‘Don’t seek for funding when you are desperate’ -Simeon Ononobi, SimplePay founder

When it comes to funding, most startup entrepreneurs are quick to jump at the opportunity to have enough funds to run their businesses and scale. However, for others, bootstrapping is the way to go, until they completely run out of funds.

However, Simeon Ononobi, Founder of fintech startup SimplePay, thinks startups should seek for funding earlier than they need it.

“I have raised funds and have seen it all. Investors either grow or kill a company. In my own instance, it has helped me grow. When a founder is desperate, it is difficult to get good funds, so it is best to start seeking for funds before it is needed and not when you need it urgently. Do not get to that desperation point, before seeking funding, because you might end up with an investor who does not know about your business and tries to run it himself, to safeguard their money and spoils it at the end of the day. I advise to try and seek funding early, so you can assess your proposed investors and make sure they trust you enough to allow you run your business comfortably.”

SimplePay was a startup of necessity, not for fun. Simeon was trying to find a way to make payments online and it was very difficult. Over time he realized this was a big industry with only one player who was difficult to reach. While trying to fix his own problem of paying online, He also discovered it was a problem a lot of people had and then he commercialized what he had built for myself to include other people. That was how SimplePay started in 2013.

Revenue has not been totally fantastic, because margins have to be reduced, every day, owing to competition, Simeon explains. However, as regards customer uptake, SimplePay has grown from the bootstrap model it was, which was just an off-the-shelf solution, to building custom solutions that now accepts a lot of other features.

“So, we have grown to do a lot of other things that we could not do back then, like recurrent billing; subscriptions; bank payments; disbursements and all that. We have done a lot of new things that we have added to the platform, but as competition comes in, it just keeps shrinking your margin. You always have to find ways to make more money and sustain the business and that is what we are currently doing.”

Simeon Ononobi, Founder, SimplePay

Regardless of revenue issues, the founder does not see other players in the industry as threats.

“I actually see them as friends. There is this discomfort with people, when they have competition, but the fact is if you have only one company doing something, then it is a monopoly and you do not get the best out of it.  Competition keeps you up at night and makes you iterate, change and grow. If not for competition, the big players will still be the big players, and they will not produce better financial products. Do I have enough to pay salaries? Do I have enough to settle investors? Those are what worry me more and not what the competition is doing.”

It is unhealthy to start fighting one another, because you kill your own market doing that.

“You know this big fight [among] telcos? Each tries to outdo the other and their margins shrink every day,because of the amount of free stuff they give out to attract customers. What people do not know is that this act is shrinking their revenue, to the point that they have to lay off some staff to cope. There are people who have not heard of payment processing solutions in Zamfara and other remote areas of the country. This is a country of about 180 million people and the truth is that less than a quarter of the population is served by all the fintech companies in operation and they are all within Lagos. At the end of the day, you are not catering to the larger part of the population. There is a lot to do and this makes me not [to] think much about competition.

“What we do at SimplePay is very little. The margins are little, so we target the big players. We have over 10,000 merchants, but only three of all the merchants can pay all your fees. So,you have to go for big merchants that can pay your fees and stay afloat.

“You need a lot of money to scale. This is a major challenge. I have also noticed that most startups try and grow businesses, without thinking of the bottom-line. We hear stories from Silicon Valley [about] how people are raising billions of dollars and some startups think it should be the same thing here, but it’s not. So, they do not focus on revenue, they focus on fancy products without thinking of how much the products are worth. These are some of the things that pose as challenges and make me focus on making sure [that] revenue grows: Power; getting the best customers; getting these customers to pay and getting a good team to work with. Getting a good team will still be a challenge and even if you get the right team, getting them to stay will always be a challenge. Conforming to new technology is a bigger challenge. The truth is there will always be challenges, but you just have to sit down and ride them out.

“Learn not to focus on the wrong things and the hype. Hype is wonderful, but it can be detrimental. You find out that people [may] not deal with you, because they think you are bigger than what they can deal with. But you need them to stay afloat. If they are saying no, because they want a smaller company, it becomes a problem. All the hype does not make sense, if there is no bottom-line attached to it. The last company I worked with, it took three years to find a perfect solution. It is either you are too early or too late. It is best to play at the right time, when the market is ripe. Facebook became a blast, because of that. There was Hi5 and MySpace, but it was the right time [for Facebook] and people were waiting for it. The millennials wanted to do something different. Always try to get it at the right time.”

SimplePay does a lot of collaborations but it has to be mutually beneficial. Simeon agrees that collaboration is the fastest way to grow. SimplePay’s most recent collaboration is with the Lekki Concession Company (LCC) for payments and they use them to work with banks. They also collaborate with Bosun Tijani’s Cchub and other fintech companies.


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Chiamaka Akuba51 Posts

Chiamaka Akuba is a graduate of Mass Communication of the University of Lagos, Nigeria. She is passionate about emerging markets and entrepreneurship and is actively working with the industry. She loves her conversations challenging and can’t help laughing when you call her ‘Honourable Writer of the Federal Republic'. Chiamaka is a Staff Writer at Outrepreneurs.


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