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Nicole Dunn and Brian Kearney, hosts of The Next Frontier Podcast, interview founders and investors in Africa, from Pre-Seed to Unicorn stage entrepreneurs and angels to professional VCs. The podcast aims to shine a light on the dynamic startup ecosystem and bring equitable funding to entrepreneurs that are tackling the most difficult problems on Earth. Their goal is to shift the narrative on startup investing in emerging markets and help grow the African yearly VC inflows to $20 billion.
New episodes drop every Thursday in your favorite podcast app and at nextfrontierpod.com.
Greg Schneider: Yeah, it's not easy. Like always the startups, as I always say to my friends who work more in the traditional space, no, they say, “How are things going?” And I said, “Depends when you ask. In the morning I can be shopping for Lambo's and in the afternoon, I can be on LinkedIn looking for jobs, and at night I can be shopping for Lambo's again.”
Nicole Dunn: Welcome to the Next Frontier. I'm Nicole Dunn, co-founder and COO at a venture-backed African Startup. I'm a VC investor turned startup operator, passionate about unlocking untapped entrepreneurial potential in Africa.
Brian Kearney: And I am Brian Kearney, a three-time entrepreneur, nonprofit founder, and angel investor based in the U.S. I'm excited about connecting capital to entrepreneurs solving the world's toughest problems.
Nicole Dunn: Join us as we changed the narrative on startup investing in emerging markets and help bring the yearly African VC inflows to 20 billion dollars.
Brian Kearney: But right before we were recording, you said something about how it helps with impact investing. Is that part of why you wanted to co-found Empowa and dive into it?
Greg Schneider: Yeah. So look, I think a big—as I mentioned off air, I grew up in South Africa, and then our co-founder originally grew up in Zimbabwe, then moved to South Africa.
Now I was also living in the Netherlands. And I think one of the challenges we observed across the continent was a lack of access to affordable planning, preventing people from reaching their full potential. And we kind of saw that. There's many examples of that. Prior to moving to the Netherlands and joining Empowa, I was running a business that financed didn't just be student loans in South Africa.
So I was always really drawn to how can we make impact in a way that is sustainable. So we think about sustainability not only in terms of climate because that's obviously a big narrative for the homes that we finance, but also sustainable as a business model. Simply relying on donations has been proven to not be effective.
So Empowa Business is designed to be sustainable. I mean that financially sustainable and that requires us to design a model that allows people to get access to affordable housing in a way that, especially once the flower gets going and we have more and more homes within the fund allows more and more people to be impacted. That's a big part of who we're trying to attract from a community perspective, but also trying to attract from a kind of financier's perspective and the kinds of conversations we have.
Brian Kearney: Interesting. And then with that model, what about DeFi makes that model work the most, or what made you dive into DeFi rather than just TradFi?
Greg Schneider: Yeah. So it's really interesting, last bull market, everyone was a blockchain business, everyone was a blockchain technology and you kind of start to scratch the surface and say why and why can't you do this in a more traditional way? Conversation gets a little bit dicey. We're not a blockchain, we finance affordable housing.
When we started to look at how we could do that in an effective way, we looked at different technology options. Blockchain technologies—the way we're going to be able to resolve this problem in the same way that Amazon's not an internet business. They're a retailer. It just happened to leverage the internet to deliver a superior product.
So Jeff Bezos kind of ongoing, “I'm an internet business. He went, “I sell books online. I sell books, but I do it online.” So the reason why we lent into the blockchain aspect of delivering this product is kind of multifaceted. So when you look at the challenge around financing housing in kind of developing markets, you typically run into a few key challenges.
So the first one is a lack of transparency and the perception around corruption, etc. So, “Where do my funds go and how are they deployed?” Well, as a start, blockchain really helps with that because we can record our payments on blocks on the chain. We can demonstrate that to any would-be financiers, and they can say with confidence, “All right, that's where the money is. That's where it's flowed. That's has been deployed. That's really valuable.” Not only can we do that, we can do that in kind of near real-time. So rather than having to send an auditor out at an exorbitant cost months into the future and say, okay, how things been performing, we can really get this feedback.
Like I said, in near real-time. So that's obviously incredibly valuable. We can move funds very quickly. So to give you an example, in our pilot project in Mozambique, we sent some funds in for the homes and we had those funds in our developers bank account using peer-to-peer because there's no exchanges in Mozambique in three days.
A separate partner sent a similar amount of money through the traditional banking sector and those funds were held in the reserve bank for six months. You can imagine trying to run a business where your funds that you've raised successfully haven't been released for six months. And then the final one, and this is probably the most critical is when trying to raise funding in the TradFi space, the traditional space for project like affordable housing in say, Bari, Mozambique.
The sad reality is that financiers who maybe are based say in Europe, so let's say in Switzerland, look at that as almost akin to an unsecured loan. For them to go ahead and raise the funds and have these homes, now they have our homes of 10,000 a home in Mozambique, for them to go and liquidate that asset if they needed to or even a portion of that asset, it's going to cost them more than the assets’ worth. Business classifies from Mozambique pay for their consultants, et cetera. Not to mention how challenging it would be to liquidate these assets because there isn't a function in housing market. So we have that challenge that because there's such a perceived high risk of that investment, the reward needs to be commensurative and that's why home loans costs 25 percent in Mozambique, right? Crazy, right?
No one can afford a home loan at 25%. You're based in the States, I think they have seven and a half, 8%. People are complaining. Quadruple that and see how you feel. So what we do is collateralize a portion of that loan using our token, which is locked up by the developer or the developer and in part by our community.
And that gives the financier a highly liquid asset that in the event of default or massive currency fluctuations, they can sit in the air conditioned office or heated office, click a few buttons and have accrued some of the investment so that immediately collateralizes the loan with a highly liquid asset, which reduces the risk, which reduces the expected return, and that return can then be passed on to our tenants who ultimately are going to purchase their home. So that's kind of around quite quickly, but probably the four ways in which blockchain helps, but also the way in which DFI helps so we can crowd an investment from impact investors from DFIs, from NGOs, from family officers, whoever think, whoever's drawn to our mission, we can provide them a return.
We can give them a collateral that is liquid, and we can allow our community to support the project in a way that also rewards them for that support and allows them to make a positive impact.
Brian Kearney: Yeah. What about affordable housing made it the industry that you dove into. Was there research into it? Was there just this one moment where, “Oh crap, I have to fix this.” What was that?
Greg Schneider: Absolutely. So look, it's interesting. Glen came to it from one perspective. I came to it from another. So, Glen having grown up in Zimbabwe and seeing all that has happened in that country, there's Zimbabwe, land up in South Africa and in South Africa, tons of Zimbabweans, I think about 2 million came across the border during the kind of as economic migrants, economic refugees, but when they got to South Africa, they weren't able to open bank accounts.
Now, Glen started to try and tackle that challenge, and it was approached by actually a Dutch pension fund to see how they could launch pensions for these Zimbabwean, I suppose, refugees in South Africa. As he started to try and solve that problem, he realized that actually one of the biggest assets you can have as somebody of a lower income is your home.
You've got a house over your head, Maslow's hierarchy of needs, that's a challenge that really needs to be addressed and one that has been so poorly addressed across the continent, and I'll get to that in a second. So, he realized before we can even have a pension, we need to give someone a place to live.
I had, like I said, been working on a challenge around providing affordable or interest-free student loans. We were trying to tackle a segment of the market in South Africa where the interest rate on the interest loan, on a student loan could be as much as 27%. So again, if you're challenging, if you think of some challenges around student loans in the States, and about four or five percent, I think they said, 27% is just exhausted.
So we were trying to tackle that problem when I got into contact with Glen and was considering my move to the Netherlands. I realized, again, housing is even supposed to further down in the mass hierarchy of needs. So it would be a really interesting problem to try and solve. And so that was it from a kind of impact perspective.
From an opportunity perspective, it's just a fundamentally broken system across the continent waiting to be disrupted. Again, just considering Mozambique for a second, they're a pilot market. Mozambique has almost 31 million people, and across the country there's only 600 homelands. That's 600 a month.
Not 600 a year, not 600,000, 600 active home loans in Mozambique. As poor as Mozambique is, and it is one of the poorest countries, one can't believe that there's only 600 people who are able to qualify for a home loan. It just doesn't make any sense. So there's clearly an untapped market and ratios like that exist across the continent.
Nigeria, again, another market that we're actively exploring. The ratio is the same. There's obviously more home loans because Nigeria is a much bigger country, but still the ratio is the same. And so that all stems from the fact that the traditional mortgage as we understand it is not fit for purpose across the continent.
So 80 percent of income across the African continent is informal, right? Many countries don't have a functioning credit system. People don't get a pay slip as we think about it. Their income is very lumpy around tourism season or around harvest season. You can see big spikes in income and then big troughs.
So to expect somebody to sign a contract and to say I'm going to pay this set amount every month for the next 30 years isn't very realistic. So we offer what we call a rent to own, more of an industry term, a rent to own contract where the tenant will pay a set amount each month as a form of rental.
But ad hoc can contribute to their home loan as and when they have additional income. And over a period of 10 years, they're expected to pay back that home. So there's a bunch of legal and kind of regulatory advantages to that structure, but it also means it's forward looking. So as long as you can keep making your rental payment and then make your ad hoc equity payments, you can live in the home.
You can enjoy the benefits of living in that home. So it is akin, I suppose, to a home loan or mortgage. And for people who historically would have had to save up in cash, 100 percent in cash to buy the homes, or would have had to self build, this is a much better alternative. They get a home that is climate resilient, so it's built to withstand natural disasters, which are all too common across the continent.
They have running water, they have pollution facilities, they have electricity. These are all things that aren't kind of a given if you have to self build a home, if you live in kind of what is often unfortunately inferior accommodation.
Brian Kearney: That brings up a lot of questions. One I had when you were talking about the last part, and I have a couple more about the actual market, the credit system, all of that. But for these homes, do you have building partners that are building these homes? Are you guys building the homes? How does that look?
Greg Schneider: Yeah. So absolutely. This is a grassroots project. We believe with partnering locally, I think for a number of reasons, first and foremost, getting all the regulatory approval, building up teams, all of that additional cost to be in each market just wouldn't make any sense.
So for that reason, partner locally, it also–housing is a local issue, right? People need to understand what locally makes sense in terms of construction, design, managing these lease to own contracts, you just want to be on the ground, you need to check, follow up, maintenance, all the things that come with it.
So very hard to sit here in Amsterdam and try and manage a Mozambique housing development. So we do partner with locally, and we also think that also empowers, as the name suggests, empowers local developers to help solve their own problem. Again, I think we've, we all, anyone in the industry can tell you countless examples of well-meaning European-based or American-based projects that have thought they'll fly in, create a solution and solve what is a backlog of 50 million homes across the African continent.
It's not going to be done remote. It's going to have to be done with local partners. So yeah, we're focused really on helping on the financing side based here, closer to where the capital is. In Europe, teams spread across Europe and some in America, but mostly in Europe, raising the funds and then working with partners on the ground to do the delivery.
Brian Kearney: That makes sense. Then the partners on the ground that has to be a pretty key part because each country is going to have a very different regulatory environment. They're going to have different legal environments. What does that look like, particularly with the view on like land rights? Is that a difficult thing to manage when you're going into new markets? What does that look like?
Greg Schneider: Absolutely. So look, every market has its own regulatory challenges, but one thing we have at our advantage is housing from a political standpoint is affordable housing. Affordable housing from a political standpoint is very popular.
No politician ever didn't get reelected by providing more affordable housing. So when we come and we say, ”Look, we're going to bring foreign investment, we're going to work with local partners, we're going to allow you to have more affordable homes.” In general, politicians are quite excited to see what we're doing.
A good example of that would be end of last year, we signed an agreement to deliver 25,000 homes in Bari and Mozambique. It's a 10 to 15 year project and that's a big undertaking, but you know, the mayor of Mozambique flew out here to do the signing. He went to get all these photos. He's been to the site multiple times.
It's part of his campaign ambitions. So that helps a lot. That doesn't solve all problems, but it's very different to some of the other challenges that blockchain projects can have in trying to move into a new market, especially in trying to stabilize things like local currency, et cetera. So that helps a lot in terms of that relationship.
Right now, we're very selective on who we work with. So we'd rather it go slow, choose the right partners, have a track record of delivery. The long term ambition with Empowa is ultimately to create kind of an ecosystem where developers and financiers and everyone can kind of be connected through what we're doing.
That would be called the decentralized approach, ultimately. But right now it does, unfortunately, have to be quite centralized, i. e. us choosing the partner, working with them closely, because any failings at this stage are much more dire. If we had 10,000 developers raising funding in countries across the globe, and one or two or three or four, whether successful, that's expected, right? And by now, if we have one successful, one that's unsuccessful, well, we'd probably significantly have our ability to continue.
Brian Kearney: Right. So what do you do to kind of analyze the credit risk if there is no credit system in the markets you're going to?
Greg Schneider: So look, we try and gain as much information as we can. And ideally, we prefer to work to kind of extend rent to earn contracts to tenants who at least can cover that minimum rental payment from their formal income, because typically, like I said, it's some form of some informal income. Ideally, we also have the advantage that we tend to have really long waiting lists for potential clients.
So a good example, just to illustrate that point, when we launched our first set of homes in Mozambique, TasRail, our local partner, printed 50 application forms. They received 150 application forms back, which means that people went out and photocopied themselves and had people apply. So, we have a waiting list to the waiting list.
So, because it's rent to own, a tenant that's not performing can be removed and a new tenant can be moved in. It's not like a mortgage where there's a change in title deed, etc. So there's that element. So make sure you choose the right people to move in. We also have our own application called EmpowaPay, which is how we manage tenants’ payments.
We're increasingly creating more integrations to allow tenants to pay through that application. And what that does is it allows us to keep track of how payments are performing. Like I said, kind of closer to real time so we can flag any potential issues. So is there somebody who isn't paying? We can identify that.
How do we deal with it through our partner? But we're not waiting for, again, some audited financials at the end of the year. So that's obviously my key. And I suppose the longer term ambition would be to have that record of payment connected to a digital identity and some kind of anonymized record that could almost act as a credit score if we were in a position where we could showcase that tenant have made successful payments of their rent for the last three years, was up on their equity payments, et cetera.
You could imagine another organization being interested in being able to query that and maybe even pay something for that in order to be able to decide whether they extend a cell phone contract or a car contract, and again, then those funds can be used to kind of lower the cost of home ownership.
Brian Kearney: Okay. That makes sense. And then when you're on the fundraising side, how do you show the market and explain the potential return for investors? Because when they are thinking a 10,000 mortgage in Mozambique, the average investor is probably thinking, “I'm never going to see my money back,” but that's obviously not the point of a business. How do you explain that to them?
Greg Schneider: Absolutely. So look, we really have the full spectrum of finances that we talk to. On the one hand, we have kind of your hard-nosed, finance-focused, “What's my return?” This kind of relevant return. “Oh, it's doing something positive.” I mean that's not a bad thing, but that doesn't move the needle.
