Abdulhamid Hassan is the CEO of Mono, a data startup that is “powering the internet economy” in Africa. At the start of the year, we mentioned Mono as one of the startups to look out for in 2021.
It wasn’t a difficult prediction as Mono had already raised $500,000 in a pre-seed round. The company also got into one of the most important accelerator programs globally, Y Combinator, where they received $125,000 for 7% equity.
Alongside companies like OnePipe and Okra, they’re helping businesses to get customer financial data. It means that some of these startups have a place in Nigeria’s recent conversations on Open banking.
According to Abdul, “Open banking is a fantastic idea. The CBN’s new draft regulations about it are quite good because we now have regulators looking at this as a viable way for them to bring in more people into the fintech space.”
Open banking is a concept that compels banks to share their customer transaction data with fintechs and other third parties. By opening up access to customer transaction data held by banks, customers can compare banking services for instance and decide what bank’s service works best for them.
Additionally, access to this data can spur fintechs and third-parties to create new and interesting products that are customer-centric. Yet, one question people ask of Open Banking is; why should they share all of this information with third parties?
Incentives to share data
One recurring question I have heard in the past week since writing on Open banking is, why would a bank that is making billions give their competitors access to data? One possible incentive is the revenue the banks stand to earn but some argue that it’s not compelling enough.
It is a question that regulators have to think about. The way Abdul sees it, “the banks need to be incentivized to share data because it is something they have to commit time and resources to.”
“You might argue that the banks have to do whatever the Central Bank says but they might not do it in a way that is scalable.”
These incentives are necessary because there’s a long road to efficient data sharing. “Right now, none of the banks have public APIs yet for developers and businesses to have access to customer financial data.”
Without public APIs, integrations are difficult. One PwC report says that integration often takes weeks and months. But it is an assessment Abdul disagrees with. “The PwC report is probably wrong because it doesn’t take weeks or months; there’s nothing for you to integrate so it will probably take years. I would say that in terms of integration, it is nonexistent right now.“
As to how Mono works around the absence of public APIs, Abdul simply says they have figured out their way around it without going into details. But one thing he’s willing to speak about is his company’s recent YC experience.
Mono’s Y Combinator experience
Mono was one of the ten African startups in Y Combinator’s Winter class of 2021 demo day. Getting accepted into YC is often seen as a stamp of approval for startups and is an opportunity for founders to speak to over 4,000 investors.
For Mono, YC was an opportunity to make strategic connections. “Without YC, we have investors who would have introduced us to some of these people, but it wouldn’t be a fast connection. You present to 4,000 investors on the same day and I’m not sure any kind of investor in Africa can pull that off.”
If you’re already imagining what it would feel like to handle that kind of pressure, Abdul shares that it was a different experience for him and his team. He says they simply applied and forgot about it.
He adds that it doesn’t speak to an absence of rigour. “The thing is that if you know your business before applying to YC, the process will be easier. Know your business, know what your metrics are, know what you’re solving for. You need to understand what makes you different and what you’re trying to sell.”
“If you know those things, applying to YC is like having a conversation with someone about your business.”
Naturally, Abdul Hassan then talks to me about Mono, what makes the startup different and the size of their ambitions.
A Pan-African play
“Even though I believe in Open banking, what we’re trying to do is not Open banking. Our mission is to power the internet economy in Africa. What this means is that as individuals and businesses are coming online and the internet is cheaper, we want to serve as a bridge between both.”
What this bridge really means is that when businesses want to access the personal financial account of an individual, Mono provides the API to make it possible. Think digital lenders who want to confirm personal information of prospective lenders for instance.
That is only one example of what the startup wants to achieve. While it is providing this service for Nigerians, the startup is already looking at the rest of Africa. Abdul confirmed to TechCabal exclusively that Mono plans to expand to Ghana and Kenya in Q2 2021.
While that is still in the works, the company is launching MyPass, a product that will modernise the Know Your Customer (KYC) and onboarding process for businesses.