Herconomy’s pre-seed raise is one for the history books. Last year, the startup shocked the tech ecosystem with its funding story. Within 24 hours of an Instagram post by its founder, Ife Durosimi-Etti, the community-based startup raised $600,000 in funding to scale its SaaS product that offered women continued access to career opportunities and discounts from selected brands. Now, Herconomy is taking another big step: pivoting to a fintech company and discontinuing its former product and model.
Change is no stranger to Durosimi-Etti, Herconomy’s founder. In the past three years, she has transitioned from corporate communications at Nigerian Breweries to operating a furniture business before putting her working gloves where her heart is—a startup that helps women thrive. Herconomy’s former product achieved some significant feats, including bringing together a vibrant community of women and offering them access to jobs, opportunities, and capacity-building workshops. Its business model relied on customers paying to access these perks.
However, Durosimi-Etti’s dreams for the startup go beyond plugging women to opportunities. She has always wanted Herconomy to become a catalyst for the socioeconomic independence of women by actively helping them grow their wealth, manage their finances, and access capital for their businesses.
In Nigeria, only 33% of women have bank accounts, resulting in women’s exclusion from a world of digital services and wealth creation opportunities. Banking the unbanked is an enormous challenge, but Durosimi-Etti thinks Herconomy has what it takes to tackle it. The community-turned-fintech Herconomy has made its first move by launching a mobile savings app that allows women to save and earn up to 10% annual interest on their savings.
Herconomy’s slogan is “save, earn, learn, connect and thrive”. The company believes that saving is women’s first step towards financial buoyancy and wealth management. This belief in the life-transforming power of a saving culture might have come from the feedback and success of several saving challenges that the community ran in-house over the years. Before launching this app, at least 500 women participated in Herconomy’s saving challenges and saved well over $100,000 in total. The app was piloted in April 2022 and already has about 5,000 active savers on it, according to Herconomy
Speaking on the purpose and impact of the pivot at a media parley to which TechCabal was invited, Lasisi, Herconomy’s CTO, said: “Our mission is to empower women in Nigeria and beyond to be financially independent, thereby contributing to the socio-economic development of their ecosystem. This is in line with our vision to empower one million women by the year 2025.” To fulfill this vision, Herconomy has launched the Each Woman Bring One Campaign, which financially incentivizes women through Herconomy’s referral program, as well as their own saving progress, to encourage at least one person in their circle to start saving with the mobile app.
This new savings app is an important part of Herconomy’s ambitious goal. The savings product has two main saving plans: Vault and Float, which accrue 10% and 8% annual interest respectively. There is also an Accountability Partner feature through which friends can check in on one another while saving towards a goal. The app also has a Save as You Spend feature with which users can make orders and get about a 30% discount on select goods and services.
Despite this pivot to fintech, Herconomy is not leaving out its extensive community play. Unlike most fintech products, Herconomy will include users of its savings app in the activities of its 6000-member community. The users will get push notifications of networking events, knowledge-sharing events, and business growth opportunities that can improve their earning potential and boost their savings. They will also get access to Herconomy’s weekly e-meetings, where experts are invited to discuss various matters affecting women, ranging from financial literacy to reproductive health. Thus, Herconomy will remain community-driven and women-focused. Even though men are not excluded from these activities or from using the savings app, the startup will make decisions and measure its impact with women in mind.
Speaking about the challenges that the company faced while building this product, Durosimi-Etti highlighted the issue of finding talent. With thousands of Nigerian talent taking up remote jobs o migrating to the diaspora to work, finding the right talent proved to be a project on its own. However, she has managed to build a 31-person team, over 50% of which is female. The company prides itself in how the gender parity of its workforce reflects the world that Herconomy is striving for—a world where women are afforded the same opportunities as men.
Herconomy currently operates in partnership with Providus Bank, with its customers’ funds secured and insured by AXA Mansard insurance company. Over the next few months, Herconomy plans to push beyond its cooperative license to secure a microfinance bank(MFB) license, enabling it to drive its core financial inclusion agenda.
As an MFB, Herconomy plans to onboard unbanked women (those without bank verification numbers) by opening tier 1 accounts for them and helping them to access all the perks of the Herconomy app, via a robust agent network. Offering credit to customers is also one of the company’s key ambitions, and according to the firm’s associate product manager, Opral Ogbuigwe, Herconomy will launch its credit offerings in 2023.
With this foray, Herconomy is betting on women and proving that even in Nigeria’s most saturated tech market, startups with social capital can distinguish themselves and make an impact with their disruptive technologies.