In a market already boasting the likes of WorldRemit and TransferWise, Somalia-based startup DagDag thinks it has what it takes to succeed in the remittances space.
Founded last year, DagDag aims to save customers time and money when making remittances by breaking down the barriers that exist in the money transfer industry. It does this by offering a simple place for users to compare providers, choose the best rates, and swiftly and safely send money home, all with a few clicks.
“If you’ve ever had to transfer money before, you’ll know exactly how hard it is to try and figure out which money transfer company will give you the best rate,” Shakur Shidane, co-founder of DagDag, told Disrupt Africa.
“DagDag makes it really simple and painless. With our easy three-step process, DagDag lets you register, find the best value provider, and send money to anyone, anywhere, at any time. It’s kind of like ComparetheMarket.com for the remittance industry.”
An interesting niche, and one DagDag has tested first and foremost in Somalia, where over 500 registered users utilised its minimum viable product (MVP), completing over 800 transactions. It is now also available in Kenya, while a recent partnership with BICCO, one of East Africa’s oldest money transfer services, will open its services to Uganda, Tanzania and Rwanda. It also plans to expand to Nigeria.
“The feedback we have received thus far has been very useful and overall quite positive. People seem to love the simplicity and convenience which has helped sure up their regular use and seen the base grow through recommendation to their friends and family,” Shidane said.
DagDag, which takes a cut on the commission paid to remittance companies on payments made through its platform and offers it to customers for free, is bidding to make the whole industry more transparent and get more people sending money online, thereby saving money.
“The remittance industry is traditionally undertaken at physical locations with senders filling in forms and queuing to pay at the counter, and can be time consuming, onerous and complicated,” said Shidane.
“The marketplace is filled with many competing providers, from the well-established like Ria and Western Union, to emerging fintech providers like WorldRemit and TransferWise, to the more niche players like Dahabshiil and Bicco Express. Each provide different services, exchange rates and commissions, so it’s impossible tell which one will offer the best value for money.”
DagDag wants to help with all that, while also offering providers a space where they can offer their services and reach out to new audiences. The bootstrapped startup is planning in raising external finance in the near future, and is busy coping with demand.
“We’ve seen a lot of demand for the service, from as far afield as Russia and Cyprus. Finding payment providers that can cover these regions has been difficult as the aim is to keep the cost of sending minimised, instead of doing multiple conversions before the final delivery,” said Shidane. “Ultimately what we want to find is global providers we can work with, or even niche ones that can cater to the growing demands we are seeing.”