issue was there weren’t a lot of jobs for product managers. I was lucky to stumble into this role that has become my career,” he said.

While the platform is still new, having only officially kicked off in 2023, David says they are “Africa’s first core product management matching platform.”

TechCabal asked how Sandbox matches product management talents with companies that need them and David explained that Sandbox has an assessment for all PMs on the platform. The assessment helps them segment entrants by experience, skill set, and specialisation.  “So anyone that wants to hire, all you have to do is go on our website, fill out the form, tell us what the JD looks like, and we will now go to our talent pool and find matching talents,” David said. 

Sandbox does not currently train newbies to become PMs, according to David and Atere. Their first phase of operations is focusing on helping existing talents to match with companies that need their services. Nonetheless, the platform currently hosts talents with as little as zero years of experience to as much as 10.

Although it’s still in its infancy, David confirmed to TechCabal that they are already a revenue-generating entity from companies that are hiring the PMs in their network. The revenue comes in the form of service charges and consultation fees at the moment, with plans to introduce other models in the future. 

Meanwhile, Sandbox is taking a slow approach to raising external funding. David said that because of the PIP community, operational expenses are low. “If we ever need to raise [money] from institutional investors, it should be because we’ve seen that there’s a potential revenue point that we need to invest in and we need to expand there. Maybe we need legal and compliance issues, or we need to expand into a market and they have compliance requirements and we know, once we are in there, we will blow up. Then it’ll make sense to raise money for such expansion.”

Constellr, a German-based satellite data company, is offering land surface temperature (LST) data to African farmers to help them plan for better harvests and face climate change. 

What is LST, and why is it important?

Land surface temperature is a measurement of how hot to the touch the land is, and how safe it is for planting crops over time. An understanding of this data can protect farmers from severe losses and boost food production, Rosa Schmidt, marketing project manager for constellr, told TechCabal in an email.

In farming, temperatures are one of the primary determinants of plant growth and availability of produce. Instability or lack of understanding of the soil’s temperature impacts the outcome for farmers.

As farming depends primarily on rain, LST will become “instrumental in drought monitoring by pinpointing areas experiencing water stress. This early detection empowers farmers to proactively adapt strategies, whether by adjusting planting schedules or opting for drought-resistant crop varieties. Farmers can also promptly detect abnormal temperature patterns indicative of other types of crop stress (e.g., from diseases) and adapt their approaches to ensure healthier and more productive crops,” Schmidt explained.

Africa’s agriculture industry, despite its promise of a bright future, faces challenges such as “unequal access to resources, climate constraints, lacking infrastructure, technologies that are not equipped to handle varying economic and ecological situations, increasingly competitive markets, and low remuneration,” according to consulting firm Morgan Philips.

Constellr is expanding into Africa, starting with Morocco, South Africa, and Zimbabwe.

“With Africa poised for the highest population growth and impact of climate change but also being the continent with the highest potential for a jump in agriculture productivity, this [expansion] holds even greater significance,” Schmidt said. 

Data for everyone

In Africa where a significant percentage of farmers are uneducated, LST data is inaccessible to the average farmer, despite its merits of helping farmers plan their planting and harvest seasons better.

Only 15 out of 54 African countries have launched satellites into space and can gather EO data. Countries like Nigeria and Ghana have used these satellites to aid farming, but the data is usually expensive and hard to obtain. Smallholder farmers who need it the most, can’t access LST data.

As water scarcity concerns continue to stand in the way of achieving $1 trillion in revenue in the African agriculture industry, companies like constellr promise to make the data available and affordable to support a sustainable and more efficient farming ecosystem.

Constellr’s plan to make LST data available to more farmers, according to Schmidt, involves a four-pronged partnership approach with commercial companies, intergovernmental remote sensing institutions, space agencies, and NGOs. By working with the four partners, constellr will share the cost of accessibility across partners so that the end users, farmers, will get it at affordable rates. When asked about their pricing model, Schmidt said the company will provide locally contextualised rates across different countries.

By using local NGOs and intergovernmental institutions, data will be available to farmers in summarised bits over different farming seasons, and may go as far as being read on the radio and in local newspapers to make it more accessible. For a start, Schmidt confirmed that constellr has “a handful of projects and partners in Africa for whom our goal is generating positive environmental and economic impact”. These partners will be their starting point.

Fake news in Nigeria affects election outcomes, security, and even banter among friends. Fake news has caused deaths during health emergencies like Ebola and misinformation leading to vaccine refusal as seen during the COVID-19 vaccination campaign.

A civic society organisation (CSO), Brain Builders Youth Development Initiative (BBYDI), through its new project FactCheck Africa, has built an AI-powered tool called My AI Factcheck, to help Nigerians tackle fake news.

The Global Director of BBYDI, Abideen Olasupo, told TechCabal in a virtual call that with their civic tech tool, My AI Factcheck, “we are covering disinformation and misinformation on governance and accountability, around climate change and SDGs.”

