Regardless of what you are building, or where you are coming from, Y Combinator (YC) interviews only last for 10 minutes. But, in the case of Bloom, a Sudanese fintech startup, the founders were reportedly grilled for about 20 minutes.
Ahmed Ismail, who co-founded the startup and sits as its CEO, first thought it was because the Sudanese market was entirely new to YC, the biggest accelerator in the world—so they needed enough context to work with—or because the market is just finding its way back to health, after years of international isolation and civil unrest.
But none of these was the reason for the prolonged interview.
“There weren’t any crisis call-outs,” Ismail told TechCabal. “They were intrigued by the markets and our solution, and wanted to know if we are the right team to build what we’ve set out to build—a new and better way of interacting with money in Sudan and the entire East Africa.”
Apparently, it wasn’t Sudan that was on trial but the 4 co-founders who had left their individual high-flying jobs in the west to take on Sudan’s many financial challenges.
Ismail, who is Sudanese, and Youcef Oudjidane, who’s Algerian, have been friends for a long time, and when they finally got to live in the same city, Dubai, spent most of their time together discussing fintech dominance in Africa. They would later decide on investing in a couple of fintech startups. But, as their research took them further across the four cardinals of Africa—especially West and North Africa—they discovered a recurring gap that needed to be filled. At that time, Oudjidane was a managing partner at a San Francisco-based venture fund, Class 5 Global, where he led investment across Africa, the Middle East, and some parts of Latin America (Latam). Ismail was an ex-investment banker at Barclays Investment Bank and a serial founder who has co-founded 2 businesses.
Seeing the gap—building to hedge against local currency devaluation—the duo paused on investing and embarked on building a solution. They started building a dream team. They reached out to ex-Goldman Sachs engineer, Khalid Keenan, and former Amazon and IBM research manager, Abdigani Diriye, asking them to join the team as Chief Technology Officer and Chief Product Officer, respectively.
They got accepted into YC 2 days after their interview in June last year; they will be part of its 2022 Winter Batch. By October last year, they founded Bloom.
Due to the wealth of experience of the 4 co-founders, Y Combinator was confident to back them—pre-product— in the unstable yet opportunity-laden Sudanese market. Michael Seibel, the Managing Partner at YC, expressed his excitement about the development: “YC values the diverse yet complementary skill sets of Bloom’s experienced founding team. Their passion and understanding of the financial challenges faced by consumers in Sudan, and the wider East Africa region, position them uniquely for success.”
On a good day on the dusty street of Khartoum, Sudan’s capital city, the sidewalks are usually filled with long queues of people anxiously waiting to cash their savings in banks that have imposed daily withdrawal limits as low as $11—a limit that keeps fluctuating according to how strong inflation hits.
Even though the international sanction has been lifted, the persistent crisis in Sudan has taken many forms to hinder its economic growth. Its banking system keeps getting weaker and the people continue to lose trust in it. As a result, the value of the country’s local currency—the Sudanese pound—keeps plummeting.
According to a Reuters report last year, many of Sudan’s 37 banks are undercapitalised, lack proper accounting standards, and show strains from years of an unrealistically valued currency.
Ismail told TechCabal that Bloom may not be able to end inflation, but it sure can help people hedge against it by enabling them to save in dollars, which is stable, while they spend in the local currency. Bloom provides local and dollar debit cards and enables users to receive money from select countries with high Sudanese immigrants.
Bloom has partnered with the Export Development Bank, a partner bank that handles deposits in Sudan. Ismail also said that they intend to work with local banks that understand the local monetary landscape of the market in every country they expand into.
“We want to help people hedge against inflation, and we are ready to enter as many strategic partnerships as possible to make that happen,” Ismail said.
Last month, when the company put out its waiting list, over 40,000 people signed up within the first 2 weeks. This is an indication of how excited the people are for this solution. For Ismail, it’s the biggest validation they have gotten so far.
Bloom raised a pre-seed last September from Global Founders Capital, Goodwater Capital and French and Inter Miami CF footballer Blaise Matuidi. The startup also plans to expand across East Africa — Ethiopia, Rwanda, Tanzania, Zambia, and Kenya, where it’ll compete with companies like Koa.
Building more than a startup
The lack of external institutional funding continues to undermine the effort of founders in Sudan. But entrepreneurs like Ismail have chosen to change the narrative once and for all.
Last year, Sudan recorded its first external institutional investment when alsoug secured $5 million to scale its e-commerce business and build a mass fintech product. TechCabal, like other analysts, projected that this would lead to an investment rush into the country, and it looks like that’s not far from the truth.
Early in March, 249Startups launched Rhino Investment, a $500,000 fund to invest in 14 Sudanese seed-stage startups, as well as an accelerator programme to help startups scale and grow through workshops, monitoring and networking opportunities. Think of YC, but for Sudanese startups. More tech hubs are also being established in Khartoum.
Ismail said the onus is now on them to help build the Sudanese ecosystem through YC.
“I think YC has not only built conviction in the team and the business, they’ve also by extension validated the market,” Ismail said. “And YC is known to open a floodgate of investment into new frontiers.”
Ismail may be correct on YC’s validation power. YC has validated many markets over the years. A good example in Africa is the Nigerian market which claimed 18 spots out of the 24 African startups that made the Winter 2022 YC batch. Nigeria is also the third country with the largest YC startups and it all started in 2015 with Paystack (which was acquired by Stripe for $200 million) and Flutterwave (which is now worth well over $3 billion and is among YC’s most valuable companies).
Nigeria is now the startup epicentre of Africa, given the number of startups it has and amount of investment they have attracted. This is what Ismail envisions for Sudan—more Sudanese startups get into the largest accelerator in the world and continuing to validate the market, with the hope of replicating the successes in Nigeria, or even surpassing them.
“We are urging Sudanese startups or founders to apply to YC and come talk to us. We will take them through the process and help them prepare. The more we get into YC, the more other investors will notice Sudan as a good market to invest in,” Ismail concluded.
Ismail doesn’t want to only build a successful business in Sudan but also a thriving ecosystem. Though, it’s still early days, and it’s uncertain how this will play out, but one thing is clear: the next Sudanese startup to go to YC is less likely to be grilled for 20 minutes.