Introducing the Founders of Scrapays
Q: Can you tell us about yourself and Scrapays?
A: Sure, I’m Bolu, short for Boluwatife Arewa. I’ve worked at the crossroads of product, operations, and strategy, particularly within the HR tech sector. I’ve managed operations and technology projects in diverse regions, including Sub-Saharan Africa, and North America. At Scrapays, I leverage this experience in similar roles, aligning with our company’s mission and goals.
And I’m Tope, a seasoned business developer. I have previously established a business delivering goods across Nigeria, Ghana, and Kenya. My role at Scrapays involves crafting and implementing growth strategies to propel our startup from its current stage to our targeted milestones.
Q: Can you expand on how Scrapays works?
A: Of course. Our model can be likened to Airbnb, but for recycling. Imagine having unused space in your garage, compound, or a small shop. With Scrapays, you can use that space to store recyclables instead of renting it out. Our platform combines software and IoT systems, enabling people from various places—homes, small shops, supermarkets—to bring their recyclable materials to your collection point.
You then use our system to keep track of inventory, process payments, and manage the business end of things, like determining profit margins. Additionally, we connect you with buyers offering premium prices for these items. So, to sum it up, we’ve created a fusion of recycling, payment processing, and technology to make environmental sustainability profitable and accessible for small-scale entrepreneurs.
Why Startup Wise Guys?
Q: Why did Scrapays decide to join the Startup Wise Guys accelerator?
A: Joining Startup Wise Guys was a strategic move for us during a critical growth phase. We recognized the need for a partner to help scale our business from the ground up. Seeing their impact on startups in Europe and other regions, we were confident that they could contribute significantly to our growth.
The accelerator program was pivotal for us, especially as the first Sub-Saharan African program participants. It offered us valuable insights into market sizing and strategic positioning and helped us identify potential revenue streams. This comprehensive support and mentorship were exactly what we needed to advance from concept to execution, which is why we applied and were enthusiastic about being a part of their community.
The Application Process
Q: How did Scrapays approach the application process for the Startup Wise Guys program?
A: The application to Startup Wise Guys was surprisingly straightforward for us. Initially, we were already considering applying when we discovered they had a focus on the Sub-Saharan African market. Then, serendipitously, one of their General Partners reached out to me directly on LinkedIn, having noticed our work. Their proactive interest in Scrapays was a clear signal that we were aligned.
For the application we proceeded to apply, and our existing traction in the market allowed us to bypass some initial stages. Typically, the process involves a general application, followed by interviews to sift through many applicants. These interviews assess both business and technical aspects, such as your MVP’s structure and viability.
Our stage of development, with a working MVP and generated revenue, meant we could jump straight to the technical scrutiny phase. I’ve since recommended the program to fellow founders, who’ve also successfully completed the process. It’s designed to be quite linear and assesses a startup comprehensively.
Life Inside the Accelerator
Q: What was a typical day like for you in the Startup Wise Guys program?
A: A day at Startup Wise Guys was highly structured and dynamic, aimed at nurturing every aspect of our startup, from technology to market fit. We had to delegate extensively to keep up with the program’s rigorous schedule, which was split into several critical subsections for startup development and scaling.
Throughout the week, we’d have two to three calls, some of which were quite lengthy, especially during sprint periods. Sprints could last all day and were tailored to the startup’s development phase—some startups worked on their MVP, while we might have focused on adding new features or improving existing ones.
These intense sprints required us to develop and demonstrate new features within tight deadlines, often within a fortnight. It wasn’t just about product development; the program also instilled discipline and structure in our operations. For instance, we developed one of our key features during a sprint and presented it in a demo.
The commitment required is substantial, but so are the rewards in terms of value gained. It’s a full-on experience that pushes you to maximize the program’s benefits and accelerates growth effectively.
Funding and Financial Structure at Startup Wise Guys
Q: Did Scrapays receive any funding from Startup Wise Guys, and can you detail the amount and structure?
A: Yes, we secured funding from Startup Wise Guys, which is structured in two main parts. The total investment was around 72,000 euros, with a portion of that—approximately 20,000 euros—allocated as a program fee. The remaining funds are distributed in three tranches, each contingent upon reaching predefined milestones aligned with our business’s growth and development phases set at the program’s onset. This milestone-based funding approach ensures that the investment is paced according to our progress and keeps us on track to meet our business objectives.
Q: In return for the funding, did you give up any equity to Startup Wise Guys?
A: Indeed, the funding arrangement with Startup Wise Guys did involve an exchange of equity. We used convertible notes, which are a common financial instrument in startup financing. This method is flexible and investor-friendly, and it allows the investment to convert into equity at later financing events. So, yes, our funding agreement with them was in return for a stake in our company.
Milestones Achieved with Startup Wise Guys
Q: What significant milestones did Scrapays reach during your time with Startup Wise Guys?
A: Our time at Startup Wise Guys was transformational. We upgraded from a Version 1 to a Version 2 IoT system, addressing previous bottlenecks in logistics and data capture from our agent network. This shift was crucial because it greatly improved the accuracy and efficiency of the data we collected. We also transitioned from our legacy systems to a new codebase, resolving several existing technical issues.
