A report by The New York Times on Wednesday revealed that some Google Duplex calls are actually made by real humans. Duplex is the…
It’s not often in the entrepreneur world that you hear of investments from banks, but here is one such story involving a very successful South African company that has rapidly grown from startup into a sophisticated, multi-million rand, 90-person-strong fintech success story.
In August this year, Investec Asset Management bought a “significant” stake in South Africa’s mobile transaction company WiGroup, in a deal which is believed by the industry to be worth just under a whopping R400-million.
Although WiGroup blankly refused to verify that figure, its impressive CEO and founder Bevan Ducasse told Ventureburn that Investec now holds a stake in the company which ranges somewhere between 25% and 50%. He added that Investec “doesn’t do small deals”, and that the firm usually invests a minimum of US$10-million.
And it’s obvious why Investec jumped at this opportunity. Any visitor on WiGroup’s official website would immediately be struck by a massive counter, incessantly marching on, recording every mobile transaction processed by the company by the second. At the time of publishing the ticker was showing that company has processed an impressive R4.2-billion.
Since pivoting from a mobile wallet solution to what it is today — a facilitator of mobile transactions — the Cape Town-based company specialises in integrating mobile transacting capabilities with retailers’ point-of-sales (PoS). This B2B model is certainly paying off.
Today, WiGroup is being used by 55 000 PoS lanes and boasts more than 60 clients, ten of which include big blue-chip companies like Woolworths, Pick n Pay, Shoprite and Vodacom. Discovery Insurance and some of South Africa’s “top banks” are to follow suite.
One of the reasons WiGroup pivoted away from its mobile payments focus, Ducasse explained, is because South Africa’s mobile market is already too saturated.
“We’re currently seeing many island plays from different banks and retailers. Everyone’s kind of doing their own thing. There’s no uniformity and that’s not going to work,” Ducasse said.
Ducasse explained that the industry is forced to deal with a chicken-and-egg situation. Between the retailers and the banks, both parties are launching their own mobile transaction plays independently from each other. That’s why WiGroup is an ecosystem play, enabling everything from SnapScan to Zapper to integrate with banks and retailers.
With Investec Asset Management’s “significant” backing in the bag, Ducasse plans to scale WiGroup’s “proven model” into the rest of Africa, specifically focusing on Nigeria, Namibia and Kenya. It already has a partnership with Nigeria’s payments processing company Interswitch.
“The need for an ecosystem, and the need for mobile transacting [in Africa] are far greater than what they are in other countries,” Ducasse pointed out.
Boasting around 90 employees spread throughout South Africa and abroad, the company’s looking to establish a global brand:
It’s about leveraging the Investec brand which is very trusted. On deals like this they do some heavy due diligence. They look into everything you do. When you go to future client companies, they know we’ve got a solid team and a solid strategy in the market.
Although WiGroup is keen on testing out new markets, the founder added that South Africa’s mobile payments ecosystem is brewing with excitement. “I bought my first coffee in 2008 off my phone,” he noted, adding that his first company WiWallet did exactly what a service like SnapScan does today. “We were the first people to build a payment app that links to a credit card.”
The entrepreneur believes that while mobile transacting will inevitably become the norm, mobile payments won’t necessarily be as big as people think:
Although, we are seeing snippets of it with SnapScan and Zapper. Niche payments is where mobile is going to take-off. We’ve processed R4-billion in the last three years. When people say that mobile transacting isn’t happening, they lie. The thing is that a lot of the R4-billion is in digital coupons, rewards and gifting — it’s in things that you can’t do with cards.
Ducasse hopes that he won’t have to carry a wallet around within the next ten years. “But that’s the hopes of a lot of people,” Ducasse added. “You always have to be realistic, it’s not a now thing. It’s a slow, gradual build.”