Series V

Investing in Trove

“Compound interest is the eighth wonder of the world. He who understands it earns it. He who doesn’t pays it.” — Albert Einstein

The rich make money, save money and invest money in profitable markets and ventures. Then they let the interest compound.

Aside from real estate, the other great wealth generator of our time is the stock market. Most often, investing is cut off from the growing middle-class population and reserved for the wealthy.

The current process for trading stocks and government bonds in Nigeria is fundamentally broken. Other than hefty charges, the account opening processes mostly require several physical walk-ins and tons of unnecessary paperwork. The alternative; engage brokers who serve as middle-men and charge exorbitant fees.

These bottlenecks, coupled with the lack of access to more mature markets like the NYSE limit participation in financial markets.

One of the most common questions in investment groups from members is “How do I buy shares of Dropbox or Lyft or Facebook?”

Ventures Platform has always been a strong proponent of democratizing economic opportunities. Trove’s vision of a world of borderless investing is something that resonates with us and the existence of such a product would be really impactful.

That’s why we’re backing Trove. The founders; Tomi, Desayo, Austin, and Ope have built a micro-investing application that allows users to invest in financial securities in Nigeria (Government Bonds, Stocks) and also in international markets (US Exchange Traded Funds & Stocks of US companies) with the tap of a button.


We’re particularly excited to see how the continent’s middle class and millennials adopt this service. The success of services like PiggyVest (one of our portfolio companies), has demonstrated consumers’ interest in taking control of their savings. We are convinced Trove will usher in a new generation into investing.

The NYSE and NASDAQ have a market cap of $30.2T and $10.1T respectively. They are the most valuable markets and have consistently outperformed every other market. Unfortunately, they have been largely inaccessible to Nigerians and Africans in general… until now.

Trove gives Nigerians (and soon Africans) access to these markets. With Lyft, Pinterest, Zoom, Jumia and a host of other unicorns still going public this year, Nigerians can now seamlessly participate in the global economy and own a piece of some of these extremely valuable companies without having to be residents of the US or having a social security number.

The team is a mix of repeat founders and finance professionals, with experience working in companies in the financial sector such as Goldman Sachs and UBS Investment Bank. We had the pleasure of working with them during the 3-month ARM Lab Corporate Accelerator. We got to witness first hand, their passion, and commitment to democratizing access to quality investment opportunities.

I am happy to announce our investment in Trove, the product is NOW live here and users can start buying US-based securities upon completing KYC.

Welcome to the Ventures Platform Family.

Kayode Oyewole

Series V

Questions about consumer lending.

Photo by NESA by Makers on Unsplash

Nigeria is still a ‘cash-and-carry’ economy. Most consumers and small business owners and operators largely depend and rely on their savings and support from friends and relations to obtain funds to start and grow their businesses, and as a result, Nigeria is lagging behind in the consumer credit scene. Formal lending to consumers is still relatively low. To give an idea, Credit penetration in Nigeria is still below 30 per cent, while the average for Africa is 57 per cent. The global average is 132 per cent.

“Nigeria has 22 commercial banks, over 900 microfinance banks, about 100 primary mortgage banks. Nigeria has not experienced the kind of consumer credit you will expect.” — Tunde Popoola, MD, CRC FICO score.

It is hard to project credit demand in the coming years because of a number of hindrances — refusal to embrace new lending business models by banks; information asymmetry; data scarcity, but the proliferation of mobile creates opportunities for new companies to fill this gap (startups like BillionLoans, Klarna, Paylater, and Branch use hundreds of data points to approve a credit decision) etc. The result? There’s a new consumer lending startup showing up every day — and for good reason.

Mckinsey reports that 53% of income earners in Africa are between 16–34 — an age group that tends to be more aware and willing to try new products. They are in school, renting their first apartment, starting new families, etc. They are not just young; they are growing in importance and willing to spend.

This begs the question:

  • What is going to drive growth in this scene and this part of the globe?
  • How high does the ceiling go?
  • Who are the borrowers today?
  • How will their needs evolve?
  • Do the same solutions work across segments?
  • How might this work without smartphones? Can it even?

Usually, consumer lending startups serve those who have steadily growing income but are underserved by banks. The average consumer’s banking relationship is dominated by making payments, but banks are doing little about it (as this Twitter thread shows).

Given that the primary means of identification is BVN which is dependent on having a bank account, the majority of people are excluded. How then do we expand access? The national ID card often takes years to get a hold of, so, how do we verify identities? Should we push for a unified software platform like indiastack (Aadhar)? What are the broader, ethical, implications of this?

How about moving beyond credit for white goods and into other segment-specific solutions like healthcare? For example, unplanned health emergencies are one of the single largest cost for many middle and lower-middle-income families.

For FinTech startups, the big questions are around strategy, choice of segments; bottom of the pyramid, middle or top? Use cases, and distribution approaches. Pick too small a section — no matter how innovative — and it may be hard to monetize. The good news is that there are real use cases, large addressable markets, and viable economic models for the truly innovative.

Access opportunities at VP’s portfolio companies. If you want to join an early-stage startup fill out this application and our founders will be able to get in touch with you.

Series V

For the Unbanked.

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There are 2 billion people in the world without access to a bank account, including 41.6% of the adult population of Nigeria adult population. These people are technically termed the “unbanked” and they are a source of untapped market in especially emerging markets.

We cannot examine the unbanked without talking about financial inclusion. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs — transactions, payments, savings, credit and insurance — delivered in a responsible and sustainable way. Financial inclusion is how we bank the unbanked.

The unbanked are financially excluded from being able to have access to certain good and services and this limits this specific part of the population from being true consumers. The path from being unbanked (financial excluded to being banked (financial included) turns citizens into full consumers)

Digital finance has the potential to provide access to financial services for 1.6 billion people in emerging economies. With this in mind, delivering financial services through technological innovations, including via mobile money, can be a catalyst to facilitate the entry of millions of previously unbanked people into the formal financial sector.

Digital finance can boost annual GDP of emerging economies by $3.7trillion by 2025. Likewise, raised productivity of financial and non-financial business as a result of digital payments could be a major source of projected increase by decreasing the unbanked population.

The FinTech sector is experiencing explosive growth in Africa but African banks have been slow to adapt to this change. Thankfully, the outlook for mobile banking remains positive because the rapid spread of mobile phones is the game changer that makes financial inclusion possible.

What is it going to take for the widespread adoption and use of digital finance especially by those at the base of the economic pyramid?

First is the creation of a widespread digital infrastructure; across the board connectivity, powerful digital payments framework and a well-disseminated personal identification system. *looking at you NIMC*

Next is a strong agent network; an established distribution network, such as post offices or retail chains, or be built from independent, small-scale traders and other retailers. Agent networks that have been built, incentivised, and managed effectively. Agents that meet the customers where they are.

Third is an effective financial services market; Policy objectives will play an increasingly important role, as the scope of mobile money regulation broadens. Regulation and policies that promote interoperability and interconnectivity will be critical to the success of digital financial inclusion. Also, there needs to be synergy between banks and Telcos not competition. For instance, M-Shwari through the strategic partnership between Commercial Bank of Africa (CBA) and Safaricom has seen success in Kenya.

Last is digital products that offer true advantage in cost and utility for the people that use them.

It is difficult to say what the game changer will be, because of differences in market and regulations. Also, financial inclusion is comparable to a jigsaw puzzle. The various pieces have to be present to complete the jigsaw.

There is no one set way to approach the challenges or assemble the pieces. What’s certain is that the opportunity is colossal.

Focusing on this market and the impact it is projected to have in the Nigerian economy, we have invested in companies like Paystack and Payconnect and are on the lookout for companies using technology to design and deliver financial services. If you are someone/know someone, talk to us.

Portfolio News

  • Thrive Agric (VP C2) and (VP portfolio) are a part of the first class of Google Launchpad Accelerator Africa. Details here
  • Paystack just introduced a new feature; merchants can now use Paystack without a corporate bank account or a CAC. More announcements from them here
  • Jalo (VP C1) have just launched their Marketplace. The Marketplace allows users to find and shop from retailers around them and get their orders delivered the same day. Users can shop for anything from, groceries, to food, to consumer electronics and more. Marketplace is currently only available to residents in Abuja. Go to Marketplace + They have also launched Jalo Retail which provides SMB retailers all the tools they need to run their operations — from selling (online and in store), to inventory management, to payments and delivery — on one platform. Platform available here
  • processed ₦1 billion in the first 19 days of March. See here

Thank you for reading.