Uncategorized

Ex-Banker from Diamond Bank Elevates Digital Banking

He is the African banker with a gleam in his eye who perceives sparkling opportunities in the vast, often tumultuous, landscape of Nigeria’s informal economy.

Uzoma Dozie – the chemist who transitioned to entrepreneurship – is a member of one of Nigeria’s most affluent and influential families.

Now 55, he is embarking on an entrepreneurial adventure that he believes will tap into immense wealth and growth within the enormous informal sector propelling Africa’s largest economy.

This venture was inspired by Dozie’s experiences while managing the family business, Diamond Bank. Observing the digital banking customer base grow threefold made him realize it was time to launch his own initiative within the tech sector.

The impetus for this new venture accelerated in 2019 with the $235m merger of Diamond Bank and Access Bank, resulting in the largest bank in Africa, serving 29m customers.

This merger prompted Dozie’s departure as CEO and the inception of a new enterprise, Sparkle, a mobile-centric digital platform designed for millions of predominantly informal retailers, utilizing AI to deliver more affordable banking services.

“I am a banker who comprehends technology. As a banker, it’s essential to grasp how to preserve wealth and manage risks,” he states from Lagos.

When Sparkle was unveiled, raising some eyebrows in the banking community due to its reminiscent name of the old family enterprise, Dozie welcomed the connection, yet he emphasizes the distinct differences in their journeys.

“The name Sparkle is deliberate. Sparkle represents a modern digital iteration of Diamond. What do diamonds do? They sparkle!” he explains.

“Compared to my current work environment, Diamond Bank feels quite dated. This has truly been an educational journey…Sparkle was established by a team of 20 individuals under the age of 35.”

Prodigal son

The company’s website refers to Dozie as the “chief sparkler,” and indeed, there is an uncommon vibrancy about him. He may not rank as the wealthiest entrepreneur in Nigeria, yet he is undoubtedly among the most approachable. Whether in

Davos in Switzerland or Dulles International Airport in Washington, Dozie is always ready for a light-hearted exchange and a brief conversation.

His affable demeanor is partly inherited from his 85-year-old father, Pascal Dozie, a respected figure in West African business, whose remarkable life is characterized by an extraordinary acumen for wealth creation.

In the late 90s, Dozie Sr was tasked with helping the nascent mobile network MTN secure investors for its launch in Nigeria. His mission entailed raising 40% of the capital from local investors. He tirelessly visited office after office, even reaching out to Nigerian expats in Washington and New York. Yet, local investors remained skeptical, and disappointingly, he could only obtain 20% of the required capital from them: others filled in the gap.

However, during a conversation in 2016, MTN boasted 60m subscribers, and those who invested at the outset had seen returns of 20 times their original investment.

“Many now tell me they wish they had invested,” he recalled in Lagos, letting out a hearty laugh.

He is also likely the only millionaire on the continent who shared a classroom with Rolling Stones frontman Mick Jagger.

The two were contemporaries at the London School of Economics; Jagger departed when he recorded his first single in 1963, while Dozie continued his path as an economist, initially in London and later in Uganda.

“We thought Mick was very unique,” he once shared with me. “We were quite conservative, and he had long hair. As a Nigerian, it was unimaginable to me that he would abandon his studies for a music career. In the village I grew up in, music was merely a pastime for those with no other options!”

Beneath the success and confidence of Dozie Sr lay historical pain and bitterness back home in Nigeria. Two of his brothers fought in the deadly Biafran War, a conflict that resulted in 100,000 military fatalities and starvation affecting an estimated 2m civilians.

His mother was caught in the refugee chaos, and from 1967 to 1971, he was oblivious to her whereabouts. After the war, his mother somehow managed to reach out to him, prompting Dozie Sr to return from Uganda to care for her and begin establishing the family’s wealth.

