Start-up leveraging blockchain technology to address the 331 billion working capital gap in Africa.

Making US$20k Monthly Recurring Revenue (MRR) with 1 full-time employee and two part-time co-founders: CEO working from overseas!

Running a small software development company, we had our ‘breakthrough’ moment in 2019 when high-profile global bank awarded us a US$150k project. I needed to grow the team in order to meet the tight delivery timelines. With a lucrative contract, an equally impressive track record and credible references, I thought funding the project would be a walk in the park: little did I know that was just the beginning.

Applying for a bank loan was a tedious process which felt like a full time job on its own. All that time and effort went down the drain as we couldn’t secure funding. We turned to microfinance institutions where requirements were more reasonable, but that too hit a snag when they requested for tangible collateral: which as you can imagine we did not have. Additionally, the admin fees, interest rates and repayment terms were crippling and unsustainable to say the least. Elon Musk was precise to say “Starting a company is like eating glass and staring into the abyss.” I was drained and dejected, but ready to fight another day.

One afternoon as I was licking my wounds, I received a call from a friend Malvin who runs MartGreen International: a logistics broker company and I shared my story. Coincidentally, Malvin had similar challenges months prior until he started working with José: our university classmate who provided cash advances.

I immediately called José who understood the business and our track record in addition to my core values and guiding principles which he had known for years. Within 5 hours I had US$10k in hand. I knew I shouldn’t count my chickens before they hatch, but it was a huge relief worthy of a subtle celebration.

We put the capital to good use and repaid the loan in under 6 months. The experience was a revelation of how capital can be the difference between life and death for small businesses in Africa. After identifying our distinctive competencies and potential synergies with Jose, I proposed an idea to start a business venture. On 6 Jan 2021, GetCheezy Pvt (Limited) was born.

We offered small collateral based consumer loans between $50 and $500, which we increased three months later after realising that smaller amounts have high administrative overheads and these had started taking a toll on my primary software development business. We had a high number of consumers and SMEs in our loan book and in hindsight that is where we lost the plot. The finer details are a story for another day. Eight months later we wound down operations with a financial loss of US $16 000, and a million dollars’ worth of lessons and experience. Fortunately, that was from our personal savings hence that is where the pain ended.

One of the key data points was how one class of SMEs from particular industries consistently performed well and had a default rate of 0%. That piece of insight was too good to ignore. In October 2021, Panamax was born to serve those SMEs. We leveraged on GetCheezy insights and built a self-sustaining business model and an ecosystem of tools, technology, people, SMEs, and strategic partners.

This model has exceeded any realistic expectations and after 10 months of operation, and with less than 45 clients, we have US $20k MRR. This milestone was achieved by 3 people: one fulltime employee and two part-time co-founders. The CEO works remotely from New Zealand and is responsible for strategic direction and primary funding. I provide and support the technology and automation while Odry: the Operations Lead – executes the strategy. We all live by the mantra “identify, analyse, optimise, appraise and repeat”.

There are approximately 44 million SMEs in Africa and Panamax will play a major role in addressing the 331 billion SME financing gap market. Panamax has created a blockchain platform to allow anyone from anywhere to participate in the African economic development by supporting SMEs which form the backbone of African economies.

The Panamax Token (digital asset) has a guaranteed annual return and can be traded with full transparency and without restrictions. With all major pieces having fallen into place, this is the right time to the scale-up our operations across the continent starting with Southern Africa. We are raising our first external seed capital. To learn more contact Tendai on [email protected]