alot isn't a word = agreed, thanks, should have remembered that from my Kenyan school teacher's insistence on perfect grammar. Google hasn't been that helpful since..
Is there an actual proposal somewhere we can view, or are we expected to take everything at face value? - Not at the moment, but doing it should be easy given how many questions I have had to answer to Seedcoin in the past and my research on the ground both when I traveled there last year and from people well acquainted with the respective countries.
I've looked at your pitch deck, the comments below apply to it as well.You need to give us a great deal more detail about how you will be complying with Australian regulations (I assume this is where the legally registered company is), as well as South Sudanese regulations (among other countries you're planning on entering into). Being part of "Seedfunder II - The Money Returns" doesn't imply any due diligence has been done on behalf of the investment community, you need to flesh that out in your proposal.
Australia:
For Australia, as a company we will be offering a depository service via our bank related account. However when we open physical branches, an AFS(Australian Financial Services) licence will definitely be required as we will be handling client money at whatever offices we have.
I have no current interest in opening offices as that just adds to costs and reduces the scope of how cheap a price I can offer to draw clients to me. Cost for the license is about $10,000.
South Sudan:
No compliance requirement at the moment, just the standard need for company registration and all the legalities needed for the average company.
Kenya:
Now this is the real challenge as they require a deposit of USD200,000 minimum. My focus here would be Bitcoin and btc trading, which has yet to be classified but may fall under the forex licence requirement that has less stringent requirements usually about KSH60,000. This will remain so until I have proven my remittance solution between Australia and South Sudan is actually gaining traction.
Uganda:
Remittance licence costs about USD2600 or whatever the BOU deems necessary based on how much you as the company are handling from clients. Dahabshiil and Amal are already operating there.
I am an African that currently lives in Africa, and I am surprised at the lack of clarity about how you will get agents on board. Having been up-close-and-personal with Vodacom's failed attempt at bringing M-Pesa to South Africa I can tell you that bringing agents on-board isn't hard or complicated if you know what leverage to use, but if you're going to operate from outside of the country it will be downright impossible. You haven't elaborated on whether or not Anyang Majok will be based in Australia or not. There needs to be plenty of detail about how you're going build that agent network.
You are correct, bringing agents onboard is really not the hardest thing here. Note that on our site, we have a list of people that we are starting out with and that will help build the network in each target country that we have specified(
https://www.tagpesa.com/meet-the-team).
Another thing, Anyang left Australia a few years ago and has been working for the Bank of South Sudan since then. He is literally a strong link in this agent setup as our major startup focus is South Sudan.
You need to elaborate on how you're going to provide support for that agent network. Who will be Anyang's support, if anyone? The same goes for Uganda and Kenya.South Sudan is easy, Anyang can easily get upto 4 people onboard within a week should we consider this necessary but we have to walk before we can run.
With a few people and offering a very good transfer rate of less then $2 approximately for each $100 transfered, we will start to iron out any issues with replenishing amounts in various locations in our agent network. By the time we are dealing with more than $500 for each customer, we would have Ironed out any problems that we are likely to encounter.
I've conducted incredibly large amounts of business in Zambia, Kenya and Tanzania. Often times, especially with foreign companies, regulatory hurdles are...created to make sure everyone is cut in to the foreign money.
I have lived in Kenya for over 10 years, and know my way around the system. You will note my strategy is that locals own at least 10% of the company registered in each country to ensure the holding company interest and theirs align. We have James on board who has been a tremendous help so far in regards to dealing with anything unforseen.
Our Kenyan Lawyer was recommended by him and so far has steered us right. I have had at least 5 meetings with him in the course of setting up the kenyan company in person last december. Make no mistake, there is still a lot of work to be done. For Kenya, our major focus really is Bitcoin trading as they have enough of an internet infrastructure to make it worthwhile as their interest in the technology picks up.
Getting a remittance license requires a deposit of at least USD200,000 in one's account which may or may not be held indefinitely there depending on the central bank of Kenya's(CBK) specific request.
You have not elaborated on how you will deal with this, nor have you detailed who your agents are in South Sudan and what groundwork they have made in ensuring compliance.Firstly South Sudan has more things to worry about than a targeted remittance license. Standard requirements for company registration are what are needed unless you happen to be a Bank. When I was there in December 2013 just before the Civil unrest broke out, I found out that they are still working on this and other regulation with some assistance from the world Bank. None of which has yet to be passed by the parliament given what followed immediately after i.e. civil war or whatever you want to call it.
Things are slowly getting back to normal..
Safaricom is going to come after you for the TagPesa name, I guarantee it. The name is too similar to M-Pesa and can easily cause brand dilution or brand confusion for them. You have not mentioned this at all (maybe some sort of SWOT analysis is a start).
Well the word "Pesa" in Swahili simply means money, you may be correct in that they do what you have stated above. In that case THANKS FOR THE HEADS UP, my discussions with our company lawyer in the past made aware that I have options of registering the name as a "Brand" that can not be used by someone else nor challenged, I will be in Kenya next week and will follow this up.
Another thing of course is, Safaricom will have to go after other companys using the pesa name e.g. pesapal, pesapoint, kenyapesa e.t.c. I have yet to hear of this happening so I take it the risk is rather low in regards to tagpesa.
iOS and Android apps? Really?? Nobody needs them. Your target demographic, both the users and the agents, need USSD access more than anything. This requires significant infrastructure in tooling up and/or partnering with WASPs in South Sudan and in Australia (or whatever the equivalent of a WASP is in those countries).
