Nigerian Reward-based Loyalty Startup ThankUCash Lands $5.3m In Seed Funding Round

ThankUCash, a platform launched in 2018 by Connected Analytics, which offers loyalty, deals and rewards services, has finally closed its seed round at $5.3 million. Last year, the startup announced an undisclosed seven-figure seed. 

The Lagos-based startup’s seed round was co-led by VC firms 500 Global and Unicorn Growth Capital. Expert Dojo, Predictive VC, SaaS Growth Ventures, Betatron Venture Group, and Accelerex Holdings were among the participants. Individual investors such as Andrew Dell, the former CEO of HSBC, and Craig Fenton, the UK director of Google, were also there.

The money will be used to grow the company’s operations in Nigeria, where it has offices in Lagos, Port Harcourt, and Abuja, as well as in Ghana and Kenya. It also intends to expand its product line and hire additional people.

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ThankUCash cofounders. Image credits: ThankUCash

Why The Investors Invested

Nigeria, and possibly the whole of Africa, apart from North Africa (and more particularly Egypt) does not have as many startups doing what ThankUCash is doing; and so it makes more sense that ThankUCash has fewer competitors and that investors are buying in. In Egypt, startups like DSquares and Zeal Rewards are making headways with their reward-focused applications. The sector is quite niche but profitable, which explains why DSqaures recently claimed it now has a network of 100 million active customers, as well as 1,700 partners with over 11,000 outlets across different sectors in Egypt, Jordan, Romania, Kenya, Tanzania, Morocco, Saudi, and UAE. DSquares is backed by heavyweight investors such as Algebra Ventures.

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An interesting fact about the investors involved in this round of financing is that they come from diverse backgrounds. While Hong Kong-based Betatron Venture Group invests mostly in Asia-focused startups, Mauritius-based Accelerex Holdings, with its latest $20m fund, focuses on African fintech startups. 500 Startups, on its own, has invested more in North African startups than elsewhere on the continent. San Francisco-based Predictive VC is perhaps the only venture capital firm that invests in data analytics startups like ThankUCash. Investments from 500 Startups and Brandon Drew are follow-ons, confirming that the startup has remained attractive to them. 500 Startups’ interests in ThankUCash started with the startup’s participation in its 2020 accelerator program, in which it was the only African startup selected to join its 26th accelerator batch.

ThankUCash also claims to have over 600,000 users and 1,000 stores on its network thus far. It also claims to have handled more than $80 million in transactions.

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Lastly, CEO Simeon Ononobi is himself a serial founder. He had previously founded SimplePay, a fintech platform that allows users with an e-mail address and a bank account to securely and conveniently send and receive payments online, reminiscent of PayPal. SimplePay’s demise remains unannounced to date. Simeon had equally cofounded MyAds Global, an Adtech startup for mobile advertising on incoming call screens of mobile phones. The idea of ThankUCash must have been inspired by the latter.

Investment into ThankUCash was made through its parent company, Connected Analytics, headquartered in San Francisco, in the United States.

“Since going through 500 Global’s accelerator in 2019, we’ve been impressed by Simeon and the ThankUCash team’s progress in implementing a rewards system that works for Nigerian consumers, regardless of cash or credit or online or offline payment,” said the principal. “It’s a win-win for businesses and banks, too, as TUC gives them the tools and data they need to grow,” Amit Bhatti, the principal at co-lead investor 500 Global said. 

A Look At What The Startup Does

Founded in 2018 by Simeon Ononobi (CEO), Madonna Ononobi (COO), Suraj Supekar (CTO), and Harshal Gandole (joined later as Senior VP-Tech), ThankUCash engages and rewards customers of Thank U Cash partner retailers and service owners.

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Merchants pay ThankUCash a charge on every purchase made in their stores, which is how the company gets money. ThankUCash, for example, receives a 1.5 percent commission for each customer it brings into the business to redeem a 5% reward item. The Lagos-based firm also charges commissions on deals and wants to charge a “substantial onboarding fee” to companies that wish to use its APIs for services like buy now, pay later.

To date, brands such as Dana Airlines, Enyo retail, ThankUCash have been able to sign (a fuel retail company). Ononobi claims that the startup has been able to help Enyo Retail expand to almost 100 locations today from 4–7 locations in 2019.

The startup also claimed it has entered into strategic alliances with major banks and financial institutions.

“We’ve signed partnerships with some banks, and one of them could boost our user base to hit 2 million once finalised. We’ve also partnered with Africa’s largest fintech firm which will also expand our reach to up to 40 million customers,” Ononobi said.

“We are working to expand to airports, where customers can get rewards when shopping across the nation. We are also working to help online merchants integrate our API to their platform,” he said.

After growing as a company, Ononobi and his team now want to embark on a more difficult task: creating infrastructure for businesses who wish to provide similar services.

“We are creating solutions that help SMEs succeed while increasing consumer buying power and opportunities. We want to build an infrastructure for rewards, loyalty, deals, buy now, pay later, cashback,” Ononobi said in a statement. 

“Cashback was our low hanging fruit and an entry point. We’re still going to go into deals, couponing, gift cards, buy now, pay later, anything that will help the business grow, but at the same time, allowing the consumer increase in opportunities of buying.”

It also plans to introduce “Buy Now, Pay Later” services. 

Aaron Tindiseega has been hired to manage the 45-man team’s growth into Kenya and the rest of Eastern Africa. The Ugandan expert has worked for Uber, Standard Chartered Bank, and Stanbic IBTC, among other banks and tech businesses. Kiki Anku, who has worked at Apple and a few startups, will lead the company’s development into Ghana.

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer