Inside GetEquity’s arduous pivot to profitability

GetEquity, a Nigerian fintech platform that capabilities as a digital market for personal capital, started within the enterprise capital growth in 2021. Its mission to democratise enterprise capital for on a regular basis Nigerians felt not simply well timed, however inevitable. Retail traders crammed a $50,000 startup spherical in an hour, and development charts climbed. 

However by 2023, the narrative had fractured. A historic naira devaluation and a continent-wide enterprise capital freeze threatened to erase the blueprint. GetEquity’s startup journey wouldn’t be about scaling a dream, however engineering a survival, one that might pressure it to desert its authentic thesis and uncover a extra basic fact concerning the African funding panorama.

Day 1: The unintentional neighbours

Jude Dike and Temitope Ekundayo first related on-line in 2020. Dike, a blockchain engineer, was making an attempt to construct an trade for startup investments. Ekundayo was engaged on a enterprise intelligence instrument. They had been chasing completely different issues, entry to market knowledge and startup fundraising, however noticed the identical market hole.

After talking nearly for months, they determined to satisfy. 

“I requested Jude for his deal with,” Ekundayo recounts. “He tells me, and I’m like, ‘You’re my neighbour.’” They lived on the identical road. 

That serendipity cemented their partnership. Becoming a member of forces, they merged concepts and entered the Mozilla Builders Accelerator, an incubator program that centered on applied sciences that formed the web, in 2020, constructing the primary model of GetEquity. 

The premise was daring: to let retail traders fund African startups the identical means folks participated in crypto token gross sales. The corporate secured a $100,000 pre-seed from Greenhouse Capital in early 2021 and launched that July.

The timing appeared good. 

“We launched in 2021, and that was a extremely good yr; we had been rising at 15 to twenty% month on month,” Dike says. 

Their first deal, a $50,000 elevate for a startup, was crammed in below an hour. It was a enterprise capital fantasy. However on the planet of startups, the story isn’t a straight line.

The early success of 2021 masked a rising structural downside. GetEquity had constructed what Dike calls “technical hubris”: a collection of merchandise like Worker Inventory Choice (ESOP) portals and inventory administration instruments.

“We constructed a instrument, however actually, it’s not what folks would need at the moment,” Ekundayo admits. It was a ‘vitamin,’ not a ‘painkiller.’ When the naira devalued in 2023, the chance of funding US-based belongings with native foreign money turned a gap they couldn’t ignore.

“2023 was our worst yr ever,” Dike states bluntly. The platform was constructed for a enterprise ecosystem that had immediately evaporated. Income from startup offers dwindled as the price of every thing soared. Their authentic thesis was crumbling.

It was a second of brutal readability that many founders face. They’d constructed a complicated engine, however the gasoline—VC offers and investor urge for food for them—was gone. They needed to discover a new gasoline or the machine would cease. Their participation within the 2023 Techstars accelerator, an ARM Labs Lagos program, supplied the framework for a determined experiment.

Day 500:

Pressured to look past startups, the crew started testing new asset courses with their consumer base. They began small: a commerce word, a debt word for bike financing. The outcomes had been encouraging however modest. The breakthrough got here with an thought so standard that, in its context, it was radical: industrial papers.

These short-term debt devices from giant, blue-chip companies are staples of conventional finance however had been largely inaccessible to the common Nigerian investor. In early 2024, they ran a check with a Dangote Sugar Refinery industrial paper. They estimated curiosity of about ₦10.5 million ($7,400). The end result surprised them.

“By the primary day we put that out, we had executed about 4 million. By the fifth day, we had crossed 27 million,” Dike explains. The product-market match was explosive. By the tip of 2024, that they had facilitated almost ₦300 million ($200,000) in industrial paper investments. The experiment was now not an experiment; it was their new enterprise.

This pivot modified every thing. Partnering with established asset managers who sourced and vetted these offers meant GetEquity now not wanted a big inner due diligence crew. The corporate needed to restructure, painfully. In 2024, GetEquity laid off 40% of its workforce after a shift in operational technique.

“It was an amicable departure,” Ekundayo explains, noting that the workers themselves had hinted at downsizing as a result of they noticed the roles turning into out of date because the mannequin shifted. 

The layoff, coupled with the capital-light partnership mannequin, achieved a vital aim: profitability. GetEquity had traded the high-risk, high-cost VC mannequin for a leaner, extra sustainable brokerage engine.

The pivot additionally revealed a hidden superpower. The digital infrastructure they’d constructed for startup syndicates, the portals, the dashboards, the funding flows, was completely repurposable. 

“GetEquity is definitely a buyer of its personal product,” Dike notes, utilizing its personal platform to distribute offers to its retail group. They’d by accident constructed a white-label answer for all the personal capital market.

Day 1000: 

For GetEquity, the breakneck development of 2021 has been traded for calculated scaling from a place of operational effectivity. The corporate is now working to formalise its new path,  searching for a digital asset custodian licence from Nigeria’s Securities and Alternate Fee (SEC) to solidify its standing. This transfer aligns with a key lesson from their turnaround, as Dike notes, “Your regulators really wish to see you thrive.” 

GetEquity’s focus is on the Nigerian market; Dike and Ekundayo have shelved enlargement plans for Kenya. Their roadmap includes introducing extra personal capital asset courses with asset managers like ARM. 

Though constructed for one objective, the corporate has discovered a extra sustainable gasoline, and the founders’ mission has shifted from disrupting the system to turning into an important, digitised a part of it.