The following article is the second in a series of extracts from South African entrepreneur Hannes Van Rensburg’s upcoming book, Cash In, Cash Out. The founder and CEO of the fintech company, Fundamo, recalls the events that have helped shape the world’s mobile banking industry as we know it as well as those leading up to the company’s exit to Visa for a whopping US$110-million.
In this article, Van Rensburg details the events when Fundamo hauled in its first big blue-chip client — the biggest bank in Africa. This was arguably one of the biggest validations in the company’s history.
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The contract negotiations with Standard Bank became the responsibility of Johan Roets. At that stage, he had recently joined Standard Bank after an accomplished career as an entrepreneur. He had a large portfolio in the bank, but liked the idea of launching a new type of banking product based on mobile phones. This meant that he gave us a lot of attention, and I got to know him well. Contract negotiations with a bank can take very long because of complex compliance and risk management. Many people in the bank had to look at the contract, which became difficult to conclude quickly. As it was a suspensive condition for the conclusion of the acquisition of eZuza, Johan started focusing on this more and more. As one would expect of a good manager, he allocated the responsibility to one specific individual: a very capable person called Patrick Crooks.
We worked well with Patrick. He worked diligently towards a contract that we could sign. Patrick looked after the interests of the bank well. He never conceded anything that could compromise the interests of the bank, but was pragmatic and worked with us to solve complex contractual problems. We needed to contract a product with characteristics – and risks – that were very different from what the bank was used to. This required a person who was willing to think outside the box. We were fortunate to have someone like Patrick negotiating on the other side.
The format and contents of the license agreement with Standard Bank became the standard license agreement for our solutions. It was a fair contract to both parties, but also ensured that many unknowns were well catered for. It was the only way to proceed in building a new industry. We needed a solid contract that was flexible enough to cater for the unknown too. Working with Patrick, we managed to create such a contract.
When we signed the contract with Johan, we gained a very important customer. It was our first blue-chip customer: the biggest bank on the African continent. We had to step up to be able to work with this new customer, as their expectations were quite different from those of our existing customers . But this time, we were ready for them. All the tribulations of previous deployments now stood us in good stead.
Both Johan and Patrick remained good friends as their careers took them to other countries and other projects. Much later, Patrick played an important role in another big project we got involved with, in another country. But that is another story.
And then there is the story about what happened to the eZuza brand. To do this story justice, I have to start at the beginning, with a woman named Monique Maddy. When we heard about Monique, she was working for, or was associated with, Google. I never established how the relationship worked, but when she spoke about the Google management team, she always referred to ‘Larry and the guys’. For me, this was an indication that she was very well connected with the decision-makers at Google.
I met Monique on a visit of hers to South Africa and liked her immediately. She was a highly driven person who clearly expected results from the people with whom she worked. She was an accomplished marathon runner who had trained with Kenyan champion- ship runners to beat some or other milestone (which she did, in the end). This showed her competitive nature. She also had a passion for emerging markets and demonstrated an amazing network during the time that I worked with her.
Without going into too much detail, I travelled to Brazil with her twice to attempt to establish the first mobile money service in the market there. During these visits, we had meetings with many very influential and wealthy people. I have recollections of a lunch at which the ex-director of Brazil’s central bank told me how he stemmed the free fall of the Brazilian currency. We also met the founder of one of the biggest Brazilian corporations on the top storey of the São Paulo corporate head office. It was an amazing time and I learnt a lot about banking systems in Brazil. We formulated a very exciting business venture, with support from the right people, but never managed to execute it. In the process, I got to know Monique well.
At some point, I inadvertently told her about the deal that Kobus Viljoen had done with Standard Bank and how the name eZuza had been discarded. She asked me what the name meant, and immediately saw the value of the brand. She contacted Standard Bank and purchased all rights to the brand (the trademarks, the domains, etc.) for a paltry sum. She told me that one never knew where or when it might be needed.
Much later, she made contact with me again and told me that she had successfully launched a mobile money initiative in Mexico, which was going quite well. She was very excited about the progress that they had made and also about the name of the company.
She had named the company eZuza.
This period in the Fundamo journey was filled with disappointment and frustration. It started with enthusiasm for what we thought Kobus would launch. We poured so much of our energy, our skills and our dreams into the eZuza project. We were so convinced that it would turn into something big, that it would pay the bills and catapult us into fame and fortune, that we could almost not believe it when it did not materialise. It felt like everything had come to an end with Kobus’s phone call that night. It led to hard decisions and painful downsizing. It was extremely hard for my management team and me to get to grips with where we were. It was difficult to keep believing and not to think of ourselves as failures.
Yet, the fact remained that eZuza’s death had led to us winning Standard Bank as a customer. We had tried very hard, and failed, to win Standard Bank as a customer a few years earlier. Now, it had come to us effortlessly. It was ironic and special at the same time. And eZuza had been resurrected to carry the flag on a different continent.
Our story was only beginning.
More Fundamo Diaries:
Fundamo diaries: launching the world’s first mobile money service in Africa [Part 1]
a href=”http://ventureburn.com/2016/03/fundamo-diaries-raising-capital-african-startup-part-3/” target=”_blank”>Fundamo Diaries — Raising capital for an African startup [Part 3]
Cash in, Cash Out is available on Amazon, Exclusive Books, and the official book site.
