Moroccan Startup WaystoCap Is Enabling Africa's Businesses To Trade Better
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As a platform that addresses the business-to- business buying and selling of merchandise across Africa, Morocco-born WaystoCap is aiming to solve the fragmented situation in a market that is still in the process of going digital. Besides being an online marketplace for products, founder and CEO Niama El Bassunie asserts that WaystoCap is also an “ecosystem offering services such as insurance to suppliers, financing to buyers and logistics management to remove inefficiencies.”
El Bassunie, who previously worked at PwC in London’s energy markets team and for a large energy company in South Africa, admitted she wanted to get a hands-on approach in the region, after getting the entrepreneurial bug while working on side projects. Her first forays in the trading sector consisted of sourcing used cooking oil (UCO) in Morocco, Spain and Egypt amid the Arab Spring revolution.
El Bassunie remembers that “this first experience trading internationally got me excited about the possibilities offered to a young first-time entrepreneur, trying to help buyers and sellers across Europe and Africa.” On another trading project between Turkey and Guinea, besides seeing the drive of the local entrepreneurial community, that’s where she got to work closely with two bankers, who later became part of the founding team of WaystoCap, Mehdi Daoui (Chief Operating Officer) and Anis Abeddine (Chief Sales Officer), which was then followed by the entry of Chief Technology Officer Aziz Jaouhari Tissafi. Though they found the existing trading process exciting enough, the WaystoCap team saw the value of “creating a digital marketplace that would address all the challenges we had been facing, and enable businesses in Africa to trade faster, cheaper, and securely.”
Following trips to Silicon Valley and researching various models, the co-founders saw the potential for building a trading marketplace in Africa, and with the aid of Nic Pantucci, Head of Platform & Growth, launched WaystoCap in Casablanca, Morocco in 2015. The startup’s mission is to “not only facilitate trade in Africa, but also to foster trade,” whereby the company uses technology to deal with “the opaque nature of the financing, insurance, and payments of trade,” and then monetize by charging a commission on a successful trade.
As of writing, El Bassunie notes that thousands of buyers and suppliers have signed up on the WaystoCap platform to either buy or sell goods, with an “average order size of US$30,000.” Working across borders, the startup works with strategic partners to ensure its efficiency, which include Coface, a trade insurer company to protect suppliers against payment defaults, as well as an undisclosed trade finance company. WaystoCap currently targets primarily soft commodities and agricultural products, as the team found it’s the most indemand in the African markets they operate in. When asked about competition to the services WaystoCap provide, El Bassunie points toward the Yellow Pagesthough she notes that it only enables suppliers and buyers to merely connect with each other.
Y Combinator, and it has also raised a seed round from an impressive list of investors including Y Combinator, Battery Ventures, Soma Capital, Palm Drive Capital, Amino Capital, Endure Capital, Story Ventures, Lynett Capital, Neon Capital and 4DX LLC. Though they wouldn’t disclose the exact funding amount, El Bassunie confirms that it is between TechCrunch’s reported range of between $2.5 million to $3 million. Though they preferred to work with regional investors, the team took note of how tech company Alibaba (which they consider their Chinese equivalent) raised funds from American investors, and thus saw the benefit of having US-based investors, given their expertise and experience with tech and online businesses.
El Bassunie counts the startup’s experience at Y Combinator as beneficial, and she encourages her entrepreneurial peers in the region who are in incubators to leverage their time in the most effective way possible. She says it’s about having a growth centric approach, focusing on their startup’s messaging, networking and preparing for investors. Take every advice you get with a pinch of salt though, as the founder says, “One needs to learn to build a filtering mechanism, otherwise you will be pulled in many directions. And this just gets better with time, as one build a more efficient decision-making process.”
With regard to the Moroccan ecosystem, El Bassunie says that it is definitely on the path to growth, with it seeing the rise of more entrepreneurs with noteworthy startups, although there’s still a lot that needs to be improved. “The probability of success in a startup is, by default, very low, so we need to provide all the tools to increase that probability of success.” As for WaystoCap itself, having started operations in Casablanca, Morocco, and its first West African subsidiary in Contonou, Benin, with the new raise, the team is all set to expand its operations now.
Niama El Bassunie, CEO and founder, WaystoCap
According to you, what is missing from the entrepreneurial ecosystem in Morocco, and what factors do you think can contribute to its improvement?
“[First], fundraising- we need more early-stage funds and regional VCs participating in the ecosystem; not just private equity firms that look at the occasional startup opportunity. We also need a lot more angel investors with the right investor mindset. Not the ones who ask you what the collateral is in exchange for their investment! So, there is a lot of work to do in terms of changing mentality regarding risk and startup investments. Success stories will help most with that.
[Secondly], mentorship- mentors that truly understand startup concerns and can give advice; often for advisors to be at their best, they need to have a vested interest. So, actually allowing advisors to start getting advisory shares; which legally is very complicated in Morocco.
[Thirdly], the legal framework is too complex and does not protect international investor’s interest. This is why, for a Moroccan startup to attract startup funding, it either has to create an international entity or struggles to convince serious international investors to act locally; the legal framework also does not really offer the possibility of investing using sophisticated financial instruments, warrants, or convertible securities and notes.
[Fourth], the ability to attract top talent with employee option pools. [Finally] recognition- promoting success stories at a national level whereby the public sector helps in the promotion of these stories to attract more talent towards entrepreneurship."
PITCH PERFECT: NIAMA EL BASSUNIE'S TIPS FOR STARTUPS PITCHING TO INVESTORS
1. Be prepared to answer every question that an investor has (that means think about what potential questions you as an investor might ask).
2. Know your numbers- from unit economics to market size; to your user’s behavior.
3. Understand what your vision is and why you are doing it. The what and how is great, but the why is even more important. Watch Simon Simek’s TED talk for more on that.
4. Make sure that you get along with your investors; and often the first meeting will be able to demonstrate that; remember these investors are in for the rest of the life of your company; and like marriage, it is important to know that you are compatible and aligned.
5. Prepare a teaser deck, as well as a pitch deck that includes more details.
6. Have a process in place: build a detailed selection of which investors you want to target (either because of their investment thesis, or if they have invested in similar companies in the past in terms of sector, geography and others). Try to find an intro from someone in your network- as it’s always better to get an investor’s interest through an intro. Ask for intros including why you think the investor is relevant. And if you do not have intros, you can use investor platforms.
7. Be over prepared for every meeting.
8. Consider applying to an accelerator or mentorship program where you will be able to surround yourself with experienced entrepreneurs and investors, they will help you hone your pitch and focus your business.