Investing in Piggybank
We are witnesses to a digital transformation happening in the financial services industry.
Independent players are picking apart the “jobs” that used to be done by traditional financial institutions — money transfer, savings and investments, financial management, access to credit, insurance, etc. — and building products around them. Because they are built-for-purpose and operate a lean cost structure, these companies can provide a better user experience, faster, cheaper, and are better able to serve yet unserved consumers. The expectation is that they can ride their trojan horse (product) to scale and build another bundle of banking services around themselves.
But this view is incomplete. Existing financial inclusion efforts too often treat “banking” as an end in itself, and the “unbanked”, as numbers that must be moved to a column labeled “banked”. Not enough consideration is given to the underlying job to be done. As Michael Kimani argues in this essay:
“People in Africa do not sleep and dream of having bank accounts. […] Simply having a bank account gets you nowhere. Simply being cashless gets you nowhere.”
At VP, we see this as an opportunity. Success in developing markets will come from entrepreneurs taking a bottom-up approach to product development; studying behavior that exists offline and applying technology to help users do what they need done. Building bicycles for their minds, instead of trains for them to jump on.
That’s why we’re thrilled to announce that we’re voting with our feet by investing in Piggybank’s $1.1m seed round, alongside Village Capital and a group of HNIs led by Olumide Soyombo.
Founded two years ago, Piggybank helps Nigerian millennials and low-middle income earners save small amounts daily, weekly, monthly, or annually, automatically via their mobile app. The team has proven adept at reading the behavior of their users and using that to inform product direction.
Customers love Piggybank.
They have rewarded them by acting as evangelists, driving growth to 53,000 savers and counting. But it’s still early days. The next step in their evolution is Smart Target, a savings and investment product for groups, based on Esusu or Ajo (West African names for informal group savings clubs common across the continent; also known as Chamas in East Africa).
We’re excited to partner with Odun, Josh, Somto, and the rest of their team as they drive more aggressively towards their goal: making savings and financial management simpler for young people and low-middle income earners across Africa.