GetEquity, the Nigerian startup identified for enabling retail buyers to put money into startups, has achieved profitability after its growth into providing industrial papers and debt notes and shedding 40% of its workforce in 2024. The shift to providing debt investments got here as retail buyers more and more sought lower-risk choices amid a broader slowdown in enterprise capital funding.
“We’re not but on the stage the place we will spend closely on progress or growth, however we’re capable of pay our staff and maintain the enterprise going while not having outdoors capital,” Jude Dike, GetEquity’s CEO, informed TechCabal.
GetEquity initially launched in 2021 to offer people the chance to personal stakes in startups and take part in Africa’s funding growth. However as liquidity into startups declined, the corporate shifted focus to serving to Nigerians lend to a few of the nation’s largest firms via industrial papers and debt notes.
Since providing debt notes in 2024, the startup claims to have processed over ₦500 million ($310,000), rising 10% month-to-month. It achieved this by partnering with asset managers similar to ARM to supply industrial papers for big Nigerian firms just like the Dangote Group—its first providing—to retail buyers.
“After we despatched the Dangote mail, we thought if we may get ₦5 million, it was a win,” Dike stated. “The preliminary responses added as much as ₦7 million. Not unhealthy. However then, inside three days, we had ₦27 million pledged. That was our eureka second.”
That eureka second validated GetEquity’s thesis that Nigerians are prepared to put money into low-risk, native debt devices. The startup additionally realised it may serve this demand and thrive with the proper market providing.
GetEquity’s partnerships with licensed asset managers additionally led to inner restructuring, making some roles redundant. Some in-house processes had been transferred to the asset managers after the corporate shifted focus.
“After we centered on non-public fairness, we needed to construct inner instruments and back-office methods from monetary processes to investor schooling and hand-holding,” Dike stated. “However with asset managers, they deal with the heavy lifting—funding memos, due diligence, audits, documentation. So now, we focus purely on distribution.”
GetEquity’s income mannequin is constructed on transaction charges, which come straight from customers, and commissions, which it earns from asset managers. Additionally it is increasing its income sources to incorporate a secondary market infrastructure the place customers can purchase and promote their investments amongst themselves and investment-backed credit score, loans backed by earlier investments.
“We’re working with just a few monetary companions to roll this out, which might open up new income streams,” Dike stated in regards to the credit-linked funding product.
The startup can also be within the technique of securing an Approval-in-Precept for digital asset issuance and buying and selling from Nigeria’s Securities and Trade Fee (SEC), which permits digital platforms to problem derivatives of SEC-approved securities.
“In our case, we’re not originating these debt merchandise; we’re constructing a wrapper round them to make them tradable. Business papers are already accredited by the SEC. We’re simply digitising and distributing them,” Dike stated.
GetEquity’s path to profitability has not been with out challenges. In 2023, Peppa, a startup providing escrow companies for web shoppers, filed a police grievance in opposition to Jude Dike and Temitope Ekundayo, the co-founders of GetEquity. The grievance adopted GetEquity reneging on a cost plan for $43,000 Peppa had raised utilizing GetEquity.
On the time, Dike informed TechCabal that Nigeria’s FX instability affected its means to pay. Whereas the startup processed $5 million from non-public fairness offers and earned “nice” margins on them, the challenges of processing the FX-based transactions necessitated GetEquity’s change to Naira-based investments.
“After we began with non-public fairness offers, we did about $5 million in whole deal quantity, with just a little over $1.5 million coming from the retail facet,” Dike stated. “The margins had been nice, however one of many greatest points was forex conversion dangers and the final volatility concerned. That made us begin considering extra severely about investing in naira and what native market dynamics may appear to be.”
GetEquity’s profitability has additionally modified the corporate’s growth technique. It initially deliberate to broaden into Kenya, however after it grew to become worthwhile, these plans have been shelved in change for deepening its debt product and incentivising prospects to refer different prospects.
“Reasonably than pursuing aggressive growth, we centered on deepening consumer engagement, rising the lifetime worth of present customers, and constructing brand-driven, natural progress. Hypergrowth is enticing, however in African markets, it typically results in excessive churn.”
After attaining profitability, GetEquity’s subsequent step is to attain $1 million in annual recurring income and launch enterprise accounts to assist fintechs and neobanks run treasury operations. The product can be just like what Cowrywise and Piggytech do with merchandise for fixed-income belongings, Dike stated.