Democratising investment

Oluwatomi ‘Tomi’ Solanke remembers that he had first heard of the Ecobank Fintech Challenge from fellow financial colleagues, but that it was not until Trove Financial decided to approach the bank for a corporate bank account that one of the bank’s executive directors mentioned the programme. It did not escape Trove’s attention that Ecobank had an extensive African network, and was highly recommended. As Solanke commented at that time: 

“The opportunity to partner with Ecobank and roll-out our app across over 30 sub-Saharan African countries would provide the icing on the cake by massively accelerating our growth.” The company had operations in Nigeria, Ghana, Kenya, Uganda and South Africa at the time, aside from its office in the US.

With some 250,000 clients, Trove specialises in the international trade of financial assets. But that cross-border business model obviously presents significant regulatory challenges. “From the very beginning, we identified those hurdles. Luckily for us, we had prior experience, either building products within the financial services industry or working directly within compliance roles in the brokerage of securities, asset management, banking, those kinds of spaces.

“My two co-founders each had 10+ years of experience, mostly in banking, and could leverage on some of the relationships they had built. We started out by partnering with people and relying on their licences and then eventually, formed relationships directly with the market. The strategy for us has always been to work with partners to go through the licensing process. But the regulatory situation is always tricky.”

Trove’s product has begun to evolve a little. From a B2B focus, or a retail operation, it has also steadily moved towards a B2C customer focus, with a couple of products that cater to a corporate audience, mostly start-ups, but also legacy financial institutions, brokers, asset managers and the like.

However, the vision of democratising the financial services industry is still intact. “I wanted to be able to invest in markets like the NYSE, the NASDAQ, DAX and the FTSE. I wanted to trade the real thing,” Solanke says.

“But there was no product that allowed anyone in West Africa to invest with tiny amounts of money. So, unless you were a high net worth individual, able to open brokerage accounts with high balances, you were almost always excluded from that,” he observes. 

“The opportunity to trade didn’t exist for you. So, we set out to solve that challenge at scale, to solve the FX bit, irrespective of the amount; to create a system that enables tiny amounts of money to be converted from local currency to whatever currency you’re using, whether it’s the GBP or the USD; to undertake the KYC profile across the region at scale; and also provide a solution to the brokerage bias [towards higher-value investors].

“It was more about democratising access as well as generating opportunities for low to middle income people on the continent. So I think one of our mantras is that, irrespective of where you live or where you stay or the colour of your skin, you should be able to partake in the global economy, the same as anybody in the western world.”

Solanke also points out that Trove’s success in building a retail platform has attracted interest and invitations to ‘white label’ the product to other companies, for them to offer it to their customer base. One such approach was received from Nairaland, the sixth most popular web search in Nigeria, with 3m registered users.

Interestingly, and it may be another aspect for Trove to explore, there is something of a pent-up demand from the Africa diaspora. “My friend,” Solanke explains, “who later became a co-founder, well his mom who was living and working in the US, wanted to invest in local debt instruments. I think specifically she wanted to invest in treasury bills. The rate for treasury bills, and mutual funds in the country was at an all-time high at the time.

“She wanted to repatriate capital to the country; and to invest and get some yield instead of just sending money back to a bank.”

Interestingly, when asked if he had noticed any particular trend in the types of stocks that Nigerians favour – or for that matter, the Africans Trove serves in other countries – he points to tech stocks and particularly those tech stocks that are familiar and indeed loved by the general public, such as Apple, Google (or Alphabet), and the like. And that tends to be the case across all territories.

But ultimately, Trove’s mantra remains the same. It is to democratise investment for Africans.