Building a Savings Culture with PiggyVest's Odunayo Eweniyi

Odunayo [00:12]: My co-founders and I saw a tweet that went viral where a lady had been saving 1,000 Naira every day in that year. She'd been saving it in the box, and so on December 31st, 2015, she broke the box, she took photos, and she put it on Twitter that she had 365,000 Naira.

Justin [00:31]: That's Odunayo Eweniyi, the co-founder and COO of PiggyVest, an automated savings and micro-investment platform based in Nigeria. In a recent conversation, Odun recounted the inspiration behind the company.

Odunayo [00:42]: The conversation, a lot of it on the internet, was around people also wanting to get their own wooden boxes so they could save like that. And we thought that that was at odds with the reality in Nigeria, where the average person has two bank accounts. So why were people not considering saving in their bank accounts? People were actually going to get physical boxes. So we started to think around how can we exploit this? And so we came up with the idea of creating an actual digital piggy bank. That's how PiggyVest started.

Justin [01:13]: So back in 2016, PiggyVest launched as a recurring savings platform, it was called Piggybank at the time, where users could save as little as 100 Naira per day. An affordable and accessible option for Nigerians otherwise were not using the formal banking sector to save. And as we continue our series of episodes exploring the startups and entrepreneurs digitizing informal and analog industries, it's clear who or what is PiggyVest's offline competitor. Their competitor is the wooden box and the physical piggy bank. So in this episode, we'll explore PiggyVest's endeavor to change the savings behavior of the average Nigerian, the growth strategies the company employed to build trust and loyalty amongst its users, their plans for expansion, both in terms of product and geography, and much more.

Justin [01:51]: Before we start, we'd like to thank MFS Africa for their sponsorship of the entirety of this conversational series. MFS Africa is building the digital infrastructure to make mobile payments interoperable across the continent. Their API hub connects over 200 million mobile wallets in almost 30 African countries. Later in this episode, Odun talks about the digital infrastructure that enabled PiggyVest to build their product. It's part of a larger open banking trend we're seeing in the ecosystem where third-party startups are providing open access to consumer banking, transaction, and other financial data from banks and other data sources through the use of APIs. This data and infrastructure can then enable an innumerable amount of products and features to be built on top, both in financial services and other sectors. It's something I talked to Abdul Hassan about. Abdul is the co-founder and CEO of Mono, one such infrastructure API startup.

Abdul [02:36]: The way I see financial infrastructure, it's in two buckets. So there are people that they provide APIs just for payment, and then there's the data part. So what we've done is we've connected to alternative financial institutions in Nigeria where we can retrieve financial data from. So it has a bank statement, transactions, return balance, income, credit, and debit. So those financial data can then be used by businesses to maybe perform credit score or maybe you want to build a new experience in your application, your web app, so you can use this financial data. The way we see the market in Africa is like what we've done to date is an infrastructure that can help us build other things as a company.

Abdul [03:19]: So today we decided to launch an identity API that allows you to get the total identity about a person, like their name, address, phone number, email, even their photo ID. Now, if you look at it, those information can then be used for something like one-click sign up, so whereby you can just click on a button and then the business will have access to all you information. You don't need to enter the information manually again. So that makes the market becomes bigger because then you can then target e-commerce, for example.

Justin [03:45]: Later in the show, we'll hear a bit more from Abdul about the use cases for and implications of open banking infrastructure on the continent. One last thing before we start, in addition to the podcast, we've been publishing an increasing amount of written content, including long-form essays and bite-sized insights, shared via our newsletter, The Flip Notes. Visit theflip.africa/newsletter to subscribe. All right, here's PiggyVest's Odunayo Eweniyi.

VO [04:09]: You're listening to The Flip, the podcast exploring contextually relevant stories from entrepreneurs around Africa.

