Sou Sou: finding venture capital through an app
Meet Fonta, Founder of Sou Sou
, a global fintech company connecting women investors and financial institutions to women-owned businesses looking for investment. Sou Sou has developed a new crowd banking platform to help close the gap for female entrepreneurs who cannot get funding through traditional banks or financial institutions. Sou Sou offers alternative financing solutions through the Sou Sou app, which helps women build their investor worthiness by saving, networking and building the credit and cash collateral needed to attract a loan from Sou Sou’s partner banks and investors.
If you had to describe yourself in three words, what would these be?
Fonta: Passionate, tenacious and a feminist.
How did you come up with the idea of SouSou?
Fonta: I spent about ten years of my professional career working as an American diplomat. And I was a management consultant for Deloitte, one of the largest consulting firms in the world. I worked in Africa, Asia and the Middle East, doing a lot of work with women – men as well – helping them get access to capital, developing innovative financial tools and I got really frustrated because a lot of men were getting access to funding and women didn’t. I was noticing a lot of the disparities that often hold women back, especially in Africa and some of the other emerging markets. But I was also working with this group of amazing African women exporters and they were running incredible businesses – million dollars plus a year in revenues – yet they couldn’t get financing from banks and VCs to grow their businesses.
As I travelled, from Nigeria to Kenya, Ghana to Tunisia and other countries, interviewing these women and asking them, “How are you doing it?” They were using informal lending clubs to help each other finance their businesses, send their kids to school, buy land, you name it. There was a different name for it everywhere I went. I started writing down the different translations of what they were called in the different countries, for example in Egypt they were called gameya and they were groups of women that were pulling together resources and they were rotating those resources. I went to villages in Kenya and Tanzania, where it was called chamas, in Nigeria they called it “Merry-go-Round”, in South Korea – where I also stumbled upon them – it is called gaedon.
As I said, I started collecting these names and interviewing people about how they were doing this informally. Some would save money and put them under their mattresses, others would have a more sophisticated approach and meet in groups. With all the information I collected, I started cataloguing how people did it around the world, what were the different ways to do it and what they would call it.
Innocent Ephraim (Sou Sou) (Photo: Nora Heinisch/Vodafone Institute)
And then I had an epiphany: What if we were to modernize this and scale it? How can we modernize these informal, under the table saving and investment clubs in a way that it could be taken to mainstream? Why don’t we improve upon this informal tradition, which exists and works well for millions for people, by helping lending circles build credit, invest their money in wealth generating assets and connecting them to traditional bank and investors?
And this is basically how Sou Sou was born. I named the company after an African tradition that has existed for centuries. But I have to say, I got the idea from the amazing African women that taught me so much during my work as a diplomat over the course of five to ten years. I just found a way of transporting this idea into a modern business model backed by fintech.
How did you start to build your company? What were the first steps?
Fonta: I started by out by doing a lot of research and interviews – as I have mentioned before. I spoke to a lot of women, industry experts and others about what I had in mind and what I planned to do. And I asked them if they felt this idea of mine made sense. At the same time, I was working on the business model and I was also juggling my personal life. I had just given birth to my daughter. I was a single mom when I launched Sou Sou. You must understand, I was planning to walk away from a very lucrative career to launch this company. Sou Sou had to make sense to justify that sacrifice.
After validating the business model, my next question was how to fund it. Interestingly enough, I actually joined a susu with some friends from college to pay for the company’s business registration, our website and cover basic expenses. Shortly after, I applied for a grant through Echoing Green, a social impact fund based in New York Echoing Green invested in me when Sou Sou was really just an idea. Their support is really what kickstarted Sou Sou. I also knew that I needed a strong team and prototyping skills. I was accepted into an accelerator program through Digital Financial Services Lab and this was a lifechanging experience. They taught us how to prototype an app, test it by using Silicon Valley tools like the Sprint methodology. And through that experience, in Dar es Salaam, Tanzania I was connected to Innocent who became my co-founder. He and I clicked incredibly well.
And it was the combination of these things that happened over eight months that really helped us to go to the next level.
What does Sou Sou mean? What does it stand for?
Fonta: Our name is a West African word commonly used in Ghana and the Caribbean. It is loosely translated as “village savings and loans” and spelled like susu or esusu.
You mentioned earlier you were walking away from a prestigious career as a diplomat and being a single mom to a new born baby when starting to work on Sou Sou. How did your friends and fellow students react to the idea of you becoming an entrepreneur rather than staying in your job?
Fonta: They thought I was absolutely crazy. I got a lot of resistance. Not because they didn’t believe in me or because they weren’t excited about this new idea. It was more about my daughter. She was born with Sickle Cell, which a red blood cell disease common in people of African descent that requires constant medical attention and she needed and still needs really good health care and a stable environment. She is a very happy child and if you looked at her you could never tell, but still her condition needed to be attended to.
My family was concerned that I was going out on a limb for this idea I had and leaving a “good job” with health benefits to do it. The irony is that my daughter is actually also one of the reasons that made me launch Sou Sou. At that time, just when she was born, we were heading out to China because I got offered a post as a diplomat in Beijing. And when we were about to leave after a year of Chinese language training and travel preparations – it was an amazing job I must admit – my daughter was not approved to travel because of her health condition. That made me re-think everything. My career as a diplomat was no longer viable. I couldn’t live in a different country for a few years because she wasn’t allowed to travel. There was no way that was I leaving her behind.
My financials took a hit because I had a child with medical expenses and after years of living a very comfortable and prestigious life I was suddenly facing financial issues, mostly because of medical expenses. I was faced with the difficult decision that virtually every mother is forced to face at one point during motherhood: Do I risk everything and follow my dreams? Or do I play it safe for my family? I had this dream of launching my own businesses focused on empowering women financially. I couldn’t let it go. And so, I picked the later.
Ironically, this was the moment that I turned to a susu. I couldn’t get the financial support for my business that I needed from my family or banks. I did exactly what all those other business women did in order to get the funding – I turned to an informal savings group and this actually confirmed that what I wanted to do was right. Looking back, I have no regrets. It was the best decision I have made.
Was there a highlight moment at the beginning that you clearly remember?
Fonta: Yes. The first loan we ever facilitated. There was this Kenyan lady, her name is Zora. She had gotten her first export contract with a huge company. It was very exciting for her and I actually knew her from my previous work.
One day she reached out to me, very upset, telling me that she couldn’t get any bank to give her money to satisfy the contract. She needed to hire a lot of artisans who would produce the products that were going to be sold in America. I was trying to help her strategize different ways to get the money she needed to service the contract. I suggested her a few banks I knew. She spent months looking for someone who would take a risk on her. She was a relatively new exporter with no track record or collateral to back the deal she won, which was pretty impressive considering. At some point, I realized that I was sending her to everybody else when I should be the one helping her.
It was one of those “Aha”-moments when I realized this could actually work. Innocent and I contacted a few local investors that were running a chama in the region. A lot of them were also women and we then reached out to them asking if they would fund this deal and empower Zora. Their response was incredible. We were able to raise over $75,000 from a chama for Zohra. She was finally able to satisfy her contract.
And my “Aha”-moment continued where I realized we can build a network of women supporting each other financially and empowering each other in building our businesses. That was probably one of the most powerful moments for me.
What was your biggest challenge and how did you overcome it?
Fonta: For me it was probably the fact that I was a black woman, much younger than my peers, working in an industry where the majority of decision makers are old white men. There often was – and unfortunately still is – a lot of scepticism in the banking and venture capital industry about minority and women founders.
There was one moment that particularly stood out. I was pitching to a famous global bank (I won’t mention any names here, but it probably could have been any bank). There was a room full of old white men and I am presenting my company. I didn’t get the funding for a variety of reasons and at first it was hard for me to accept because I knew that I was one of the best people there. I was really disturbed by it. But then one of the gentlemen pulled me aside later and he said to me: “Look. You have a lot of odds against you. People tend to invest in people that look like them and unfortunately, there aren’t many investors that look like you in this space. You have to be smart about how you pitch your company, how you present yourself and who you present it to. Because there are some doors that are just not going to open.” I appreciated his frank feedback.
At the same time, it also helped me realize that sometimes you just have to find your own way and it is not always going to be fair. I just needed to figure out a way around it. Amazingly, the solution that I was looking for already existed within my own community.
Innocent at the final pitch (Photo: Impact Hub/Vodafone Institute)
Fonta: We have made some interesting and very strategic new hires. We have a really powerful development team that we just brought on board. We just secured, thanks to my co-founder Innocent’s incredible network, two very high-profile advisors. Our next step is to take this incredible team and scale our operations. We are taking a very aggressive approach in building something that can be scalable in both the developed and undeveloped world. It’s not going to be easy, but we are very excited about it.
If you could give a tip to aspiring entrepreneurs, what would it be?
Fonta: I would tell them two things. One is something that my father always quotes from my grandmother: “See it, believe and then do it.” And I feel that we – as women – have insurmountable odds and so many reasons why it might not be a good idea but if you can visualize it and you can actually believe it then you can really manifest anything. Many of the most successful leaders and athletes use this technique. We – women – are incredibly powerful. The obstacles that we face like gender inequity, unequal pay and sexism, are actually what make us strong. I live by the code this: if you can see it, and believe it, you can achieve it. This would be the first thing I would tell aspiring entrepreneurs. And it doesn’t really matter what anyone says after that. The seconds thing is: Take baby steps – that is how you get from A to Z, even if it takes longer than you would like. I had to learn that the hard way because I am a big thinker, very strategic, and I like to be aggressive in what I go after. But it is all about the execution of the little things, over and over again, to get the progress that you want.
The interview was conducted by Christina Richter from FIELFALT, the community and blogazine for female empowerment. FIELFALT wants to encourage women to leave their comfort zones to dare something and to achieve their goals and realize their dreams.