I recently came across news of an 'Acquire-hire' involving an African startup. Weeks later, I stumbled upon a link to an exclusive interview where a founder shared never-heard-before details about their entrepreneurial journey with Benjamin Fernandes. As it turns out, the founder who was at the center of the acquisition news and the one featured in the #BuildOurAfrica interview I watched would be a guest speaker at a Founders’ Mixer organized by Founder Circle at WeWireAfrica’s office in Accra, Ghana.

Yes! Someone built it! Keep reading to find out who they are and how they did it…    

Clad in a Smile Identity-branded tee, khaki pants, and Yeezy Foam, Paul took the stage to share his story under the theme 'From Idea to Exit' with other founders at the event. Paul Damalie is the Founder and ex-CEO of Appruve, a KYC Startup now acquired by its lead competitor, Smile Identity, as part of its expansion moves to Africa. Starting off as an insurance salesperson in Takoradi, Ghana, he shared how he overcame numerous challenges: from surviving a legal battle with his co-founder to being caught up in a war zone, going broke and getting stuck in Cape Town, and the Startup facing three near-death situations in its lifetime before ultimately achieving an exit through acquisition. 

Paul & the interviewer at the event.

Going From Zero to One

Inspired by the challenges he faced as an Insurance Salesperson, he knew he would create a solution to solve the problems he encountered. Like many founders who experience the pain points they experience firsthand, he had a better and deeper understanding of the problems. This understanding led to the creation of Appruve, a solution aimed at resolving the issues he had personally experienced.

Paul: Right after high school, my first job was as an Insurance Salesperson, and I was essentially the youngest among the sales group. It gave me the opportunity to learn hands-on skills, especially the art of selling. As an Insurance Salesperson, one of the key aspects of the job is meeting a certain quota because your salary is commission-based. So every week, I had to meet a quota of ten (10) clients. They would then take the list of clients to the headquarters in Accra and return to tell me that only five (5) of my clients had passed the KYC (Know Your Customer) process. “Oh we are sorry, only  five (5) of your clients passed the KYC”.  What? What is this? Do you know how hard I work yet you’re taking 5 of them. This meant I wouldn't make as much money. That's when they started talking about KYC. This was around 2011, and it was really frustrating for me. It was my first exposure to the challenges of KYC. Later, when I got into banking, I encountered a similar challenge. It was a problem that existed in the banking world as well. I always knew that one day I would attempt to solve it, and when the opportunity presented itself, I took it. We went deep into the problem and began working on the solution.

Surviving Startup Woes in the Early Days

Appruve came into existence as a solution to Paul's experiences as an Insurance Salesperson but encountered a set of issues that threatened the life of the startup. Paul mentioned that Appruve almost died three (3) times in the history of the startup.

Paul: In the very early days, we received a lot of free infrastructure support from companies like Google and Amazon. However, the challenge arose when my co-founder began using these resources for personal gain without my knowledge. I only became aware of this when one of my employees, who was then the Head of Engineering, informed me. I think what happened next was me trying to understand why he was doing it and what his motivations were. In an attempt to understand what happened, he became disappointed, because he thought I was siding with the employee, and he got angry. I am not going into the details; you can look for the interview. The bottom line is that he attempted to sabotage both the company and my reputation. We had built ten Proof of Concepts (POC) across Africa, and you can imagine the shock of being a Head of Tech at a bank receiving an email from a company that just completed your POC, informing you that the CEO has resigned. You know, it's disturbing. At the time, I was shuttling between Cape Town and San Francisco, and this situation was extremely challenging because my phone was blowing up. One of our investors just assigned us a deal and now you sent an email that the CEO has resigned. My investors were pissed with me. I did not send those emails; my co-founder did. You can imagine! I could not understand why he did all that. Eventually, we went to court and settled out of court and we moved on. But It was challenging; that out-of-court settlement meant that I became broke. I got stuck in Cape Town actually. But it was an opportunity. I was depressed so I learned how to sell properly over there. 

In 2017, when Ivory Coast was coming out from a civil war, I had to attend a Swift Conference for banking institutions. On my way from the conference to my hostel, rebel attacks escalated, and the vehicle I was in came close to being shot at. This particular experience felt like a near-death one. On another occasion, I had a similar near-death experience when the engine of the aircraft I was on, flying from Kenya to Zanzibar, failed. 

Building Resilience from Negative Experiences and Lessons

These challenges helped Paul develop resilience and learn some valuable lessons.

Paul: You experience something like this early in the life of the company; it helps you build resilience. Appruve nearly died three times in the history of the company. But at every point in time, we remember our collective experiences or failures and how we traversed those challenges. We figured out a way. The question we are all asking ourselves: How far can we go? It is not about next week or months or, you know, the year... it is just the next day. If you can stay alive up to the next day, and the day after, and the day after, you will progress.