In 1971, he launched his first enterprise, the African Development Consulting Group (ADCG). The roots of what would evolve into the family’s core business date back to the mid-1980s, inspired by witnessing a procession of traders from his hometown of Owerri, in Imo State, eastern Nigeria. Most transported large amounts of cash, putting them at risk of theft.

The challenges faced by these everyday individuals led to the creation of Diamond Bank, which prioritized money transfers that allowed traders to travel without carrying substantial cash reserves.

It all started in a small third-floor office in Victoria Island, Lagos, staffed by just 20 employees and equipped with a mere $5m in capital. Diamond Bank overcame initial skepticism – many were hesitant to work with such a fresh face in the volatile Nigerian banking sector – to ultimately serve 16m customers.

This is the formidable legacy that Dozie’s eldest son now aims to uphold.

Get on my cloud

Dozie has made a commendable beginning with Sparkle, which he established in 2019. Targeting the retail sector, the company claims to have nearly 250,000 customers, executing 20,000 transactions daily valued at over $420m so far. While modest in the context of Nigeria’s expansive banking sector, it is a significant start.

Sparkle seeks to underprice its competitors by leveraging AI and machine learning for an advantage. The platform employs AI to engage with clients who speak any of Nigeria’s 500+ languages, from Yoruba to Hausa. Additional services include tracking spending patterns on daily, weekly, and monthly bases.

The intended audience for Sparkle consists of Nigeria’s 40m micro, small, and medium enterprises, which collectively account for over 80% of the workforce and contribute approximately 50% of GDP, despite many owners never having visited a bank.

“The principal aim of Sparkle is to facilitate the formalization of small businesses. In Nigeria, the majority of enterprises operate informally… The reasons they remain informal are due to the high costs associated with becoming formal,” he explains.

“It’s also about solidifying your accounts and transactions. That’s a key proposition from Sparkle…we provide essential tools that startups need: payroll, inventory management, invoicing, all at an affordable price,” Dozie elaborates.

With the establishment of the African Continental Free Trade Area, I inquire whether he plans to expand across the continent.

“I’ve cultivated a network of contacts and relationships. It’s a long-term endeavor, but for now, we don’t need to venture into Africa as Nigeria itself presents a large market alongside a vast diaspora,” he responds.

Securing a notable share of a fiercely competitive market is a daunting challenge – I ask Dozie where he envisions Sparkle five years from now.

“Who is my current competition? Traditional banks. Many traditional banks have operated the same way for years. We aspire to present them with an alternative because the future is digital.

“I aim to reach individuals who have never set foot in a bank. We want them to say: ‘I want to start a business; I want to be with Sparkle.’ That’s our vision for five years ahead.”

Finding satisfaction

Meanwhile, Dozie is applying his entrepreneurial acumen as an angel investor through his investment fund, Black Knights.

“Technology has empowered us to assist a larger number of individuals. I believe financial services can leapfrog through technology,” he asserts.

One of his investments is in a Nigerian furniture company, Taeillo – a firm he engaged to furnish his Lagos office. He describes it as producing minimalist furniture akin to IKEA.

Founded by Jumoke Dada in 2018 at the age of 26, the company aims to offer Nigerian consumers uniquely contemporary furniture that equals imported quality – with furniture imports to Nigeria valued at approximately $8bn annually.

The company has raised over $3m across three funding rounds, including $2.5m in a round at the end of 2022. By that time, it had expanded operations to Kenya, shipped nearly 10,000 furniture pieces, and served over 5,000 customers in both countries.

Black Knights invested in the company to bolster its growth, providing it with credibility that attracts further investors, according to Dozie.

“Investors in my fund contribute not just money but also financial insights and guidance,” he explains.

“This angel investing brings me immense fulfillment. I find myself thinking like my father. He invested, gaining both financial and non-financial returns. As you progress in life, those non-financial returns provide a warm feeling, motivating you to help more people.”

It seems the Dozie family finds fulfillment much more easily than Mick Jagger.

Leave a Reply

Your email address will not be published. Required fields are marked *