Loyalty, offers and rewards companies are a rarity in most African markets. The unit economics and different components resembling foreign money instability make such companies arduous to tug off within the area.
But ThankUCash, a platform launched in 2018 by Related Analytics, has managed to thrive, proving that not all is gloomy within the offers, coupon and rewards enterprise. And to that finish, the startup, which introduced an undisclosed seven-figure seed final 12 months, has lastly closed the spherical at $5.3 million.
VC corporations 500 World and Unicorn Development Capital co-led the Lagos-based firm’s seed spherical. It noticed participation from U.S.-based accelerator Professional Dojo, Predictive VC, SaaS Development Ventures, Betatron Enterprise Group and Accelerex Holdings. Particular person traders like Andrew Dell, former CEO of HSBC Africa and Craig Fenton of Google U.Ok. additionally took half.
The corporate plans to make use of the funding to broaden inside its dwelling market of Nigeria — the place it operates in Lagos, Port Harcourt and Abuja — and out of doors to Ghana and Kenya. It additionally desires to enhance its product choices and add extra employees.
For years, store-like companies in Nigeria resembling supermarkets and eating places have operated offline, counting on bookkeeping and head information to report their clients’ actions of their retailers. This made it troublesome to supply money again and loyalty factors to clients.
On-line platforms like ThankUCash current these retailers with a possibility to delve into rewards and assist them retain loyalty and improve income.
CEO Simeon Ononobi began ThankUCash with Suraj Supekar, Madonna Ononobi and Harshal Gandole, who act as a chief technical officer, chief working officer and senior vice chairman of engineering, respectively.
The multi-merchant rewards platform (which suggests clients can hop on from one service provider to a different to earn loyalty factors) permits clients to earn rewards anytime they store with 1000’s of retailers listed on its app.
The enterprise raised a $320,000 pre-seed after grabbing the consideration of accelerators resembling 500 Startups, Google Launchpad and different native traders like Microtraction and Ventures Platform.
Up till this level, ThankUCash stated it has recorded over 600,000 customers and onboarded greater than 1,000 shops on its platform. Additionally, it claims to have processed over $80 million in transaction quantity.
Having matured as a enterprise, Ononobi and his workforce wish to tackle a extra difficult job: constructing infrastructure for firms that wish to provide akin companies.
“We’re creating options that assist SMEs succeed whereas rising shopper shopping for energy and alternatives. We wish to construct an infrastructure for rewards, loyalty, offers, purchase now, pay later, money again,” he stated to TechCrunch on a name.
“Money again was our low-hanging fruit and an entry level. We’re nonetheless going to enter offers, couponing, reward playing cards, purchase now, pay later, something that may assist the enterprise develop, however on the similar time, permitting the buyer improve in alternatives of shopping for.”
Ononobi, a serial entrepreneur who beforehand constructed a funds firm and in addition apps for Nigerian banks and the federal government, reckons that ThankUCash will do to rewards the identical factor Flutterwave and Paystack did to funds in Africa.
Some firms resembling banks have launched cashback packages through debit playing cards to customers up to now. However most of them have been typically inefficient, from setup right down to collections and redeeming of factors, and Ononobi argues that their inefficiencies boil right down to no technical help. ThankUCash sees a gold mine to supply plugins banks and fintechs can faucet into to supply cashback and rewards.
ThankUCash co-founders. Picture Credit: ThankUCash
The bit about purchase now, pay later is fuzzy now since there are solely a handful of distinguished BNPL companies in Africa. Nonetheless, the corporate appears to be positioning itself for the approaching proliferation of such companies buoyed by related happenings globally the place purchase now, pay later companies have seen an uptake because of pandemic-induced shopper behaviour.
“The expertise is such that we’ve our machines in shops. In order clients request loans, we generate a code for it, clients enter it into the POS machine and the service provider will get credited immediately. The code can solely be used within the retailer chosen and just for the mortgage quantity requested, such that on the finish of the day the shopper is shopping for straight from the retailers,” defined the founder, who additionally talked about that his startup may enterprise into providing purchase now, pay later companies itself sooner or later.
ThankUCash’s consumer-facing platform will stay operational. However to set the infrastructure play in movement, it has signed a partnership with funds firm Interswitch to onboard its retailers.
The corporate, which can also be within the strategy of making integrations with funds gateways, stated a few financial institution partnerships are in its pipeline.
By way of how ThankUCash makes cash, retailers pay the corporate a price on each buy made of their shops. As an example, ThankUCash will get a 1.5% fee for each buyer it brings into the shop to redeem a 5% cashback merchandise. The Lagos-based firm additionally takes commissions for offers and plans to cost an onboarding price for companies that wish to use its APIs for its companies, together with purchase now, pay later.
ThankUCash has perfected one providing: the cashback product the place retailers can get extra walk-in clients. It’s bettering the offers class, permitting retailers to promote merchandise quick (by hiring ex-managers of DealDey, a Nigerian defunct offers firm). And whereas at present constructing out its purchase now, pay later infrastructure (which supplies companies an opportunity to promote merchandise no matter whether or not clients have cash or not), ThankUCash plans so as to add a fourth providing quickly: a remittance product the place retailers can promote immediately to the diaspora.
The chief govt doesn’t give particulars about this product. In the meantime, its traders, who’ve doubled down whereas aware of data like this, are enthused about “the continued evolution of the corporate”, a comment made by Amit Bhatti, the principal at co-lead investor 500 World.
“Since going via 500 World’s accelerator in 2019, we’ve been impressed by Simeon and the ThankUCash workforce’s progress in implementing a rewards system that works for Nigerian customers, no matter money or credit score or on-line or offline fee,” stated the principal. “It’s a win-win for companies and banks, too, as ThankUCash provides them the instruments and information they should develop.”
The 45-man workforce has employed Aaron Tindiseega to steer its growth into Kenya and the japanese Africa area. The Ugandan skilled has expertise working for banks and tech firms like Uber, Normal Chartered Financial institution and Stanbic IBTC. For its growth into Ghana, Kiki Anku, who has labored at Apple and a few startups, will spearhead the duty.