Africa native and investment advisor Eric Osei gives a summary…
Zimbabwean entrepreneur Takwana Tyaranini first started Senditoo with his Guinean counterpart Ibrahima Soumano over two years ago in London.
Calling himself a circumstantial entrepreneur, Tyaranini had just lost his job after working as a Mental Health Practitioner in the UK National Health Service for more than 15 years. Instead of trying to get another job in an industry he was comfortable in, he struck out with his business partner on an idea he was sure was a winner. Thankfully for him, he was right.
Over the past two years, Senditoo has grown into a recognisable African brand that you use to send airtime back home, no matter where you are in the world. With over 140 countries, a network of 400 mobile operators with a combined reach of 4.5 billion prepaid users daily, it is not surprising that Senditoo has raised a million dollars in funding since 2016.
Here, Takwana shares the story of Senditoo, and how his brand became a business valued at £5million in two years.
How did you start Senditoo, and did you know at the time that you would target the remittance market (specifically airtime) to begin with?
What appealed to us the most as co-founders at the time was that 70% of immigrants had never sent airtime back home, so we felt that this is something that would appeal to them because it is an act of love. Similar to buying flowers, it is a moment of instant gratification. It is a very small amount of money, like £2 or £5, and yet it means a lot. It is a very beautiful feeling, you get the sense that you have done something very huge and yet it is a small act. I find that we Africans across the globe are very expressive people, it almost always feels over the top but it is genuine and very sincere. So, what we find with our customers who do this once is that you come back to their accounts four months later and they have completed over 60 transactions. Our customers describe it as a very addictive feeling.
Which markets did you start with, and how did you decide which channels to begin with?
We made a strategic decision to chase the numbers first. There are about 250 million immigrants that live outside of their countries. Our first markets were actually the Indians and the Nigerians; countries with huge populations that live in the UK. In the first month of our business, I personally made over a thousand calls to friends on Facebook asking them for £2 of their money. That was the time I learnt perseverance above talent and smartness is what’s more important in business. Most of the people I called were from Zimbabwe and it was very much reflective in the numbers that we subsequently got. It was a very small market at the time but it gave us 70% of our transactions when we first started.
There was a lot of excitement because someone would turn around and say I just sent this to over 250 of my friends on my WhatsApp list, you should get some transactions coming through. Then before you knew it, we had transactions from Dubai, Australia, Turkey and the USA. Soon enough we started to realise that we needed to hone in on the motherland because most of our clients were sending to Africa, Nigeria, Zimbabwe, Guinea, Ethiopia, South Africa and DRC.
How does your technology work?
We have a very capable technology team that we have been working with from the get go. Our technology works via API access. Once we identify a service provider, we connect their API to ours and this creates a smooth transaction process for the customer that is fast and very easy to use.
How do you make your money?
We get a small percentage fee off every transaction. Our competitive advantage when we started in the remittance market is that if you wanted to send small amounts you were going to get billed so much for such a small transaction, so we wanted to build a high value product that was not at all too taxing on our client’s wallets but still had great impact to their loved ones back home.
Did you bootstrap the company from the beginning?
Yes, we did and it was a very painful process. We had the conviction that what we were doing made sense. We invested thousands of pounds of our own money in to the business and yet in three months of us starting we were doing only three to four transactions a day – those were very painful days. I’m a very religious person in so many ways and it was one of those situations where I realised synchronicity is God’s way of remaining anonymous.
It happened that my business partner spoke to a contact of his before we started the business. At the time, this contact wanted to start a mining business in Guinea. My business partner who is from Guinea was very happy to advise him, and as a result things went very well for him in Guinea.
Later down the line he was in London, and my business partner requested a coffee meeting. Then a very simple but profound thing happened. A transaction came in right at the time when he was having coffee with him. So here he was with a potential investor and he was able to show that our business was running. We were profitable and we were not losing money. We had no crazy overheads or headquarters, just our laptop. He immediately identified the opportunity because he understood the scalability of it all. He invested in us, and a couple of months down the line we raised more money. So far, we have raised a total of a million dollars.
At the time, we were known as OzaRemit and we rebranded to Senditoo, and then it was pretty much fun and games from then on. It has been quite a nice journey for me, I call myself a circumstantial entrepreneur because I believe anyone can do it. It’s about identifying a problem, coming up with a solution and surrounding yourself with smart people.
Who is a part of the Senditoo team?
The team is very compact. Essentially, our investors are a very qualified and smart bunch of people, and they are very much involved in the decision-making processes of the company. We have taken an outsourcing approach to teams that are established already and know exactly what they are doing. Our technology team are our business partners who have equity in the business. They have been with us from the beginning and were able to clearly see the opportunity and chose to work with us.
What is the next stage for Senditoo? Late last year in Nigeria, MTN applied for a banking license. This signals a new age for multi-national operators taking a new step in digital and payments. Do you view this as a huge opportunity for companies like yours?
One of the things we are excited about is money transfer, and the reason why is because the standard customer acquisition cost is about £70, whilst our acquisition cost in airtime transfer can be as low as £2 to £5. People who send airtime home usually send money home as well, hence it didn’t come as much of a surprise to us when our current clients encouraged us to add money transfer. Fortunately for them, we are launched this new service at the end of March 2019.
Your company facilitates transfers to 140 countries with a network of over 400 mobile operators that reaches 4.5 billion prepaid users every day. Who are your major competitors?
Competition is a very strong word for us, so what we do is simply focus on our own effort by enhancing our client’s experience. We focus on making our platforms better and delivering second to none value to our users.
Finish this sentence… In 2020 Africa will be
Oh, that is deep. What excites me about Africa is the possibilities. We are at a stage where we have realised that Africa can perform. I believe that we have gone past the potential stage. I think in 2020, Africa will be showing our diverse strengths – achieving much more than what we are already doing. The biggest thing that could ever happen to Africa is seeing a kid from Bindura, Bulawayo or Marondera being in a position where they can replicate my story that happened in London, where you can start a business that is valued in the millions in a short space of time. I believe that talent is global but opportunities may not be. Genius is found everywhere.