Konga exits B2C e-commerce, shutdown KongaDaily and now a “JiJi” Clone

Konga, the poster child of Nigeria e-commerce is pivoting to pure-play marketplace helping merchant list and sell via WhatsApp. As we found out this morning, customers can no longer “Buy” on Konga, instead, they can only “contact seller” and chat up merchant to finalize order.

This is displeasing as we are currently concluding a report on e-commerce in Nigeria and a possible way it can re-invent itself going forward. With the hope that market players can adjust their strategy in the new year and “think different”! We will publish that later in the month.

Layoff as sign of trouble

Back in July 2016, Konga made its first significant layoff, the CEO had stated as well that the company will be downsizing every six months. It also made a whopping 60% layoff last November, we also learned from an insider that some were let go silently in December.

KongaDaily Shutdown

Sometimes, size could be a burden and the new vertical which looked like it could turn around the company, could not live up to expectation. At its height, the company was doing N700k daily in the transaction but was too small to move the needle at Konga. It’s also said that company has made a significant investment in suppliers and couldn’t sell enough to justify the need for such an investment.

Acquisition negotiation

There are rumors that Konga is currently pushing to sell itself as current investors as refused to back it and money in the bank is fast depleting. An acquisition talk was (alleged) to have been held with Yudala but the talk has not proceeded positively in recent days.

What this means for the industry

Our view is that, for as long as humans use the internet, commerce will remain a thing. As such e-commerce will not die but will need a radical model to execute in this market.

With Paystack recent report of N2.7b in transactions in December (mostly from Merchants), then e-commerce is actually working but not at scale. The question is, what’s the best way to do e-commerce in Nigeria?

Flutterwave hits $2billion in transaction and increased banking partners

It’s been a pacesetting year for Flutterwave, as expected, the company has grown in leaps and bound.

Over the period the company has grown by 900% in transaction volume; from $200m a year ago to $2billion and from 6 banking partner to 45 across Africa. This is a massive growth year for the company.

Earlier in the year, the company allowed merchants to recieve payment from international cards and paypal, however some merchants were fraudulent (according to sources) and were later restricted and automated acceptance stopped and process reviewed.

It’s also interesting to know that Flutterwave powered ALAT and GTBank MarketHub given that these products were owned by banks.

 

PiggyBank.ng, Nigerian Startup to Shake the mainstream in 2018

I have been following PiggyBank since their launch in 2016, and to see them grow aggressively over 2017 is amazing! Reading through the co-founder’s article on medium gave an impressive look into the steady execution and future of the company. I must say, it’s an impressive journey of how a Nigerian startup can be gritty, execution-minded and be awesome!

Product viabilities

Everyone in the world is aware of the need to save, and particularly in Nigeria(maybe Africa), we have Esusu culture of regularly saving money daily, weekly and monthly; most times jointly. I personally participated in joint-saving while in high school and running a small business. If there is any challenge to scale from that model, it’s the fact that, some people default after they have collected the fund contributed by everyone.

With PiggyBank, you are able to safe, put a SafeLock on it, and be sure to get your money when the time comes, say 3months time. The pain you get from the emergence of easy access (e-banking) to your money is the fact that, you can pull out your savings too quickly and as such, not be able to get the value of saving for a significant period.

(By William Iven, Unsplash)

The Accelerators

Till date, PiggyBank has participated in 3 accelerators; Village Capital, PitchDrive and BlackBox, all in 2017. When you look at the pattern of execution, you will see a coordinated, ambitious and lean(viral) approach to how they execute their strategies. I want to believe that their participation in the accelerators shaped greatly, the way they execute.

When you run a startup, getting a helping-hand in thinking through and executing your strategy has a value that can never be underestimated.

The Market

According to the last banking report, there are about 97.57m bank account holders in Nigeria, this is the Total Addressable Market (TAM) for the startup and given that we can assume a 25% Servicable Addressable Market (SAM) from the lot. Remember not all Nigerians with banking account will be ready to save money YET in a startup. This will change over time as their acquisition of a microfinance license could insure customer deposit as well, giving customers more confidence.

The Execution

In 2017, the startup grew 30,000% from 21m savings to close to 1 billion naira just within 12 months? That’s super impressive. According to the CEO, 30% of the money is in SafeLock, meaning customers have a pre-determined time for withdrawal and as a business, they can do investment with the money and make more.

The Future

This year 2018, we see PiggyBank breaking new ground and growing savings by at least 500%. With the acquisition of a microfinance, they will be able to hold money for longer, open a standalone bank account for customers and be able to introduce new products that will push them to the mainstream.

On the funding side, we predict (going by the pattern of startups in Nigeria) a $1.2m series a funding before the end of the year.