Alamin Musa, who leads product development for BBYDI mentioned during the call that “FactCheck Africa uses AI and credible news sources to verify claims.” 

How exactly does that work?

An ABC solution

FactCheck Africa’s mission is clear: to empower individuals with the tools to distinguish fact from fiction. To achieve this, Musa said they “harness a synergy of artificial intelligence and reputable news sources. Combining Google’s fact-checking API with the GPT-4 model, FactCheck Africa ensures its arsenal is robust and technologically advanced.”

At the core of FactCheck Africa’s solution lies a user-friendly web application. Users simply input a claim, and the AI engine springs into action. It combs the internet and scours top-tier news outlets to scrutinise the claim’s validity. The result? A resolute stamp of truth or an honest acknowledgement of uncertainty when the AI cannot provide a definitive answer. Transparency, they believe, is a cornerstone of trustworthy fact-checking.

TechCabal tried out the tool with a popular fake news about the death of Muhammadu Buhari, Nigeria’s former President, and the result returned within seconds, showing two primary sources, 18 secondary sources, a sentiment analysis, and a fake news verdict.

But it doesn’t stop there. The organisation pairs this technology with insights from trustworthy journalistic sources, creating a hybrid system designed for accuracy and reliability. 

While the solution seems a useful simple tool for people who can access it, there’s a concern for people who can’t access the internet for such a tool. To this, Olasupo explained that “FactCheck Africa is driven by a vision of accessibility. During the Nigerian elections, we did radio programs that reached more than ten million people. We’ll use the Radio to spread more fact-checks. We will also build USSD code solutions and provide a toll-free number where people can call us and our in-hour fact-checkers will verify news for the callers.” 

FactCheck Africa wants to ensure that anyone, from any background, can access fact-checking easily. One of the notable features of their FactChecking web tool is a translation feature including five languages: English, Hausa, Yoruba, Igbo, and French—languages predominantly spoken across West Africa.

FactCheck Africa’s future

At different times, BBYDI has set up projects to tackle misinformation and fake news. In 2020, BBYDI set up KnowCovid19Ng to educate Nigerians on COVID-19 misinformation. In the buildup to the 2023 general elections in Nigeria, the CSO started the Factcheck elections Ng project to validate claims from politicians to reduce the virality of fake news. When the elections ended and fake news did not stop, BBYDI, through what is now FactCheck Africa, started building the My AI Factcheck tool to house all their numerous projects under one solution for tackling fake news in Nigeria and West Africa.

“Last month [September 2023], we went for the US West African Tech Challenge and I’m happy to tell you that we were finalists in the competition. The financial support we will be getting from them will help us to expand into other West African countries easily,” Olasupo told TechCabal.

While Olasupo says they’re yet to know the exact amount, the competition promises $250,000 for finalists. One of FactCheck Africa’s plans for the grant is a new phase of media literacy which includes partnering with the Nigerian Union of Journalists body to reach more people, and a gamification model of their AI tool to onboard teenagers.

“We are building a gamified fact-checking platform that puts players in the role of a fake news writer and encourages them to get as many followers as they can without losing credibility. Our research has shown that more kids will be interested in learning about how to counter misinformation and disinformation if it’s gamified rather than discussing it in classrooms,” Oladupo further explained.

The civic tech tool’s future, while well-defined, will face several challenges, including adoption from users. However, the group is confident that their experience with civic advocacy gives them an edge in reaching people in different communities across Nigeria and West Africa.

As Nigeria’s small and medium-sized enterprises (SMEs) continue to grow, contributing about 48% of the GDP, Nigerian entrepreneurs face the pressing challenge of delivering goods to customers on time and well.

The logistics challenges range from concrete problems like the absence of infrastructure to abstract ones like lack of trust, or tardiness on the part of delivery companies. Shipbubble, a logistics and e-commerce aggregation company, is solving this problem.

Co-founded by Jordan Ajibola, the CEO, and Ayodeji Abon, the CTO, Shipbubble is creating a  one-stop API integration that allows e-commerce businesses to harmonise all their logistics needs on one platform, eliminating the need for multiple logistics partners. 

The e-commerce industry is projected to reach $3.64 trillion in revenue by the end of 2023. Only $9.02 billion (0.24%) of that amount is projected to be in the Nigerian e-commerce space. With a pressing logistics problem, Nigeria may fall behind, or fail to boost revenue in the e-commerce sector.

Ajibola and Abon sat with TechCabal at our office in Lagos to demonstrate how Shipbubble works. Ajibola was quick to mention that Shipbubble is helping companies “locate the perfect logistics partners based on cost, proximity, and performance, allowing for logistics partner assignment without the hassle of text messaging”.

A 2021 World Bank report notes that the cost of moving goods (per unit distance) domestically in Nigeria is about 5.3 times higher than in the US. Meanwhile, Shipbubble claims its aggregated platform will allow traders to have options to choose from a wide range of affordable companies that have been vetted for quality service delivery by the company, cutting costs and earning trust in the process.

