How SweepSouth & Lumkani Are Building Sustainable Businesses in The World’s Most Unequal Society.
When I think about inequality in South Africa, my mind automatically goes to the Time’s cover depicting the road that separates Primrose & Makause — an image that shows how the atrocities of the past have still not been rectified — how many are still to see the promise of a free & fair society. But, in the midst of all our social failings, there are some amongst us who dare to solve the most important problems the majority of the South Africans face on a daily basis; Unemployment, Poverty & Survival.
Off the bat Social Tech initiatives are admirable, & more people should do them. The idea of product design, management & building technology products centred around being empathetic — more so when you are building technology for a group that has been previously marginalized — those are the ideas of design thinking, putting the feelings of users first & optimizing for emotional usability; meaning whatever product you are building should enact some sense of emotion from the user, the worst thing that can happen is for you to build a product someone is indifferent about. That being said SweepSouth & Lumkani’s products were built with care & empathy, the former being a bit harder to get right due to the intricacy & nature of marketplaces; there are so many things one needs to get right.
What is a SweepSouth & what is a Lumkani? SweepSouth is a South African marketplace startup focused on connecting helpers with people who need their homes cleaned (I don’t like the connotations of the word domestic worker) &Lumkani is a hardware startup that sells a device which helps detect fires early in households & businesses in the informal sector. Both have expanded their offerings to other avenues but at their foundational core, SweepSouth is a marketplace for around the house-work & Lumkani is a home protection insurance company if I can put it like that.
They describe themselves as an Insurance company funny enough not a security one, yes the device in peoples’ homes is there to detect fires & not to guard against criminals for that you would have to check out Jonga. Furthermore, through the help of Hollard Insurance, our favourite innovation-backing insurer, Lumkani is able to sell all kinds of insurance products to their customer base. For R70 a month, a family gets a fire alarm device & up to R40 000 insurance cover for the structure of the house plus household belongings. For R150 a month, a family gets an additional funeral cover benefit.
Ensuring that those who are most vulnerable have a sense of security. Tens of millions of Rands of possible fire damage have been saved through our early-warning fire detectors.
I have my own quarrels with funeral cover, but that’s a story for another day. What these young gentlemen are doing should be commended, they are solving unique problems with empathy & dignity.
Founded in 2014 by couple Aisha Pandor & Alen Ribic, SweepSouth has since amassed $6 million in funding & onboarded 15 000 SweepStars & over 100 000 users onto the platform. The scale-up, after backing from Naspers, has bold intentions of growing beyond the core business housekeeping & South Africa with the recent expansion of services to include other auxiliaries such as plumbing, gardening, electrical work etc along with a move into the Kenyan market. I personally find this business remarkable, not only for what it is are now but what it can be in the future.
At the core the business model works like this:
“SweepSouth retains 4% – 20% of the total booking fee to cover the costs of running the company. This includes the costs of insurance that cover all bookings, vetting & other onboarding, some transport costs, support for SweepStars (in case of any emergencies), & business running costs like internal office staff, marketing, transaction & banking fees, software & technology, & telecoms & admin.”
Plus a R35 service fee charged on all bookings, which is used for the management of the platform itself & support functions. Overall if you, the user would request your house to be cleaned on the platform, let’s say they charge you R250 + R35 service, R200 goes to the SweepStar (depending on how long they have been on the platform), R85 goes to SweepSouth. If SweepSouth, for example, processes R60 million a month in gross bookings, with a take percentage of 20%, that means their platform turnover would be R12 million. I have a high level of conviction that they might be doing more that than, SweepSouth is a big company with annual revenues (AR) in the hundred million range.
Moreover, they too have ventured into insurance with the assistance of Simply Insurance & Lion of Africa Life Assurance, offering a suite of insurance products for both the platform user & the SweepStar. By creating this marketplace, they have inadvertently created an ecosystem & a community that has limitless potential.
Nevertheless, some argue the longevity of this kind of employed but Jobs are essential & hard to come by, jobs give people a sense of importance, status, autonomy & freedom. Yes, we can argue that not all jobs are made equal, as black people, that our mothers & fathers cannot simply resort to being house-workers, they deserve more than that. We can also argue that — that take comes from a position of privilege, but entrepreneurs like Aisha Pandor have taken steps to liberate the way we think about these kinds of jobs. The people on the platform are not there volunteering, they are there as self-employed people managing their time, working where they want for whomever they choose to. Importance, status, autonomy & freedom, these are the things we seek as ordinary workers in society, this is what platforms like SweepSouth are accomplishing.
We tend to look west for solutions to our problems; I suppose most colonised countries do, but our problems are unique to us & we should solve for them in our own unique way. Yes we might take inspiration from others sometimes after all SweepSouth is the Uber for house-work. Maybe I should write about that, problems that are unique to us & how to solve them or maybe I should just shut up & instead of writing, try & solve them, what do you think? My passion lies at the intersection of Finance, Technology & Agriculture, maybe you can give me an idea.