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From WeChat's Nigerian failure to embedded insurance success: lessons in local innovation

SAG Ventures, had paid out its first claim through a clever FMCG-embedded funeral cover product dubbed Purchase Pal, underwritten by the continent's largest insurer, Sanlam. Image: Photo by Keenan Constance on Unsplash. When Johannesburg-based South African entrepreneur Prince Nwadeyi was researching his MPhil in Inclusive Innovation at the University of Cape Town, one interview proved transformational. A young woman broke down describing the humiliation of borrowing money to bury her mother, only to face gossip at the funeral about the family's financial struggles. That 2019 conversation shaped Nwadeyi's thesis on information asymmetry and life insurance uptake in township communities. More importantly, it led him to question whether insurance could be embedded invisibly into everyday purchases, eliminating the paperwork, intermediaries, premiums, and waiting periods that keep vulnerable communities unprotected. Last week, Nwadeyi took to Linkedin to share that his holding company, SAG Ventures, had paid out its first claim through a clever FMCG-embedded funeral cover product dubbed Purchase Pal, underwritten by the continent's largest insurer, Sanlam. A grieving family received a much-needed funeral payout because they'd purchased participating products at one of South African supermarket and wholesaler Big Save's stores. No forms, no monthly deductions, just automatic protection triggered by routine shopping habits. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. 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Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The innovation exemplifies a principle increasingly recognised as crucial for African product development: building with communities rather than for them. Nwadeyi's approach emerged from deep ethnographic research and venture building experience (iterative product development and go-to-market) in partnership with leading blue-chip companies, not top-down, boardroom assumptions about what consumers need. During a recent yet-to-be-published African Tech Roundup Podcast conversation, recorded shortly after his insurance product went live, Nwadeyi emphasised how understanding incentive structures across entire value chains - from wholesalers to consumers to capital providers - enabled breakthrough collaborative thinking. Rather than competing with traditional distribution channels, his team embedded coverage within existing retail margins. Strategy meets reality This community-first approach contrasts sharply with the template-driven product development that Lagos-based Nigerian 'social engineer and human experience expert' Dayo Ayoade witnessed during his tenure leading WeChat's failed West African takeover bid. Speaking with fellow Nigerian co-hosts Chika Uwazie and Eche Emole on the Afropolitan Podcast, Ayoade described how back in 2015 his team spent billions on marketing and feature development, only to watch WhatsApp - with no Nigerian office and minimal local investment - dominate the market. The turning point came through an unlikely channel. During the Redeemed Christian Church of God's December congress, Ayoade's team spent just ₦150,000 (~USD 95) on Wi-Fi and a banner promoting Pastor Adeboye's sermons on WeChat. That single week generated 3.6 million new users—more than all their previous marketing efforts combined. "Culture eats strategy for breakfast," Ayoade reflected. The Chinese executives, uncomfortable with religious content, decided Nigeria wasn't a market they wanted to pursue. This disconnect illustrates what Ayoade identifies as a fundamental misunderstanding: products solve social problems, not technological ones. His sense is that WeChat succeeded in China by enabling factory workers in small communities to coordinate daily needs through group chats, and that in the UK, contactless payments proliferated because pervasive train systems made tap-to-pay natural behaviour. Neither imposed solutions; both amplified existing cultural patterns. Design with, not for The same philosophy underpins Marcus Welby Rance's citizen-centric approach to digital transformation at South Africa's Western Cape Government. Rance advocates moving beyond technology-first thinking towards what he terms "empathy-driven innovation", understanding citizen pain points before proposing digital solutions. Rance's framework, rooted in Ubuntu principles of interconnectedness, maintains that co-creation can bridge the trust deficit between African governments and citizens. Crucially, the initiative prioritises the 73% of the Western Cape's population classified as vulnerable, rather than focusing on digitally-enabled middle-class users. He admits that while the approach requires patience and political will, it offers a path towards digital transformation that serves communities rather than abstract efficiency metrics. Accidental innovation Perhaps nowhere is the "people decide" principle more evident than in Nigeria's