Then we have all the other side, the real kind of NGO, a philanthropic organization who's very driven by impact and throughout kind of everything sits somewhere in the middle. We tend to place, right now, especially the audience that is most interested in what we're doing is sitting somewhere kind of on the philanthropic, but not completely, not a charity. We don't do donations, but they measure results, they've been mandated, and they measure results based on what's the return, what's the sustainability of that return, but also what's the impact that's being made. So, being able to demonstrate that our homes are over 50 percent women-led households, the climate initiatives, etc.,
That's typically as important as the return. So when we offer something akin to a 10 percent return, but we can also show these impact metrics, that ticks a lot of boxes for them. Ideally we would want our business to be in a position where it's so sustainable that even that hard-nosed investor can't deny the returns, but that's not 100 percent who the audience we're playing to at this stage.
We're definitely not a charity. We're definitely not looking for donations. It's not, we're not really in that space, but there's plenty of organizations who've been mandated either because they're government organizations, maybe their pension funds, whatever, to hit that kind of ECG metric and make sure that they're sharing sustainable returns. In which case, I think we are an interesting prospect for that audience for sure.
Brian Kearney: Yeah. And then what–
Greg Schneider: Oh, and so it's like the final thing I'll say is in terms of how do we demonstrate that you'll get your money back when we've done a pilot project, Mozambique admittedly it's at this stage, it's 35 homes and we're scaling that up.
But we're able to demonstrate to that audience, not only have those people been successfully paying back, paying their monthly rent, which they have, but some of them are, I think after 3 months, 5 percent of equity had already been paid back. I think a little bit higher, we have some who are almost halfway through paying their homes back already in a year or 15 months.
So, we're able to showcase that there are, there is a market for this. And I do think it's important to point out Empowa doesn't house the homeless. So I just, that's sometimes a misconception. We typically provide funding to working, the working poor or urban poor. So it will be nurses, policemen, teachers, civil servants.
Typically in other places in the world, these individuals would at least have a home with running water and toilets and electricity, but in many of the countries we speak, we're marketing, we're working in, they don't, and that's a segment of the audience that also needs to be addressed.
So when you start to understand that it is a nurse, it's a teacher, that they’re making these payments based on this income that they earn, that they've been able to make ad hoc payments and this can showcase that research, you know, skepticism, be able to address some of the skeptic. Obviously, there's always going to be some people who think the risk isn't worth the return. But if they want to make an impact in those kinds of people's lives, very good project.
Brian Kearney: Yeah, that makes sense. And no matter what the startup is, there's people who aren't going to think the risk is worth the return. So that makes sense.
Greg Schneider: Of course. I mean, everyone's heard this fun stories of investors who go, who's going to let somebody stay in their spare bedroom or who's going to let somebody stay in their apartment or who's going to, which random individual is going to give somebody else a lift in their car. That's never going to work. Yeah. Those are the investors in Uber, and Airbnb.
Brian Kearney: Right. Yeah. No, that's exactly true. And that provides a fantastic transition to a few questions I had about your background. So I have more questions about Empowa. When I was doing a little bit of research, it looked like you used to play in the Airbnb world a little bit. Tell me about that.
Greg Schneider: Some good stalking. So yeah, I joined straight out of university, I joined as an intern at a digital marketing agency company called Quirk, which went on to be Africa's largest digital marketing agency. And I kind of rode the wave from being an intern all the way to being on the executive.
Sadly, I joined just too late to have gotten any of the equity stake, so I didn't really monetize all that time, but I definitely learned a lot of lessons. I think once, the founding team, who had obviously formed a close relationship, had their earn out and moved on. I decided, okay, probably had some good education, work with somebody else. I've learned some good lessons. All my friends have left the party. It was time for me to go for my own. So, I joined a business, I managed Airbnb properties. Well, yeah, it was a really random, but I went on to join as the team. I just kind of joined in a senior role and take a stake in that business.
We've managed at our peak, like a hundred of a hundred listings across Cape Town, which was, yeah, I'll be honest and say not a business that ultimately I really enjoyed. When people on holiday, I think they sometimes, they come with a very set intention for the two weeks that they have their time off and can be a bit of a challenge.
And you have a lot of listings. There's always something going wrong, right? There's always a geyser that's burst. There's always something that's happened. And you're basically constantly putting out fires. And even if you have 99 happy apartments, you just need one to kind of mess up your day.
So you end up leaving that business, bouncing around doing a lot of consulting mostly. And then, yeah, I suppose joined up with the founder of Quirk who had sold and made a lot of money to do Learning Loans. So he had decided to refocus his efforts post the acquisition of Quirk into impact-focused projects, which is how Learning Loans came into existence.
We worked on that for a long time, had some good success there. I think at our peak, we had, just before COVID, we had about 30 institutions, colleges, universities using our service. And then when COVID hit, I suppose many businesses, a lot of those organizations closed down or didn't close down, but closed their doors and was unclear when they're going to open again.
Distance learning in South Africa is not as realistic. Data is really expensive. Having kind of the hardware to enable it is more challenging. So there was a moment where I needed to, like for many people, they reflected. I'd lived in South Africa my whole life and I was deciding whether I wanted to maybe experience what it'd be like living abroad.
