March 27th 2022
The Next Wave provides a futuristic analysis of BizTech and innovation in Africa. Subscribe here to get it directly in your inbox on Sundays at 3 PM (WAT).
This year’s Super Bowl was dominated by ads from crypto companies—Coinbase, eToro, and FTX—whose app downloads got boosted by 279% in the US. Coinbase aired a QR code ad for 60 seconds during the event and in that period, over 20 million people visited its landing page, a development that crashed its app for an hour.
The ad, which cost Coinbase at least $7 million, helped it jump from 186th place to 2nd place on the App Store. By captivating viewers through offering a limited-time promotion of $15 worth of free bitcoin to new sign-ups—along with a $3 million giveaway—it is clear Coinbase wants to make crypto mainstream. It wants to introduce crypto to 1 billion people, and the Super Bowl’s 100 million-strong audience was a great place to start.
Similarly, in Africa, Binance, the world’s largest crypto company per transaction volume, tried to reach Africa’s teeming population by sponsoring the annual Africa Cup of Nations (AFCON)—the biggest sporting event on the continent.
One might think, cynically, that the end game of these sponsorships is merely for these fintech companies to acquire customers. But that would only be half true. What is happening is simple: these tech companies have realised that their products and brand are new and more popular among the digitally literate, so, they are trying to draw in the section of the population that is digitally illiterate by using their favourite stars to advertise these products.
According to Briter Bridges, African startups raised an estimated $4.9 billion in 2021, so it is not surprising that more money in their purses means they are able to acquire more customers.
The last 3 seasons of Africa’s biggest TV show, Big Brother Naija (BBN), were sponsored by tech and online gaming companies. Last year, when Abeg, a Nigerian social payment company acquired by PiggyTech Global, forked out $2 million dollars to sponsor 2 seasons of the show, its users jumped from 20,000 to 2 million within 3 months. Two years ago, Kuda Bank, a Nigeria-based neobank, also rode on the show to double its customer base to over 600,000 by the end of 2020.
Africa startups are growing their audience base by endorsing celebrities with a cult following on the continent. Last October, it was all glee when Chipper Cash, a cross-border payment company, launched in the US by unveiling Grammy-winning Nigerian Burna Boy as its international brand ambassador, to tap into a $45 billion remittance market. Since then, Nigerian fintech company Flutterwave has announced a partnership with Wizkid, another Grammy-winning music star; and Kuda Bank has done the same with rising Nigerian musical act, Fireboy DML, whose “Peru” remix with UK international pop star Ed Sheeran dominated global charts in 2021. In the past year, the number of these partnerships have increased with fintechs—Risevest, Bitsika
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Becoming household names
There is a shift in the way tech startups are entering their prospective customers’ homes.
One interesting thing about this year’s Super Bowl ads, is that while digital brands were embracing traditional TV ads, traditional brands were turning to digital ads. And this trend is not peculiar to the US, it seems. “For the most part, startups in Nigeria have been used to digital advertising, but that hasn’t scaled properly,” Joshua Chibueze, Chief Marketing Officer and co-founder of PiggyTech Global told Rest of World. “There is a particular section of the market that wouldn’t pay attention to what you’re offering, until they see you on the medium they are already used to and trust.”
Thousands of these startups’ users didn’t know about them until their brands or products were aired on TV or they signed on their favourite celebrity as ambassadors.
This is why Nigerian tech startups such as PiggyVest and its acquired startup Abeg, and Helium Health are splashing ads on the match days of Lagos football club, Sporting Lagos, the brainchild of Shola Akinlade, CEO of Nigerian fintech, Paystack. Nigerian tech startup brands are using Sporting Lagos matches as an opportunity to reach an offline audience and further solidify their relationship with their online audience. Match days are headlined with a half-time show by a top Nigerian music act. As an attempt by tech startups to become household names, it seems to be working.
From the Cabal
E-commerce company Kaiglo updated its mobile app to become the one-stop online shop for Nigerians. Read more about its new update here.
Have a great week.
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Sultan Quadri, Staff Writer, TechCabal.