entertainment landscape. During the same Afropolitan Podcast conversation, Ayoade highlighted a striking statistic: while Nigeria's highest-grossing cinema film reached perhaps 200,000 viewers, YouTube creators like Uche Montana routinely attract 4-6 million views per movie. "Nigerians don't go to cinema," Ayoade observed. "Nigerians watch home videos." YouTube simply became the new distribution platform for Nigeria's existing home video culture—a shift that happened organically rather than through strategic planning. The mathematics are revealing. Nigeria's billion-naira box office success translates to roughly 200,000 viewers paying ₦5,000 (~USD 3.20) each. Meanwhile, a YouTube home video achieving 6.4 million views represents 30 times the reach, and unlike cinema-goers, nobody watches twice because data is expensive, making these genuine unique viewership numbers. This pattern exposes a familiar challenge: Africans excel at creating value but struggle to capture it within existing monetisation frameworks designed for different markets and consumption patterns. Sustainable innovation architecture What connects these examples is sophisticated understanding of incentive alignment across complex ecosystems. Nwadeyi's micro credit business, Setana Capital (backed by Allan Gray's impact investment fund, E Squared), illustrates this approach by partnering with wholesalers to access transaction data, using that intelligence to provide working capital directly to township retailers, and financing stock purchases through existing supply chains. The result: Nwadeyi claims a 99.9% repayment rate across multiple verticals, from spaza stores to Uber drivers requiring fuel credit. "We don't give entrepreneurs cash," Nwadeyi explained during our conversation. "We partner with the value-making process." The embedded insurance innovation applies similar logic. Rather than competing with traditional brokers, the team embedded funeral cover within FMCG product margins, creating value for retailers (customer stickiness), insurers (reduced acquisition costs), and consumers (invisible protection). These solutions didn't emerge from Silicon Valley playbooks, performance-metric-obsessed boardrooms or donor-funded innovation labs. They developed through patient ethnographic research, systems thinking, and willingness to work within existing economic structures rather than attempting wholesale disruption. Authenticity advantage What distinguishes these innovators is their starting point: purpose rather than scalability. Nwadeyi's insurance product addresses a specific pain point he researched extensively. Ayoade's insights emerged from genuine attempts to understand Nigerian communication patterns. Rance's government work prioritises vulnerable populations over prestigious technology demonstrations. This purpose-first approach enables what Nwadeyi describes as "assimilate, understand, and respond" rather than reactive market behaviour. It requires cultural humility, acknowledging that communities understand their needs better than external observers, regardless of technical expertise or funding capacity. The approach also demands long-term thinking. Nwadeyi was at pains to emphasise that Purchase Pal represents part of a five-year strategy spanning multiple financial services verticals. The goal isn't rapid unicorn status but sustainable value creation that other innovators can adapt and scale. Beyond import-export innovation The path forward doesn't involve creating African versions of global successes. Instead, it requires building infrastructure that amplifies existing African cultural patterns and social structures. Ayoade suggests that rather than building "Nigerian YouTube," opportunities lie in creating payment systems that integrate with existing platforms to solve local monetisation challenges. Nwadeyi's embedded insurance model points towards similar possibilities—leveraging existing distribution networks and consumption patterns to deliver new forms of value. Rance's government work demonstrates how this applies to public sector innovation: creating platforms that enable communities to solve problems themselves rather than imposing predetermined solutions. These case studies reveal innovation that's distinctly African: purpose-driven, community-centred, and built on deep cultural understanding. In contexts where Silicon Valley's "move fast and break things" mentality has revealed limitations, Africa's Ubuntu emphasis—the interconnectedness of people and communities—offers sustainable alternatives. The distinction determines whether solutions extract value rather than create it, whether products serve balance sheets rather than communities. As Nwadeyi observed: "You've got to be willing to try, you've got to be willing to do the hard work to learn, listen, understand." The future belongs to those who stop building for Africa and start building with Africans. Andile Masuku is Co-founder and Executive Producer at African Tech Roundup. Andile Masuku is Co-founder and Executive Producer at African Tech Roundup. Image: Supplied BUSINESS REPORT Visit: