Herconomy’s pre-seed raise will go down in history. The Startup’s funding story stunned the tech community last year. Within 24 hours of its founder, Ife Durosimi- Etti’s Instagram post, the community-based Startup raised $600,000 in funding to scale its SaaS product, which provided women with ongoing access to career opportunities and discounts from select brands.
Herconomy is now taking another significant step, pivoting to a fintech company and discontinuing its previous product and model.
Durosimi-Etti, who came up with the idea for Herconomy, is used to change. In the last three years, she went from working in corporate communications at Nigerian Breweries to running a furniture business to starting a business that helps women succeed. Herconomy’s previous product accomplished some notable feats, such as bringing together a vibrant community of women and providing them with access to jobs, opportunities, and capacity-building workshops. Its business model was based on customers paying to access these benefits.
But Durosimi-Etti wants the Startup to do more than connect women to opportunities. She has always wanted Herconomy to help women become financially independent by actively assisting women in expanding their wealth, managing their finances, and acquiring financing for their enterprises.
In Nigeria, just 33 percent of women have bank accounts, which results in the isolation of Nigerian women from the world of digital services and possibilities to make money. Durosimi-Etti believes that Herconomy has what it takes to take on the enormous challenge of providing banking services to unbanked individuals. The community-turned-fintech company, Herconomy has made its first move by launching a mobile savings app for women. With this app, women can save money and earn up to 10% annual interest rates on their savings.
“save, earn, learn, connect, and thrive” is the motto of Herconomy. The organization believes that setting money aside for saving is the first step women should take toward achieving financial stability and managing their wealth. This confidence in the life-changing power of a saving culture may have originated from the community’s feedback and the success of multiple saving challenges that were run in-house over several years. Before this app came out, at least 500 women saved more than $100,000 by participating in Herconomy’s saving challenges. Herconomy says that about 5,000 savers are already using the app, which had a test run in April 2022.
Lasisi, Herconomy’s CTO, spoke about the purpose and effects of the pivot at a media roundtable to which TechCabal was invited. He said, “Our goal is to help women in Nigeria and elsewhere become financially independent. This will help the social and economic growth of their ecosystem.” This fits our plan to empower one million women r by 2025.”
To reach this goal, Herconomy has started a campaign called “Each Woman Brings One.” This campaign gives women financial incentives through Herconomy’s referral program and their savings progress to get at least one other person in their circle to start saving with the mobile app.
This new app for saving money is a big part of Herconomy’s big goal. The savings product has two main plans: Vault and Float. Vault earns 10% interest per year, and Float makes 8% interest per year. There is also a feature called “Accountability Partner,” which lets friends check in on each other as they save for a goal. The app also has a “Save as You Spend” feature, which allows users to order goods and services and save about 30% on them.
Despite its recent shift toward the financial industry, Herconomy is not abandoning its significant role in the community. Herconomy, in contrast to most fintech solutions, will include users of its savings app in the activities of its 6000-member community.
Users will get push notifications about networking events, events to share knowledge, and business growth opportunities that can help them make more money and save more. They will also be able to join Herconomy’s weekly e-meetings, where experts talk about issues like financial literacy and reproductive health that affect women.
As a result, Herconomy will continue to be community-driven and women-focused. Even though men are not barred from participating in these activities or using the savings app, the Startup will make decisions and assess its impact with women in mind.
When discussing the company’s challenges while developing this product, Durosimi-Etti brought up the issue of finding talent. Thousands of talented Nigerians work from home or move to the diaspora to find work. This made it hard to find the right people to hire. But she has built a team of 31 people, and more than half are women. The company is proud of how the equal number of men and women in its workforce reflects the world it wants to create, where women have the same opportunities as men.
Herconomy works in collaboration with Providus Bank, with funds secured and insured by AXA Mansard insurance company. Herconomy will continue to grow in the coming months. Herconomy intends to go beyond its cooperative license in the coming months to obtain microfinance bank (MFB) support, allowing it to drive its core financial inclusion agenda.
The Startup plans to use its extensive network of agents to help unbanked women (women who don’t have bank verification numbers) open tier 1 accounts and use all the features of the Herconomy app. One of the company’s main goals is to give customers credit, and Opral Ogbuigwe, the company’s associate product manager, says that Herconomy will begin providing customers credit in 2023.
Herconomy is betting on women with this venture, demonstrating that even in Nigeria’s most saturated tech market, startups with social capital can distinguish themselves and make an impact with disruptive technologies.