I think that whatever the circumstance you find yourself in, no matter how painful the challenge will be, just know that, yes, the reality is you will have a problem. Let's say the problem is that tomorrow you will be sacked if you don't pay your school fees. You'll be very tense; you will be frustrated because you have been trying to get money from anywhere. If you can't get the money, you will literally think that is the end of your life. Usually, when you're in the middle of a problem, that is how bad you feel, and you are forced to make tough decisions. I think that is usually the moment when you have to calm down and step back. You will be able to really look at the merit of the problem; you look at the problem and look for solutions. The biggest lesson for me is that anytime we have a problem, always step back, look at the problem, break it down, and try to find solutions and calm down. Don't be too tense. Just calm down; I know it's challenging, but if you calm down, the problem will eventually be solved. It will not be solved maybe at the time that you want because this is what the world is. The world doesn't follow your own schedule. But eventually, it will be solved. I bet those of you who have a car here, ten years ago, you were probably walking. If you look back now, you may be wondering wow… that is a dream you had but ten years later, now having a car is a common thing for you. Your biggest worry is fuel or money coming in. Problems are problems; take them as they come; do what you can do and just stay focused.

Navigating Regulation: Gems for Founders Experiencing Regulation Setbacks

Before founding Appruve, Paul used to organize FinTech events and publish content about the Ghanaian tech ecosystem. These events primarily attracted founders, bankers and Tech enthusiasts. His publications also garnered attention from key players in both the global and African tech ecosystems, which he later leveraged to secure a grant from the Bill and Melinda Gates Foundation and expand into new markets in Africa.

Paul: I believe that when you find yourself in any position or role, do it to the best of your ability. The reason I say this is that before I started Appruve, I used to organize FinTech events – the first of their kind in Accra. These events brought together FinTech founders and bankers, including some key ecosystem  figures like the current Head of FinTech at the Bank of Ghana. At that time, he was with Tigo (now AT), leading the rollout of Tigo Cash in Ghana. Fast forward seven years, and he's now at the Bank of Ghana.

These events helped me build credibility and relationships, not just in Ghana but across the continent. I also published content on the overall tech ecosystem in Ghana, which attracted numerous opportunities. One notable outcome was securing a grant from the Melinda Gates Foundation. They reached out to us after reading our publication, and I consulted for them. So all these networks sort of build a reputation for me. And it was actually what I leveraged on going to market. So if I was going to Cote D'Ivoire, I would look up my email for contacts that have reached out from Cote D'Ivoire and probably a banker or Founder or someone and I would reach out to them. Hey, I am coming to this market, what should I do to be able to make sure regulators understand what I am doing? 

Typically, when we are expanding, I go and live in the country for three to four months and learn the language if I can, eat the food, stay there and get to know the people whose network matters. And that is what helped me build the kind of profile or network that is needed to be able to go to multiple countries (market)and listen to the founders who are in those markets for their trade secrets. 

Exiting: Getting Acquired by Lead Competitor 

Engaging in activities unrelated to Appruve, even before the startup's formation, proved invaluable. It allowed him to build relationships and gain a deep understanding of his market. This proved to be one of Paul's trade secrets and superpowers, as it led to a relationship with the CEO of his lead competitor, Smile Identity, which later resulted in the acquisition of his company. 

Prior to the exit, Paul held annual calls with the CEO of Smile Identity, and had developed a relationship with him. I know that may sound uncharacteristic of the typical founder, but to Paul, relationships matter in business, even if they involve competitors. When Smile Identity came to Ghana, they had to rely on Appruve's database, which not only established a working relationship but also solidified the existing bond between both founders. 

Paul: Usually, don't dismiss your competitors. You never know who might help you in the long run. For us, establishing a relationship with them and building a working partnership with them helped us establish a path towards exit

Paul with Founders at the Founders' Circle Mixer

Details of the Deal

When there is a fundraising round, founders often openly disclose the figures. However, it appears that founders are more tight-lipped when it comes to acquisitions. This has become a characteristic of the African startup ecosystem, prompting questions from various players in the ecosystem. One of the key individuals raising such questions is Ngozi Dozie, the Co-founder of Carbon, who wrote an article questioning this trend. During the Q&A session, an interesting question came up. The person asking the question referenced the article and inquired about what Paul thinks is responsible for this trend, specifically asking for the monetary value of his exit deal. Paul cited the nature of the deal as one of the reasons and mentioned security concerns as another reason for this lack of disclosure. 

Paul: I think it depends on the stakeholders in the business. Maybe the company acquiring you will say we don't want to expose this information because we think it gives us a strategic advantage. That is one reason. Secondly, you also want to protect the founders who are exiting. 

He shared a story of a startup that publicly announced their fundraising, and the very next day, they were targeted by armed robbers.

Paul: In my case even when we raised money, I never have made the funding announcement public; our acquirers did want to put the value out there. But we gave a range… The transaction was between 15 to a little over 20 millions dollars. So yeah, that is it! And it was a cash and stock deal. 

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