14 Feb The power of partnerships for tech startups
South Africa has been put on the map as a “big four” tech start-up ecosystem, with partnerships in the tech space skyrocketing in Africa over the last few years, writes Ashleigh Butterworth, content marketing specialist at Finch Technologies.
Africa is fertile ground for technological advances and the development of internet infrastructure is boosting this growth.
According to the World Bank, by 2025 the internet economy is forecasted to reach $180 billion. In addition to this, if there is just a 10% improvement in internet connectivity, the GPD is likely to be boosted by 2.5%.
Seeking out partnerships with the right players is not only essential in building better products, but also in improving digital literacy and financial inclusion.
Looking at examples in financial technology, here are a couple of partnerships leading the way in South Africa:
After building a successful platform, website, or product, both large enterprises and start-ups can face similar stumbling blocks. Growth can reach a standstill when any business lacks the resources and customers needed to stay afloat.
“Tech partnerships and integrations are a growth lever, they allow oppositions to build better, more intuitive and integrated products and solutions faster, without the need for “know-how,” says Michael Bowren, co-founder of Finch Technologies.
Software as a service (SaaS), greatly benefits from integrated solutions because it allows for more functional products. It is a win-win situation for both parties involved.
Organisations that use these integrated solutions have seen a decrease in the sales cycle, costs per lead (CPL), and churn.
In the financial services space, integrated solutions have helped fix an extremely broken onboarding process. Solutions like Gathr from Finch Technologies make an impact by assisting large enterprises with digital onboarding solutions that have seen increases of 44% in product onboarding completions.
This is a great example of a tech partnership where enterprises that don’t have an internal solution are able to quickly innovate.
Companies like PayFast, Finch Technologies, Loop, and Stitch have seen the value in partnering with innovative start-ups and solution providers. API fintech Stitch works closely with partners such as Yoco, Pay@, Adumo Online, dLocal, Peach Payments and others to offer instant EFTs on their payment gateway platforms, alongside that Loop developed a delivery management software and partnered with Checkers60.
Similarly, Finch Technologies worked closely with VodaLend Compare to offer personal loans via their app and PayFast launched a new merchant-financing service in partnership with local fintech lender, Retail Capital, called Easy Advance.
“If it weren’t for partnerships with other tech and financial services players, it’s safe to say that PayFast wouldn’t be what it is today,” says Colleen Harrison, head of marketing at Payfast.
“Through our partnerships with pre-built platform integrations and alternative payment methods, we have been able to bring new solutions to market quickly and seamlessly. The key to a good partnership is having a common vision to not just further each other’s business interests but also to disrupt and benefit the market at large.”
Partnerships in tech don’t always need to be technology based. If we look at business finance online marketplace FundingHub, they’ve attributed their success to the affiliate partnerships as well as the technology. An online marketplace is beneficial to both parties.
The lender doesn’t need to spend their budget on generating more leads through online solutions. And, the marketplace platform can make its revenue off commission.
“Finding the right partners takes time and effort, once you’ve found them it’s about delivering on your promise, hearing their needs and aligning expectations,” adds Lara du Plessis, head of partnerships at FundingHub.
On the flip side comes the need to partner with tech companies with the intention of building networks and leveraging each other’s connections. Tech start-ups are all driving a common goal on the continent – to digitise products and services in Africa. Creating a community in the tech space is a critical component and can take many forms.
As tech innovation rises so does the need for networks that facilitate learning, communication and growth. Platforms like Innovation City give entrepreneurs and world changers the opportunity to accelerate digital innovation by fostering co-creation.
While Women Who Build Africa offers an intentional community that brings together women and non-binary people working in or around the tech space across the continent and in the Diaspora.
Being part of these communities allows start-ups and entrepreneurs to exchange information, but also create long-term relationships that bring mutual benefits. According to Zippia, 78% of start-ups see success from networking and for tech teams especially these events can catapult a company’s growth.
“Partnerships in tech are critical, but for fintech it’s everything. As a fintech start-up founder, who is not coming from a banking background (like most founders with successful start-up founders). Platforms, forums, and conference panels are a great way to create these partnerships and most importantly allow us to share Airbuy’s big vision and make stakeholders understand how we see the future of an inclusive Africa,” says Njabulo Makatini, co-founder of Airbuy.
A common error for tech start-ups can often be marketing and PR tunnel vision, with the purpose of only promoting your brand. Start-ups can see greater impact then they encourage open dialogue with competitors. Panel discussions and virtual chats provide the ideal platform for sharing thoughts about a common topic. These discussions allow start-ups to unpack their product offering, dive deeper into tech trends and leverage the communities of other panellists.
Thea Sokolowski, head of marketing and communications at Stitch, says: “Ultimately, it’s the goal of start-ups across the continent to collectively see the ecosystem thrive. At Stitch, it’s our mission to make it easier for businesses to launch and scale.
“Part of that means providing them with reliable financial infrastructure, but it’s just as important to open our own network, knowledge and access to resources wherever we can so we can all continue to build on work that’s already been done, versus continuing to reinvent the wheel.”
The end goal? The ultimate sign of making it in the start-up space is either being acquired or at least being presented with the opportunity to exit. Partnerships provide the ideal roadmap to get to this triumphant position, you just need to be strategic about forming them.