Viable Solutions, the startup in Ethiopia behind the EPhone super dialer software, has successfully secured $200K in pre-seed capital from Angel investors, valuing it at $1.9 million.
Ahmed Al Alola, a Middle Eastern angel investor, is leading the round. Amadou Daffe, Co-Founder and CEO of Gebeya, a Pan-African talent marketplace, is one of the other angel investors in this round.
“Fundraising is the most distracting task from growing a company, especially for a small team like ours. We feel very grateful and responsible for our investors who believed in us and our vision. After months of hard work, checking off fundraising from our to-do list allows us to focus on building our product and understand our users better,” said CEO Nohe Fekade
“Our vision is building a modern and relevant Dialer & SMS app specifically tailored for the African market, enabling users to hasten USSD codes and access integrated third-party services at one convenient place,” he added.
EPhone plans to use the funds to accelerate product development and client acquisition. The startup intends to combine mobile money USSD services and integrate third-party on-demand services such as ride-hailing and food delivery into its platform.
The tremendous traction of EPhone may have influenced recent investor interest. Without any marketing, the firm gained 90K subscribers in 12 months and 134K users in 18 months. The user base has now surpassed 150K users after 21 months of operation.
“You rarely find a passionate, competent, and complementary team who share a very deep understanding of their customers and execute on a common vision that addresses a very big market,” Ahmed Al Alola, the lead investor, said.
“Many African countries are going through political & social stability leading to economic reform. With the advantage of having a young population, high mobile, and smartphone penetration, EPhone is positioned to serve that massive market with its innovative dialer app and its convenient value-added services. I believe the great founding team is capable of delivering on that vision,” Ahmed said.
“This is my first Ethiopian investment. Even though Ethiopia isn’t the hottest startup hub in Africa, it has a population of youth hungry for change and technology adoption,” he added.
For his part, Amadou Daffe, Co-Founder and CEO of Gebeya, said: ” Ephone is a quite exciting startup with a product that has huge potential in a country like Ethiopia with more than 45M mobile connections. This is an incredible opportunity for a Super App that centralizes all the essential apps in the country.”
The process of getting financing as an Ethiopian startup, according to Nohe, Co-founder, and CEO of EPhone, is “extremely time-consuming.”
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He said the startup’s latest fundraising procedure took 9 months from start to finish, including a few months for the investors to wire the funds.
The founder further noted that they initially approached and pitched to a number of local angel investors, which did not go well.
They began to hunt for overseas investors later on. Nohe recalls contacting hundreds of Angel investors on LinkedIn until he obtained a commitment from the round’s lead investors.
EPhone intended to raise a smaller quantity of pre-seed money. However, due to Ethiopian Investment Law’s minimum capital requirement for foreign investment in Ethiopian enterprises, the startup decided to raise $200,000.
In order to execute SAFE ( Simple Agreement for Future Equity ) contracts with the angel investors, the startup got incorporated in Delaware, United States.
EPhone’s most recent investment is a testament to Ethiopia’s developing startup environment. International investors rarely support Ethiopian technology businesses. However, institutional investors, rather than angel investors, make up the majority of those who have done so. This transaction demonstrates the possibilities of international angel investors participating in Ethiopian businesses and provides a more diverse funding option for early-stage enterprises with smaller cheques.
What You Need To Know About EPhone
EPhone, which was launched in 2019, is a super dialer app that combines advanced dialing with smart SMS capabilities. It basically works to automate Teleco’s USSD services, allowing users to check/recharge their prepaid balance, purchase and send packages, as well as allowing them to issue call me back requests with a single click.
It currently allows users to use Ethio Telecom’s USSD services without having to go through the USSD process.
Ephone earns money in two ways at the moment. The first is a commission from services offered in the app, such as airtime sales and other third-party services that will be added in the future. The second comes from advertisements.
EPhone Bills, a tool that allows corporations and organizations to top-up airtime remotely to their employees, was the startup’s first B2B offering. The revenue from this business, as well as in-app airtime purchases, helped to cover the company’s operating costs and keep the founders employed.
Nohe Fekade, the CEO, and Haileyesus Shitalem, the CTO, are the founders of the company. EPhone is Nohe’s third firm after co-founding two others.
Haileyesus is a full-stack developer and the founder of “Ask Anything Ethiopia,” a Telegram-based Ethiopian version of Quora.
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