African businesses need more than money
Meet the startup unifying the financial stack
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Hey there! Welcome to this edition of Tech Safari.
At Tech Safari we get to work with incredible partners.
And today, we’re partnering with Bujeti to explore the world of small to medium businesses, and how startups are solving for them.
And we’re backing it up with an event: The Founders Finance Stack.
We will dive into all the tools founders/business owners can use to manage their finances. RSVP here.
Let’s dive in!
In Africa, small and medium businesses wear different faces.
It’s the solo, street food seller in Lagos, skillfully turning foot traffic into customers.
It's the tour operator in Zanzibar, arranging trips with a small team of 12.
And it's also the family-owned mini-supermarket in Nairobi that survives for generations, with a growing number of outlets.
Two things they all have in common?
One: they’re the heart and soul of Africa’s economy.
Right now, Africa has 44 million such businesses. And these are only the formal, registered ones.
Two: they’re constrained regarding assets, revenues, and employees.
In Africa, businesses start small and stay small.
And it’s not by choice.
It’s just hard being a small business in Africa.
SMEs have limited resources like funding, manpower, and skills.
Then comes the long-standing pain of infrastructure.
If you’re not dealing with internal system lags, it’s external gaps like broken logistics and power outages.
And if you have razor-thin margins?
Things can get sticky. Fast.
In South Africa, 64% of township SMEs have to shut down during crippling power shortages (also known as load-shedding)
And those hanging in there are losing up to 61% of their total revenues.
For big firms, it’s easier to throw cash at some of these problems.
But for SMEs, that cash is hard to come by. Why?
Traditional lenders simply don’t like them.
Banks consider SMEs a high lending risk, and they act like it.
They turn away businesses that don’t have collateral.
They insist on strict financial records and credit history.
But sadly, financial records and SMEs don’t exist on the same axis. For some reason, financial planning and bookkeeping are left for big corporates.
For SMEs, budgeting and expense tracking is done on paper, or Excel sheets at best.
And when it's this inefficient, it leaves no trace of who’s spending what and why.
Really, really annoying reconciliation and reimbursements.
Employees getting a bit too ‘creative’ with expenses.
The disappearing act of spending visibility.
And business owners are left scratching their heads about their actual earnings.
But SMEs (and even well-funded startups, for that matter), can’t afford to leak out money.
Frugality is your best bet for surviving on thin margins.
And tracking your business expenses is step one in understanding how you can save money and make more money.
Well, this guy had the same realisation. Now he’s using tech to bring budgeting and expense management closer to African businesses.
Unifying the Financial Stack
Achille grew up in Benin and moved to France. Like most diaspora, he was sending money back home frequently.
But it was a major pain: Achille had no visibility on where that money was going after he sent it.
So he built some software for himself to track his remittances.
Building it came easy to Achille.
That’s when Achille’s personal budgeting software leveled up.
See, at Paystack Achille was helping companies unify all their payments.
And that’s when he realised: it wasn’t just payment methods that were fragmented: it was the full financial stack.
Budgeting, expense management, bookkeeping, reimbursements, and employee spending were all fragmented. You had to go to a different place to get each feature.
In the best case, these processes are handled in spreadsheets; in the worst case, it's kept in the business owner's mind.
Achille had built himself a tool that gave him full visibility on his spending. But he realised that African businesses’ needed that visibility even more.
So, he built an all-in-one portal that manages all of the businesses’ financials, giving them visibility over all their spending.
Bujeti gives small and medium businesses the tools that large businesses use to run their finances.
They work with small teams through to large companies and plug into bank accounts and accounting software to give a full view of their financials.
And as Achille built Bujeti, he realised there was another key need to solve for: corporate spending.
Getting access to and issuing corporate cards for each employee is a tedious process, but Bujeti rounds this up with their budgeting and expense management.
Where Bujeti’s tech gets really interesting is automation. We’ll use Tech Safari (a small business you know well) as an example.
Every time an expense needs to be paid, our team has a shared card that we all use.
I give approval for each expense over WhatsApp (yes, our operations need work, don’t judge..).
With Bujeti, I can set ‘rules’ and ‘policies’ around when payments can be made and where approval is needed.
So, every time a team member at Tech Safari needs to buy data it’s automatically approved.
For every transaction over $100 USD, it sends a ping for me to approve it.
We don’t make that many transactions, but it saves a lot of time and inconvenience.
For larger businesses, it’s a huge lifesaver.
Take Koolboks, for example.
Koolboks is a solar refrigeration company that sells in 18 countries. They manage up to 100 transactions a day with multiple employees.
Keeping tabs on these transactions was Prisca's job as the Financial Accountant.
Instead of needing to make approvals for every transaction, Prisca could set ‘rules’ around when payments could be made.
This meant that payments could be made faster, and she had a control room where she could everything and easily understand where Koolbok’s money was going.
Capturing all this data helps Koolkboks keep track of their financial health.
It also gives Bujeti the full view of a business. And that opens up a world of possibilities.
The Full View
Remember how banks just don't like SMEs?
Well, it’s because they don’t understand them.
But if you can get a full view of what SMEs are up to and track their financial health, viola 🪄
You now have the data to bridge their credit gap.
And that’s exactly where Achille wants to take Bujeti.
‘When you have a dataset on how businesses are managing their cash flow, you’re now in a place where you can address Africa’s 331 billion dollar credit gap.’
SMEs need more than money.
They need visibility and control: getting their business out of their head and into one system to track their financial health.
Bujeti is on a mission to give business owners a 360 view of their company and help SMEs in Africa grow.
What do you think of Bujeti’s story? And are there other interesting companies supporting SMEs in Africa? Let me know here.
And that's a wrap for this week!
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