Justin [04:19]: So where I'm very interested in starting the conversation and to go a little bit more in-depth on, in particular, is you and your co-founders, I know, are entrepreneurs with a tech background. You don't have a wealth management or finance background. And it's interesting because in this space there was the banks who weren't doing this, I know that there's other fintechs in Nigeria, and certainly some of the founders come from a finance background versus a technology or a product background. And so I'm curious to hear your thoughts on what is it about you and the team, and how you built this company that you think makes it successful. And is it, in fact, the fact that you're not finance people, and you're product people and tech people, that is what is PiggyVest's core competency here?

Odunayo [05:05]: I think that there's a very healthy mix of several things in there. And I think that us not being financed people actually does play a role in being able to abstract from what should be, and then think about what we want to do and what we think should be. Because the background of an engineer is to find a solution, we would look for a solution and then, after the fact, look for the regulation to fit around it. So we were not, I suppose, bogged down by “oh, this isn't how it's supposed to be because these are the rules that said it shouldn't be that way”. That being said, before we had PiggyVest in 2016, between 2013 and 2016, my co-founders and I actually spent a lot of time building companies and had a lot of them failing. So we'd been working on B2C companies for three years and continued to do so even after we'd started PiggyVest in 2016. The full focus of PiggyVest actually came in 2017, when we realized there was something here.

Odunayo [06:03]: So a lot of what we were doing was building for consumers, and speaking to consumers, and hearing them, and trying to understand what they wanted to see in their financial partner, what they wanted to see in their employment partner. So we'd had quite a bit of practice, I think, with talking to people and figuring out how a lot of these services should fit into their lives before starting PiggyVest. And also the execution from us was a bit different, we focused on bringing money back to the basics for people. And I have a background in computer engineering, my two co-founders have backgrounds in mechanical engineering and computer science, respectively, and so it was a matter of what is the best solution, the most basic solution for this. And at the time, we didn't quite realize how highly regulated this sector was, so we just built first and then the rules followed.

Justin [06:55]: Yeah. And so a lot of your core competency ... And I'd love for you to talk from a product perspective, but my understanding is a lot of your core competency is designing a product that engenders trust, and being really great at customer acquisition, and community, and all of these things that I think banks are also, and other fintechs, but banks certainly, are very bad at. And to some extent, the financial product and the yields, it's kind of commoditized. Is that fair to say? And that's what your differentiator is, is that you're just distributing the same product everyone else is but in a much better way?

Odunayo [07:27]: Yeah. I think that because if someone said what would prevent someone from getting into this business, the answer is absolutely nothing. Anybody can build it. So there's no secret algorithm for creating a recurring savings platform. If you can integrate into Paystack, you too can do it. But being able to gather all these people, make them trust you, make them understand the product at the most basic level, certainly hasn't hurt that we came first, so everyone else came after us. So there was already us, and for a bit it was just PiggyVest, PiggyVest before everyone else came to join the party. So I think that was really nice as well. So yeah, distribution is something that we learnt to do, and growth hacking and finding the cheapest way possible to get the best possible results. We did it on our previous startup with very successful results, just on a much smaller scale than PiggyVest. So yeah, I think you nailed the core competencies part better than I could have explained it to you.

Justin [08:25]: Thank you. I try to do my research. So I'd love to get a little bit deeper from both a growth and a product perspective. What are some of the things that you've done? I know you created the 90-day savings products and a lot of the different things, especially from a growth perspective, to build out that trust. Can we talk a little bit more in-depth about some of those interventions and product decisions that you've made that have worked really well over time?

Odunayo [08:49]: Okay. The first one is that on the main wallet on the platform, you can only withdraw for free once every 90 days, and that was done both for the users and honestly for the business. We were running an assets under management company and the only way to properly manage assets is when you can retain them. When can you retain the assets? So we decided that this is something that we needed to look at. And then, if you look at the 90-day savings period, people can put their money in banks and they can access that anytime. So what would be the difference if they put their money in PiggyVest and they can access it at any time? And the goal here was also to help people save substantial amounts of money. But then we also looked at how long can people go without their money for, and we thought 90 days is a very fair assessment of where this needs to be. So the shortest possible period for a very comparable amount of value. You're earning interest, you're saving.

