Bungalow: Could this Google-backed startup become Africa’s answer to Airbnb?

(CNN) – Since launching Airbnb in 2008, it has revolutionized the travel industry. Sharing a home or renting an apartment has become a fashionable, and often affordable, alternative to booking a hotel room.

More than a decade later, the company has 6 million active listings worldwide in more than 200 countries. But one region that has not yet been broken is Africa.
Despite rapid growth in the past decade, Airbnb had about 130,000 listings across the continent in 2018 (the company has not disclosed any recent numbers), with the majority based in South Africa. For comparison, in May 2019, there were more than 80,000 properties listed in London alone, according to city authorities.
Cameroonian startup founder Nghombong Minuifuong is not due to a lack of demand or supply, but the lack of a single payment method is particularly prevalent on the continent. Guests and hosts on Airbnb cannot use mobile money, a system that allows users to send and receive money via cell phone. This is becoming increasingly common in Africa, where there are more than half a billion registered accounts, according to the Global System for Mobile Communications (GSMA), an industry trade group.

Bongalo is available in 12 cities across Cameroon and Rwanda.

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That’s why he launched Bongalo, the home rental platform that accepts mobile money and competes to become Airbnb in Africa.

“My vision is to build a platform … that enhances travel across Africa by connecting people with affordable accommodation,” he says.

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In terms of size, the startup still pales in comparison to Airbnb. Bongalo launched in Cameroon in 2017 as a real estate company, but in 2019 it moved to Rwanda, focusing on its current model. Minuifuong says it has more than 1,000 drugs listed in total in both countries and more than 5,000 users, but he expects demand to rise as Africans are able to travel more freely across the continent as Covid restrictions are lifted.

Kristelle Chukosa, a consultant with market research firm Euromonitor International, says domestic tourism across the continent has rebounded rapidly since the Covid-19 outbreak, thanks in part to less stringent travel requirements within Africa and a tourism industry focused on local travelers, she says. .

But it can be difficult to find good and cheap housing. A 2019 report on Hospitality in Africa, by online travel agency Jumia Travel, notes that “cost remains one of the major barriers to faster development of domestic tourism” and that technology will be key to lowering prices. According to the report, the average hotel rate in Africa’s most famous city is $50 per night.

Bongalo menus usually cost about $40 a night, says Minuifuong. The properties, which have been verified prior to being listed, can be booked via the company’s website and will soon be available on an app. He adds that the platform is particularly popular with customers between the ages of 25 and 35.

“The younger generation of tech-savvy travelers has embraced the convenience and affordability of the shared rental economy in recent years,” Chukosa says. “In countries such as Cameroon, improved internet and social media penetration has made room for affordable hotel apartment rental options, allowing owners to easily promote their services.”

Pay over the phone

By accepting mobile money, Bongalo also helps customers avoid the transaction and currency exchange fees that come with paying by credit or debit card, and enter the “unbanked” market in Africa, where no bank account or internet access is required.
This is critical in sub-Saharan Africa, where less than half of the adult population has traditional bank accounts, according to the World Bank. Minuifuong says mobile money has also become a preferred payment option for many people with bank accounts.

“The solution has penetrated a lot in the African continent, and everyone trusts it because of its simplicity and security. People prefer it to cards,” he says.

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

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

local solutions

In 2022, Minuifuong wants to expand Bongalo’s operations to Ivory Coast, Senegal and Kenya. In the long run, he hopes to 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 daunting task because it has “become a household name across the continent,” Chukosa says. But she notes that the African market remains unpenetrated, and that start-ups like Bongalo, which designs their services for local consumers, “may intensify competition in the future, especially if they receive support from international investors.”

So far, Bongalo has received $320,000 through Google’s Africa Black Founders Fund, a scheme that will see $4 million invested across 60 black-founded startups on the continent, and is currently raising seed funding.

Even if Airbnb starts accepting mobile payments, Minuifuong is confident there is still room for its business.

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

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