Manage Your Finances with Wallet
Announcing our investment in Wallet!
Pitch
Wallet is a smart banking alternative that helps people perform financial transactions faster, manage their finances and do more on their mobile phone.
Website
Team
- John Oke, CEO and Co-founder. He formerly worked as a Software Developer at Surebids and at Wema Bank PLC, as well as participated in several exciting projects across Nigeria’s technology scene. He co-founded Ngfeeds.com, and has a degree in Computer Science.
- Joseph Benson-Aruna, COO and Co-Founder. He has a background in User Experience, User Interface Design and Product Management. He has wide experience with Startups, Fintech Companies and Banking having worked at Jobberman, VConnect, Interswitch, and McKinsey Digital Labs.
How we first met
When Microtraction launched, I took all my meetings at Vestar Coffee and I had seen John a few times on his laptop coding constantly . One day, whilst waiting for my next meeting, I walked up to him and struck up a conversation. He told me of his efforts to build an alternative to conventional banking and I was impressed by the ambition of his vision as well as his progress. He subsequently informed me that he hadn’t raised money and I encouraged him to apply for funding via our website. It was more or less a blind date in a coffee shop.
Problem
Money plays a huge part in our daily lives. We trust banks to help us keep our money secure until we are ready to spend it. Banks have done a good job of providing this basic requirement, but have not innovated significantly beyond this in providing improved and better financial products and services that we want.
Personal finance for a lot of millennials is hard. Traditional banks do not provide services beyond deposits and transfers, some of these include access to credit, forex, investments, budgeting and the like. There have been FinTech startups, who have introduced solutions to some of these problems and for their products to be truly effective, they will need to be built on top of existing banking applications. Traditional banking apps are built on legacy infrastructure that fail to encourage collaborative innovation and easy integration via Open APIs with these innovative FinTech startups.
Solution
Wallet have built a core digital banking alternative from scratch that makes transactions fast, convenient, reliable and accessible for businesses and consumers. They have also built a customer-centric mobile wallet paired with a pre-paid debit card that solves many problems that customers have in managing their finances on a day to day basis whilst keeping transactions fees low.
The solution is highly extensible, allowing them in the future to operate in multiple countries, connect to various global payment networks, and introduce new financial products easily. Wallet is primarily focused on the personal finance and doesn’t plan to build out all the financial products that customers would need but rather aims to become a platform with well documented and Open-Banking APIs that make it easy for FinTech developers and startups to sit on top of their alternative digital banking wallet.
Market
What made us excited about the market
We believe access to financial services is essential for every African. Wallet’s launch market (Nigeria) has 180m+ people. Today we have 33m+ unique BVN accounts and World Bank put the number of Nigerians without a bank account at118m people.
For traditional banks it’s not cost-efficient to serve low-income & rural customers. Wallet as a software-only banking alternative doesn’t have the CAPEX of traditional banks. Starting with smartphone users — we believe that in the long term, Wallet-as-a-Platform in partnership with FinTechs that build on top of it will be able to expand its customer base and serve every type of customer offering them affordable, accessible and consistently innovative financial services.
The Team
Why we believe in/backed this team
One very key and interesting thing about the co-founders is that they are both very technical. John is a full-stack developer who codes mobile, front-end, and back-end. John had built enterprise solutions and inter-bank APIs since his University days. Joey is a top-class operator and one of best product designers/developers I’ve met in the ecosystem. When I spoke to other people in the banking and finance ecosystem about both Co-founders, they had fantastic things to say about them.
Despite being relatively young, they are a team with domain expertise and have a combined experience of over 20 years in the banking industry. They have also built similar technologies for a bank and now want to explore their own solutions without the bureaucracy. I had no doubts of their technical abilities to build a world class product.
Product
The very first version of the product was (and still is), easy to use. I use it for transfers, to top up airtime on my phone and pay my Apple music and Netflix subscriptions. It had a quantum of utility that was already interesting. From the onset, they cared about product quality and showed a clear eye for design. They were very thoughtful about the features they wanted to build and how they intended to monetize those features. “Chen” — the kick-ass designer who designed the Paylater product — also joined the team.
Wallet Version 2, is the true fulfilment of what got me excited in the first place. We knew that there was an opportunity to build a product that will replace what we traditionally use our banking apps and cards for. We also knew that they could build an alternative that was truly centred around the customers’ spending experience with the potential to become a financial network and platform.
Competition
Wallet’s biggest competition are the banks and the status quo as they are building a product that people don’t really know they want. The Walkman or the Blackberry were products that were very popular and common in their prime. If you asked anyone if they were happy with these products they would have said certainly, but when the iPod and iPhone launched, people who saw or experienced both knew it was something they wanted.
Wallet wins by rethinking what personal finance means to the consumer and abstracting the complexities of being able to manage your money better. Over the next decade, we believe consumerization of personal finance will be a defining trend with a lot of innovation coming from FinTech Startups and Wallet will be the platform that enables this on the continent. This is the reason why we invested in these guys because they have spent a lot of time thinking deeply about what the future of consumer finance should look like (or should be) and how to build a product that people really love.
Traction
We didn’t invest in what Wallet had at the time, but invested in the future they were trying to build. When we made the decision to invest in Wallet, they weren’t really growing but we didn’t care about their traction, hence our name Microtraction. We invested because we weren’t in doubt that they could execute on their vision and bring a high quality product to market. However, it was good that they had active users who were making quite a number of transactions regularly at the time they applied.
Conclusion
We believe that Wallet can become truly Pan-African. They are building a central hub where people spend their money and have access to other financial services which have been built on top of their infrastructure. FinTech companies have been unbundling services/products traditionally offered by banks. What Wallet is doing is re-bundling those services/products into a unified customer experience that the user will love. To do that, it requires a nimble and flexible technology with an open API infrastructure which Wallet have built.
At Microtraction, our long term mission is to accelerate Africa’s transition to a sustainable and developed economy. We do this by investing in entrepreneurs who leverage technology, capital and innovation to try and solve some of the largest problems on the continent. If you are working on solving one of these problems, we should talk!
Thanks to Dayo Koleowo, Ife Koleowo and Adaobi Adibe for reading drafts of this.
Until Next time….
Semper Fi,
YB
Sign up for Opentraction, our newsletter where we share actionable insights and real world advice from founders & operators who are building venture backed startups in Africa
🚀 Have or know a tech product I should be aware of? Let’s talk
💰 Are you a founder of a startup? Apply for funding
💭 Just want to give us feedback? Please reach out
🐦 Don’t want to miss Microtraction news, updates? Follow us on twitter