Honestly, its a case of making sure the right tool in this case whether an app or USSD is easy to understand and use. Another thing is that you are assuming that old feature phone are the growth market rather than android, which are suprisingly in vogue especially with the younger demographic.
I assume you have done rounds in places like Kenya and looked at the latest and cheapest phone that are on sale. If You haven't, just take a look at this article for a different perspective on why an app is a genuine reality -
http://techcrunch.com/2012/12/10/50-android-smartphones-are-disrupting-africa-much-faster-than-you-think-says-wikipedias-jimmy-wales/Granted, ioS may be a stretch given the cost for the average person, however that will not be my focus when I start on this, android definitely is. The people who will notice Bitcoin definitely have a feature phone of some sort and hail from the younger generation.
Another thing trying to get a deal together with a phone company for the use of their USSD capability is an idea not worth the time unless you own the company of course. If you were the phone company, would you offer your platform for something you can do yourself! I think not. Remittance is an idea that has been on my mind for years long before I heard about Bitcoin, I had discussions with companies like Tagattitude in france -
http://www.tagattitude.fr and their advise don't even bother trying the approach you just mentioned. Their experience with thousands of interested people who don't own the phone company, but want to make use of USSD feature has never been great.
I understand that, as a startup hiding behind an "incubator", you don't have to produce any financial data whatsoever. But it would be to your credit if you had some predictions and some financial data to-date.
I have predictions and a simple analysis given my knowledge of South Sudanese Australian remittance to East Africa.
Besides some low-res screenshots of an Android app and of the website there is no indication as to where you are in the process. Are those just mock-ups and this is just an idea? Or have you started development?
As explained previously, there are two parts to my whole approach. There is a complete bitcoin trading platform already developed by Tagbond and whose owner I have agreements with to make use of their APIs. So those are real existing app already done by the phillipino based company and available for my own use. The company employs more then 10 people who are actively developing this and related platforms.
Now being a bitcoin related platform, means that I may not be the most welcomed Bank customer in Australia, just ask Coinjar. With this in mind, I have a secondary solution targeting users that have very little to do with Bitcoin for the moment, which is most of my community. I plan to Brand this as coinremit and is a USD based solution, which should not meet any problems with any of the Australian Banks.
This is where the Android app and my agent based network comes into play. I am currently working to get the trading platform into place while building my coinremit platform with aim of meeting all australian requirements so clients should feel comfortable doing this.
You have not created any confidence in your ability to secure funds. Cryptocurrency holding services get hacked on the regular, and require an incredible amount of detailed forethought, planning, and skill to secure. You haven't mentioned - at all - how you plan on securing your user's money whilst you hold it.
Securing the user's funds(btc) is being done by a company that is already in operation and doing that at the moment i.e tagbond.
You have not detailed how you will move fiat around. If your target is cross-border transactions, you will need to have a large fiat float in the receiving country (or countries) that is regularly topped up by wire transfer or whatever. Moving large sums of cash into the country is rife with regulatory and tax concerns, all of which remain unaddressed by you.
I will have a company registered in each country that will work with each network of agents in question to ensure each movement of fiat does not face any challenges. Kenya, Uganda and South Sudan(Juba) have a fairly decent banking infrastructure with the same bank often having centres and branches in this countries.
Our Bank of choice literally has Branches in all 3 countries, so that will not be an issue.
Your market may be bottoming out before it has begun: http://www.iol.co.za/business/companies/vodafone-joins-moneygram-to-spread-m-pesa-1.1646234 - you need to address how you will compete with that (going back to the SWOT analysis suggestion).
Simply put competition is going to be at the cost level. The above is no news,so you should know, Mpesa already has linked up with Western Union, I have sent money to an Mpesa Wallet from my western union account several times, but the cost hasn't exactly been that great.
To send $100 dollars costs $10, which is 10%, we are offering 3% and its going to go down from there as competition heats up. To be effective, we intend to be always lean and cost conscious.
Another thing that you may not be aware, my target market is the frequently mobile East African who often would rather hold dollars, just to reduce the cost of frequently having to trade their home country currency across different local currencies as they travel.
Alot of them usually get this money in a remittance format and would rather have the USD dollars. MPesa is not serving this market adequatly enough otherwise dahabshiil and Amal would not have been growing for the last few years.
There seems to be some confusion around this "exchange" thing. Are you planning on operating a cryptocurrency<->fiat exchange that anyone can trade on? Why bother? Who will use the exchange? How will you secure it? How will you scale it up?
There are two parts to this, a cryptoexchange that can deal with bitcoin trading and fiat conversion using already created apps by Tagbond and a USD dollar based remittance solution called Coinremit that is literally be worked on at the moment.
Why bother? Who will use the exchange? How will you secure it? How will you scale it up?I bother to do it for the simple reason that I believe Bitcoin is going to gain traction and grow; and as it does I want to be part of its growth story in East Africa.
As for Security and scaling up, Tagbond & tagcash system is already in use at the moment. I am sure if there are any problems, the development team of more then 10 people can handle it. As for scale, it's runing on AWS and ready to handle more then I will likely ever have a chance to throw at it.
I think that's all I can think of offhand. As it stands, Seedcoin inspires no confidence in institutional investors or even casual observers. If you want money through their fund-raising efforts YOU are going to have to do the hard work of proving that this is a viable venture.
Fair enough, I have answered the above questions as best as I can. If there are clarifications needed, please shoot away.
