Africa’s Female Focused Community, Herconomy, Raises $600,000 Pre-Seed Funding to Unveil Financial Services and Boost Operations

Herconomy is leveraging fintech to empower women, from creating a women-focused social media community to planning Africa’s largest financial services platform for women.

Women make up half of the world’s population, but they face greater barriers to financial products and services that can improve their well-being and economic empowerment. According to UNCTAD, based on World Bank Financial Inclusion data, while 72 percent of men worldwide had a financial account in 2017, only 65 percent of women did (a 7 percentage point difference).

Even though financial inclusion has improved in Nigeria, gender parity remains a concern. According to EfiNA, a financial sector development organization in Nigeria that promotes inclusive finance, only 15% of women (compared to 27% of men) were banked in 2008. (a gender gap of 12 percentage points). By 2018, the gender gap had widened to 13 percentage points, with 33 percent of females banked. Nigeria was ranked 128th out of 153 countries in the World Economic Forum’s Global Gender Gap Index 2020, emphasizing women’s economic disenfranchisement. Given the importance of closing the gender gap and improving women’s quality of life, policymakers and the public and private sectors have continued to collaborate on a variety of fronts.

For Herconomy, Africa’s first women-focused digital platform, changing the course of the financial exclusion narrative and underrepresentation of women in the economy will require a frontline and hands-on approach. Formerly AGS Tribe, the female-focused organization has repositioned itself as a financial technology (Fintech) service provider to democratize economic opportunities for women and even the financial landscape. “We decided to rebrand this year to Herconomy so the essence of what we do is easily communicated,” said Ifedayo Durosinmi-Etti, the founder and CEO of Herconomy. “We understand that when the life of a woman is positively impacted, value is created not just for that woman but for the community at large.”

Following the success of her 2018 book “Accessing Grants for Startups” (forwarded by former Lagos State Governor Akinwunmi Ambode), Ifedayo founded the AGS Tribe in response to popular demand from people from all walks of life, including entrepreneurs and working professionals looking to improve and build their skill sets and access global opportunities. Recognizing a significant knowledge gap, the MBA degree holder decided to take a comprehensive approach by establishing a community that would serve as a pan-African female-focused network.

The AGS Tribe was hosted on Telegram, which was a fully paid community, to accommodate the growing community. “The Telegram time served as a customer discovery time,” Ifedayo explained. “We eventually had to migrate to our mobile app because Telegram wasn’t as supportive and flexible for what we needed.”

They knew they wanted to reach even more women after their mobile app launched, so they introduced a free tier that gave members of their platform free access to all opportunities on their platform. They also added a new tier that provided up to a 30% discount on various products and services.

These brands came from industries such as fashion, travel, salons, spa and wellness, law, and hospitality, so Gold members with Visa cards can take advantage of services that improve their well-being. As a result, the AGS Tribe community grew, and by the middle of July 2021, the community had grown to over 15,000 members.

One of the AGS Tribe’s success stories is Mobaby Care Nigeria, whose founder Mariam Adebola-Salami received a $1,000 grant in March 2019 and another N1,000,000 in June 2019. Mariam was able to achieve a 10.5 percent growth in her business in ten (10) months with a customer base appreciation of over 1,000 with the assistance of AGS. As a result, Mobaby Care Nigeria was able to obtain equity investment.

“Some of our members have won international grants, and in November 2021 one of our members, Confidence Stalavey, became an Obama Leader,” said Ifedayo. “Another community member of ours died in an unfortunate incident of domestic violence in June 2020 and as a community, we facilitated a fundraiser, which eventually raised over N26 million which has been placed in an FBNQuest trust fund for education for her kids. The organization does so much to help each other as a community. Another community member successfully secured a job in the UK after attending one of its weekly capacity-building workshops.

Recently, over 500 women were able to save $100,000 in 6 months through the AGS Savings Challenge.

This year, they unveiled the Herconomy Cooperative Multipurpose Society, which was described as the community’s first step toward owning a female-focused bank in Nigeria. The community launched a capital raising campaign to fund the expansion of Herconomy.

Ifedayo announced plans to raise capital for Herconomy on her Instagram story in August 2021, and 130 people expressed interest. “I had previously spoken with some investors in the past and the vision was lost on them but I knew what I wanted and trusted my community,” said Ifedayo.

Ifedayo was accepted into the Startup Bootcamp, an accelerator, in June, so she postponed the capital raising project until September to focus on Herconomy’s business model. By September, she had sent an email to the 130 people who had expressed an interest in investing in Herconomy, informing them that the time had come for them to do so. She also attached a Google form where they could indicate the amount of money they were willing to invest. She then updated her Instagram story to say, ‘If you indicated interest earlier, you’ve got mail.’

More people became interested all of a sudden. That list grew from 130 to 509 people, but this time with specific numbers that they could commit to within the next two weeks. Herconomy received a massive 11.4x oversubscription, raising $5.7 million versus the $500,000 target within 24 hours of its capital raise exercise.

“70 percent of the funding we received came from our community while the rest was from Venture Capitalists and Angel Investors,”  said Ifedayo. “Due to the minimum floor of $20,000 investment, a Special Purpose Vehicle (SPV) was created to onboard members with less than $20,000.”

According to the organization, the funds will be used to hire an in-house tech team, improve their product, increase marketing efforts, and expand their operations.

Some Angels who invested in Herconomy include:

1. Nkiru Ayemere – CEO, Zephans and Co

2. Ehi Onwudiwe – Director, Business Transformation, Ernest and Young

3. Olanrewaju Smith – CEO, World Bay Technologies

4. Ope Makinwa – Head of Reserve, Diageo

5. Ama Akpata – Co – Founder, Jand2gidi

This is what some investors had to say;

“I have followed the Herconomy story right from the AGS Tribe days and I have witnessed tremendous growth over the years. Not just the business, but of the founder as well. I have been a member of the community from the beginning so when the opportunity came up to invest, I certainly was interested in deepening my commitment by contributing my own token as an investor towards building a future where women thrive. I love Ife’s passion, doggedness, and drive and you know what they say…..you don’t only invest in a business idea, you invest in the founder. Herconomy is the future and I chose to invest in the future!” – Ehi Onwudiwe – Associate Director, Business Consulting, EY.

“Our thesis is that community is very key to the future of consumer fintech in Africa. The company has a very strong community element, and also focuses on creating financial products and prosperity for women- who have historically been underserved with financial services. We like the company very much and are happy to be on this journey with the team” – Olu Oyinsan – Managing Partner, Oui Capital.

The female-focused organization has also announced that it will engage in additional capital raising activities and is looking for investors who share its vision of women’s empowerment, inclusion, and diversity.

Herconomy is setting its sights on more audacious and ambitious goals, inspired by the great strides made and the need to consolidate gains for women in the economy. According to Ifedayo, Herconomy’s upward trajectory will result in the establishment of Africa’s largest digital bank, which will focus on financing women and projects that advance women’s economic status. Meanwhile, Ifedayo stated, “Herconomy is committed to enabling women to learn, network, and earn high interest on their savings as they spend.”