The Next Best App is African and Going upnup!

Tony Mallam is upnup’s Managing Director and a seasoned media entrepreneur and venture capital advisor. Tony bought KFM Radio in 1996, with the popular media personality Kevin Savage, and the Ethos Private Equity team, which was the start of his journey as an entrepreneur. They ran it for four years before selling it. Tony then went on to invest in Clickatell, which has grown into a global business based in Silicon Valley.

Tony was a part of the SABC’s restructuring team, which he joined after qualifying as a chartered accountant and doing his articles. He ended up in radio, working with the big commercial brands like 5FM, Metro and Highveld, as well as the advertising sales unit. For about 9 years, he was a partner in a venture capital advisory firm, Cape Venture Partners (CVP). They did a multitude of capital raises, advisory services and entrepreneurial development work, before he was sucked back into radio. He set up a new station in Cape Town called Smile 90.4 FM, got the licence and the funding and ran it for a while before being asked by Times Media to set up their radio division.

Here are Tony’s answers to our Member Q&A:

Q: Who are you guys as a company and on the whole, and why are you sorely needed in this world?

upnup app is Africa’s first passive micro-investing app and the first fintech platform in South Africa that allows you to reward yourself after every purchase by accumulating funds through its roundup and add up options. With upnup, a user can choose to automatically invest in Bitcoin or preserve savings in a ZAR wallet by rounding off their change during a purchase.

South Africans have a very poor savings culture, in general. A recent study on South Africans savings habits found that while many wanted to save, they found formal savings offerings to be overly complex and intimidating.

However, with the rise of digital technology, saving and investing can be done at the touch of a button. In fact, in Africa living from pay-check to pay-check is common in African countries, but Mobile Money is changing this way of living. According to a report from the Boston College Economics Department, Mobile Money users are 10.9% more likely to save than those who do not have a Mobile Money account.

The average consumer probably does several transactions every day, and because of the pandemic, a lot of these transactions are likely to be done with cards. This is precisely why micro-saving and investing using digital methods over traditional bank or ATM deposits makes perfect sense.

Q: Do you have any latest company news to share? 

A: Our focus is on providing citizens with stable alternatives to traditional savings options and allowing them to personally store their micro-savings in the form of bitcoin or USDC in a personal wallet or withdraw them as they accumulate to use or save elsewhere. As such we’ve recently launched bitcoin withdrawals from the upnup platform and added USD Coin (USDC) micro-saving to our service offering.

Users of the app who have saved up bitcoin can now choose to withdraw their savings and store them in a cryptocurrency wallet or convert them to South African rands. This is great news for our growth in that we’re expanding and offering a greater variety of micro-saving and investing options to upnup users.

Q: Where did the business concept originate and how has the journey been so far? 

Well, we were struck by the reality that most people in the country don’t see it through to the end of the month and have nothing left to save. Our feeling was that the best way around this was to develop a plan or an app, to encourage savings and micro-investment.

The bottom line is that we wanted to get people to start using the app to create this culture of saving. We started with Bitcoin as the foundation.

We’ve had an incredible ride so far, gaining a huge amount of interest from the Press who have featured our product launch and updates quite regularly. Of course, as is the case with any startup, we have had the usual challenges and roadblocks along the way but this hasn’t stopped us from building to where we are today.

Q: Anything interesting happening in the future for your company/company’s CEO, etc? 

We have a roadmap filled with exciting product updates that we can’t wait to share with our new and existing users but from a high-level perspective we are currently undertaking a fundraising round. This will help us achieve the next part of our journey which includes expansion to additional regions, potentially even the South-East Asian market.

Q: Can you give us a real-world/practical example of how your product/service works?

One of philosophies is that South Africans should not be held back by old-school methods of saving, like the piggy bank, hiding money under the mattress for fear of traditional investments dropping, for example. With the majority of South Africans using mobile phones and bank cards, it was a no-brainer that they should be given the option to diversify their investment portfolios through the use of our technology.

The upnup platform operates solely off of the user’s bank account transactions. As you accumulate daily transactions, the platform accumulates daily savings. It’s like tipping yourself for good work at the till point. Instead of spending your tips right away, you invest them in Bitcoin, a non-traditional asset whose growth has exceeded expectations, and one that the world is slowly adopting more and more.

Q: What are some of the challenges you’ve faced as a startup in South Africa?

We’ve seen various cryptocurrency scandals such as the FTX scandal shake the world. Although our message from day one has been for micro-investors to stay away from fad-coins and stick to bitcoin, these scandals have seen some become reluctant to choose cryptocurrency to micro-invest. We’re confident in our messaging that USDC which remains 1:1 with the US Dollar and Bitcoin are the most reliable cryptocurrencies to invest in and will continue to educate consumers about the risks of memecoins, fad and other coins.

How we’ve launched is that we’ve gone the way of saying, let’s get the mechanism in place, let’s get people to buy into the concept and get them into the habit of saving regularly in small amounts. We’re certainly not advising people to rush in and put their house on Bitcoin, but what we are saying is take a little bit of money every week and here’s an opportunity to get into crypto if you’ve never been in it before.

This is an easy way to start your savings journey and rather than just put it in a low interest-bearing account, I take that little bit of money and give it a bit of interest using Bitcoin.

Q: Who or what has been your most helpful ally?

South Africans have, understandably, long been cautious when it comes to the security of their banking details and where they log into their accounts. The country is, after all, host to tens of thousands of financial crimes every year, with losses totalling more than R300 million. According to the most recent report from the South African Banking Risk Information Centre (SABRIC), debit card-based crimes increased by 22% from 2019 to 2020. In the same period, there were zero reports of banking app software being compromised to commit fraud.

Our most helpful ally has been the payments and data API Stitch, which allows customers to link their financial accounts to the upnup for the purpose of making fast, secure payments. Upnup uses Stitch’s technology to automatically transfer funds from our customers’ linked bank accounts into their Upnup wallet.

Given South Africa’s poor savings culture, it only makes sense to empower people to save. Technology is increasingly allowing them to do so and build their savings while they spend. Misplaced fears about financial crime and safety shouldn’t stop them from exploring these options.

Q: What’s on your business growth wish list?

Our user base is our first priority given our mission to increase the number of South Africans with at least some savings. We’ve added USDC and withdrawals to the platform following user growth and then we’re going to add things like fractional shares and savings accounts. In the future, we might look at alternative investments like solar exchanges.

Q: What is your take on doing business in South Africa?

We’re in full support of the work that the government is putting in towards formalising cryptocurrency investments in South Africa through the implementation of regulation over the last year.

While the South African Revenue Service (SARS) has long treated earnings from cryptocurrencies as income tax, the government has made it clear that it believes more interventions are needed. Last year, SARS issued a guidance note to banks discouraging them from cutting off companies that offer cryptocurrency services. Essentially, in the past, if you were a business that dealt with cryptocurrency, there was a risk that your bank might actually refuse to do business with you and close your accounts. What this guidance is is really minimising or taking away that risk. So, if you’re in a business that is dealing in cryptocurrency, cryptoassets, or blockchain, you are now in a better position and it will actually encourage the growth of blockchain and crypto businesses, I do believe, in South Africa.

We’re seeing positive regulation from South Africa’s advertising authority early this year and expect to see further support from the government in the future.

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Contact number: +27 21 753 3645