Bongalo: Could this Google-backed startup be Africa’s answer to Airbnb?

(CNN) — Since its launch in 2008, Airbnb has taken the travel industry by storm. Sharing a house or renting an apartment has become a fashionable and often cheaper alternative to booking a hotel room.

More than a decade later, the company has 6 million active listings in more than 200 countries worldwide. But one region that has yet to be cracked is Africa.
Despite its rapid growth over the past decade, Airbnb had approximately 130,000 listings across the continent in 2018 (the company declined to disclose more recent figures), with the majority in South Africa. By comparison, in May 2019, there were more than 80,000 homes in London alone, according to city authorities.
Cameroonian startup founder Nghombombong Minuifuong attributes this not to a lack of supply or demand, but to the lack of a single payment method that is mainly found on the continent. Guests and hosts on Airbnb cannot use mobile money, a system that allows users to send and receive money via a mobile phone. This is growing in popularity in Africa, where there are more than half a billion registered accounts, according to Global System for Mobile Communications (GSMA), an industrial trade group.
Bongalo is available in 12 cities in Cameroon and Rwanda.

Bongalo is available in 12 cities in Cameroon and Rwanda.

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That’s why he launched Bongalo, a housing rental platform that accepts mobile money and competes to become Africa’s own Airbnb.

“My vision is to build a platform that…improves travel across Africa by connecting people to affordable places to stay,” he says.

scale up

In terms of scale, the startup still pales in comparison to Airbnb. Bongalo was launched in Cameroon in 2017 as a real estate company, but moved to Rwanda in 2019, switching to the current model. It has a total of more than 1,000 homes in both countries and more than 5,000 users, Minuifuong says, but he expects demand to increase as Africans can travel more freely across the continent with the lifting of Covid restrictions.

Domestic tourism across the continent has returned quickly since the Covid-19 outbreak, Christele Chokossa, a consultant at market research firm Euromonitor International, said, thanks in part to less stringent travel requirements within Africa and the tourism industry targeting local travelers, she says. †

But good, cheap accommodation can be hard to find. A 2019 report on hospitality in Africa, by online travel agency Jumia Travel, notes that “cost remains one of the main barriers to faster development of local tourism” and that technology will be the key to lowering prices. The average price of a hotel in Africa’s most popular cities is $50 per night, it says.

Bongalo’s offerings usually cost about $40 a night, Minuifuong says. The properties, which have been verified before listing, can be booked through the company’s website and will be available on an app shortly. The platform is especially popular with customers between the ages of 25 and 35, he adds.

“The younger generation of tech-savvy travelers has been embracing the convenience and affordability of the shared rental economy in recent years,” said Chokossa. “In countries like Cameroon, improved internet and social media penetration gave way to affordable hotel apartment rentals as it allowed owners to easily promote their services.”

Pay by phone

By accepting mobile money, Bongalo also helps customers avoid transaction and currency conversion fees associated with paying by credit or debit card, and leverages Africa’s ‘bankless’ market as no bank account or internet access is required.
This is crucial in sub-Saharan Africa, where less than half of the adult population has a traditional bank account, according to the World Bank. But mobile money has also become a favorite payment option for many people with a bank account, says Minuifuong.

“The solution has penetrated so deeply on the African continent and everyone trusts it because of its simplicity and security. People prefer to use it over cards,” he says.

According to the GSMA, the region accounted for 64% of the globally traded mobile money value in 2020 – a total of $490 billion.

Bongalo also accepts credit and debit cards, which appeals to international tourists or the African diaspora, Minuifuong says, although he adds that the majority of guests live on the continent and about half of them usually travel within their own country. For the less tech-savvy who don’t want to book online, the startup partners with independent travel agents who can book accommodation directly for the client or include it as part of a wider travel package.

Local solutions

In 2022, Minuifuong wants to expand Bongalo’s activities to Ivory Coast, Senegal and Kenya. In the long term, he hopes it will be available in all African countries.

Nghombombong Minuifuong (third from left) founded Bongalo five years ago.

Nghombombong Minuifuong (third from left) founded Bongalo five years ago.

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Competing with Airbnb will be a challenge as it has “become a household name across the continent,” Chokossa says. But she notes that the African market is still under-penetrated, and that startups like Bongalo, which tailor services to local consumers, “could intensify competition in the future, especially if they get support from international investors.”

So far, Bongalo has received $320,000 through Google’s Black Founders Fund in Africa, a scheme that will invest $4 million in 60 Black-founded startups on the continent, and it is currently in a round of seed funding.

Even if Airbnb started accepting payments with mobile money, Minuifuong is confident there is still room for his business.

“Competing with Airbnb is very possible because we understand how the market works,” he says. “It’s about people being more local-centric and using local solutions.”

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