A Ugandan travel tech startup has turned to a stronger currency away from the Uganda shillings in to avoid the challenges that have reportedly caused many businesses failures in Africa. Tulavo has changed their website currency from Uganda shillings to United States Dollars in order to accelerate Growth against their next huddle to expand business in another African country. There is a saying that over 80% of businesses in Africa fail in their first year of establishment.
Why it matters: Changing the currency to United States Dollars will facilitate Tulavo to scale to other African countries. Since many international travelers don’t understand the value of the Uganda shillings, adopting a foreign common currency will help Tulavo easily scale and make more conversions.
The big picture: The lack of a common currency in Africa makes it hard for tech startups to compete favourably with other continents. This slows down growth and negatively affects the profitability of African businesses. The African market is not organized to favour competition with other continents making it too costly to invest in Africa. This is the major cause of business failure in Africa.
- Too many currencies. Every country in Africa has its own currency.
- Every country in Africa has atleast 2 languages and a national language not familiar with foreign travelers.
- African countries have unfavourable different legal frameworks which hinders startup competitive growth compared to other continents.
To book a cheap hotel room like the one shown in the photos above at $30, please go to https://tulavo.com
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The Tulavo Solution: Many travelers in Uganda have been using Tulavo.com to select their choices of cheap hotel rooms and pay in Uganda shillings. Converting users from other countries however was too low and this is attributed to the unfamiliar currency used on the website. This is why Tulavo has changed the currency to United States dollars. The act will help the company to convert atleast 40% of it’s users and get more signups. The move is also aimed at preparing Tulavo to open office in another African market projected for 2023.
What they have to say: The Chief Of Operations at Bookablehood Ltd, a company that owns the Tulavo brand in Uganda, Ms. Justice Basirika says in a release made this morning that the change was aimed at accelerating growth.
“We want to scale to other African countries and this forced us to adopt a common currency. Many international travelers don’t understand the value of the Uganda shillings and this was affecting our conversions”.
Justine Basirika, COO
Basirika reveals that building a startup in Africa is so challenging due to a fragmented market.
She points out the United States of America and the United Kingdom which she says are able to grow because they have an ecosystem that is common and favourable to business growth in these continents. They have a common currency, a common language and favourable laws.
In Africa however, according to Ms. Basirika, all the 54 countries are using are using a different currency. If you choose to trade in the local currency, clients from other countries may not be able to easily understand the price and if you trade in a foreign currency, still the locals will not easily understand the price. This is also made worse by the issue of language.
A country like Uganda for example has more that 50 languages. The solution is to use a foreign language and currency even when you are building a product like Tulavo which is African in nature.
Tulavo want to harmonize it’s marketing strategy with technology making it important to adopt a common currency.
Many travelers are familiar with the US dollar. Since Tulavo is using one website across Africa, the currency will save the company resources that would have been wasted in opening multiple websites especially everytime they open operations in a new market.
Tulavo will enter a new market by end of 2024.
By the numbers: Over 100,000 subscribers are already using Tulavo. This makes Tulavo the fastest growing platform for cheap travel accommodation in Uganda.
- Tulavo started in 2019 June.
- The company is now projecting an increase to 1,000,000 subscribers by end of 2023.
- The company is now working to help hotel owners whose room rates don’t exceed $100.
- Tulavo now has presence in over 100 major towns of Uganda.
