Herconomy – a Nigerian startup empowering women through financial services, capacity building, jobs, and networking, has announced the close of a $600,000 pre-seed round to expand the product offerings on their platform.
The pre-seed round was led by members of the Herconomy’s community, venture capitalist firm Oui Capital and a host of angel investors including Zephans & Co CEO Nkiru Ayemere; Ehi Onwudiwe, Director of Business Transformation at Ernst & Young; Head of Reserve at Diageo, Ope Makinwa; Ama Akpata, co-founder of Jand2Gidi and a host of others. According to the founder and CEO, Ife Durosinmi-Etti, when the round started, the startup got commitments worth $5.7 million from 509 community members within 24 hours but decided to only accept what it needed to scale up to the sum of $600,000.
How It Started
In June 2018, Ife Durosinmi-Etti published the book, “Accessing Grants for Startups” – a guide towards gaining local and international opportunities like grants, fellowships and other opportunities available to entrepreneurs in Africa.
The book was a culmination of all the opportunities Durosinmi-Etti had been sharing on her personal Instagram profile for a couple of months. Months after publication, in December, Durosinmi-Etti decided to create an instagram page for the troves of people who had begun following her to get access to the opportunities on her page. She named the page, AGS Tribe, building a community where women get access to several opportunities globally.
In Nigeria, women dominate the unpaid job sector, twice the figure of men. There are also more male wage earners, with an estimate of 65.67%, which is more than the female wage earners scaling up to 34.33%.
Per TechCabal, Durosinmi-Etti said that she wanted to create a place where women could gain access to opportunities, grants and fellowships.
She said, “I just wanted to create a place where women could get access to opportunities, grants and fellowships. When people saw how much value we had to offer, they started following us and discussions around these opportunities grew. It was at that point we knew that it was more than just an opportunity board, it was a community.”
Bye 2019, the AGS Tribe had grown to amass thousands in following on social media, hence handling the page and community became a full-time job for Durosinmi-Etti, and she decided to launch a paid community platform where people could access these opportunities seamlessly. Her initial plan was to create a web platform to this effect, but that proved impossible when the platform crashed on the launch date on the 6th December 2019. That same evening, the Tribe moved to Telegram group offering people access at ₦5,000 ($12) a month or 50,000 ($120) a year.
A year after launch, AGS Tribe had grown to a community of over 1,500 paying members who could access the community’s opportunities as well as weekly capacity building workshops focusing on a variety of subjects from investments and finance, to SGBV and health issues.Scaling, however, became a barrier as the team behind AGS began to find it difficult to coordinate the number of conversations the Telegram community had.
“It was a bit hectic,” Durosinmi-Etti admitted. “We had such a large number of people in one group. Logging off for hours could mean you’d return to see thousands of messages in the community. And because opportunities are shared between conversations, people would sometimes have to read through every single message to find what they want. It was imperative to find a solution.”
HerconomyOne of the global issues worsened by COVID-19 was the wage gap. Millions of people lost their jobs due to the lockdown, but women were hit harder with 5.5 million of them affected, almost 1 million more than men. In addition, many more women faced increased responsibilities at home as the lockdown mandated work and school-from-home situations.Capitalising on this, AGS Tribe expanded their outlook to other opportunities by launching an app.
The launch of the app also came with the realisation that not all women would be able to afford the membership fees and they wanted to reach even more women. “The mobile app also included a free membership option,” Durosinmi-Etti added.
The app has a three-tier membership structure: a freemium subscription which gives members access to their community and opportunity board for free; Silver membership which gives you access to their weekly capacity building workshops called the Lightbox; and a Gold subscription which offers access to the community’s affinity network where members can get discounts from over 60 brands including Raddison Blu Lagos, Qatar Airways and Adidas. The mobile app came with additional benefits for their Gold members (people who pay $120 yearly). They also introduced a job board and eventually became Amazon’s first recruitment partner in Nigeria for their EU region.
Presently, Herconomy has a community base of over 15,000 people with 20% of them as paying members. The startup plans to introduce financial services to its community members which it believes will be of great benefit to them. Over the years, it has run several saving challenges overseeing at least 500 women who have saved over $100,000 in total.
With its new funding, Herconomy plans to introduce a savings feature where members can earn high interests. While most of Herconomy’s funding has come from bootstrapping, the startup has gotten funding from various individuals and corporates who contributed grants and gifts in kind for its community members.
Till date, Herconomy claims to have disbursed about 30,000,000 ($71,600) in grants to forty-two women and men as part of its annual grants programme.
Revealing that she pitched the idea of Herconomy to several angel investors but their responses were a turn down, she decided to change approach by getting them into the Startup Bootcamp Accelerator. “I quickly figured that many female-led startups do not get funding easily, so I decided to create a table for myself”, Durosinmi-Etti stated. Durosinmi-Etti said that in August, she made a post via Instagram stories, asking if anyone was interested in investing in Herconomy. She further stated she gained “hundreds of responses from community members who were ready to invest.
“In the end, we had 509 people who pledged $5.7 million, but we only needed $600,000. While most of Herconomy’s funding has come from bootstrapping, the startup has gotten funding from various individuals and corporates who contributed grants and gifts in kind for its community members. Till date, Herconomy claims to have disbursed about ₦30,000,000 ($71,600) in grants to forty-two women and men as part of its annual grants programme. “I pitched the idea of Herconomy to several investors but we didn’t get any yeses at first,” Durosinmi-Etti said.
The game-changer for them was getting selected for the Startup Bootcamp Accelerator program. During the program, they fine-tuned their business model, got advisors on the program. “I quickly figured that many female-led startups do not get funding easily, so I decided to create a table for herself,” Durosinmi-Etti commented.
In August, she made a post via Instagram stories, asking if anyone was interested in investing in Herconomy. Within a day, as Durosinmi-Etti explains, she got “hundreds of responses” from community members who were interested in investing.
“In the end, we had 509 people who pledged $5.7 million, but we only needed $600,000. We also noticed not everyone could afford our $20,000 minimums, so we decided to create a Special Purpose Vehicle (SPV) for the people who couldn’t. They did this because it was extremely important for their community members to be part of this raise. So we went on GetEquity, created a private deal room and invited specific people that had indicated to invest,” the founder shared.
While the round did include investments from venture capital firms like Oui Capital, most of it came from Herconomy’s own community of users who were interested in building the brand, 70% of whom were women. “It all worked out for the best,” Durosinmi-Etti said. “We were able to ensure that women could easily invest. I’m excited about creating the mindset of investing in women which is what we preach at Herconomy.”
Speaking on their investment, Olu Oyinsan, Managing Partner of Oui Capital said, “Our thesis is that community is very key to the future of consumer fintech in Africa. The company has a very strong community element, and also focuses on creating financial products and prosperity for women- who have historically been underserved with financial services. We like the company very much and are happy to be on this journey with the team.”