Rwazi Brings Big Data to Sub-Saharan Africa
“Sell to the rich, live with the poor. Sell to the poor, live with the rich.” That old saying couldn’t ring truer for companies seeking to bring the joys of consumerism to the last frontier – what finance professionals call “frontier markets.” Perhaps the least known opportunities can be found in the great country of Africa, a place where Americans go on safaris. We’re only joking of course. Africa isn’t a country, it’s a continent with 54 countries, of which only two are considered “emerging markets” – Egypt and South Africa. Of the remaining 52, just 11 qualify to be tracked using stock indices from global index provider MSCI.
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The above countries represent about 400 million people, many of whom are PHDs – poor, hungry, and determined. These are places we’d expect to see interesting startups emerging, and one we came across recently is an exciting Los Angeles startup named Rwazi.
Welcome to Africa
You need to spend time in Africa to understand that local businesses operate using a different set of rules. Money talks, and you’ll quickly lose track of how many big smiles are flashed when you soften up a difficult situation with some hard currency. Should you act puzzled as to why money is required to move things along, someone around you will always step in with a chuckle and say, “welcome to Africa!” That’s why establishing ground truth can be difficult. Trying to get an honest answer from someone can be like asking the barber if you need a haircut.
Now imagine you’re an American company that’s looking to launch a product in Kenya, a country that’s twice as big as Australia. Knowing what products already exist on shelves in the most popular grocery stores would be nice, but knowing the price of each product would even be nicer. Imagine the cost of sending over a handful of people to do market research in Nairobi, which would hardly suffice. What happens in capital cities isn’t what happens in the countryside. Just 8% of Kenya’s population lives in the capital city, with 15 cities having a population of 150,000 or more. To truly understand the Kenyan market, you need boots in the ground across all major cities. That’s where Rwazi can help.
Rwazi’s Business Model
The elevator pitch couldn’t be simpler. An increasing number of people in Africa have smartphones, and it’s common to see vendors peddling them on the streets, cracked screens and all. As Chinese smartphone manufacturers bring prices down, phones are quickly becoming a gateway for income in the growing gig economy. Rwazi developed an app that enables anyone with a smartphone to go out and collect data on demand after some preliminary training. The only requirements are that you present yourself in an acceptable manner and are eager to learn. They’re called “mappers,” and the app helps them collect the data and verify the source using geolocation. It’s a simple idea but brilliant when you consider there’s absolutely no alternative to collect such information.
More than 50,000 people across Sub-Saharan Africa in 40 countries provide business intelligence for Rwaza across various industries and sectors such as consumer goods, medicine, pharmaceuticals, hospitality, and fintech to name a few. This region of the world contains over a billion people with the number expected to explode in the coming years. If you’re a multinational fast moving consumer goods (FMCG) company, this is where your growth is coming from over the next 50 years.
Having such a large network of mappers also allows Rwazi to easily perform quality control on the fly. When you ask 5 people to answer a question, and 3 of them provide the same answer, you’ll know what the truth is, and you’ll know who isn’t telling the truth. In most African countries labor is extremely cheap. Adding extra layers of quality control isn’t going to break the bank, and it’s a great way to identify those mappers who might be able to add value outside of just collecting data. Imagine being able to conduct surveys with local people asking local other people questions in their native languages. The use cases practically write themselves.
Rwazi Success Stories
When one multinational bank struggled to increase usage of their banking products among African consumers, they turned to Rwazi for help. Using the app, consumers received regular notifications to log valuable data such as earnings, budgets, banking products they used and why, along with images and time-stamps that provided rich metadata to mine. As a result, the bank can continuously improve their product offerings and drive customer growth.
A similar use case was addressed by a unicorn fintech firm looking to expand their offering retail outlets. Mappers share data on what products they were buying and where, allowing the fintech to pinpoint new retail stores monthly to visit for new marketing activations.
A UK food multinational was struggling to increase the market share of its milk brand in Africa’s most populous country, Nigeria. Rwazi was able to setup notifications to capture data on when Nigerians bought milk and from where. The company was then able to track which milk brands where being purchased from which stores for how much which enabled their sales teams to reach new stores every month and drive revenue growth.
The Rwazi Advantage
Rwazi believes they’re the only company with 50,000 boots on the ground capable of gathering data reliably. Not only are these individuals mappers, but many are also consumers of Rwazi’s end customers who feed the platform data on purchases at retail outlets and consumption at home. The result is a rich data set that provides a complete picture of how products are selected, purchased, and consumed.
The benefit for Rwazi’s clients is obvious, but there’s also a feel-good part of this business that should get the ESG types all excited. Rwazi helps identify young people who are eager to work, and this gig economy will give the most ambitious workers an opportunity to earn a decent income which can lead to other opportunities.
In many African countries, the smartphone is quickly becoming a personal bank. That’s why access to SIM cards is being so heavily regulated. Just about anyone with a phone can seamlessly transact with Rwazi meaning they can onboard consumers very quickly as needed. Skills learned performing different tasks can be leveraged to perform even more sophisticated tasks. Landing marque reference clients like 7UP, Pepsi, Colgate, Gillette, and Coca-Cola means Rwazi has momentum and a first mover advantage. While they’re mum about how profitable this business is, we can easily see the potential for this business model to be extremely lucrative.
Want to 10X the value of your business? Just add some artificial intelligence. Perhaps the most valuable component of Rwazi’s business will be the proprietary big data sets they’re generating. Stick those in the cloud, attach some predictive analytics to the lot, then start telling brands what their next move should be. Open an office in Silicon Valley, and Mauritius might have a unicorn grazing in her pastures before long.
We’ve been scouting startups across this planet for years now, from cybercrime fighting units in Moscow to blockchain apps in the rice paddies of Indonesia. Oftentimes, the success stories will be business models that have already been proven in developed markets, and which are now being replicated in emerging markets. That’s not innovation. What Rwazi is doing feels like something new and exciting because it is. There’s a lot of potential for this business model that expands beyond just capturing prices in grocery stores.
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