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When Abraham Banaddawa was studying medicine in the USA, he realised he wasn’t going to change much in the world. This realisation made him change courses to Business Administration where he would impact the world as an entrepreneur.
After graduating from Florida Southern College, he returned to Uganda and worked as a consultant in finance and wealth management while he figured out his next steps. It was during this period, four years ago, that he started building what would become his wealth management startup Level Africa.
“I wanted to open my investment account, and it was very difficult. “Abraham tells CEO East Africa in an interview. “The banks didn’t help me because they had more profitable ventures and I ended up going directly to a person in the know at the Bank of Uganda who helped me to open up one, but the process took two weeks. This surprised me because, in the West, it takes a couple of minutes. This is how I ended up building Level Africa to solve this”.
Level Africa is an online marketplace for investment. It is currently a web app. It is a one-stop centre for users to invest in different assets across Africa with different asset managers or directly in the markets, from a single account. “We want to give people safe and convenient access to legitimate and profitable investments in Africa.”
Through the web app, a user can finish onboarding and become investor compliant, and then they can build their own custom portfolio. “We are building something similar to Amazon, but for investment”.
The closest comparison to Level Africa is a Nigerian startup Cowrywise and Robinhood is the USA. However, Level Africa’s model is unique. “We are not trying to sell a particular investment product, but we pool different legitimate and vetted investments, then give our users the right information to make a decision.” This is also different from XENO, which operates as a unit trust. Level Africa is also the first non-bank and non-exchange player that offers small denomination government bonds which appeals to even young clients.
The business model is simple. Level Africa charges a commission from the different investment options players on its platform giving users cost-effective access to a broad investment market. They also charge investment advisory fees for particular clients who seek advisory services.
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The startup currently has close to 300 individual users excluding the investment clubs, and as of Q2 2023, the investment amount was over shs 250m. And all of this has been achieved organically without any marketing. But the startup plans to aggressively market starting this month.
However, financial literacy is a challenge in Uganda, and not so many Ugandans understand the investment options available. But Level Africa has managed to carve out a niche clientele.
“Our key customers have been Ugandans in the diaspora who have challenges investing back home. I met someone who used to fly into Uganda every three years to re-calibrate their portfolio, then fly back to Canada. But with Level Africa, you can invest from anywhere. We also have the young, middle-class Ugandans that have embraced digital investing. We are also targeting investment clubs that have been looking to expand their portfolio.”
The investment market is heavily regulated, and it is important to engage with authorities before churning out a product. This is something Abraham recognized from the get-go. “We are the first fully digital player in this space. At some point, we had a situation where different regulators were going back and forth. However, we worked closely with the Capital Markets Authority to give them a thorough understanding of our business. We did get an investment advisory licence and security dealers licence.”
However, Abraham recognizes regulations are still a work in progress. “We are part of a group of companies and individuals that are trying to push for even better regulations. Regulators need to make sure that what they are bringing is good for the market and to protect the consumer, so it is tough. But CMA has been very receptive to feedback so far.”
Abraham hopes to grow Level Africa to become the premier destination for investment in Africa. “If anyone, anywhere in the world is looking to invest in Africa, Level Africa should be the go-to marketplace. Whether it is investing in tourism in Rwanda, minerals in Botswana, the stock market in Johannesburg or Accra, Level Africa will be there. We expect the platform to grow to millions of users with unlimited investment options within the next 5-7 years.” Abraham says bullishly.