Anglophone East Africa is home to more than 400 million people, half of whom are under 25 years old. The region happens to be one of the most dynamic in the world; However, over 200 million people in East Africa do not have access to a bank account or mobile money.
But for those who do, they risk facing inflation, a regional problem that affects how they save and preserve their wealth. The average East African currency, for example, would depreciate by 20% per year.
Flowering – not to be confused with Robinhood-like app for teens in the United States – is a fintech that is trying to help Sudanese hedge against this growing devaluation. It offers a “high-yield” savings account, free currencies and adjoining digital banking so customers can save in a stable currency, the dollar, and spend as they go in local currencies.
The company was founded by Ahmed Ismail, Youcef Oudjidane, Khalid Keenan and Abdigani Diriye end of 2021. As managing partner of Class 5 Global, a San-Fransisco venture capital fund that has backed startups like Careem and Meliuz, Oudjidane has played a pivotal role in the VC’s efforts to assess growth opportunities. investing in emerging markets.
At one point, Sudanese-born Ismail teamed up with Algerian-born Oudjidane to seek more investment in Africa. After carefully studying different models developed by early digital banks such as TymeBank, Kuda, FairMoney, they saw a big gap in creating a savings product that helps solve what they believe to be the biggest problem facing African consumers face: inflation and currency devaluation.
“The problem that we believe is most prevalent is the inability of consumers to protect the value of their assets. So we set out to build a business that does just that, helping people save money in the stablecoin and spend as they go in local currencies,” said Ismail, the company’s managing director. , to TechCrunch during a call.
They tapped CTO Keenan and CPO Diriye, both also from East Africa, to join the project. The foursome graduated from Russell Group universities and, alongside early entrants, worked at Amazon, Meta, IBM, Uber, Goldman Sachs and Barclays.
Further market research has highlighted East Africa as the perfect place for the team to start. And more importantly, from Sudan. But the northeast country doesn’t seem to have an active, let alone vibrant, tech ecosystem. The country only saw its first foreign investment last year when Fawry backed fintech e-commerce player Fawry Alsoug after 30 years of international sanctions.
So why Sudan? “We think the right way to start a business is to look for the biggest opportunity first. So Sudan is interesting for three reasons. It’s a very big economy and I believe in 2015 it was the fifth largest economy in Africa,” Ismail replied.
“We know he has struggled economically since then, after South Sudan’s secession. However, the purchase energy and consumer spending are still among the highest on the continent per capita. And more importantly it’s probably the most underinvested country in Africa from a venture capital funding perspective and the most important dynamic that I think of Sudan is that it’s a friendly place to do business,” the CEO explained on why his company chose to launch from Sudan first.
Bloom works with the Export Development Bank, a partner bank that handles deposits. And the best way to think of Bloom is that it’s the Bank’s technology, customer acquisition, user experience, and marketing partner.
The ever-low-key company says it offers free accounts that allow users to save dollars and buy and spend Sudanese pounds. It also provides local and dollar cards and functionality for them to receive funds for free from several countries around the world, mainly where most of the Sudanese diaspora resides from.
“People don’t hold Sudanese pounds, they usually buy dollarized assets like real estate, or they buy land or physical US dollars,” Ismail said. “What we’re giving people is the ability to symbolize that. And with small amounts of money, you can retain value, instead of having to save huge sums to buy an apartment or land.
More than 15,000 people signed up on Bloom’s waiting list published a week ago. The founders say Bloom will start integrating them this month while touting its For now, users can only receive money; however, the company strives to let them execute exits later when it has accumulated enough entries and volumes to create liquidity.
Today, Bloom announces that he is part of Y Combinator’s 2022 Winter Starter Batch after being admitted earlier last July. The company, which only launched from stealth last week, raised a pre-seed in September from Global Founders Capital, Goodwater Capital and select football players including Blaise Matuidi.
The Sudan and San Fransisco-based startup plans to expand into the Anglo-East African region such as Ethiopia, Kenya, Rwanda, Tanzania and Zambia and ammunition from a seed round imminent will oversee this process. Competition could grow with fintechs offering similar services in certain markets, such as Fingo, another YC-backed company; Koa and inclusion.
“We are from the region. We understand the nuances of our markets and can navigate what may seem like an ambiguous landscape. We are also comfortable – perhaps even thriving – working in volatile markets. We are preparing for the next decade of growth in Africa,” said CPO Diriye.