That's when I got connected with Glen, who at the time was just writing, had just written the white paper for Empowa. And said, “Well, I'll do some other stuff kind of while we work on this, but let's see if we can raise some funding to make this reality,” which took a bit of time, but we were able to finally raise some funding, have the kind of runway we needed to deliver this thing properly.
And so that's when I focused my time full time on Empowa basically in the Netherlands. And I suppose that's been the last two years, I don't know. It's all a bit of a blur, but yeah, I think it was an idea born out of COVID, right? Ironically, those were some of the best years for blockchain, right?
When we were all stuck at home with nowhere to spend our money. Now, we are, “Do I buy more of this random token or do I go on holiday to Greece? I'm going to go on holiday to Greece.”
Brian Kearney: Yeah, that's for sure. I have a couple more questions about your background. But first, I want to know a little bit about the challenges of fundraising because when you just spoke, you kind of made it sound like, “Oh, we just decided we're going to fundraise.”
But I'm sure there's a lot more to it than that. And it's not an easy thing, particularly if you're fundraising in Europe for something in Africa, where again, a lot of the investors you're talking to might have absolutely zero experience with the entire continent. They might've never been. The only things they might hear are the bad news stories, which give you a horrible view of it. It's the same as here in the States. Everyone thinks Chicago is just this murder capital of the world, and it's really not that bad. You just only hear the bad stuff, it's a similar thing.
Greg Schneider: Of course. So look, maybe a bit on the fundraising. We built our project, our project right now has been built on Cardano, which we were drawn to because of its focus in that space and impact and also within Africa. At the time that we were deciding what layer one to choose, low fees were very important and they had quite a keen focus on Africa with the organization set up in Kenya and kind of a CEO focus on that aspect of their project. So we started off with Cardano and they have a thing called Project Catalyst, which is a community-led fundraiser where they can allocate funds.
And we were very fortunate to have secured 60,000 in dollars in FundFive, which we used to deliver four homes as a kind of pilot homes to show we could actually deliver homes with a partner and to finance the NFT sale, which we saw there was a thousand NFTs, which I think raised about 400,000 dollars if I'm not mistaken.
It's a few years back now. And those were just NFTs that promised future potential in the project. There'd be a funding community. And it was really the peak, I suppose, of NFT seasons that helped us a lot, and finally we did a token sale. So we were able to do a token sale, which I think the final week of our token sale, Russia invaded Ukraine.
And all our metrics, everything, everything didn't look as rosy as it did the week before, but we were quite fortunate. We had quite a successful first few weeks. So we were close to sold out. Oh, we also did an ISPO, it’s also a Cardano, I think primarily a Cardano initiative where people, you run a stake pool, people stake their ADA.
So stake the Cardano native token, you get the rewards that they would ordinarily get. You might have validated it but instead you give them your token. So it’s a trade. So if you've got to hold on to their capital ADA, give the interest effectively. The way I used to describe it to my non-crypto fans is put their dollars in your bank account, you get the interest and you give them your token in lieu.
So those four things helped us to raise enough funding to give us sufficient runway to deliver the first 35 homes, to build a lot of the infrastructure, to build the blockchain, rssentially, blockchain kind of gaps that we needed. Right now, we're obviously in a position where we're trying to raise funding, and we're always trying to raise funding for more homes, right?
And that's just the virtue of our project. That’s obviously become more challenging because in general, sentiment is not where it was 18 months, two years ago. The positives of that are we talk to much larger organizations because we have a bit of a track record. So when we get a yes, then yes, there's a bigger check.
The challenge is because times are tough, people are more kind of skittish about signing that check. And what we're experiencing right now, and as I say to the team often is we're in this position where we have a lot of dominoes around people who are interested in supporting our project, but nobody wants to go first.
And I think that's almost always the case with startups. Like you often hear these stories where money starts flowing as soon as you got the right person on board. We're lucky we've had some good partners. Mercy Corps Ventures is a VC that's very focused in the space, has put some money in, and we've just finished the kind of, there was a grant and we just finished that period and getting a review done.
And I think based on how that review goes, it will help with kind of unlocking, knocking that first domino and hopefully setting things off, but yeah, I mean, right now we've kind of just come out of the European summer, which Europeans are very good at work-life balance. So things do definitely quiet and down over August, but we expect now for the final quarter to convert a lot of these kind of, “Yes, I'm interested.” to, “Yes, here's a check.” Yeah, it's not easy.
Like always for startups, as I always say to my friends who work more in the traditional space. “No,” they say, “How are things going?” And I said, “It depends when you ask. In the morning, I can be shopping for Lambos. And in the afternoon, I can be on LinkedIn looking for jobs. And at night I can be shopping for Lambos again.” That's a journey. I mean, I've done it a few times now successfully and unsuccessfully. So you get a bit hardened. You maybe, you don't get to invest in the Lambo that you specced out on the website. And you also don't click submit on the CV application on LinkedIn yet. You just kind of like hover in the middle until, you know.
Brian Kearney: You're polishing your resume. You’re not sending it out.
Greg Schneider: Exactly. Exactly. And you're not like your hearts are broken when the kind of orange Lambo with the other stitching isn't actually going to be yours.
