How Jozi innovator turned loyalty card hobby into startup with over 150 clients

Not many of us have had the fortune to be able to turn our hobbies into a full-fledged business as Tshepiso Manyoha has had.

Manyoha, the founder of Johannesburg based loyalty and rewards startup Loyal1 last week won R500 000 worth of prizes in The Workspace and MiWay Business Insurance Entrepreneur Competition.

He founded the company with Tsietsi Molai and Nokuthula Manyoha in 2015. About 150 small businesses currently use his “loyalty-as-a-service” platform.

“We have a few large corporates that we are in advanced talks with and one that is already concluded and initiating integration,” says Manyoha, who declined to disclose the name of the corporate.

Loyal1 is currently integrating artificial intelligence (AI) and machine learning tools onto its loyalty and rewards management platform

Last year South Africa’s retail trade industry generated R1-trillion in sales. Manyoha believes that 10% of this is directly attributable to loyalty and rewards programmes that retailers run.

An Independent Online article last week stated that consumers have saved billions of rand through loyalty programme rewards, with Clicks paying back R320-million in cashback rewards last year, while Pick n Pay gave back R3-billion during this financial year in personal discounts.

Manyoha says his startup is targeting the 25 million economically active adults in South Africa. “Stats also show that 79% of South Africans that engage the retail sector participate in loyalty and rewards,” he adds.

High school hobby

For the Jozi innovator, it all started when he was in high school when at the time he was already a loyalty and rewards fanatic.

“This has always meant keeping a fat wallet full of cards, coupons and vouchers. I would go out of my way to fill up stamp cards so I can get my freebie,” he says.

He then began using apps to create digital versions of his various cards on other apps, but what got him is that they never carried local content.

Nor did they cater for the carwash, dry cleaners or coffee shop down the road. To find out about specials it seemed he always had to be present at the retailer that was offering such a special. This got him thinking.

After a stint in IT consulting Manyoha decided to build a platform that allowed consumers to participate in loyalty and rewards programmes in a way that they would want it — all in one place and hassle free. “And this is how Loyal1 was born,” says Manyoha.

‘More than just a rewards and loyalty platform’

He describes his startup as being a consumer shopper aggregator which uses loyalty and rewards to aggregate shopper and consumer data with “more granularity than has been possible before”.

“Using this data and Loyal1’s integration with point of sale (POS) systems, payments and other value-added services, we are able to take the consumer’s shopping experience to the next level.

“This allows retailers, brands and other consumer-facing companies to target and convert other potential consumers with more efficacy than any other system on the market,” he claims.

Responding to Ventureburn questions on what sets apart his company from the competition, Manyoha explains that Loyal1 provides a B2C and B2B value-based service that is industry and sector agnostic. It sets him off from his competitors, most of which he claims serve niche sectors, instead of offering a full end-to-end market.

“In other words, we will enable shoppers to participate in rewards conveniently and give them power over their own data, while on the same platform we will provide rich data analytics to businesses when the customer has left their building,” he explains.

Last year the startup joined Tshimologong‘s incubation programme, and IDF Capital‘s I’M IN Accelerator programme, which Manyoha says he is now in the final stages of completing. His startup is also part of the TechNvst programme.

‘Funding biggest challenge’

Manyoha has yet to raise any funding and has instead bootstrapped the company using his own savings, as well as those of his wife and his best friend, who he says made a large investment.

Funding is his startup’s biggest challenge.

“We are clear on our strategy and have the team to execute but need money to activate and access the market,” he adds. The startup generates revenue from subscription, transaction and brokerage fees.

Manyoha said Loyal1 has experienced a 30% growth in shoppers and small business partners. “We are expecting a huge spike in the first quarter of 2019,” he adds.

His company currently employs 10 full-time employees (only five draw a salary) and in line with current growth he expects Loyal1’s staff compliment to double by next year.

The company is now integrating artificial intelligence (AI) and machine learning tools onto its platform.

“We are becoming more than just rewards and loyalty and will be providing a richer personal shopping experience that will also become a personal shopper consumer and credit profile management tool,” says Manyoha.

Featured image: Loyal1 co-founder and self-proclaimed “chief loyalist” Tshepiso Manyoha (Supplied)