Most African markets don't offer loyalty, deals or rewards services. Currency instability is one of the factors that make it hard for such businesses to succeed in the region.
ThankUCash, a platform that was launched in the year 2018, proves that there is still hope in the deals, coupon and rewards business. The startup, which raised an undisclosed seven-figure seed last year, has finally closed the round at $5.3 million.
500 Global and Unicorn Growth Capital co-led the Lagos-based company's seed round. It had participation from U.S.-based companies such as Expert Dojo and Predictive VC. Andrew Dell, former CEO of HSBC, and Craig Fenton of the UK were individual investors.
The company plans to use the investment to expand in Nigeria, where it operates in Lagos, Port Harcourt and Abuja, as well as to other African countries. It wants to add more staff and improve its product offerings.
For years, store-like businesses in Nigeria such as supermarkets and restaurants have operated offline, relying on bookkeeping and head knowledge to record their customers' activities in their shops. Cash back and loyalty points were hard to offer.
Merchants who use ThankUCash can use the rewards to help them retain loyalty and increase revenue.
The CEO started ThankUCash with four other people, including a chief technical officer, a chief operating officer and a senior vice president of engineering.
The multi-merchant rewards platform allows customers to earn loyalty points at any merchant they shop at on the app.
The business raised $320,000 pre-seed after getting the attention of local investors like Microtraction and the 500 Startups.
ThankUCash said it has recorded over 600,000 users and onboarded over 1,000 stores. It claims to have processed over 80 million transactions.
Having matured as a business, Ononobi and his team want to take on a more complicated task: building infrastructure for companies that want to offer similar services.
We are creating solutions that help small businesses succeed. He said on the call that they want to build an infrastructure for rewards, loyalty, deals, buy now, pay later, and cashback.
Cashback was our entry point. We are still going to go into deals, couponing, gift cards, buy now, pay later, anything that will help the business grow, but at the same time, allowing the consumer increase in opportunities of buying.
ThankUCash will reward the same thing that Paystack and Flutterwave did to payments in Africa, according to Ononobi, a serialentrepreneur who previously built a payments company and also apps for Nigerian banks and the government.
Some companies have launched programs using debit cards in the past. Most of them have been inefficient from setup to collections and redeeming points, and Ononobi argues that their inefficiencies boil down to no technical support. ThankUCash sees a gold mine for banks and other financial institutions to offer rewards.
ThankUCash is a company.
Buy now, pay later is fuzzy since there are only a few prominent services in Africa. The company seems to be positioning itself for the imminent proliferation of such services thanks to the fact that similar things have happened around the world.
The machines are in stores because of the technology. Customers input a code into the POS machine when they request a loan, and the merchant gets credited directly. The code can only be used in the store that the customer chooses, and only for the loan amount requested, so that at the end of the day the customer is buying straight from the merchants.
ThankUCash will remain operational. It has signed a partnership with Interswitch to onboard its merchants.
The company is in the process of making integrations with payments gateways and said a couple of bank partnerships are in the works.
Merchants pay ThankUCash a fee on every purchase they make in their stores. ThankUCash gets a 1.5% commission for every customer it brings into the store to redeem a 5% cashback item.
Merchants can get more walk-in customers with the ThankUCash product. Merchants can sell products fast by hiring ex-managers of DealDey, a Nigerian deals company. ThankUCash plans to add a fourth offering soon, a product where merchants can sell directly to the diaspora, and it is currently building out its buy now pay later infrastructure, which gives businesses a chance to sell products regardless of whether customers have money or not.
The chief executive does not give any information about this product. The company's investors, who have doubled down, are excited about the continued evolution of the company, according to a remark made by the principal of 500 Global.
The principal said they were impressed by the progress of the ThankUCash team in implementing a rewards system that works for Nigerian consumers. Businesses and banks will benefit from TUC giving them the tools and data they need to grow.
The team has hired a new leader to lead its expansion into Africa. The Ugandan professional has experience working for banks and tech companies. Anku, who has worked at Apple and a few other companies, will lead the expansion into Ghana.
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