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South African fintech startup Rehive — which aims to become the Shopify for small companies to build their own fintech apps — has launched a new platform and series of off-the-shelf products.
Rehive’s platform allows developers to build, launch and scale their own fintech applications without needing to build the core technology from scratch.
Speaking to Ventureburn last week, the US registered startup’s co-founder, SA-born Helghardt Avenant, (pictured above, right, with co-founder Michail Brynard) said the startup hosted two hackathon events in Cape Town last month, which attracted about 25 participants in all.
The startup plans to continue hosting a hackathon a month for the rest of the year (read more about the startup’s month-long hackerhouse and hackathons here).
“We’re doing a roadshow visiting leads in Johannesburg, Amsterdam, Brussels, New York and San Francisco. Everywhere along the way we are hosting hackathons, workshops, demos and talks on using the Rehive platform and fintech business opportunities,” he said.
Avenant said the platform will enable other entrepreneurs and developers to build the next Venmo, Coinbase, Revolut, Kickstarter, Uber payout system or Snapscan. He claims that Rehive has got 80% of the necessary backend logic covered.
“We go as far as saying in the next five years even reserve banks will use our technology to help managing the digitisation of cash. When governments start issuing fiat currency on a blockchain, then naturally existing financial enterprises will all need tools to manage these assets securely and efficiently,” he said.
‘The Rehive platform will enable other entrepreneurs and developers to build the next Venmo or Snapcan’
Rehive allows users to add 1000 free user accounts or to make 2000 free transactions, after which users are billed at $0.005 per user account as well as a fee of $0.0025 per transaction and 0.15% per value of the transaction.
Users can either build their apps themselves or get Rehive developers to help them to do so.
“If you do it yourself, you get free access to the platform and only get charged a variable fee. If you do it with us, Rehive charges a fixed platform fee for dedicated support and training. This fee is $2 500 for 64 hours per month, or a negotiated fee if you need more support based on your needs and commercial requirements,” said Avenant.
He added that Rehive also has off-the-shelf products and implementation agreements for qualified leads. These products can range between $3000 to $150 000 per implementation.
‘Just under 10 000 accounts’
The platform currently has just under 10 000 consumer accounts, while the startup has processed over R20-million in transaction volume since 2015, he said.
However Avenant admitted that the only metric he’s currently tracking is the number of hot leads that are in a position to pay for the startup services (more than 10 companies since June last year) and that the company had neglected to track the number of active projects being developed and number of users on the platform.
Nonetheless he estimated that there are over 50 project accounts on the platform with which the startup has had no interaction.
“In the end, corporate clients are the most viable leads in the short term. We don’t have a full bank client yet, but have been talking to promising leads in SA, Europe and US,” he said.
Avenant said the startup is talking to banks in Europe with the strategic intent of positioning Rehive as a technology layer to be compliant with the PSD 2 regulatory framework which will affect payment services offered by banks and is expected to take effect next year.
Tim Draper’s two 10-minute meetings
The startup was registered in the US in February 2015 by Avenant and Michail Brynard, after the two — fresh out of university — joined blockchain accelerator Boost VC in San Francisco.
At the time of joining Boost VC, the company had built a consumer facing digital wallet for South Africans to seamlessly send money to each other. The two had developed an innovative feature that made it easy for users to purchase bitcoin for ecommerce payments directly from the app.
Their first product attracted about 1000 users in the first 14 weeks processing just under R2-million in transaction volume.
However, while building their first product the two were inspired by the question: “What if we made our technology available for others to easily build fintech apps, where they don’t have to go through the pain of building everything from scratch?” This is how Rehive started.
The startup has so far received funding from Boost VC and in January landed an investment from Silicon Valley investor Tim Draper (who has invested in Tesla and Skype) together with a few other angel investors. Avenant did not want to say what amount Draper and fellow investors had injected in the startup, saying only that it was “less than $500 000”.
Avenant said Draper made a decision to invest after only two 10-minute interviews he had with the two, adding that they update Draper with regular emails and he responds with questions.
“Tim Draper is in quite an interesting position where he invests both in early-stage startups and startups that are a bit further along. Basically he understands where the further-along startups are, where they’re lacking, what opportunities there are and he sees where the young ones are coming in.
“So in his mind he just wants to see how can this one just either fuel that one as a parallel business and complement that one in the long term. So he just makes a quick decision,” said Avenant.
He said the next step for Rehive is to start offering more hosted services, making it easier for clients to add new features.
“In the long term, Rehive will adopt more and more best practises from blockchain technology as the industry matures and it becomes more clear how technology can benefit real use cases,” he said.
Featured image: Rehive founders Michail Brynard and Helghardt Avenant (Supplied)