This is in addition to creating a tracking page for each business, allowing traders and customers to follow the goods from start to finish accurately. 

Abon says an easier way to think of what Shipbubble is doing today is to think of Paystack and other payment aggregators, and how they helped e-commerce businesses to sell faster by supporting online stores with instant accounts where payments are validated within seconds. “Shipbubble is like that, but for logistics,” he says.

Shipbubble’s 10,000 steps to expertise

Ajibola and Abon built the Minimum Viable Product (MVP) in 2021, fully transitioning from an earlier version called GetDelivery to Shipbubble by May 2022. The founders then participated in the Startup Wise Guys accelerator program from October 2022 to March 2023, further honing their expertise. Shipbubble has since secured support from angel investors and venture capitalists, including Microtraction, a venture firm that invests in pre-seed startups. As of October 2023, ₦267 million worth of products have been shipped via Shipbubble.

But they’re still far from their destination. 

One of the fundamental aspects of Shipbubble’s approach, according to Ajibola, is “helping businesses scale internationally and having more options”. To do this, they need to onboard more logistics companies internationally; this will need more time and more money. The founders are confident that their product will attract the right funding to scale and bring in more partners.

Esther Ulueme, 28, a Nigerian entrepreneur spends her nighttime tracking orders and her daytime talking to clients for her skincare and perfumery brand, leaving her little space for adequate rest and to scale. Ulueme is optimistic about Shipbubble’s solution. “Putting logistics companies under an umbrella like Shipbubble’s will keep them in check,” she tells TechCabal over WhatsApp. “You won’t have to worry much because you’re sure the logistics companies under Shipbubble would have gone through checks and won’t tamper with or lose your product.” 

Abon assures business vendors like Ulueme that “[Shipbubble’s] streamlined approach means that entrepreneurs can set up e-commerce ventures with ease with Shipbubble, and Shipbubble will handle everything from inventory management to sales and distribution.” He is confident that this approach will help small businesses scale faster with fewer resources.

Ulueme, who is keen on expanding globally, tells TechCabal that knowing that Shipbubble has logistics companies that can deliver outside Nigeria will help vendors sell internationally without stress.

TechCabal earlier reported that M-KOPA closed a $75million drive back in February 2022. The digital financing firm has given reasons why it raised $250 million in debt and equity financing. The breakdown of its latest capital injection includes $55 million in equity and over $200 million in debt.

Yesterday, May 16th, M-KOPA general manager, Babajide Duroshola, was on a Twitter space organised by Big Tech This Week. On the Space, he explained that debt helps one to get the required working capital to put to use as soon as possible 

“For the size of our business today, It is very difficult for us to be lending based off equity drawdowns. So debt was the preferable option because it allowed us to do bigger things,” Duroshola explained. 

He said it is better compared to equity which is nice but expensive because equity involves giving a part of your business to someone with the promise to take huge returns. The M-KOPA boss explained that debt is faster and helped the firm to scale. 

Experts at TLG Capital, who spoke at the TLG Future Africa Venture Debt Conference that was held virtually today, noted that only 13% of Africa venture capital is backed by debt. The infographic shared during its afternoon session showed low venture debt in the ecosystem as Venture Equity accounted for $4.5billion compared to $650million in debt funding in 2022. 

TechCabal, last month reported that debt funding has become a more attractive financing option for startups.

Founding Partner, Future Africa, Iyinoluwa Aboyeji, who was present at the conference acknowledges that the game of funding has changed.”The game has changed. But now capital has become so expensive that you have to ask yourself whether it is worth sacrificing to build the business you want to build,” he stated.

With the success of its business model in Kenya, M-KOPA’s new funding is premised on boosting its smartphone financing offering, expanding into additional markets, and prioritising sustainability.

Going further, Duroshola explained that in recouping some of the credit in smartphone financing, how they get individuals to pay is through the technology. He noted that if any customer defaults on payment, the smartphone has the capacity to lock itself. However, he noted that there is flexibility in payments and customers can walk away anytime.

“The payment is flexible and they can pay on the day they can afford the device. You can use three days payment or seven days. Even if you miss a day’s payment, you can pay the next. Customers can walk away anytime. We do not force people to pay by all means,” he explained.

The evidence is on the streets of Lagos today where motorcycle transport has returned. If GRide had a death certificate, the cause of death would be head-on collision with sudden government policy. It was a near-death experience but Gokada scrapped itself for parts and started a rebirth in March 2020. 

It has now been 18 months since the company pivoted from being a ride-hailing provider to a logistics company. 

GRide became GSend to help businesses and individuals in Lagos with intra-city deliveries. Since this pivot, delivery volume has increased by a hundred fold, revenue has increased 10 times and $100 million has been realised in annualized transaction value, according to the company.

But in its boldest step since it was founded in January 2018 by Fahim Saleh, Gokada now identifies as a super app. In addition to other items that can be packaged in a motorcyclist’s delivery box, food is taking the centre stage. 