Brian Kearney: Right, right. Exactly. So are you thinking that the next rounds are all going to be venture funding? Or do you envision another ICO down the road? Maybe when the market improves on the crypto side.
Greg Schneider: So I think two things. I mean, first of all, I think the kinds of funds we want to raise in order to really start making impact is probably more likely to come from the institutional investors. I think that's the first one. I think the regulatory framework globally is much clearer when it comes to institutions. In general, governments are kind of like if you're big enough, you're big enough to do what you want with your money, whether you agree with that or not, I'm not going to get into politics, but that's general, the consensus.
We've also, the community has really been generous in giving us the funds that we need to have gone to this point and to give us the runway that we have. And we prefer to really start to show meaningful delivery before we went back and ask them for more money. So I think that's unlikely that we'll go back to community fundraising unless we were in a position where we had delivered so much, and regulars where your payments are changed, everything, that we felt like, cool, we can give people a chance to continue to get more involved.
But we have a little bit left, as I mentioned earlier in the interview, of our friends have been allocated, our tokens have been allocated to community, to kind of community funds. We do need to distribute those at some point so that we might, to just get that last little bit, maybe we'll do something.
But like I said, it's quite a small percentage of what we're looking to sell. It's just that it was in our white paper. It was in our tokenomics, and therefore, it seems reasonable that any person who participated in our project would want to see those funds out of the team's hands, hypothetically, in the same way that you want to see all our funds, all our tokens have been separated into their own wallets, with named wallets, obviously can be trapped, so people keep quite a good eye on where our funds go, but just for completeness sake. We said we're going to distribute this much. Let's make sure that it's going to connect these hands. And we also, when we did our token sale capped, the amount of tokens we could sell. So while we're not, this feels like decades ago in crypto time, but I think it was like the most was four and a half thousand dollars worth you could buy. I think the least was two and a half dollars, something like that, maybe even less.
I can't recall, or maybe it was less than. We had four and a half thousand token holders at the end of our sale. So we really tried to distribute our token, limit the number of wells that existed, which I think we did a good job of. And so we'd also want to make sure that those tokens go out in an evenly distributed way. So again, we don't have anyone pumping and dumping our token because we're not that kind of project, right? Property is typically a long term prospect.
Brian Kearney: Yeah, that makes sense. When you do that next token sale, you're gonna have to let me know. I'll be interested for sure.
Greg Schneider: No, definitely. I appreciate the support.
Brian Kearney: Yeah. Yeah. It's a cool project. Okay. So on your background, growing up, did you think that you're going to be going into startups or is this kind of out of left field? To use a U.S. baseball analogy.
Greg Schneider: Yeah, of course, I kind of know my American sports, so not completely out of left field. My dad was a bit of a sale entrepreneur, admittedly both successful and unsuccessful as is always the case, but I kind of grew up–and my mom actually runs her own business as well. So kind of grew up in a family where people were quite entrepreneurial. They kind of worked for themselves, kind of had to ride the trials and tribulations of that.
But it was never, you know, I work nine to five and I get my paycheck at the end of the month. So, I think maybe through osmosis or that's just kind of what I was drawn to. I know it's not for everyone, but I think, yeah, I think it wasn't unexpected. And as you all know, as anyone who is entrepreneurial and has run their own business, they know there's pros and of course there's cons.
There's sense of, the few times that I have worked for somebody else, one can't deny that knowing that your next paycheck is likely going to come in on the 25th, very likely to come in on the 25th. You don't need to worry about it. And there's, you're only doing one job and you just need to do that job really well is obviously a luxury that you forego when you do your own business.
But at least for me personally, the advantages and the challenges and especially the kind of stimulation that you get from in your own bus and on your own business far outweighs that sense of comfort. So yeah, very happy being in the Empowa team. It's nice to have colleagues. I've also done startups where I've just been by myself, maybe just a couple of us and that can get quite lonely, especially in the world of, I suppose, remote work and shouldn't be even worse.
So it's nice to have a team and we do get to meet up kind of weekly fortnightly altogether here in Amsterdam. The ones that are based here. So, yeah, not completely out of left field, but, and I've tried both. And I think I'll be sticking in an entrepreneurial, which I don't envisage having to look for another job. Things at Empowa are going according to plan. If that were to be the case, then probably another startup for me.
Brian Kearney: Yeah. Yeah. That makes sense. It can become addicting for sure, the startup world, like you said, might not have the stability, but the camaraderie you have in building something is kind of second to none, I think.
Greg Schneider: Yeah. And I mean that’s stability, you know, also as I sadly witnessed so many friends kind of go through the trials and tribulations of retrenchments, which is very common in South Africa, unfortunately, and it's common everywhere. I do sometimes question how much stability, with that sense of stability is sometimes a bit of a false sense of security.
At least I know what our bank account looks like. I know how much round we've got. I know what needs to get done to raise money. But how many people get to work on a Monday, scan their badge and get a weird error message and then check their personal emails and are told that they've been let go and they never knew what was going to happen.
