Before fintech took over, eCommerce was the darling of the Nigerian tech ecosystem. The ecosystem bloomed a little over a decade ago — expectedly so since eCommerce was huge globally — with mostly startups that had online shopping ideas occupying the space.
With the likes of DealDey, Efritin.com, Gloo.ng, and Konga shutting down, getting acquired, or changing model, Nigeria does not look set to be part of a sector predicted to be worth $6.5 billion globally by 2022.
Apart from the disposable income of the country’s addressable market, distrust is a major challenge. And this inability to trust is founded on fear.
Physical transactions are often plagued by buyer-seller suspicion, much less sales by proxy. And to somewhat address this, merchants adopted the Pay on Delivery (PoD) method, which, not wholly abandoned, hasn’t favoured them greatly.
Offering a safer option, escrow services burst onto the scene. These are third-party services that collect and hold payment from a buyer that is only released to the merchant after confirmation of satisfactory service.
Quite unpopular at that time, this was what a team of software developer and entrepreneurs decided to build in 2017 after a year in the Ghana-based incubator programme, Meltwater Entrepreneurial School of Technology (MEST).
And so, Aigiomawu Ehi, Ibrahim Oladele, and Tomisin Adeshiyan co-founded and launched Vesicash in February 2019.
"We did a couple of researches in different spaces, and we found out that the problem is not only in the eCommerce space, it was also in the freelance sector, real estate sector, and in other sectors too. We decided that escrow was a way for us to solve this problem. So, we immediately registered the company called Vesicash with the sole purpose of guaranteeing payment security for digital transactions across Africa," explains Aigiomawu Ehi, Vesicash Co-founder and Chief Technical Officer (CTO).
Oladele is the Chief Executive Officer (CEO) at Vesicash, while Adeshiyan is the Chief Product Officer (CPO).
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In October 2018, the trio launched the Minimum Viable Product (MVP) for Vesicash in Nigeria and got feedback that they integrated to develop a scalable product.
"It's an end-to-end infrastructure that allows people to make and receive escrow payments. We have a set of APIs that any business from any sector can integrate. We also made provision for other kinds of interfaces, like SDKs and widgets, that can also be plug and play into your app and use directly if you don't know how to use APIs."
Aigiomawu adds that Vesicash’s ability to design products for different users — depending on capacity and sector — is what makes the company stand out.
The startup runs a B2B2C model, with an arm handling B2C.
Instant Escrow is a product that serves consumers directly. It allows a user to get a one-time link from the website to complete a transaction without needing to plug it into a system.
There's also a similar product for merchants like WhatsApp and Instagram vendors called Trizact Payment Link.
However, Aigiomawu confirms that most of Vesicash's users are businesses cutting across legal firms, health, eCommerce, real estate, lifestyle, and agriculture within and outside Africa. Among the 300+ monthly users are Lagos-based lifestyle brand, May Anthony; Nigerian medical equipment store, EveryMedical; and African Things.
With users from Nigeria, Kenya, South Africa, Singapore, the UK, Canada, and other parts of the world, Vesicash operates a flexible commission-based model depending on location. Vesicash expects that businesses will charge their users, especially freelance platforms.
"For customers that are outside Africa, we charge them 5% for every transaction that happens. For those in Nigeria, we charge 2.5%."
There are also clients with customised solutions who are charged different percentage commissions.
Ingressive Capital has invested in Vesicash, but Aigiomawu mentions that the startup is in the process of raising another round.
Without confirming the startup's profitability, Aigiomawu says the business has been making steady growth.
"The growth rate of our monthly revenue is between 30% and 45%."
Founders inclusive, Vesicash has grown a working team of ten people, and there are plans to hire more. However, getting talent with the required skill sets is a challenge.
Nevertheless, Aigiomawu believes this won't be the case for too long as more communities providing on-demand talent spring up.
She adds that Vesicash is in the process of starting something similar. It is noteworthy that Aigiomawu's first foray into entrepreneurship was to organise training for university students interested in tech.
In its two years of operation, Vesicash has intensified efforts to push adoption.
"When we came into the space, adoption was really slow. But with time, we were able to build a good recognition," Aigiomawu says.
She adds that through targeted marketing and awareness campaigns, the startup has become one of the top options when searching for escrow services in Nigeria.
Meanwhile, Aigiomawu is hoping that a regulation that adversely affects the business does not come up, as is common with the Nigerian government.
She also hopes that more African startups can attract investors' interest.
As the startup eyes more high-end users to push revenue, it will continue to work towards its lofty plans at launch.
Featured image source: Supplied