Gokada’s super app is entering the market at a time when Lagos residents are consuming ₦5 trillion ($12 billion) worth of food annually. “If the population is to grow to about 30 million by 2030, Lagos will likely need food worth ₦6.3 trillion on an annual basis,’’ the state’s commissioner for Agriculture said in May.

Dika Oha, a former senior executive at Andela and Konga who leads Gokada’s product development, says Gokada delivers more food than any other delivery service in Nigeria. 

The claim is hard to verify without numbers from other players. But Gokada’s evolution from transport provider to food aggregator could help ecosystem players understand the future of super apps in Africa.

A standing fleet is an asset in emergencies

In August 2019, Gokada took a two-week break to readjust its business strategy following OPay’s sensational entry into Nigeria’s ride-hailing market. 

A new fleet of 200cc motorcycles were fitted with new tracking features. A higher standard of quality was demanded of drivers who, in many users’ eyes, looked rather unkempt for a technology business. 

Perhaps not anticipated at inception, but these changes would serve the company effectively six months later.

Facing existential questions about its future, Gokada repurposed the tracking feature from the ride-hailing business to begin winning customers over to GSend. “We decided we could not launch without that ability for customers to track,” Victor Daminabo, Gokada’s head of operations, tells me.

Building on that foundation, Gokada set an audacious target: have drivers pick-up and complete every delivery in Lagos within two hours. They set up a goods-in-transit insurance policy to cover cases of damage or loss of items in their custody, Daminabo explains.

Starting off as a service for sending individual packages, Gokada iterated to enable one driver to book and fulfill multiple deliveries. That iteration birthed ‘Gokada for business’ which helps enterprises create different user profiles for staff in various branches. The organisation uses one Gokada account but each unit can monitor deliveries separately.

This was how Gokada acquired Fan Milk and Jumia Foods as enterprise customers. Rather than invest in their own assets, these companies readily adopted Gokada’s logistics fleet of over 1,000 motorcycles which is already integrated with payments systems like Paystack and Flutterwave. 

Eating into other verticals 

As the ghosts of GRide gave way to a thriving GSend, the data showed something interesting: Gokada says it has recorded over 1 million deliveries so far in 2021 and about 40% have been food deliveries.

This volume may have been triggered by formal partnerships, like with Jumia Foods, but small and medium restaurants that used Gokada to find delivery drivers would become the core. (Gokada’s partnership with Jumia ended in April 2020)

Susan*, who lives in the Surulere area of Lagos, tells me the food she ordered directly from a restaurant in her neighborhood in May was delivered by a Gokada driver.

With this happening frequently, it encouraged Gokada to float GShop, a service that aggregated restaurants, opening the door for the company to bundle all it offers onto one app.

So why a super app? On one level, it is a practical decision. 

Users enter the company’s ecosystem of services through one channel. That singular funnel makes it easier for the company’s developers to manage updates. Growth and sales teams focus resources on selling one app.

But Oha, Gokada’s VP of product, explains their motivation is also to take advantage of Nigerians’ increasing familiarity with ecommerce as more businesses – food, fashion and furniture outlets – use Facebook, Instagram and WhatsApp to find and sell to customers. 

Social media platforms grow through network effects – the presence of more users doing more things improves the quality and usefulness of the platforms. Super apps emulate this playbook too, following users’ lead to add more products to the stack.

But as Yinka Adegoke explained in this insightful piece, apps become super by offering essential services within large markets. WeChat and Alibaba serve 2 billion users a month across China and parts of Southeast Asia; but can Gokada find a market that large and homogenous?

From food, back to ride-hailing

The only way to reach those exalted heights, then, is by aggressively focusing on customer satisfaction for high-demand products, making the app sticky and top of mind. 

Or as Oha puts it, ensuring Gokada is the first thought a user has when they need to order food – arguably a bigger need than sending parcels. 

To assure users, Gokada is sticking with the simplicity and transparency that has made ride-hailing platforms universal: tap to order, input destination and track your order in real time as it arrives. 

And yes, pay on delivery.

Perfecting this cycle also means paying attention to renowned global food delivery services like Doordash, Grubhub, UberEats and Deliveroo. The reward is that perfecting a time, quality and culture-sensitive business like food delivery in Africa can be a springboard for getting people to trust and use other products en masse.

Those other products, according to Oha, could be groceries, fashion and electronics. And in cities that permit, motorcycle-taxi – the company’s first love.

—

Most people who started using mobile phones in the 2000s became familiar with USSD through loading and checking airtime balance. With time, mobile banking became a major use case; again for airtime transactions, but also for buying internet data, sending money and paying bills.

Unlike mobile apps that need to be downloaded and installed, USSD (Unstructured Supplementary Service Data, if you insist) is lightweight and straightforward to use.  

Dial the code for the desired service, follow the instructions e.g. “press 1 to Check Balance” on each page and, provided there isn’t some “connection failure” or “entry error”, your wishes will come true.