And it might even be a company that's performing well, i. e. is profitable, but not well enough for shareholders. So, yeah, I think that's also something I think over time I've started to realize you don't delude yourself, sometimes if you're working for somebody else that you're more, that your financial security is more so than if you're working for yourself. That it's a luxury or everyone has the idea needed to run with but I asked, me personally, I think I'm more of an executor than an ideator. So it's harder for me to think of what's a great business idea. But if I connect with somebody who's got a good idea, I'm going to get it from zero to one.
But yeah, far too many of my friends have thought that they were sitting pretty in there. I mean, I'll give you a crazy example. Over COVID, I only had one friend lose their job over COVID and he was exceptionally, exceptionally senior at Uber in South Africa. And if you had said to me going into COVID, “Who would be the friend that you knew who was least, who was like the least likely to lose their job because of COVID?” You think almost instrumental, but, you know, they decided to consolidate, move the offices to another location because Sunday to offices and then he could have been relocated, but didn't want to. But yeah, I can get you all the details.
Brian Kearney: Yeah. No, that's true. And then I also found in my background research that you've done a little bit of lecturing as well. Talk about that.
Greg Schneider: I feel like I'm in on Hot Ones, I don't know if you've ever watched it. Like really going, you know, but be careful with LinkedIn. Lecturing, as maybe this interview is a testament to, I'm not shy to have a long answer to a short question. So lecturing gives you an audience that can't go anywhere, but I do really enjoy it.
It's a nice way, I think, in some cases to give back or also just to be challenged. I've done some lecturing also kind of as part of programs where it's maybe less affluent students, which is also very rewarding. So, yeah, it's always, if it can be called a side hustle, it's always been a bit of a side hustle, but I've enjoyed it, especially when I was doing my digital marketing stuff.
And yeah, I don't do it right now. I'm not in a position. Empowa is very, very, very time-consuming. So I don't think it would be fair either to Empowa, in our community who's entrusted us with a lot of their funds to make it a success. And we face our students, you know, who demand a lot from a lecturer.
But I hope that with time and stability and hopefully a slightly bigger team, I can look at doing something like that again. I don't think I'm smart enough on blockchain yet, but if you stay in the industry, and if you've survived this fair market, then I think you've earned the right to tell all the newbies who come in the next new market a thing or two, so that's at least some of my motivation.
Brian Kearney: That's for sure. Yeah, the people who are throwing all of their savings into the most recent Altcoin, not quite as common now as it probably will be in 18, 24 months so it'll be interesting to see.
Greg Schneider: Yeah. Absolutely. I think people who've bought during this bear market, I can see him coming back. I was kind of interested in blockchain, one of the bull markets and then, you know, land up getting involved in other kinds of startups and my interest waned ‘cause I didn't have the time and they obviously got back into power during the last bull market. And speaking to some people who have been in the industry much longer and kind of been through the cycles, there's definitely a wisdom that was unappreciated. And I definitely don't profess to have developed that wisdom myself, but I can see when you've seen the cycles and you've seen the people coming, the number of people who applied to work in Empowa during the bull market, you can see this all the time. “I care so much about your mission. So much. I really want to–thank you so much.” Now, our mission hasn't changed. If anything, we're closer to delivering on what we wanted. The blockchain part isn't as sexy as it once was.
Brian Kearney: We need to have an AI thing in there somehow, and you'll probably get those resume CVs back up.
Greg Schneider: Yeah, it probably would help with our fundraising as well, credit scores will be generated by AI.
Brian Kearney: Exactly. Exactly. Interesting. Well, we have one last question that we're asking every guest. I'm really intrigued to hear what yours is going to be, but it is, what is one or maybe two, if you want contrarian views that you have that most people will not agree with you.
Greg Schneider: That's interesting. I'll give you one that is this ongoing discussion that I have with the team, is not the one that you're looking for. So my most conservative view is that strawberries are the most overrated fruit in the world and pears are the most underrated fruit. –So that's
Brian Kearney: Interesting.
Greg Schneider: That day, I think everyone's, “Ooh, strawberries are so delicious. Oh, they're so romantic.” Oh, whatever. But they're actually normally quite average and pears, super versatile, but everyone wants to call them like an apple. So pears are underrated, strawberries overrated. So that's quite contrary. I assume it's probably not the answer that you wanted.
Brian Kearney: Oh, that's a great answer.
Greg Schneider: Yeah. I mean, I think that from my perspective, what I think is, I think that working in–this is not necessarily a concern, but I always find it amazing working in the industry of blockchain, how we are in a bear market. Everybody is like, “Blockchain, it's quiet, it's dead, it's not very…” but every day you look and there's new partnerships, there's new big organizations trying things, there's ETS being applied for, there's MasterCard doing stuff, people say, “Oh, the bull market will come around in the next couple 18, 24 months.”
And I don't necessarily know if I disagree with that because I'd like to plan for the worst, hope for the best. I'd like to plan. It's going to take us 24 months to get there and it'd be sooner, but I find it very hard to believe it will take that long with how much is happening, bubbling under the surface.
So not financial advice, for anyone who's listening, if anyone wants to think that they must now go buy an old coin or whatever, do not do that based on what I've said. But what I will say is I think we're much closer to maybe not mass adoption, but large scale adoption that people give it credit for.
