#WhyWeInvested - CD Care

April 18, 2024

100,000 Africans are born daily compared to 10,000 in the US and 11,000 in the EU. 

This means Africa is building a huge talent pool for the world. What is exciting is that this talent, through their smartphone or computer, now has access to opportunities to learn and work anywhere in the world, not only in Africa. 

However, while we have seen a great rise in smartphones, with 450m on the continent today and growing fast, most of those devices have limited functionalities and poor durability. And at the core of this lies affordability. It is key that we create systems to make smartphones accessible to every young African to enable them to access the great opportunities within the global digital economy - and this is a key part of our investment thesis. devices, 

Thus, we set out in 2023 to find the player best suited to achieve this at scale. From our many conversations with key players in the space, we found that the root problem of financing the purchase of quality devices is core to solving the larger problem. This led us to explore companies with circular business models focused on refurbishing used phones to make cheaper, second-hand phones more accessible. From that, we came to understand that successful financing solutions will need to consider the unique attributes of African consumers, such as their preference to save-to-buy rather than borrow-to-buy, as well as their debt aversion that’s both cultural and religious. 

Having a thorough understanding of this nuance, demonstrating strong traction, and being led by experienced, hyper-passionate founders—Tobi Odukoya and Deji Farohun—are all of the reasons we chose to invest in CDcare out of all the startups we spoke with in the space!

Unlike the globally popular Buy-Now-Pay-Later (BNPL) model, which has seen many challenges in Africa, CDcare has taken a different route. Acknowledging the limitations of BNPL, especially in the African context, CDcare leverages a model deeply rooted in the practices of traditional African community savings organizations where members became eligible for loans after consistent contribution. CDcare applies this concept by offering customers the opportunity to save towards an item through monthly payments. After reaching a threshold of at least 50% of the retail price, the item is handed over, and customers continue payments until fully paid off.

Since its launch in 2021, CDcare has shipped items valued at over $10M+ to its customers, with sales figures reaching new YoY heights. In such a short time, they have maintained a near-perfect repayment rate while exceeding the six-figure monthly revenue mark.

CDcare's innovative blend of tradition and technology is not only transforming access to devices but also contributing to the growth of the digital economy in Africa. As they navigate the challenges and embrace the opportunities ahead, CDcare exemplifies the transformative power of innovative local solutions with the potential for outsized global impact.

We’re excited to be supporting them through their journey!