A misconception is that USSD is for people who use basic phones but the feature has become mainstream even among smartphone users in Africa. A study of smartphone users in Bangladesh, Côte d’Ivoire, Kenya, Nigeria and South Africa showed that 87% of all financial-related transactions were conducted via USSD, with only 13% via mobile app.

So, USSD works well. But it still has its fair share of frustrating glitches that you normally wouldn’t encounter on an app. For one, you need to memorise the code for each service you want to access. You could minimise an app to get information from, say, your notes app. But you mostly can’t minimise a USSD session once it’s started.

USSD’s original design did not foresee “how the introduction of smartphones would bridge the worlds of computing and telecommunications to form an entirely new industry,” Wiza Jalakasi explains.

But that’s not to say we should throw it away. On the contrary, some companies recognise that USSD is here to stay in Africa. As such, they are merging the best of both worlds: stacking the visual appeal and interactivity of smartphones on top of USSD’s simple and efficient backend.

One such company is Hover, a US-based company, and their solution is called Stax.

Making USSD smart 

Stax is a mobile app currently available only to Android users in 10 countries, including Nigeria, Uganda, Kenya and Tanzania. It has three use cases: buy airtime, send money, and request money. All without ever dialling any USSD code.

It’s not a digital wallet or account, so it doesn’t ask for an email address or phone number. But – and this is an important but – Stax needs certain phone permissions.

What permissions? Three precisely: to make and manage phone calls; send and view messages; and access your contacts.

With those enabled, you can input how much airtime you want to buy, choose the bank or fintech-powered account you want to debit and input the phone number to credit or select from your phonebook.

It would be great if this is where it ends but – somewhat unfortunately – Stax asks for two other permissions to complete this task of buying airtime. Permission to display on top of other apps on your phone and another to connect with mobile money and telecom services on your behalf.

This gave me pause and maybe it is because of the copy: “Allow Stax to have full control of your device?”

Three paragraphs beneath that question describe why the permission is needed. But all the bad news I have absorbed about privacy risks over the past four years flashed before my eyes, discouraging me from clicking “Allow.”

Jess Shorland, co-founder of Hover, agrees that some work needs to be done to make users more comfortable with the permissions. But she has an explanation for why they are necessary:

“It allows us to automate the USSD session on behalf of the user. We’ve basically built a different interface for USSD. The user interacts with that interface in a way that is a lot more screen-reader friendly.”

In other words, the accessibility permission is what enables Stax to do these things on the user’s behalf. 

When a user gives Stax access, the app activates a screen reading functionality and acts as a web browser. USSD is still happening in the background but instead of presenting those USSD screens, Stax’s SDK reads the USSD dialog, runs the functions and shows the user a familiar app interface.

But what are the risks? Because there is no way to convince a user that giving up control doesn’t somehow make them a little vulnerable. Shorland says Stax only takes the information needed to enable the user complete their transaction. 

“Everything happens client side, not on our servers. It’s also what enables us to be offline,” she says, emphasizing that the app is open-source as a sign of transparency.

Who in Africa needs Stax?

I guess it’s kind of cool that Stax, a fintech app, works offline like regular USSD. But with the internet being more central to the digital and financial services space today, why should we cheer for Stax?

Hover CEO and co-founder Ben Lyon says they are “building for the world as it is today so that we can bridge it to where it ought to go.”

In 2020, there were 159 million monthly active mobile money accounts in Africa, according to the GSM Association. Africa represents more than half of the global mobile money usage.

Lyon thinks such numbers and smartphone usage – expected to double to 678 million by the end of 2025 – will make USSD even more mainstream. “It is a standard view of the tech industry that USSD is a bygone thing. It is actually just categorically wrong.”

If that view is wrong as he insists and if USSD’s user experience needs to be modernised for the smartphone age, then solutions like Stax would seem right on time.

Stax wants the app to be under 10MB so that it will work easily on every (Android) phone. Average transaction time is supposed to be 12 seconds. 

My airtime purchase this morning took a bit longer. It showed a transaction failure message at the end and my bank debited me two seconds later. But I got the airtime.

Stax is… a work in progress

As of today, Stax currently supports transactions for eight banks (Access, First, Guaranty, Keystone, Sterling, UBA, Wema, Zenith), OPay and Paga. 

Being in the USSD business in Nigeria means getting into the CBN (banks) vs NCC (telcos) scuffle around who pays for USSD services. What does Hover think about this debate?

“Because we believe that USSD is about accessibility and inclusion, I believe strongly that consumers should not pay to access the channel,” Lyon says.

“I hope NCC and other players come around to this view that consumers should not pay.”

Outside of that and other potential headaches, Stax’s focus will be on convincing individuals and businesses that the app is reliable for all seasons and geographies, regardless of internet connection, says Peace Itimi, who leads growth for the product.

“We are not monetizing Stax yet and it’s not on the near term roadmap to monetize it,” Lyon says. “There is a WhatsApp sized opportunity here and our first priority is to make sure we can seize the opportunity at the appropriate time.”

