TooGood wants to fill the gap left by Done Deal as 'Groupon for Uganda'

There's a discount void in Uganda, and TooGood wants to fill it. In April 2016, Eat Out Kenya - an online food and menu curation platform  - acquired Uganda's Done Deal for an undisclosed amount.

However, two years later, there was not an active and up-to-date discount platform in the country. That's why this team of 9 decided to launch one early this year.

"After the acquisition of done deal by Eat Out, the deal site market in Uganda was left with no major player," the team says. Adding that they "had the experience, the knowledge and the resources to start."

They also acknowledged the inspiration from Groupon. "We can not rule out the Groupon inspiration, we are keen followers of what they do."

TooGood, a discounts aggregator, launched in May this year with the aim of helping shoppers save money. "At TooGood, we believe that every shopping outing should be an opportunity to save money for another outing," wrote Nathan Ssenyondo, the MD.

Located at Hive Colab in Kamwokya, TooGood is a team of 9. These boast of previous experience from being a part of Done Deal as well as Sukuma online.

"The entire management team running Too Good was part of a successful startup/ deal site/discount site called Done Deal Uganda that was acquired in 2016 by Eat Out Kenya, a venture specializing in restaurant reservations," Nathan wrote.

Adding that "after this acquisition, we started our first company called Sukuma Online in July 2016, a digital marketing company offering 360 digital marketing solutions to small, medium and big businesses in Uganda and East Africa."

Among the notable team members are Alex Ssenoga (CEO), Kapeyi Samson (CTO), as well as Nathan himself as the MD.

All the three were part of Done Deal. Alex as the Systems administrator and head of digital marketing, Nathan worked as the head of sales and merchant relations while Samson as the lead developer.

No external funding has been raised by the team yet, though are currently on the lookout. "We have not raised funding yet but looking to raise our first round of USD 100K," Nathan wrote.

Also read: Kilimall has completely shut down its Ugandan business

But, they launched with their own funds estimated at $15,000 (UGx. 50 million) and so far, have been able to sign up at least 94 merchants. With a target of hitting 1000 in the next 12 months.

"Our target is to have 1000 Merchants listed and offering deals within 1 year from now," Nathan wrote.

Their current process of uploading the deals is manual and largely done by the TooGood team itself. If they are to scale to 1000 merchants, then a lot of work has to be done to automate the process as well as onboard the merchants on how to do it on their own.

When it comes to the Busines model, they are currently looking at two avenues of generating revenue; advertising and commission.

"We charge a commission from merchants for every order generated through TooGood website [and also charge] an advertising fee from corporate companies that want to advertise on the website but not necessarily offering deals," Nathan wrote.

Though, my issue is around the margins when it comes to the commission. You'd have to generate a significant amount of sales revenue for a merchant, to negotiate favorable rates. But, there are already existing and established segment verticals like Jumia Food who are able to do this.

Additionally, I don't see any upper-hand for TooGood when it comes to advertising. It is not like they have niche visitors. This puts them in direct competition with Google as well as Facebook and you know who wins here, always.

Although they don't have a direct competitor, there are a couple of existing players in other segments who - when compounded - are a big challenge for TooGood. This includes all Jumia ventures (Food, Mall, and Travel).

One of the selling points for all of the Jumia ventures is the discounts they regularly offer. Additionally, it is likely that at least the biggest chunk of what TooGood is offering can be found on one of Jumia's platforms. The other notable competitors are Coupon Book - which an app - and Eat Out.

All in all, TooGood is a much-needed and exciting platform with the potential to exit through an acquisition by a more established e-commerce company or one that's looking to enter the market.

Digest Africa


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