MATTHEW BUCKLAND: Start-ups make a marked difference in informal sector

A criticism of the country’s nascent start-up scene is that the businesses being created are irrelevant to the actual needs of the country. Entrepreneurs are often dazzled by the shiny things that come out of Silicon Valley, but in reality they are appealing to SA’s middle class, as opposed to 90% of the population.

It’s a missed opportunity, because the informal sector offers a chance to come up with unique and creative business models and work with a large, untapped potential market. Not all start-ups have that Silicon Valley mentality. In fact, there are start-ups that are very much trying to solve SA problems.

These include bringing e-commerce and connectivity to townships, tackling fires in informal settlements, providing management software to taxis, giving more employment options to domestic workers, and bringing the unbanked to the formal economy. Here are some of these start-ups that are making a difference:

Pargo is a courier and logistics company that claims to “solve the challenges of last-mile distribution”. The company wants to create access to goods and services for everyone in Africa. It looks like it is well on the way to fulfilling that mission, boasting more than 1,500 pick-up points, many in hard to reach rural areas or informal settlements with no fixed address. https://pargo.co.za
It started off as a university thesis and then became a full-blown business. Lumkani is a social enterprise start-up aiming to solve the problem of shack fires in informal settlements via a tech-based early-warning system. It measures the rate of temperature increase, then sets off an alarm, alerting other networked devices in neighbouring shacks that there is a fire. Text messages are sent to those affected in the community with GPS co-ordinates of where the fire started. Since 2014, Lumkani claims to have distributed detectors to over 11,000 households. https://lumkani.com
In the domestic worker space, SweepSouth brings an Uber-type sharing economy model to the world of domestic workers. It is run by a husband and wife duo headed up by Aisha Pandor, who is CEO and daughter of education minister Naledi Pandor. SweepSouth has significant traction with 80,000 customers and over 7,000 registered domestic workers. Many households can’t afford to pay more to domestic workers, and many can’t afford to employ domestic workers full-time at fair rates. The sharing economy model alleviates this by sharing work among networks of people who pay fair rates and cumulatively allow domestic workers to earn a decent month’s salary.
This country has one of the lowest savings rates in the world, and a start-up called Franc wants to solve this. The company aims to make investments accessible via a mobile app that allows members of stokvels to invest in low-cost ETFs or money market funds. Unlike most investment products in the country, Franc is bottom-basement cost, does not have complicated or hidden costs, and is flexible when users want to withdraw their money. https://www.hifranc.com
Also helping South Africans save is micro-savings mobile wallet Prospa, aimed at low-income savers via a mobile savings app with no monthly fees and no required minimum account balance. It uses the power of group saving to maximise interest rates for savers. https://www.prospa.co.za
Tackling the issue of connectivity in rural areas and townships is a Wi-Fi tech company called Ikeja, which allows residents to purchase mobile vouchers to access the internet. It already has a presence in townships like Nyanga, Gugulethu, Khayelitsha, Delft, Tembisa and Katlehong. https://www.ikeja.co.za
CodeX is a Cape Town-based start-up boosting tech and coding literacy in the country. It offers a one-year coding programme that trains and then helps place young talent as software developers into companies. http://www.projectcodex.co
Trying to combat the country’s high crime rates is an app called Namola. Users are able to make emergency calls without using airtime, and it claims 200,000 downloads, with 10,000 emergency calls made so far. The app is apparently big in Soweto.
https://namola.com
Jonga is another start-up playing in the security space. It is a low-cost, community-based alarm system for townships and low-income communities. It involves a motion sensor module and mobile application that detects and notifies homeowners of intrusions.
http://jonga.co/
Quickloc8 works with the local taxi industry, allowing owners to manage their taxis better with smartphone technology. It provides real-time tracking, GPS location, notifications of drivers’ shifts, and information on how many trips taxis made between ranks. It also reports speeding and accidents.
https://www.quickloc8.co.za