Anglophone Over 400 million people live in East Africa, with half of them under the age of 25. Despite the fact that East Africa is one of the fastest-growing regions in the world, over 200 million individuals do not have access to a bank account or mobile money.
Those who do, however, risk being affected by inflation, a regional issue that affects how people save and maintain wealth. For example, the average East African currency is believed to devalue about 20% every year. Bloom is a fintech attempting to help Sudanese individuals hedge against the rising devaluation. It is not to be confused with the Robinhood-like app for teenagers in the United States. It provides a “high-yield” savings account, free FX, and related digital banking services so that customers can save in a stable currency, the dollar, and spend locally.
Ahmed Ismail, Youcef Oudjidane, Khalid Keenan, and Abdigani Diriye started the company in late 2021. Oudjidane was a managing partner at Class 5 Global, a San Francisco venture firm that has financed startups like Careem and Meliuz. Ismail, a Sudanese by birth, teamed up with Oudjidane, an Algerian by birth, to scout more African investments. After researching several models pioneered by digital-first banks such as TymeBank, Kuda, and FairMoney, they saw a significant need for developing a savings product that addresses what they believe is the most pressing problem facing African consumers: inflation and currency depreciation.
Consumers’ incapacity to protect the value of their wealth, we believe, is the most pervasive problem. So we decided to start a firm that does just that, that enables individuals save money in a stable currency and spend it in local currencies as they go,” said Ismail, the company’s CEO.
CTO Keenan and CPO Diriye, both of whom have roots in eastern Africa, were brought in to help with the project. The four graduated from Russell Group universities and have worked at Amazon, Meta, IBM, Uber, Goldman Sachs, and Barclays, among others. Further market analysis revealed that East Africa was the ideal area for the team to begin their journey. More importantly, they are from Sudan. However, the northeastern country does not appear to have an active, let alone a thriving, tech ecosystem. After 30 years of international sanctions, it only received its first foreign investment last year, when Fawry funded fintech and e-commerce firm Alsoug.
So, what’s the deal with Sudan? “We believe that the best way to start a company is to go after the biggest opportunity first.” Sudan, then, is intriguing for three reasons. It’s a huge economy, and I believe it was Africa’s fifth-largest economy in 2015,” Ismail remarked.
“We are aware that it has faced economic difficulties since South Sudan’s secession.” Despite this, purchasing power and consumer spending per capita remain among the highest on the continent. And, most significantly, it’s probably Africa’s most under-invested country in terms of VC money, and the most important dynamic I think about Sudan is that it’s a pleasant location to do business,” Ismail said when asked why his company chose Sudan as its first market.
Bloom collaborates with the Export Development Bank, a deposit-taking partner bank. The best way to think of Bloom is as a bank’s technology, customer acquisition, user experience, and marketing partner. Users can save in dollars and buy and spend in Sudanese pounds with no fees, according to the business. It also offers local and dollar cards, as well as a function that allows them to receive free remittances from a number of nations across the world, primarily from the Sudanese diaspora. “People don’t keep Sudanese pounds; instead, they buy dollarized assets like real estate, land, or tangible US dollars,” Ismail explained. “What we’re allowing people to do is tokenize that.” And, unlike saving up large sums of money to buy an apartment or a piece of land, you’ll be able to hold value in tiny quantities of money.”
Bloom’s waitlist, which was posted a week ago, had more than 15,000 people on it. Bloom will begin onboarding them this month, according to the founders, who boast the company’s $1 CPS marketing efforts. Users can only receive money for the time being; however, after the company has accumulated sufficient inflows and volumes to generate liquidity, users will be able to run outflows. Bloom announced today that it has been accepted into Y Combinator’s Winter 2022 startup batch after being accepted early last July. Global Founders Capital, Goodwater Capital, and some football players, notably Blaise Matuidi, raised a pre-seed in September for the startup, which only launched last week after being in stealth mode.
The Sudanese and Dubai-based firm wants to expand across the Anglo East African region, including Ethiopia, Kenya, Rwanda, Tanzania, and Zambia, with funding from an upcoming seed round. Fintechs offering comparable services, such as Fingo, another YC-backed business, as well as Koa and Finclusion, may create competition in some sectors.
We’re from the area. We are familiar with the intricacies of our markets and can navigate what may appear to be a perplexing world. Working in unpredictable markets is also something we’re used to – and possibly even enjoy. “We are laying the foundation for Africa’s next decade of growth,” Diriye said of the investment.
