Simeon Ononobi and his co-founders Madonna Ononobi (his wife), Suraj Supekar and Harshal Gandole launched Connected Analytics in 2017 in Lagos to offer rewards programs to customers. They’ve since amassed some 600,000 users and a network of nearly 1,500 merchants, from pharmacies to supermarkets and barber shops in Nigeria. The startup is also entering Kenya, with plans to offer its service in Ghana, Uganda and Rwanda.

Living in San Francisco, while attending 500 Global’s accelerator program in 2019-2020, they got a taste of the American shopping experience (pay monthly for an iPhone!) In this episode, Simeon tells us how he’s implementing loyalty and buy-now-pay-later plans to a market that is largely unfamiliar—and at times mistrustful–of such services.

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TRANSCRIPT

Shereen Abdulla

Simeon, welcome to Rise of the next, it’s wonderful to have you on!

Simeon Ononobi

Thank you very much. Thanks for having me.

Shereen Abdulla

My pleasure. Why don’t we start off by giving the listeners a little bit of a background? I’d love for you to please share with everyone your story and your journey.

SIMEON’S BACKGROUND AND WHY HE CREATED THANKUCASH

Simeon Ononobi

My name is Simeon Ononobi, I’m one of the four Co-founders of Connect Analytics. People know us more as ThankUCash, which is our flagship product. I’ve had personally a long journey — I started my first business when I was still back in school, I was 16. For me, it was — I was trying to figure out how to solve problems and how to make money from it. So, while I was back in school, I founded a company called Compuvacity, which was effectively teaching my colleagues or my co-students how to use a computer, how to send Yahoo messages, how to use Yahoo! Messenger, and stuff like that. I figured out a lot of people didn’t know what this was because that was just the beginning of the internet in Africa.

Shereen Abdulla

Yahoo, it was a long time ago.

Simeon Ononobi

And it was amazing. I was chatting about — I was getting about $3,000 – $4,000 a session.

Shereen Abdulla

Not bad at all!

Simeon Ononobi

Yeah, it was too much money for a student. So, I wanted to learn more about technology and understand how things were done because, at that point, I was studying biochemistry, but I just got fascinated with computers. I wanted to know more, how does this internet work and stuff like that. So, I used the money, the proceeds from my first venture, and I built what we call the internet cybercafes.

Shereen Abdulla

I remember those, back in the day!

Simeon Ononobi

Yeah, so I was making money, but I was also learning. I learned how to code, how to do a lot of coding on my own, and stuff like that. I started learning stuff and that led me to build a mobile app for a bank, and that was where my start, my journey, really, really started.

Something funny happened then, I had some money, I bought a mobile phone, that was the first time we [had] GSM mobile phones in Nigeria, and I lost my phone, I lost all my contacts. I was like, “This shouldn’t happen like this. This shouldn’t really happen.” So, I decided to write software that would allow me back on my phone, so the next time when I lose my phone, I don’t lose my contacts. That was my first ever startup called Backup My Phone. I sold that then, very early on, to a network provider and I joined him in building the first FinTech company in Nigeria, called SimplePay. [I] had a lot of learnings, had a lot of progress.

Before I joined [I said] to myself, “Wait, what is really the problem in Africa?” And I saw the problem from two angles. One was businesses were opening and closing shop at an alarming rate. So, you find a restaurant that you would naturally just go and eat in, and you go there two weeks later and you hear it shut down because of lack of customers or because of lack of data and stuff like that. And on the flip side, you get consumers not having the opportunity to buy stuff. You either had to be very rich — it was not like the mid-level earners weren’t even available.

Shereen Abdulla

Why did this gap exist and what was driving the problem?

Simeon Ononobi

It was like you didn’t have so many businesses; what you had were traditional businesses, which were like brick and mortar salespeople. If you were just like a regular day-to-day guy that just came out of school looking for work, you wouldn’t end so much — you would live a not-so-comfortable life, but, I mean, you get by day-by-day.

It opened my eyes the most when I got selected in 500 [Global]. When I got selected to 500, it was like, “Hey, America is a different thing. It’s a different — it’s a new world.” I mean, when I got to 500 and I was in class and stuff like that, people were getting mentorship and all that stuff, I realized that I could get an iPhone for 30 bucks a month. Who gets an iPhone for 30 bucks a month? It’s something new. It’s impossible because where I come from in Africa, you pay for everything upfront, two years upfront in some cases. You literally pay two years of rent upfront. It was like something very new to me, like, how did this even work? How do you pay rent monthly?

When you go into a new environment, you think it’s the same thing that you’re coming from, and I’m like, “Wow, there’s an opportunity here.” So, we set up this company just before I came to 500 and what we were going to do was — we wanted to solve problems where businesses stopped shutting down by giving them customers and getting customers into the door, and also create opportunities for those customers to be able to buy stuff when they come to the door. And today, yeah, we’re doing very well; just recently raised a Seed round of about $5.3 million.

What we saw was brick-and-mortar stores couldn’t get customers because whenever you walked in, it was Hail Mary — you walk in, you buy a product, and you walk away. They don’t get data on you, they don’t get anything about you, they can’t resell you, they can’t go back to the store. We also saw that they didn’t have opportunities like you’d have in the West, where you could buy something today and pay over a time period. All those have never existed.

So, we needed to help customers get opportunities that could help them. So we started with ThankUCash and we said, “Hey, what about if each business could say thank you for every single customer? Just say thank you, and do it in cash. It’s like, here, you walk into a store and you buy a product and the owner says, “Hey, thank you for coming. This is 10% back on what you bought.” What we now did extra was that cashback — you could spend it across multiple merchants. So, we create an experience for customers.

Let’s take what you would be familiar with — CVS. You walk into CVS and you get drugs for your headache. Now, you’ll get points, and those points, if you don’t fall ill anymore in the shortest possible time, you don’t get to spend those points. Because of that, the customers don’t get excited about actually earning points from different markets. What we did was to say, “Hey, let’s create an experience for you. You can earn points at CVS, or any pharmacy, and use those points to go watch a movie at the cinema once you’re well.” And we saw the virality of this. Everybody loved it.

HOW THANKUCASH WORKS

Shereen Abdulla

So, basically, the points would be redeemable across the network of merchants on your platform, correct?

Simeon Ononobi

Correct.

Shereen Abdulla

So, in that case, it isn’t quite a cashback; instead, customers would earn points on the platform, but the points would be exchangeable across a variety of different products.

Simeon Ononobi

Yes, but we call it cashback because, when we first started, we allowed you to cash out the money. We just stopped it after a while. We could have changed the word, wherever you use, which is cashback, but when we first started you get 10% cashback. So, you go, you bought a product [for] $100, you got $10 back. [We] would allow you to cash it out as cash. But after a while, we said, “You know what, why allow people to cash it out? Why not just create an experience for them?”

Shereen Abdulla

Well, why did you stop the cashback, though?

Simeon Ononobi

We tried two things. We always do A/B testing, and we tried to say, “You know what, what about if we create an experience for you — would it make sense for you?” Because the cash sometimes [is] very small. If you bought a product for $10 and you got $1 back, you probably look at it and say, “Wow, what’s $1.” So we decided to use it as an experience rather than just give cash back.

Shereen Abdulla

And that proved more effective in your A/B testing?

Simeon Ononobi

People that earn huge cashbacks instantly, they were taking out the funds. But those same people, when they earn little cashback, they don’t want to take out the funds. They don’t want it to be in cash, they just want to keep it there. So, we were like, “Wait, what do we do to get people excited?” So we started testing, “Hey, you know you have $1 — you could actually use it for a bottle of Coke, you could use it for a pizza or shawarma, or you could use it to watch a movie at a cinema.” And we have seen people use these points for different experiences.

THANKUCASH’S MERCHANT NETWORK

Shereen Abdulla

How many merchants are on your platform?

Simeon Ononobi

Well, about 1,500, at the moment. We just signed the largest pharmacy chain today, so we’re excited. We’re popping champagne in the office and excited about it.

Shereen Abdulla

Congratulations!

Simeon Ononobi

Thank you very much.

Shereen Abdulla

And what kind of merchants are on there?

Simeon Ononobi

So, we have different categories of merchants. We have gas stations, supermarkets, grocery stores, we have restaurants, we have fast-food eateries, now we have pharmacy chains, we have cinema houses, barber shops, female hairdressing salons, we have massage parlors, we have different types of merchants.

Shereen Abdulla

Quite the variety.

Simeon Ononobi

Yeah. We also have startups that are into aviation.

THANKUCASH’S CUSTOMER BASE

Shereen Abdulla

And how many customers use your app — not the merchants, but the people spending using ThankUCash?

Simeon Ononobi

Currently, we have 598,000, as of this morning, that are active, but we’re projecting to get to 3 million within the next few months because of the partnership that we’ve signed up for. Yeah, so actively we have plus or minus 600,000.

Shereen Abdulla

And what is this partnership that you’re referring to?