And I think it's fine to put an 18, 24-month timeline, ETFs, all that stuff. But if you’re feeling disillusioned, go look in the parts of Twitter that aren't about pumping down and go look at actually even actually look at the news, right? And industry news, not mainstream news. It's pretty interesting to see why is PayPal's doing something, MasterCard's doing something, Visa's doing something, Banks in Europe are going to be able to hold 2%, I think it was, of their pro bono in blockchain in 2025. And I started thinking, oh, hold on. These people are not investing all the money that it took to get into that place if they thought it was dead and they're not necessarily also doing it for an 18 to 24-month payback, although it may still take that long.
So maybe less, not so contrary, maybe just a piece of insight, but definitely the strawberry has been overrated. Sit down, think about it, and you'll realize, unless you dip them in chocolate, what are they even doing?
Brian Kearney: That's fair. Hard to beat chocolate covered strawberries. But pears grow really well around me, so I tend to agree. I also very much agree with the crypto mining rig. For people listening, I'm actually turning my camera, but I have my rig I'm building over here. I very much agree that I say 18 to 24 months for the same reason. I'm like, eh, if it takes 18 to 24 months, I'll be okay. But I tend to agree. I think particularly the ETFs that are coming out are very interesting and four months ago, no one would have thought they'd be as close as they are to being approved. No one. And they think it's like 75 percent odds that Wall Street is putting on them being approved now. That's pretty, pretty crazy.
Greg Schneider: And I think the other thing maybe that I'll say, maybe it’ll make us run out of time, but I'll try that quickly, is that obviously this America is a big driver of everything financial.
But if you, again, maybe based–you get a perspective of, say, you're even maybe a bit of Asia, and obviously with our folks in Africa, we get quite a bit of Africa. Yeah, I mean, the rest of the world's not really waiting. So I think that's obviously bullish. And again, if you've many people raise the question of, “Why do I need blockchain?” and I've been living in the Netherlands now for almost three years, and it still blows my mind when I click pay, and the money just clears immediately here in Europe, right?
And maybe that's a given in the states as well. And you have a lot of apps that can do that. But if I want to transfer money in South Africa, something's gonna take two to three days between my bank accounts, and that's not something like remittance payments and getting money in and out of countries and currency regulations.
So all of these things just go to show that there's a big part of the world where this technology actually is game changer. And it's not an incremental improvement. It's a massive improvement. But I think once it picks up across the continent, I think that's going to be really impactful. I mean, Kenya's had M-PESA, which I think about 70 percent of GDP goes through for decades now. I mean, I was in Nairobi for work over a decade ago and everything was in M-PESA. It's been like that for a long time. So it is already adoption of something like a digital currency. So I think when you start to realize that there's a lot of use cases elsewhere, it's really interesting. You start to say, okay, maybe it will be slower.
In the States, because it's not as needed, maybe a bit slower and you can as needed. But in parts of the world where it is, I think it will be pretty impactful pretty quickly. And the final event, in fact, I'll give you is in Mozambique. I think USDT can at times have a 5 percent premium. People will pay an additional, will pay equivalent of $1.05 for one dollar of USDT because they just see the value of an unregulated, easily movable version of the dollar. And it's crazy. I mean, who would ever pay a premium on a stablecoin? Well, when you start to see that there's real utility to a blockchain-based stablecoin, then for some people, then yeah, you'll pay a premium.
Brian Kearney: That's interesting. I had no idea. I'm gonna have to dive into that.
Greg Schneider: So yeah, just something to consider. So I think, yeah.
Brian Kearney: Yeah. Well, thank you. Thank you for the time. This has been a great conversation. I've really enjoyed it. We'll want to schedule a recap down the road once the series A goes through. I want to hear what's going on there, but for the last, for the audience, what is next for Empowa and where can they go to follow along with your progress, or if they want to invest, reach out there?
Greg Schneider: Awesome. Yeah. So look, I think what's next is to deliver in at least phase one of a large development and spoke by the most big, so the 25,000 homes we've broken this up into hundreds, thousands, et cetera.
So really getting the first phase out, which we hope to still do this year. And to at least launch a pilot project elsewhere in the continent, Nigeria or Uganda are looking quite likely, but you know, it just depends on a few key discussions. It's important for us that we're diversified both from a partner country currency perspective just to start to de risk.
So that'll be a big focus between now and every year. If you want to stay up to date, obviously our website is Empowa.io and you should be able to get links through to it. If Telegram's your choice, we post there. Twitter's obviously also, or X, that is another good place to follow us. Discord as well, those are kind of our three big platforms.
And then if you're more into, say, the institutional space or corporate space, we tailor our content a little bit on LinkedIn for that audience. So, if you're into the crypto side of it, Discord, Telegram, Twitter, I suppose, as usual. If you say I only want on one institutional level, that's other things, LinkedIn is probably a good place to find us.
Brian Kearney: Perfect. Well, thank you. Thank you for your time. And we'll talk soon.
That's it for today. Do you want to learn more about investment opportunities in Africa? Go to nextfrontierpod.com for more episodes, new insights, and the latest trends in the African startup world.