Africa's Mobile Gateway: MFS Africa 📲

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I am pumped for this edition.

It’s a collaboration with friends of the newsletter, Marge and Ona from Sati (or, Sourcing Africa To Invest).

Sati, aims to uncover Africa’s history of tech and investment to understand the present and predict the future.

Today we’re diving into one of Africa’s most important companies that you probably didn’t know about: MFS Africa.

And honestly, no one dives as deep as Marge and Ona at Sati. That’s why we’ve done this story in two parts. Before we begin..

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Dare Okoudjou started building MFS Africa with one goal in mind: To be able to send money to his mother in Benin, from anywhere in the world.

Over the last decade, MFS Africa has built a hub that has connected over 400 mobile money wallets to services and to each other globally.

And today, MFS Africa is an African Giant → they have raised a $200 million Series C round and acquired companies across the world.

But before we can understand the company, we need to understand the man behind it himself: Dare Okoudjou.

MFS Africa revolves around Dare’s experiences travelling the world and watching the telecom and mobile money boom happen before his eyes.

In this two-part series, we will spend the first part diving into: The Story of Dare.

Let’s go👇🏾

The Early Days

Hailing from Benin, Dare first left the country at 18 when he had the opportunity to study in Morocco, before heading to Institute Nationale De Telecommunications in Paris.

After his Engineering degree, he joined PwC’s team in Paris, where he covered Europe, the Middle East, and Africa where he worked on several projects in telecoms.

After years of being based out of Paris, he decided to try something different.

His buddy at PwC had taken a year off to volunteer in Sarajevo, Bosnia and Herzegovina, and he was inspired.

Feeling a connection to the continent, he wanted to do something more fulfilling than making slides.

So, he and a friend took a year off PwC to work at a refugee camp in Tanzania for a year.

While Dare had idealised the non-profit world, Dare jokes that he made peace with capitalism after that experience.

He saw business as a way to uplift people and create better incentives.

And when Dare’s year was up, and he went back to PwC. But he didn't stay long - his time in Tanzania had inspired him to build something on the continent.

But before taking the leap, he decided to get an MBA at INSEAD, in Paris, France.

At this point, Dare had lived across the globe. And he had faced the problem that many diaspora face.

Dare would get calls from his mother in Benin, who needed money. But sending that money was notoriously difficult.

Dare tells us that he sent money in every way possible.

For instance, in France, he used a cash-to-cash process, where he would go into the post office, give them cash and two weeks later it would be posted to his mother in Benin.

When he lived in the US, it was even harder. He would physically give cash to people flying back to Benin - the fastest option at the time.

While money transfer was difficult, Dare noticed a contrast: making calls was getting easier, and cheaper.

And around that time, MTN (Africa’s biggest telecom) made an announcement that set Dare’s thinking (and eventually, MFS Africa) in motion.

MTN had announced it would launch MTN Banking - banking users through mobile.

The announcement went on relatively unnoticed, but the penny dropped for Dare.

And the telecom guy in Dare realised: If you could move data, then you could move value.

So when Dare graduated from INSEAD in 2006, he joined MTN in South Africa to launch mobile money across the continent.

Moving Value

Dare had a goal: To be able to send money to his mom in Benin from anywhere in the world.

And his realisation: If you could move data, then you could move value.

And if data (ie, texts, calls, media) could be sent between different mobile operators, then so could money.

This concept is called interoperability. And we first saw it play out with phones.

It’s why even though you might be a T-Mobile user in the US, you can still receive texts and calls from a Verizon number. Or when you’re a Telstra user in Australia, you can call someone on Airtel in India.

The gold standard behind interoperability is a company called the GSM: the Global System for Mobile Communications.

Founded in 1982, GSM is the layer 1 infrastructure that telecoms connect with, to enable interoperability for text, voice, and video.

Dare wanted to build GSM - but for money.

Imagine being able to use your mobile money account to access lending and saving services. Or to send money from MPesa to someone's Apple Pay balance.

The idea gripped him, and his vision was set.

Dare assembled a crew from his INSEAD and MTN days, with Mazunzo (Maz) Chaponda joining as CTO. Dare explained his vision to Maz and they started building.

They built out a platform that let them build interoperability between mobile money wallets and other services.

They had to build at a KYC Level and have the ability to debit (pay), credit (receive), authenticate and manage electronic signatures.

It needed a messaging layer, a compliance layer and a settlement layer.

It took time, but once it was done they were ready to rumble.

Ahead of their time

But Dare and Maz had built a product ahead of its time.

Telecoms were still setting up cash-in/cash-out services for mobile money.

Even if they wanted to use MFS Africa, they had no capacity to.

So, Dare turned MFS Africa into the Research and Development arm for telecoms.

He pitched telecoms to launch services on mobile money, like lending, savings, insurance and ringtones.

On one condition: the telecom had to connect to MFS Africa’s platform.

MFS Africa did this work for five years, but they weren’t making money. The services were sub-scale.

Mobile money hadn’t yet deeply penetrated the continent. They were underfunded and understaffed.

There was a moment when the team was $10,000 away from bankruptcy. A friend from INSEAD gave Dare $10,000.

Another time, Dare borrowed $5,000 from his sister in Canada. And in 2014, Dare tells us that he had a moment where he almost gave up.

He vividly remembers his trip to Côte d'Ivoire in 2014.

He had just launched a mobile money connection between Benin and Côte d'Ivoire, and was on the way home to South Africa.

He had three weeks of runway left. On the way to the airport, he was in a taxi finalising an offer to sell MFS Africa for $200,000.

He ended up declining - his gut told him not to do it.

Things went from bad to worse. That same night he was about to fly out to South Africa but Ebola had broken out, and his flight was delayed.

He got a call at the airport from his home security. A robber had entered his house - he could hear his kids screaming on the phone as security chased him out.

It all hit at once.

He asked himself ‘what the hell am I doing?’

He could have had a steady job, family holidays and a nice place.

Instead, he had his electricity cut in the summer, he hadn’t taken his family on holiday for years, and his family needed him.

And he had just turned down $200,000.

He felt helpless.

That’s when Dare released the absurdity of what it means to chase your dreams: being relentlessly optimistic, tunnel-visioned and sticking to your conviction.

That was the one and only time he had doubts about what he was building.

But that doubt didn’t last long.

That night at the airport, he bought himself a beer and wrote a list of 10 people he would talk to to save MFS Africa.

If he got to number 10 on the list, he would call it quits on the MFS Africa Dream.

He tried numbers 1, 2, 3, and 4 with no luck. Then number 5 rolled around, which was lunch with a gentleman, Kumu, whom he knew from MTN.

Dare was on the verge of launching with Vodafone and told Kumu that he needed $500k for 1 year of runway.

Kumu introduced Dare to Moss Ngoasheng, the CEO of the investment firm, Safika.

Moss left Dare a voicemail expressing his interest to invest. But Dare almost missed it. ‘I never listen to voicemail.’

It was the holiday season in South Africa, but Moss got his team to do the deal over Christmas.

They weren’t happy about it, but the deal went through - and MFS Africa raised $500,000.

MFS Africa was still in the ring. And now Dare had some money to play with.

And it turns out, that expedition to Côte d'Ivoire to launch peer-to-peer mobile money transfers would change MFS Africa’s trajectory.

In the next edition, we will dive into MFS Africa’s meteoric rise into the company it is today.

Inspiring, right? Let me know what you think of Dare’s story on LinkedIn here.

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👋🏾 Caleb