Odunayo [09:53]: What we saw at the beginning, people were like, "What is this 90-day thing?" But now people are saving for so much longer. People will go for the entire one year stretch without touching the funds, people will go for six months. And I thought that at the beginning, it seemed very difficult, and very raw, and not very data-backed, because there was nothing else to measure it against, but now it turned out to be the best decision because that's what actually shaped the habits that you see today in all of the users, and that's a feature that's going to continue to stay. It's never going away just because it works so well in helping people modify their bad savings habits. And so if you can do 90 days, then you can do 180. If you can do 180, you can do the whole 365. That's how it started to build up.

Odunayo [10:37]: And then I think that another interesting one is on the target savings feature, where if you do set a target, say to buy a phone, to buy a bag, to buy anything, you have to reach 70% of that target. Again, it's a form of financial training. You say you’re headed here, we don't set that target for you, and now it's our job to help you meet up to, or at least try. So everyone left on the platform has its own very tiny behavioral modification thing that we try to put in place. It's uncomfortable at first, but we find that users eventually start to get used to it and then they start to ask for even more restraining rules, but obviously that's a personal thing.

Justin [11:17]: Yeah. And I guess any issues that they have with those interventions, they have to take it up with their former selves and not with PiggyVest.

Odunayo [11:24]: They'll try take it up with customer service, and we try to be as human as possible. There are always extenuating circumstances where you have to suddenly use that to figure these things out, but for the most part, rules are rules.

Justin [11:36]: Yeah, definitely. And I'm so interested. I mean the second part of the question also just on engendering trust and building community and the growth interventions that you guys have done, I think there's this general pervasive narrative on the continent around the difficulty of digitizing informal industries. And in Nigeria, there probably was a lot of informal savings, there probably still is a lot of informal savings. It's very difficult to measure, obviously. So how did PiggyVest really overcome the challenge of getting people to feel comfortable to do that in an environment and on a continent where this narrative again is pervasive that it's a very difficult thing to digitize and to formalize?

Odunayo [12:19]: To be clear, I think that Nigeria still has a very huge informal market, and I don't even think PiggyVest has begun to even scratch the surface of the number of people that we could help to save. But as for how PiggyVest was able to build the community, we relied very much on social media and word of mouth. I suppose those two things are intertwined. So when we started PiggyVest, very important to know that we didn't have money. So it was very clear that we needed to be smart about how to get people onto the platform. And so we started with people wanted to get wooden boxes. Who are those that wanted to get wooden boxes? So my co-founder, Josh, actually approached one of the people who were selling the wooden boxes to come on the platform and check it out. In hindsight, that was a very smart thing to do. At the moment, it just felt yeah, talk to that guy.

Odunayo [13:09]: And so we started that way and then we started to plug into trends and conversations on social media, especially Twitter. And what we quickly realized, after nine months, was that when people had successful experiences on PiggyVest, they quickly went back to Twitter, much like they would if they had a bad experience, to talk about it. And because we were new, it really sparked up other people's curiosity. So on December 31st of 2016, the first-ever final withdrawal day of the year that we had, everyone was requesting for their funds back after a whole year of saving, and we saw the most insane thing happen. As soon as someone gets their alert hit, they'll go to Twitter and they'll say, "Oh, I just withdrew this X amount of money from PiggyVest with interest. Thank you for helping me save," and this and that. And then people kept doing that, and then they kept on bringing this attention. And all of a sudden, someone who worked in radio, slightly more popular than everyone else, did the same thing, and then there were just this huge explosion of people asking, "What is PiggyVest? How can I sign up?"