Besides technical upgrades, the program helped us refine our business model and attracted capital from investors we were in talks with, as our structured approach gave them the confidence to commit. Additionally, we expanded into a new region immediately following the program, marking a significant step in our growth journey.
These sprints challenged our market understanding and prompted us to reassess our opportunities. As a result, we emerged with a stronger market proposition, which, coupled with the credibility of having completed the Startup Wise Guys program, led to successful funding rounds with new investors.
The program’s rigour and intensity fostered a conducive environment for experimentation and growth, allowing us to refine our operations and strategy significantly in 2022.
Q: Did the accelerator help you gain a better understanding of the market?
A: Yes, Startup Wise Guys played a pivotal role in enhancing our market comprehension. They encouraged us to rigorously question our understanding and assumptions about the market. As geoscientists with a technical background, we had to balance our technical insights with financial acumen to redefine the market problem we aimed to solve. The program emphasized the “why now” aspect, prompting us to reassess the urgency and relevance of our solution.
We conducted bottom-up computations to define our projected addressable market accurately, dedicating entire weeks to sprints focused on product, market, and sales. This sequence of focused efforts allowed us to dissect and understand each business component thoroughly.
The funding from Startup Wise Guys was meticulously aligned with our progress and distributed across milestones. The first tranche, amounting to 20,000 euros, included a 17,000 euro program fee. Subsequent tranches of 25,000 euros each were contingent upon achieving the set goals. It highlighted the program’s thoroughness and the conditional nature of the funding, reinforcing the importance of meeting those milestones to secure the full investment. This structure ensured we remained focused and driven to hit our targets.
Impact of the Accelerator
Q: Can you update us on Scrapays’ progress since completing the accelerator program?
A: Following the accelerator, Scrapays has made significant strides. We’ve successfully closed funding rounds, including contributions from notable names like the Google Black Founders Fund and Loyola VC. This funding has been instrumental in our continued experimentation and growth.
Technologically, we’ve conducted comprehensive reviews and upgrades of our codebase, informed by the Engineering Sprints during the program, which has positioned us for better scalability and infrastructure development.
Regarding our operational impact, we currently have thousands of micro businesses on our platform. These partners have registered an impressive 45 to 60% income growth within their first three months on Scrapays, which is a testament to the effectiveness of our system. Our aim is to double this network by Q1 of next year.
Moreover, we have expanded our services to offer working capital loans to our micro-business network, leveraging their transactional data for credit assessments. This access to capital has resulted in a 2x or 3x increase in their recycling volume, significantly boosting their business operations and, by extension, our reach and impact.
Currently, our network serves Waste producers (Households, mom-and-pop shops, supermarkets, and medium and large enterprises), facilitating the collection and recycling process. The post-accelerator phase has also seen us enhance our platform to provide our Enterprise Waste Producer businesses with real-time access to performance data, like profit margins, which is crucial for their independent growth and operational efficiency. Our tech and business growth continue to advance as we build on the strong foundation of the accelerator program.
Future Goals and Long-term Strategy Post-Accelerator
Q: What are Scrapays’ future goals, and how has the Startup Wise Guys experience contributed to your readiness for these challenges?
A: Looking forward, our journey since the Startup Wise Guys program in early 2022 has been marked by continuous development and learning. We’ve since participated in other accelerators, including the Google Black Founders Fund, which has also shaped our growth trajectory.
The technical and growth preparations we received from Startup Wise Guys were foundational. The program’s structure, which tied funding to achieving specific milestones, particularly in improving our profit margins and becoming EBIT-positive, was an immediate benefit from our participation.
While we can’t credit our entire progress to Startup Wise Guys alone, the program certainly laid the groundwork for subsequent achievements and learnings. Post-accelerator, we’ve closed significant funding rounds and met crucial milestones, such as expanding our agent network and advancing our IoT capabilities. These steps have been vital in reaching our current status and will continue to guide our strategy as we aim for further growth and solidify our market position.
Advice for Aspiring Accelerator Applicants
Q: What advice would you give to someone applying to Startup Wise Guys or any other accelerator?
A: When applying to an accelerator like Startup Wise Guys, it’s critical to communicate your startup’s story clearly and compellingly. Use relatable analogies to make your concept understandable to someone outside your industry. It’s also vital to frame your traction in a way that reflects interest and potential growth, even if it’s not strictly financial. Show the scalability of your technology; accelerators are interested in ideas that have the potential to expand significantly.
Furthermore, it’s essential to have a well-thought-out financial model that doesn’t just focus on a single revenue stream but explores multiple avenues for generating value.
Understand that it may take several attempts to secure a spot in an accelerator, and that’s perfectly normal. Use each application to refine how you present your vision and goals for your startup. The process is iterative, and with each attempt, you’ll better understand and convey your business’s potential impact. The point isn’t to achieve perfection on the first try but to learn and improve continually.