Ben also name-drops WeChat as a possible inspiration for monetization. With a large user base, Stax could begin enabling discovery and access to third party services, in what could make Stax a super app of sorts. 

“When people understand what the product can do, they will fall in love with it,” Itimi says.

That depends: on how they fix those curious accessibility permissions, and if people really feel the need to switch from basic USSD – which works okay – to a shinier, app-enabled life.

—

Before becoming Director of Operations at ORide in 2019, Ridwan Olalere had been around Nigeria’s startup scene for a few years, taking note of big problems. 

He was the fourth senior engineer hired during Flutterwave’s very early 2016 days. It was a great perch for gaining insight into Africa’s untapped e-payments landscape.

In October 2020, Olalere took the leap from operator to founder. He left Uber as a Country Manager for Nigeria to start Lemonade Finance, “a borderless money app for Africans.”

When you consider his undergraduate foundations in aeronautical engineering, it appears Olalere has always had a thing for moving valuables over long distances. At Uber he helped people move around Lagos and Abuja. At Lemonade, he wants to move money from Africa to the world.

But why Lemonade and why now? Why does Africa need another ‘borderless’ money app in 2021?

Sweetening a sour taste

I have not had a need to send money to Europe. I have no family or dependents there. But Nigerians with children schooling in the UK and other parts of Europe often need to pay school fees or send upkeep money.

Those with second homes in these countries may also want to fund overseas bank accounts for other purposes. 

Olalere adds one use case: “You have a Piggyvest or Risevest account and want to withdraw the money to use it in Europe. What do you do?”

At the moment, there are not many options for satisfying these needs. If you Google “Nigeria to Europe transfers” and visit this clickbaity result, you’re going to be disappointed: 

‘Unfortunately, we are unable to make transfers from Nigeria to Europe at this time.’ 

But Lemonade says ‘Um… actually we can’. The app was launched in October 2020 and rransfers to Kenya, Ghana, the UK and banks accounts in Europe have been added.

The big promise? The transfer will reflect in two to five minutes, not business days or weeks.

How Lemonade Finance works

It is easy to sign up for a basic Lemonade Finance account. Inputting my house address was about as vulnerable as I felt. No bank verification number or government-issued ID was required.

To fund a Lemonade wallet, the app generates a virtual bank account which the user transfers money to from their naira bank account or fintech app. 

When a user wants to transfer money from their wallet to a foreign account, Lemonade does the currency conversion. In addition to inputting the destination bank account, a sort code is needed. Receiver does not need to download Lemonade; it goes into their bank account.

To be sure, the Lemonade account I describe above is an entry-level one with a ₦50,000 limit on amounts that can be sent. As with most fintech apps, Lemonade invites users to upgrade their account by adding more KYC details. 

But instead of relying on BVN (the go-to KYC tool for startups until recently), Lemonade uses third-party identity verification from companies like Jumio and Onfido. The latter is used by Revolut, the UK digital bank. 

Normally, this verification process requires the user to take a picture and upload a government ID. Olalere says it is as efficient for KYC purposes as using BVN.

What’s the tech in Lemonade?

All of Lemonade’s stack is in golang, the open source programming language developed by Google.

“We built out these parts of the app ourselves, most of it in one AWS container,” Olalere says proudly.

Lemonade’s Android and iOS apps were built in-house by a team of 4 backend engineers, 3 mobile developers and 1 infrastructure engineer.

License and registration

Regulation has been a recurring subject in Nigerian fintech in the first half of 2021. The Central Bank of Nigeria has been especially vigilant against services that move currencies in and out of the country. 

Lemonade is a remittance business squarely within CBN’s purview. But Olalere believes the regulator’s focus is to stop bad actors. “We keep dialoguing to make sure we are compliant.”

He says Lemonade Finance is licensed in Canada as a money service business and has necessary license coverage in the US, UK and Europe to enable Nigerians to send money to bank accounts in those countries.

Lemonade has a license partner for inflows into Nigeria. Why not a direct license from the CBN?

“It’s about time and cost. If you want to get up and running quickly as a startup, you don’t want to wait six to eight months for a license if you can partner with someone who already has it.”

In any case, this licensing partnership does not mean Lemonade depends on the partner for technology. The partner’s technology downtimes will not affect the startup.

Growing Lemonade’s user base

It’ll probably not take long before competitors emerge in Lemonade’s Africa-to-Europe money transfer space (we might hear of ‘Grape Finance’ or something soon). How will Olalere’s team stay top of mind with existing and prospective users? 

“A good cross-border product delivers on time. Our delivery is instant, never next day. We keep working on new rails and we ensure uptime is really high if you want to use it in the middle of the night.” 

It’s a bold promise, premised on the capacity of a team assembled from Flutterwave and OPay. Lemonade’s growth comes down to them bringing all that expertise to bear and perhaps hoping the CBN stays off their backs. 

—

Steve Jobs built the biggest consumer tech company of all time because he was the best at welding functionality and aesthetics. But he made that brand lovable by prioritising customer experience. 