Odunayo [14:18]: And for us, people who are building a product without a lot of resources, it became clear that the best way to market this thing is for people to hear about it from other people that they trust. We don't have to spend as much money on traditional marketing and all of these things if we can just keep maintaining good experiences for people because people will talk. And we ended 2016 with I think 460 something users, and then we ended 2017 with I think about 50 something thousand users. And then in 2018 it was 130 something thousand, in 2019 was 700 and something thousand, and now we're going to end this year with close to two million, because the experience is what we decided to focus on. People will speak, just give them a good experience.

Justin [15:10]: So close to two million. That's great. And just in Nigeria alone, to be clear, right? You're just in Nigeria.

Odunayo [15:15]: Just in Nigeria alone for now. We're really close to looking at other markets, but Nigeria is really huge. And I think that there's still a lot of value here, although we will very, very, very soon be looking at other markets and seeing how we can do the same thing there.

Justin [15:29]: Yeah. Well, I was going to ask you about expansion. We should just go to that topic right now. I remember you giving a talk, it was during the New African Renaissance conference where you did that panel with Shola, and Patrick, and so on. And I remember somebody asking you about expansion and you just said, "We're just going to follow Paystack," right?

Odunayo [15:47]: That's true.

Justin [15:49]: And so obviously Paystack now has a mandate to move to some other countries, I'd imagine. And so I'd love to get your perspective on requisite infrastructure. Is it truly that you're just going to go into whatever markets Paystack goes into because they're opening them up or are there other considerations around geographic expansion in particular?

Odunayo [16:06]: I think that for us, one of the most enabling factors for launching in Nigeria was that Paystack had launched a month before, and that meant that the dream of recurring transactions on the person's card was real, and that meant that we could build our own product. So I think that that infrastructure is still very key to whatever PiggyVest can do in any other country. That being said, there will be other factors to consider, like the size of the market vis-à-vis the effort you have to put into it. And also the fit. You have to look at the people's lifestyles and how does recurring transactions fit into it? Do they have the needs that we identified in Nigeria? There's a thing called collective education of the market. Nigeria was just prime in that space that PiggyVest launched that it was just really ready. I say this because we had several products before that that were just slightly before their time and then they failed.

Odunayo [17:03]: So you have to look at the market and look at where is the population at right now? Is there an inflection point coming where this product is going to fit perfectly and then does the infrastructure exist? So in that regard, you might not want to look at expansion as because we're in Nigeria, we expand across Africa, you might want to look at it that which other markets around the world could use this kind of product and have all those factors already working together that we can then go in there and launch with I won't say minimal, but not as much problems as if we launched in say another market. And then potential partners. Potential partners are very important. When PiggyVest launched, we launched in partnership with a microfinance bank and then grew from there. Who would those be in say Ghana, or Kenya, or Rwanda, or Uganda, or Mexico, things like that.

Justin [17:54]: Yeah. And from an organic growth and trust perspective, does it feel like you have to then start scratch in a new market where the PiggyVest brand isn't known? Because it feels like you guys had this slow and compounding growth and built trust, and obviously the product is more mature, but at least from a brand recognition perspective, if you launched in Kenya or in Mexico, it's square one. Is that a fair statement to say?

Odunayo [18:19]: I think if we launched in Kenya, it'll be maybe square 1.5. I think PiggyVest is slightly known there. If we launched in Mexico, it will be a proper square one where you'd have to build brand recognition, and I think that that's where funding comes in. We haven't raised a subsequent amount of funding so far because first of all, Nigeria is going pretty well, and we're going to work on getting several things in place before then raising a subsequent round of funding, which can then allow us to go start from square one another market. We already have these learnings from building from scratch in Nigeria. I don't think that you necessarily have to experience that slow compounding growth again in another market as long as you already did prerequisite research before going to that market to launch. So I think funding is very important when you're thinking about that.

