Nigerian Fintech startup, Abeg, a wordplay popular Nigerian slang which means to ask or beg for something was launched in September 2020. The platform was founded by Dare Adekoya, Muheez Akanni, Patricia Adoga, and Eniola Ajayi-Bembe.

The Nigerian fintech Abeg was launched with a Cash App-Esque play and leveraged on a wallet-based system. Abeg gives room with the use of tags for users to request and send money to each other.

After the rapid growth of about 5,000 users in its first few weeks of launch with zero marketing, what emerged as a couple of Gen Zs trying out something cool outside Nigeria’s traditional payments space quickly turned into a company looking to scale. And for weeks to come, the number of users was on the rise.

However, in the early month of the year 2021, the much-gained fame garnered by the app especially on Twitter started taking a downslope. It was obvious it was dying as fast as it emerged.

Surprisingly in April 2021, Multichoice announced the startup as the Big Brother Naija show’s headline sponsor before the commencement of the show months later.

A lot of theories started flying around about how the six-month-old startup Nigerian Fintech Abeg could have managed to sponsor a show that cost $2 million without prior announcement or disclosure of any fundraising and seemed to be struggling at that time? This and more were questions on the lips of a lot of observers.

However, there are reports that the CEO Adekoya the startup’s founder confirmed to have raised a pre-seed round from local investors, and a portion of the undisclosed pre-seed fund was used to sponsor the show by the team.

Big Brother Naija

Big Brother Naija is a reality show that features a group of people who live together in a huge house, away and detached from the outside world but are being watched via CCTV.

The name “Big Brother” is a franchise that started in the Netherlands and has since been duplicated worldwide including Nigeria. The pay-TV company MultiChoice Nigeria is known to be the official organizer.

The recent season which gave in to the blitzscaling of the Abeg platform was the sixth since its launch in 2006. The show being the most popular and most-watched reality show in Africa is said to rake in impressive numbers in terms of cash and viewership.

The 5th edition before the last was said by the show organizers to have a whopping 900 million votes cast by viewers. With such a magnitude of viewers who are glued to the screen daily, it is only fitting that companies who need publicity have to pay a premium that costs about $2 million.

How Big Brother Impacted the Nigerian Fintech Abeg

The Nigerian fintech Abeg happens to be a product of leading financial technology company Piggytech Global Limited as revealed in the fine prints of MultiChoice announcement about Abeg in April about being the BBN show’s headline sponsor.

Piggytech the parent company of Piggyvest is Nigeria’s most popular savings app as well as one of the most valued fintech startups in the country. Piggytech is said to have acquired Abeg in late 2020 and from hearsay, it is said to have made the payment for the sponsorship on behalf of Abeg. Although, Abeg’s CEO dismissed this report and insist the funds were from the pre-seed round.

It is just logical to assert the funds came from piggytech as it is rare for a startup such as the Nigerian fintech Abeg in the pre-seed stage with a few thousand followers to raise such funds and use $2million as a marketing budget.

Even though the acquisition of Abeg by Piggytech is been shrouded, Piggytech and its subsidiaries have neither refuted nor affirmed their relationship till the moment. Akanni, CTO of Abeg, is said to have disclosed in a call that “We [Abeg and PiggyVest] are more or less under the same parent company; so, like sister companies and subsidiaries of Piggytech,”.

Of course, Abeg isn’t the first tech startup to sponsor the BBN reality TV show as other tech companies have taken such steps in the past. They include the now-defunct e-commerce company PayPorte, betting companies such as Betway and Bet9ja, and fintech the likes of  Kuda, Patricia, and unicorn Flutterwave.

Each one of these startups has reported astronomical growth following the season finale and it was a perfect blueprint Abeg had to go through for which it did perfectly.

Coming into the show with a new design, a relaunched application, and over 20,000 users, Abeg now claims to have almost 2 million followers using the app.

“Big Brother is like a large billboard in Africa where brands can … advertise and promote their products. And as Abeg, we are trying to infuse culture, lifestyle into the app, because payments are part of people’s lives,” COO Adoga said.

“So it’s pretty much worked for us because we’re trying to … promote and introduce the brand to the market and [tell] people what we’re about and what Abeg is supposed to be.”

When Abeg was launched in 2020, its best use case for social payments was to let users run giveaway campaigns. These giveaways on the app became more prominent during the Big Brother Naija show as celebrities and influencers (sponsored by Abeg) used the Abeg app to send out money to their fans.

“We went the giveaway route basically to attract a lot of signups, which worked, and for people to reserve their usernames and get around with the app,” Adekoya said. “Moving forward, Abeg will be your go-to payment app for anything you want to pay for.”

The Abeg team knows relying on such a model is unsustainable. Users enjoyed using the app for giveaways on version 1.0, but it wasn’t enough for user retention. Now that Abeg has acquired more users and grown 100x, retention will become more critical than ever in version 2.0 and they are exploring more specific use cases with Piggytech’s backing.

That is the reason for Patronize, also known as “Abeg for businesses” was launched. The platform, another Piggytech subsidiary is a Square-Esque product for Nigerian small and medium businesses to receive payments from customers using the Abeg app.

Just like Square, Patronize provides tools to enhance business growth, manage and also reward their customers. However, unlike Square, Patronize is void of cards. With its smart point-of-sale (POS) devices, Abeg is trying to disrupt POS machines in retail shops, stores as well as bank transfers.

For real, these are two tough propositions by Abeg, but Abeg is right to think there is an opportunity. Just as fund transfers in Nigeria are meant to be instant with the help of the Nigeria Interbank Settlement System (NIBSS) as the infrastructure behind it, failed transactions and downtimes are still common occurrences.

Abeg, with its wallet system, is providing a unique channel to make payments which, according to the company, has a 99.9% uptime. Abeg is counting on the fact that customers will see it as an alternative when they feel dissatisfied with traditional payments and they will become the go-to platform to pay for movies, food, event, or drugs from pharmacies.

Will all these strategies be enough to retain users?

It isn’t entirely certain as one would still be required to use bank transfers to fund an Abeg wallet. Some users don’t see the need to make transfers into their Abeg wallets each time they’re required to make payments when they could easily transfer money to the recipient’s bank from their respective banks.

These are issues that Abeg needs to look into to retain its millions of users. One of the ways it has plans to get this done is via direct integration with PiggyVest so users from the savings app can fund their Abeg wallets.

How is this going to be? So PiggyVest reportedly paid out ₦250 billion (~$500 million) into its users’ bank accounts at their last email to users this month. That’s a whole lot of money. So, since an Abeg wallet can perform some of the functions of a traditional bank such as transfers, bill payments, buying tickets, PiggyVest is asking its users, “why don’t we use your Abeg wallets as your default withdrawal vault instead of your bank accounts.”

Trust me, some users will likely find this not too convenient but Abeg is planning to allow users to earn interest on money left in their wallets in a bid to cajole them.

These strategies will help Abeg to leverage the pull and success of its “sister company” to achieve retention of users and, at the same time, it will bring into fruition the financial ecosystem Piggytech is building to retain float.

Aside from all of these, Abeg is going big on social gatherings, sponsoring entertainment events, musical shows of Grammy-award-winning artists such as Wizkid and Burna Boy to acquire more users this upcoming holiday season.

Despite the influx of venture capital into the Nigerian fintech space, the market is saturated with platforms having comparable features like airtime purchases, utility bills payment, savings, and making transfers.

Abeg claims to be different as its users won’t experience slow payments and high transaction costs existing on other platforms.

Although this pitch remains lost to some users, Piggytech believes Patronize will do the trick in changing users’ opinions. The business-focused platform is as well on a user acquisition spree, onboarding tens of hundreds of merchants with smart POS devices to cater to the needs of millions of users acquired by Abeg.