Nigeria’s ThankUCash secures $5.3M to build infrastructure for cashback, deals and BNPL services – TechCrunch

Loyalty services, deals and rewards are rare in most African markets. Unity economics and other factors such as currency instability make such businesses difficult to start in the region.

However, ThankUCash, a platform launched by Connected Analytics in 2018, has managed to thrive, proving that it’s not all bleak in deals, coupons and rewards business. To that end, the startup, which last year announced its seven-figure inception, finally closed the round at $5.3 million..

Venture capital firms 500 Global and Unicorn Growth Capital co-led the initial round for the Lagos-based company.. It saw participation from US-based accelerator experts, Expert Dojo, Predictive VC, SaaS Growth Ventures, Betatron Venture Group, Accelerex Holdings. Individual investors such as Andrew Dale, former CEO of HSBC and Craig Fenton of Google UK also participated.

The company plans to use the investment to expand into its home market in Nigeria – where it operates in Lagos, Port Harcourt and Abuja – and beyond Ghana and Kenya. It also wants to improve its product offerings and add more employees.

For years, store-like businesses in Nigeria such as supermarkets and restaurants have operated offline, relying on key bookkeeping and knowledge to record their customers’ activities in their stores. This made it difficult to offer customers cashback and loyalty points.

Online platforms like ThankUCash provide these merchants an opportunity to delve into the rewards and help them retain loyalty and increase revenue.

CEO Simeon Ononobi started ThankUCash with Suraj Subkar, Madonna Ononobi and Harshal Gandol, who serves as CTO, COO, and Senior Vice President of Engineering, Respectively.

The multi-merchant rewards platform (which means customers can go from one merchant to another to earn loyalty points at another) allows customers to earn rewards anytime they shop with thousands of merchants listed in the app.

The company raised an initial $320,000 after attracting the attention of accelerators such as 500 Startups and Google Launchpad, and other local investors such as Microtraction and Ventures Platform.

So far, ThankUCash said it has registered over 600,000 users and has over 1,000 stores on its platform. It also claims to have processed more than $80 million in transaction volume.

Having matured as a company, Ononobi and his team want to take on a more complex task: building the infrastructure for companies that want to provide similar services.

“We create solutions that help small and medium businesses succeed while increasing consumers’ purchasing power and opportunity. We want to build an infrastructure for rewards, loyalty, deals, buy now, pay later, and get cash back,” he told TechCrunch in a call..

“Cashback has been our outstanding low payoff and entry point. We’re still going to go into deals, coupons, gift cards, buy now, pay later, anything that will help the business grow, but at the same time, allowing consumers to increase buying opportunities “.

Ononobi, a serial entrepreneur who previously built a payments company and also apps for Nigerian banks and government, believes ThankUCash will do to reward the same thing that Flutterwave and Paystack have done for payments in Africa.

Some companies such as banks have launched cashback programs via debit cards for users in the past. But most of them have been generally ineffective, from preparation to combos and points redemption, and Ononobi argues that their inefficiency boils down to a lack of technical support. ThankUCash sees a goldmine of providing plugins that banks and fintech companies can take advantage of to offer cashback and rewards.

The founders of ThankUCash

The little part about buy now, pay later is now ambiguous as only a few prominent BNPL services are in Africa. HoweverThe company appears to be preparing for the imminent spread of such services backed by similar events globally as buy now and pay later services have seen a proliferation as a result of consumer behavior caused by the pandemic.

“Technology makes us have our devices in stores. So when customers request loans, we generate a code for it, customers enter it into the POS machine and the merchant is approved directly. Code can only Uses In the chosen store and only for the required loan amount, so that at the end of the day the customer buys directly from the merchants,” explained the founder, who also mentioned that his startup might take the risk of offering the services of buying now, and paying later itself in the future.

ThankUCash’s consumer platform will remain operational. But to start up the infrastructure, it signed a partnership with payments company Interswitch to get merchants on board.

The company that is also In process Integrations with payment gateways, said a couple of banking partnerships in the pipeline.

Regarding how ThankUCash earns money, merchants pay the company a fee on each of them Purchase Made in their stores. For example, ThankUCash earns a 1.5% commission for every customer you bring into the store to redeem a 5% cash back item. The Lagos-based company takes commissions for deals and plans to charge a “heavy qualification fee” to companies that want to use their APIs for their services, including buy now, pay later.

ThankUCash has perfected one proposition: a cashback product where merchants can get more customers without pre-booking. It optimizes the bargain category, allowing merchants to sell products quickly (By hiring former directors of DealDey, a Nigerian deal firm that no longer exists.) And while it’s currently building the buy-now-pay-later infrastructure (which gives businesses the opportunity to sell products regardless of whether customers have money or not), ThankUCash plans to add a fourth offering soon: a remittance product where merchants can sell directly in the diaspora.

The CEO does not give details about this product. at the same time, its investors, who doubled their size while privy to information like this, excited On “The Company’s Continuous Evolution,” a statement made by Amit Bhatti, President of Co-Investor 500 Global.

“Since we went through the 500 Global accelerators in 2019, we’ve done it he liked her The manager said Simeon and the ThankUCash team have implemented a rewards system that works for Nigerian consumers, regardless of cash, credit, online or offline payments. “It’s profitable for businesses and banks as well, as TUC gives them the tools and data they need to grow.”

The 45-man team has appointed Aaron Tendesiga to lead its expansion into Kenya and the East African region. The Ugandan professional has experience working for banks and technology companies such as Uber, Standard Chartered Bank and Stanbic IBTC. For its expansion into Ghana, Kiki Anko, who has worked at Apple and two startups, will lead the task.

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