Apart from access to finance, lack of required skills and technical know-how, especially in online marketing, is one of the obstacles facing SMEs in emerging markets and developing countries.
This silent but huge gap is what GrowthBond, a platform designed to automate the credit assessment process for small business owners to grow their online marketing, is cut out to do.
The company works to help small businesses that cannot afford or don't have the skills to run your own marketing with loans tailored for online campaigns via Google and Facebook, assisted by marketing certified experts.
In an interview with Business Insider SSA, Ferdinand Kjærulff, Founder and CEO of GrowBond, said the company currently run more than 300 campaigns for travel agencies to operators, small restaurants, beauty clinics, real estate agents, architects, and all kinds of small businesses that are building a product or a service.
How Growthbond works
GrowthBond issues credit up to $50,000 for small companies to hire internet marketing experts and increase their Facebook and Google ads. The company does this by reviewing companies’ marketing and revenue data, monthly revenue, return on ad spend, and unit economics to automate the diligence process and make a funding decision.
If a company’s Facebook/Google ads and Stripe/Paypal sales metrics are positive, GrowthBond issues credit for the companies. If the company does not conduct online marketing or charges customers offline, it will provide a smaller loan for a marketing expert to setup advertising and a payment gateway. Consequently, Growthbond gradually disburses, monitor, and control the capital going into Facebook/Google ads and the sales and revenue going back into the company to charge the repayment.
The company spends 20% of the loan on marketing experts and 80% on Facebook ads.
Challenges facing small firms in online marketing
Kjærulff said small firms across Africa do not make use of the opportunities available in online advertisements. Today, millions of African and Asian online retailers, selling everything from shoes, clothing, and cars, run their entire business through Facebook.
“Although, it can be really risky to launch an online campaign, you can spend a lot of money and a lot of time and not getting any results. So that's the big challenge for any SMEs.”
He said GrowthBond will help small firms to solve some of these challenges in online campaigns. “But getting companies onboard has been a huge challenge, to attract them and the trust for them to provide their different kind of data and their Facebook accounts, etc. “Another thing is the challenge of getting certified experts to a certain level to run campaigns and get the required results for the small businesses.”
The CEO said the company doesn’t do any equity investments. “We only focus on the return on investment for the advertising campaign. So if as long as the campaign is profitable, meaning that they're not losing money on the campaign, but they're selling the product at a profit, then we essentially take 20% of that profit timeline.”
At the moment, GrowthBond says it is extending operations in Kenya and Nigeria (in the discussion of partnership with CCHub) to finance 60, 000 SMEs by 2022 across Rwanda, Ethiopia, and Tanzania.