“You’ve got to start with the customer experience and work back toward the technology – not the other way around,” he famously said.

A lot of companies have taken on this ethos. Startups have dedicated customer experience (CX) units to figure out how to cultivate satisfaction and loyalty in users. One aspect of CX is customer engagement; building relationships with customers through tools like email, live chat, push notifications and the odd shoutout on social media. 

Mailchimp, Twilio and Amazon’s Simple Email Service are among the most popular platforms providing features for customer engagement. Each is a multibillion-dollar company with recurring revenue from services like transactional messages, i.e. the type of message a startup sends after users sign up for a service or complete a purchase.

One Nigerian startup is pushing a super-platform that helps companies engage with their users using segmentation and personalization.

The name? Engage. Opeyemi Obembe and Victor Eduoh, the startup’s co-founders, want it to be the platform that helps every company build relationships with customers. 

Obembe used to be a lead engineer at a health maintenance organisation in Lagos, where he realised how important customer messaging is for business growth, retention and ultimately, revenue.

Obembe’s view is that businesses don’t grow by sending generic broadcasts to every customer, without considering how unique user profiles are. He gives the example of a bank that keeps nudging him to take a loan; when he dials the USSD code, a message pops up saying he cannot borrow because he has no account with the bank. 

“You should be able to target conversations only to people it is useful to,” he says.

How does Engage work?

Engage lets companies segment customers by variables that are relevant to their business goals. 

A company can plug in their existing mail provider services like MailGun or Amazon SES and Engage promises to break the data down into detailed analytics and reporting. The company can then use the granular data to make transactional messages more relevant to the user. Messages can be sent to users through multiple channels; email, SMS, push notifications.

While Obembe credits Amazon, Mailchimp and other existing mail infrastructure companies for currently leading the way, he says Engage is bringing new value into the market.

“We’re different in two ways: we are heavily focused on transactional messages which nobody is doing at the moment. We are the only solution that lets you bring in your existing messaging infrastructure.”

On the Engage backend, there are integrations for payment service providers (Paystack, Flutterwave, or Stripe). With those, companies can segment users by payment events and automate payment emails.

My impression is that Engage is not a car manufacturing factory but is rather aiming to be an efficient assembly plant that helps companies integrate parts into a whole. As with payment integrations, there are also plugs for messaging platforms like Twilio, Termii, and Hollatags.

But Obembe says they are not merely coupling parts. Their mission is to help companies see more value from the individual platforms when combined together than would be possible when used independently.

Who is it for?

For now, Engage will focus on helping tech companies with transactional messages. 

The current version is a minimum viable product, Obembe says. They want to take feedback from companies that engage up to 200,000 customers per month and go big in the coming months. 

Eduoh, who leads the startup’s marketing, says Engage charges up to $100 per month for companies currently using the platform. 

Launching the MVP comes with the risk that Engage may be misunderstood as too niche a product, a concern Obembe admits. But they already have a few backers; Diaspora Angels Network, angel investor Olumide Soyombo, 8185 Investment (led by Adeleke Alex-Adedipe) and a Nigeria-based venture capital firm have helped the startup to a $100,000 raise.

“We believe that when people engage customers better, customers will be willing to pay more,” Eduoh says. 

It’s a belief and a promise: Engage can help your customers trust you more. It’s a pitch to companies not just in Africa but across the world. That raises the scrutiny on Obembe and his band of five, but also the potential for global success on Mailchimp and Amazon’s scale, should they crack the customer engagement code.

—

Chijioke Dozie wondered how Nigerians would prefer to buy consumer electronics they could not afford or did not want to pay full price for at once.

As co-founder and CEO of Carbon, he oversees a profitable business that directly lends millions of dollars to consumers; but Chijioke knows the consumer credit surface has barely been scratched. So, on December 27th 2020, he tweeted a poll to his timeline. 

It was a tiny sample size but the favoured option harked back to Carbon’s early days. When the company was known as Paylater, they made plans to partner with e-commerce companies and offer interest-free loans to online shoppers; “but the likes of Jumia and Konga didn’t go for it so we pivoted,” Dozie says.

He has found a way to reawaken the company’s plans to join the global Buy Now Pay Later wave (BNPL) currently led by Affirm in America, Klarna in Europe, and Afterpay in Australia. PayPal entered the sector last year.

BNPL startups raised a record $1.5 billion globally in 2020, according to CB Insights. By 2025, the sector is expected to hit $680 billion in transaction volume worldwide.

This week, Carbon became Nigeria’s digital BNPL first-mover after announcing and launching Carbon Zero. With Carbon Zero, consumers can shop online with Carbon-verified merchants and pay in instalments at 0% interest. “No hidden charges,” the company insists.

But barely a few days after the product’s launch and announcement, Carbon Zero’s promise is being contested. 

Many people’s curiosity boils down to two core questions; how do Buy Now Pay Later loans work, and can it work in Nigeria?