Simeon Ononobi

Banks that are looking at us and saying, “Hey, we could use you as a value-added service rather than just traditional banking. We could use your system to actually offer our account holders, that are businesses, cashback solutions, and they could actually reach out to our own customers that are individual customers.” So, what we are doing right now is we integrate into the banks to say, “Hey, you can offer our services to your merchants, and also to your customers, and create a loop where your merchants and customers enjoy more services than just regular banking services.” So, right now, we are modeling a bank that has about 1.5 million customers, and once we do that we have all your customers, we also have the merchants.

Shereen Abdulla

And the consumers who use your app, are they all Nigeria-based?

Simeon Ononobi

Yes, but we’ve just launched in Kenya; we’re still ramping up numbers in Kenya. We’re also launching in Ghana, and we are signing up in Uganda and Rwanda. The idea is the five locations will be live before June this year. So, we will be in five countries.

BUILDING A REWARD PROGRAM IN AFRICA

Shereen Abdulla

How do you build a reward program that works for the African consumer?

Simeon Ononobi

So, trust was a problem, and I’ll explain what I mean. If I walk into Walmart and I pick up something like a product, and I see it’s $12, there is a likelihood I’ll believe it is $12 and I will just go to the cashier and pay $12. Walmart will still be able to give me a percent, or 2% in cashback, or a discount, and I wouldn’t feel like [they’ve] increased the price just to give me the cashback. In Africa, it is the reverse — everybody feels that when you see a discount, there has been an increase in the main price of the product, just to account for the discount. So, because of that, it’s consumer resistance to the fact that, “Hey, are they saying they’re going to give you 20% off? Or they’re going to be 10% up? Oh, well, they build the price to make sure they account for 10% or 20%.” There’s this resistance from users that we have to first try to go over.

That’s why we started saying, “You know, what, pay the regular price of the product; instead of a discount, we’re going to give you part of it back.” So it was a bit of a hustle to try to convince people that, “Hey, you’re going to earn cashbacks; don’t worry, you’re going to earn this, you’re going to earn that, just keep buying from this much and keep buying from this.”

On the flip side, it was also a problem trying to explain to merchants that, “Hey, you don’t need to write on paper the names of consumers, you can actually just have a system that works.” This is a real story — I walked into Swatch, the wristwatch company, and I wanted to buy a wristwatch. I was about to leave the store the lady goes, “Hey, sir, can I have your name and number? I need to write it down so that when we have new products I could actually send you an SMS or an email.” And I’m like, “Okay, don’t you have an automated system where you could actually do this?” And I realized they didn’t have that, and that’s how they were one of our first customers. Now, the idea was to give cashback to this customer and the data of the customers automatically go to your platform, and you can see when they bought the product, what product they bought, so you could automatically retarget this customer with new products or tools to enhance the product already bought.

Shereen Abdulla

Do you work with each merchant to tailor a loyalty program?

Simeon Ononobi

No, we built one that fits almost all types of merchants. Let me explain what I mean — for instance, when you walk into a store, you buy stuff, you put in your phone number, it automatically captures your data and sends the data to the dashboard that we create for the merchant. From the merchant’s side, you can see how many customers have walked in, what they bought, how much is spent. If they’re returning customers, it shows you they’re a returning customer, if they are new customers, it shows you they are new customers. It automatically sends them SMSs, emails, welcomes them to the store, and stuff like that.

Now, all merchants need access when it comes to like, “Hey, I want to give more to my customers. I want to give more to my merchant.” We start adding tools that they can request for; we call them models. So, you can actually add more models as a merchant to what you’re actually doing. For instance, if you want to try out happy hour at your restaurant, our system can allow you to push out a deal at a particular time of the day. So, you can say, “If you come between five and six today, you get 10% or 50% off, just for that hour.” You can do that with the platform, but you have to activate it on the platform. Let’s assume you’re a supermarket and you have expired products, that are going to expire in three months, and you need to get rid of them quickly; you can actually drop the price and push it out to as many customers as possible and they will get it. We try to build one platform by listening to everybody, but try to make sure that we tailor it in such a way that you could use it depending on what kind of merchant you are.

SIMEON ON CHALLENGES AND HIS CO-FOUNDERS

Shereen Abdulla

Simeon, by the way, what have been some of the biggest challenges you faced in building ThankUCash, other than the trust that we just alluded to?

Simeon Ononobi

I would say one of the biggest was trying to convince partners to work with me.

Shereen Abdulla

Do you mean the merchants or other partners?

Simeon Ononobi

No, the partners like equipment partners, point of sale terminal partners that we use, and stuff like that. So, for instance — let me explain what I mean. In America, you have companies like Square. Square has a device that is a point of sale terminal that is connected to payments, connected to inventory management, connected to everything. You could just buy one device, and it has everything. In Africa, it’s decentralized. So, you have a different company that provides the terminals (which is the bank), you have a different company that builds the terminals (which is the payment terminal providers), you have a different company that processes the transaction (which is the transaction processing company), you have a different company that owns the cards, if you’re paying with cards. So, you have to talk to everybody to be able to get them onto one platform.