Justin [19:04]: Yeah. And staying on the topic of expansion, but talking more so from a product perspective and vertical expansion. So I've heard you mention in the past insurance, I know you've mentioned crypto, as well. I'm curious, especially as it relates to the macro considerations in these markets, and especially a market like Nigeria, with inflation and with all that's happened with End SARS, how much of that do you take into consideration as it relates to your product roadmap, and how much of it is needing to then also figure out what to prioritize, and how do you select what to focus on?

Odunayo [19:43]: So I think that that's a very important question because we reached a point this year where we started to look at what would be the most useful products for the people on the platform. And I think that when you think of alternative products like crypto, and forex, and all of these other plays, you need to look at the people on platform and then look at what is best for them, and then what is best for the business. We have a forex product and we have a crypto product in the works as well, but what is most important is that the roadmap, we've made some slight modifications, but it's remained largely the same. PiggyVest has close to two million users, and one of the most important things there is that it is officially a mass-market product. Because it's a mass-market product, the need of the people on the platform expands past the need of a niche population.

Odunayo [20:33]: And that means that when you're thinking of product offerings to those people, you cannot just think of the things that you hear on Twitter or the things that you hear on Instagram. You need to hear the people who are using the product and figure out how they are using the product. I'll give an example. For instance, there's been a lot of conversation about how the Naira is not what it used to be and how are you going to hedge against it. But here's a product that has, again, quite a number of people, and one of the things that you must realize about in Nigerian market is that for some people, currency devaluation isn't even a conversation they can afford to have because they don't have enough money. And we made the mistake of thinking that if people are engaging with digital products, it means that they have money or it means that they're very well to do, but that's not necessarily true. There was something I was reading the other day and it pointed out to me that if you are earning 150,000 Naira in Nigeria, you are in the top 1.8% of the population.

Odunayo [21:33]: That's incredibly insane when you think about it. And then when you abstract that to the conversation you have about cryptocurrency, about Forex, you start to think about it very, very differently, that there is so many people for whom Naira is still the daily reality. And so that's how you have to think about the product that you offer to everyone is who are you speaking to and who's likely to use it? And one of the things that we pride ourselves on at PiggyVest is that we continue to make products that everyone can use. Everyone. Affordability, accessibility is how you have to think about everything, including cryptocurrency savings, including insurance, including any kind of product you want to offer digitally in the fintech ecosystem in a way that's sustainable for their day-to-day lives and that fits their Nigerian reality. And so that's how we think about products that we offer. So sometimes it might seem like we're just waiting and watching, but that's really what we're considering.

Justin [22:33]: Yeah. And it's so interesting, there's always this question about how deep is the Nigerian market when these consumers don't have a lot of money, but it seems like it's PiggyVest's belief that if you design products correctly for the average Nigerian, that there's demand. And as long as you make it accessible and affordable, to your point, and design it in a way that fits their realities, then you can grow, I mean I don't know, it can grow to 50 million users in Nigeria or something like that.

Odunayo [23:04]: I mean for you to continue in this business, you have to hold that belief. So yeah, I definitely think that. I think that a lot of us, PiggyVest and all the other fintech companies, believe very much in the fact that there can be value that can be created, and there can be wealth that can be created if you allow people to start small, give them the infrastructure that allows them to start small. And out of a lot of the messages I got, I had maybe 10% of them telling me that, "What you've built is not just a business," and that's incredibly moving.

Odunayo [23:35]: I had someone who said he saved for two years to get a laptop. He saved for two years to get a laptop and now that laptop that he got is now compounding his income. And I think that it's incredible that just the availability of this platform is why he was able to do that. Clearly, I'm not saying that fintech is the be-all and end-all for wealth creation, I just think that it's making a dent. I think that if you create accessible average products that everyone can use, that goes back to the basics of financial planning for people, then I think you can be able to make a market that's previously not there.