How Affirm and Klarna do it

Perhaps by coincidence, Carbon was founded the same year former PayPal co-founder, Max Levchin, started Affirm. So it is apposite to benchmark the Nigerian fintech’s ambitions by what the American billion-dollar company has achieved.

Like Carbon, Affirm offers interest loans. But the latter has become notable for helping merchants “convert a sale and power a payment.” 

Affirm makes money by charging merchants for these conversions. Merchants that use its services sell big-ticket items with the expectation that the zero-interest instalments will boost sales significantly.

One such merchant is Peloton, the fitness company that sells bikes and online gym classes. Peloton was responsible for 28% of Affirm’s revenue in the 12 months to June 2019. 

Another is Shopify. Affirm offers its product on Shopify merchant sites in a partnership that gives Shopify an equity stake in Affirm. 

In Europe, Klarna is the BNPL leader and currently the second most-valuable startup at an $11 billion mark. 

The Swedish fintech gives users a 30-day period to try before they buy. They also offer interest-free instalments that are to be paid every two weeks. Users access Klarna either on the fintech’s app or at the checkout point of stores like Asos, Adidas, H&M, and Abercrombie & Fitch.

Klarna actively encourages shoppers to check out at these stores without paying immediately. 

They do the backend work of confirming the shopper’s risk profile via a soft credit check, settling the merchant for the purchase and notifying the shopper of their payment schedule. They also charge merchants a transaction fee.

As to concerns that “pay with Klarna” could seduce and possibly trap millennial shoppers in debt over unnecessary spending, the company says it has safeguards; loans are only offered to those who can pay, and there are thresholds against unlimited shopping. 

Affirm, Klarna, and similar startups promise to help users better manage their cash flow. Their rise suggests transparent interest-free loan products are here to stay, and will inevitably spread to Africa.

Carbon’s Nigeria problems

For retailers, two factors make BNPL appealing: an increase in e-commerce adoption and the desire to reduce high cart abandonment rates. For users, BNPL replaces credit cards and makes it possible to buy items that would not normally fit into a monthly budget.

But there are more factors to consider for this experiment to succeed in Nigeria, Carbon’s test market.

Affirm and Klarna are building on three existing institutions: a consumer credit culture, well-structured identity infrastructure, and heavy consumption as a social norm.

Nigeria’s central bank wants banks to lend more to activate this credit culture but it remains a difficult proposition. 

Through indiscriminate money printing and borrowing below inflation rates, the Central Bank and the government unwittingly weaken confidence in the currency.

There is also an identity and data problem. BNPL works in developed countries because borrowers are wary of tainting their credit scores (Klarna reports to credit bureaus). While Carbon adds to the groundwork of developing Nigeria’s credit rating industry, it is far from stable.

And consumption? Economists say it is a function of disposable income. A consumer’s confidence in taking a loan, even a zero-interest one, is as strong as their ability to pay. 

As it happens, there are just not many Nigerians making enough money. About 98% of Nigerians have less than ₦500,000 (~$1,030) in their accounts, according to the Nigeria Deposit Insurance Corporation’s 2016 data.

This reality discourages traditional banks or retailers who may want to offer low or zero-interest rates. Not only is it possible that they lose their money or that the naira they receive in future will be worth less than what they lend today, but they also may not find enough people to access the loans in the first place.

Testing the waters, from ground zero

Dozie’s product managers have considered how these factors affect Carbon Zero’s potential.

To entice retailers and guarantee their money, Carbon Zero requires a user to earn a minimum of ₦200,000 (~$400) monthly and make a 20% down payment on any purchase.

Carbon pays the retailer in full for every purchase and then follows users up on repayment. Because users must have a Carbon account, there will be a credit score to check potential for defaults.

Yet, there remains a crucial fault line in Carbon Zero’s present iteration; large differences between the market price of items and how much they are sold by Carbon-verified merchants. 

One instance: AirPods Pro cost ₦162k through Carbon Zero but ₦103k at a Lagos market price.

Where an iPhone 12 Pro costs ₦513,615 ($1,059) in the market but ₦695,000 ($1,433) through a Carbon vendor, that amounts to an effective interest rate of 71%.    

Yele Oyekola, Carbon’s product manager for Zero, tells TechCabal they have no control over the prices, and that “Some of our merchants also provide after-sales support which I believe has been factored in their pricing.”

He confirms that Carbon hopes to make money by charging “a small commission on each transaction”; however, the price of items are determined wholly by merchants.

This issue of the size of markups set by retailers will ultimately decide if Carbon Zero will reach Affirm and Klarna’s aspirational success. 

Oyekola admits that consumers could be put off if the 0% loans turn out to be more expensive than paying cash or taking a bank loan. 

“It’s a concern and it’s something we’ll address with our merchants but we’ve also carefully selected them and product quality is something we don’t have to worry about,” he says.

“We are expanding our merchant pool so we’ll be providing more options for our customers to choose from.”

If they pull it off – reducing and eventually solving this initial price problem – then perhaps Nigeria’s own BNPL wave will start rising.