Shereen Abdulla

By the way, so there are a few of you Co-founders over at Thank-UCash — how did you guys come together?

Simeon Ononobi

So, funny enough, we met at different times. I’m the CEO, there’s a COO, and CTO, and the VP of Engineering. It was just like luck; let me explain what it was. Initially, I had started a company with one of my Co-founders, who later became my wife. So, I’m married to one of my co-founders.

Shereen Abdulla

Okay, interesting!

Simeon Ononobi

Yeah. So, we co-founded a company. I was her technical lead, in her company, when she wanted to set up a streaming company. I was like, “Yeah, I’ll build this stuff for you.” So, I helped her there and she just made me a Co-founder of her company, but it was a bit silent and all that. So, when I was going to fund this company, I needed somebody in sales and I was like, “Hey, would you join me to build this?” And she said, “Yeah, no problem.” She’s very, very good at sales, and I said, “Join the company.” We got married and became a couple.

I also met my CTO — we’re friends, the three of us became very, very close friends. We actually lived in the same house for a while, and while he was always in Nigeria he was like, “Hey, I have this guy that works under me and would love to join the company as a staff.” So he moved, also, to Nigeria and as the third Co-founder.

Shereen Abdulla

Seems like a very tight squad, let’s say.

Simeon Ononobi

Yeah, yeah. We’re a very tight squad. Very, very tight squad.

WHAT’S NEXT FOR THANKUCASH

Shereen Abdulla

Simeon, earlier in the conversation, you mentioned that you guys have recently raised $5.3 million — what are you planning on using the funds for?

Simeon Ononobi

Yes, we reached 5.3 million and it was just, basically, expanding and growing the platform as fast as we can. So, it was first, for us, to be able to expand it to other countries, which we’re doing right now — our target was to get five countries before June. Also, launch other vertical products. Currently, we’re building three major products, which we are spinning off our platforms. So, yes, we started out as a loyalty and deals platform, but right now we’re also embedding buy-now-pay-later into our system. Through our integrations into all our partners, we can actually offer buy-now-pay-later by plugging in lenders. So, lenders are plugging in and can actually, instantly in store, give out credits for people to buy products.

We’re also looking at launching through the same platform because now we have a network of merchants in Nigeria. We hope to have the same thing in Ghana, Kenya, Uganda, Rwanda, where we have a network of merchants, and we want to use this to solve the remittance issue. What do I mean by that? Remittance, today — so, Africa has a bit of snag, and I’m going to explain what snag is. If I want to send money right now — if I’m in America and I want to send money to, say, my grandma in Kenya, in Nairobi, what I will do is, because my grandma might not know how to read and write or go to the bank, I would get a cousin and send the money to a cousin, and tell the cousin to go get drugs for my grandma. Now, most times, a party happens afterward; so, they use this part of the money to have a party, and at the end of the day, my grandma doesn’t get the entire money or doesn’t get the drugs. So, I keep going back and forth with it. So, for instance, if I was to send money right now and say, “You know what, I want to pay school fees of someone in the village or in Lagos,” I’ll send money to my sister. I’m sure she’s not going to spend all that money on school fees, she’s going to buy herself a spa session and use the rest for what I asked before.

But what about if I could track and actually pay the school fees or the grocery items directly while I’m sitting in my room in America? I could pick up a store and I say, “You know what, I want this pharmacy, I want to spend $100 on drugs, and I want to spend it for my mom, and this is her phone number,” and once I keep the key that into the app, it automatically sends my mom a code and says, “Go to this location and pick up your drugs.” And she can go to that location [and] pick up drugs. The same thing for school fees, the same thing for groceries the same thing for bill payments, or TV payments, and stuff like that.

We want to bring this to America, want to bring it to Canada, want to bring it to the UK, where immigrants can actually send money back home without actually sending money back home. And that’s what we call it in time — that’s the second major thing, what to use the funds for.

Third thing we’ll use the funds for is to build a card network for rewards. Right now, in America, if I use my credit card, I get rewards — I get 1%, or 3%, or 5%, depending on which credit card or debit card I’m using. In Nigeria, in Kenya, in Ghana, it’s not possible. There is no such thing, because there’s no infrastructure for it. So, we are building an infrastructure where any bank can plug in and be able to reward customers using that credit card system. So, these are the three things that we want to use the funds for.

Shereen Abdulla

I look forward to following ThankUCash on the growth.

Simeon Ononobi

Thank you very much.

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rewards programs

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