Justin [24:07]: I'm curious to hear what you think about competition, because I think where this conversation is going, and certainly the premise that I wanted to start this conversation with is that your competition, PiggyVest's competition, was the wooden box. But as you start to talk about insurance, and as you start to talk about crypto and forex and remittances, there's a very interesting thing that's happening in Nigeria, which is every fintech seems to all of a sudden become the same thing. You know what I mean? Everyone's offering, has some sort of mobile wallet, is doing remittances, is adding crypto. And I wonder if you have a perspective, as a builder, on as you look at expanding your products, do you say, "We don't care what anyone else is doing because we have more users than them," or is that not even a consideration because the opportunity set is so wide because, again, your competition is non-consumption?

Odunayo [25:00]: Well, I mean I definitely care. I don't know why people say they don't care about competition. You have to care. Come on, they're building the same thing as you and attacking the same market. Anyway, so I think that there was something I was talking about on Twitter the other day is that that's what fintech is. Fintech is going to come, look at financial services, break it down completely unbundle it, hopefully make it better, and then start to rebundle. Everyone started like, "I'm a savings company and a loans company," and all of a sudden you just can't see the difference between everybody again. I don't see a problem. I think that as you build, your users ask you for things, and you have to, based on your data, make those decisions whether you want to launch those products or not. So I think that's what's happening. It's a rebundling, but it's not new or different than what was expected. This is exactly what was going to happen, maybe a bit earlier than I thought, but very interesting to watch, but certainly the only person who wins here is the consumer. They come first.

Justin [25:59]: Yeah. And Paystack. Paystack wins too.

Odunayo [26:02]: Oh yeah, always. Paystack always wins. And Flutterwave. They process all the payments. We all use the same people. And one day, we're all going to be building fund managers and banks, and we're going to all have started as apps, and I think that's very interesting. I think in maybe two, three years, it will be so much consolidation of these products and it's going to be very, very, very interesting to watch.

Justin [26:25]: Do you think that the ecosystem and those who are building in the ecosystem are open to that sort of consolidation? Is there going to be the X.com and PayPal style mergers that we saw in other markets? Because it's like everyone wants to have their own company.

Odunayo [26:42]: From a Nigerian perspective, I understand why everyone wants to have their own companies, but I also think that it really depends on who you speak to. The people I've spoken to have mostly been open to it in theory. I think the problem is usually in practice. How does it all work out? But I think that at some point we will not have a choice. At some point, we need to come together to form stronger entities that can then stand the test of time. Of course, I could be wrong, but that's just how I see it. I think that because of the kind of volatility that the Nigerian economy experiences, you're going to need a lot of strength, and strength is usually when you come together and attempt at these things. I definitely believe more in collaboration. We always maintained that we don't think we can do everything, and so we're always open to working with people who can, and I think that's important to keep that state of mind so you don't run yourself crazy trying to put your hand in all of the pies.

Justin [27:47]: Thanks as always to MFS Africa for their sponsorship of this episode. Earlier in the show, we heard from Abdul Hassan, the co-founder and CEO of Mono, on open banking and API infrastructure. And in an environment with limited data on something like consumer spend, for example, we can see how open banking can create even more opportunities and insights for businesses on the continent.

Abdul [28:04]: So I think one of the interesting things that could eventually come out from what we're doing is an enterprise solution where, as a company, you can do competitive analysis. You want to understand, for example, let's use e-commerce, there's Konga and there's Jumia. Jumia wants to understand what Konga customers are buying. How much are they pay for items? At the end of the day, Mono has all this data. Those things are anonymized. Jumia wouldn't know that this is Konga customer, but we will tell them this is what people are spending money on the most in this segment. So we could do all those data analytics. So if we have a lot of merchants on board and then those merchants have millions of customers, everything then get connected. There's definitely a network effect.

Justin [28:54]: That's it for this week's episode of The Flip. Next week, we're back in Kenya to talk with a Y Combinator-backed startup building tools for informal retail on the continent. See you then.