Startup and Funding

The locally developed MoyaApp now has 6 million active users, after rethinking data

4 Mins read

With more than 23 million users in South Africa, WhatsApp is by far the dominant messaging service in the country, easily shrugging off rival platforms such as Signal and Telegram.

But the rise of the locally-developed MoyaApp is starting to represent a potential real challenge for the Meta-owned WhatsApp, with more than 10 million downloads, six million active users, and four million users daily.

It was not an overnight success. MoyaApp is in fact an offshoot of 14-year-old company, Datafree, which was founded by Gour Lentell.

Lentell grew up in Zimbabwe, moved to the United Kingdom in the 1990s, and then moved to Sydney, Australia, where he founded and sold off a couple of startup companies.

MoyaApp

MoyaApp CEO Gour Lentell

When he founded Datafree in 2008, its goal was to improve the performance of feature phones, the tier of devices below smartphones, when it came to accessing the internet.

The thinking at the time was that there were two billion people on the internet in developed markets, but there were another four billion people who would be coming online in developing markets.

The assumption that they would be accessing the internet on feature phones proved to be correct – but only for Datafree’s first seven years.

The arrival of cheap and powerful smartphones – especially Android devices – changed things.

The shift to smart devices put Datafree on the back foot, as there was now no market for its services.

A lucky break and a new mission

“We were fortunate,” says Lentell. “After seven years we had no money, no staff, some working technology. Luckily, I met an investor in the UK who liked me, liked the company, liked the difference we were making and the vision we had, and re-funded us with £3 million in 2016.”

The group then raised a further £15 million and refocused the business on improving the performance of smartphones in emerging markets.

That saw it move into reverse billing. This is a lot like toll-free calling, where a business pays the data bill for consumers who access its website.

This has seen it partner with government agencies, insurance companies, and even an online betting group to offer services where these entities’ customers or staff can access their sites without incurring data costs.

An insightful but costly lesson

Lentell knew that data affordability was an issue for the average South African, but he never truly grasped the implications until he tried to boost the number of subscribers to a live sports-score app.

After spending R1 million over three months advertising it on Google and Facebook, the app had achieved 33,000 active subscribers, despite the end users not paying for data.

“We only kept 30% of the people who downloaded the app,” says Lentell. “The churn was huge. How does this make any sense to spend that kind of money to get a very modest audience?”

He decided to research the poor response in Guguletu and Philippi, in Cape Town.

What they found shocked them. Datafree assumed that people would act like smartphone users in developed markets, in that they would just download dozens of apps and always have at least some access to data.

Instead, they discovered that constraints of the users’ devices, along with data affordability were curbing how they used their devices.

These limitations meant they only have a handful of apps on their phones, as storage capacity is limited on these devices. Apps had to compete for storage space with pictures, songs and other media.

They also found that, at the time, there was a widespread view that “apps steal your money so don’t put apps on your phone.” People did not realise the apps were being updated to make them more efficient, but they just saw it as their data being stolen.

An obvious play

The idea for MoyaApp came about when they asked people what they would miss most if they ran out of data. The answer was, overwhelming, messaging.

“The answer, in hindsight, was obvious because we all live on messaging,” says Lentell.

This, however, would mean it would have to go up against WhatApp.

Lentell says the group thought it would gain traction if it provided a messaging service where MoyaApp, and not the end user, paid for data.

From the group’s perspective, paying for its users’ data made sense, as texting did not actually use a lot of data. A user texting all day, for instance, would only use up about a megabyte, as long as they did not use photos and videos.

The group’s data compression technology would also help it reduce the amount of data used.

A stealth success

The success surprised them. MoyaApp launched in January 2019, without any adverting, and within three months had signed up 100,000 users. The app has since been downloaded over 10 million times.

Though MoyaApp is taking on WhatsApp, Lentell says it is actually modelling itself on WeChat.

WeChat, which was created by Chinese mega tech company Tencent, offers messaging as well as micropayments and an array of other digital services.

MoyaApp is now also offering payment via its e-wallet, MoyaPay, which can act as a de facto bank account.

MoyaApp makes its money by acting as a place where large brands can market themselves to prospective consumers, offering them a research service and providing video ads at no cost to the end user.

The app now offers access to an increasing range of services. It is home to 300 content services, including news, entertainment, live sport results, education, weather, jobs, and health information.

Lentell says the realisation of the importance of the data constraints changed how his company operates. It now looks at everything through the lens of how much data its services are consuming.

“It’s extraordinary how much data can save when you focus on usage. The average website is shocking when it comes to how much data they use, because no one has thought about it.”

Lentell says those designing websites in South Africa should learn from what his group discovered when it came to data, and think about how the end user views data usage.

“There is this implicit assumption that all consumers have data. That’s true in the US. It’s not true here.”

 

Source: Larry Claasen | Business Insider SA

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