Bongalo: Could this Google-backed startup be Africa’s answer to Airbnb?

(CNN) – Since the release of Airbnb in 2008, it has flooded the travel industry. Sharing a home or renting an apartment has become a modern, and often more affordable, alternative to booking a hotel room.

More than a decade later, the company has 6 million active listings worldwide in more than 200 countries. But one area that has not yet been broken is Africa.
Despite rapid growth over the past decade, Airbnb had around 130,000 listings across the continent in 2018 (the company will not disclose more recent figures), with the majority in South Africa. For comparison, in May 2019, there were more than 80,000 properties registered in London alone, according to city authorities.
The founder of the Cameroonian start-up, Nghombombong Minuifuong, sees this not in the lack of supply or demand, but in the absence of a payment method that is very common on the continent. Guests and hosts at Airbnb can not use mobile money, a system that allows users to send and receive money via mobile phone. This is becoming increasingly popular in Africa, where there are over half a billion registered accounts, according to the Global System for Mobile Communications (GSMA), an industrial trading group.

Bongalo has listings in 12 cities across Cameroon and Rwanda.

Bungalows

That’s why Bongalo started, a mobile rental platform that accepts mobile money and claims to be the Airbnb of Africa itself.

“My vision is to build a platform that … improves travel across Africa by connecting people with affordable accommodation,” he says.

Escalation

In terms of scale, the startup is still pale in comparison to Airbnb. Bongalo started in Cameroon in 2017 as a real estate company, but in 2019 relocated to Rwanda, turning to its current model. It has more than 1,000 properties registered in both countries and more than 5,000 users, Minuifuong says, but expects demand to increase as Africans can travel more freely across the continent by lifting Covid restrictions.

Domestic tourism across the continent has recovered rapidly since the Covid-19 outbreak, says Christele Chokossa, consultant at market research firm Euromonitor International, in part thanks to less stringent travel requirements in Africa and a local traveler-focused tourism industry. , says. .

But good, cheap accommodation can be hard to find. A 2019 report on hospitality in Africa, by online travel agency Jumia Travel, notes that “cost remains one of the main drivers of local tourism growth” and that technology will be key to reducing prices. The average price of a hotel in Africa’s most popular cities is $ 50 per night, he says.

Bongalo listings typically cost about $ 40 per night, says Minuifuong. You can book real estate, which is verified before being registered through the company website and will soon be available in an application. The platform is especially popular with customers between the ages of 25 and 35, he adds.

“The younger generation of tech-savvy travelers has embraced the convenience and affordability of a shared rental economy in recent years,” says Chokossa. “In countries like Cameroon, improved internet and social media penetration has given way to affordable hotel apartment rental options, as it has allowed homeowners to easily promote their services.”

Payment by phone

By accepting mobile money, Bongalo also helps customers avoid the transaction and currency conversion charges that come with paying by credit or debit card, and leverages the “no bank account” market in Africa, which does not require a bank account or access. on the Internet.
This is critical in sub-Saharan Africa, where less than half of the adult population has a traditional bank account, according to the World Bank. But mobile money has also become a preferred payment option for many people with bank accounts, says Minuifuong.

“The solution has penetrated so far into the African continent and everyone trusts it because of its simplicity and security. People prefer to use it over cards,” he says.

According to the GSMA, the region accounted for 64% of the value for money from mobile devices made worldwide in 2020 – a total of $ 490 billion.

Bongalo also accepts credit and debit cards, targeting international tourists or the African diaspora, Minuifuong says – although he adds that the majority of visitors live on the continent and about half of them usually travel within their own country. For the less tech savvy who do not want to book online, startup has partnered with independent travel agents who can book a property directly for the customer or include it as part of a wider travel package.

Local solutions

In 2022, Minuifuong wants to expand Bongalo to C Εte d’Ivoire, Senegal and Kenya. In the long run, he hopes it will be available in all African countries.

Nghombombong Minuifuong (third from left) founded Bongalo five years ago.

Nghombombong Minuifuong (third from left) founded Bongalo five years ago.

Bungalows

The competition with Airbnb will be fierce, as “it has become a household name across the continent,” says Chokossa. However, he notes that the African market remains underdeveloped and that start-ups such as Bongalo, which are tailoring services to local consumers, “may intensify competition in the future, especially if they receive support from international investors”.

So far, Bongalo has received $ 320,000 through Google’s Black Founders Fund in Africa, a project that will invest $ 4 million in 60 start-ups on the continent set up by blacks and is currently increasing its initial funding round.

Even though Airbnb has started accepting mobile payments, Minuifuong is confident that there is still room for business.

“Competition with Airbnb is very likely because we understand how the market works,” he says. “It’s about people being more local and using local solutions.”

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