Less than half of South African university students complete their degrees, a stark contrast to the 30% rate seen in OECD countries. However, [email protected], a pioneering South African startup, is determined to change this trend. Focused on keeping students on track throughout their academic journey and preparing them for the workplace, the company has recently received recognition from Google as a recipient of the 2023 Google for Startups Black Founders Fund. Co-founder, Lungelo Gumede, told BizNews that [email protected] has achieved remarkable results, boasting an impressive success rate of 90% for their students in a pilot programme, with certain years recording zero drop-outs. Gumede said that black founders often found it difficult to secure investors, but [email protected] adapted their business model and managed to make it more attractive for their preferred investor. – Linda van Tilburg
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Excerpts from the interview
Having a scholarship does not necessarily mean success at university
The problem we’re trying to solve is essentially founded on an experience that we had as founders while we were at university. I was one of those top students coming into university. The seven As, head prefect all those nice things and actually in my first two years at university, I found that to be extremely easy. However, in my third year, I started to struggle and it was just a multifaceted combination of issues, some personal. But in summary, I’d lost a lot of focus in my third year and I lost my scholarship. I was one of those students who had to find a way to pay for the rest of university. I ran a tuckshop, I used to manufacture hoodies and I ran a private tutoring business as well. So, I eventually was able to pay for my fees and I eventually did graduate. But upon graduation, my co-founder and I sat down and we thought to ourselves, that’s not the ideal experience that a student should have at university, especially one who was a top student coming in. What happened that caused a student to struggle this way? When we reflected on the problem, we realised that perhaps the scholarship that I was on wasn’t as mindful of some of the challenges that were facing. It was forgetting that as much as they were providing funding for me to get through university, that’s only one component.
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Providing four pillars of support for students
We sat down and did a bit of research on what was happening internationally around student success, and I discovered that according to most of the empirical evidence, there are essentially four main pillars for students to succeed. These are founded on some of the main frustrations for students at university. One of those things is financial, which is the access issue, insufficient funds to pay for studies. That is important and I think scholarships are doing a good job in South Africa, trying to do that, trying to provide that access. But the other thing, of course, that causes students to drop out is related to struggling academically and not having that additional support to push them through academically. Sometimes as well, it’s just frustrations with the entire administrative system at university and with the scholarships that they receive. It can also be a loss of interest in the programme or an inadequate career readiness aligned with that. So, when you put all these frustrations together, we created a model to support students that is founded on four pillars, which is essentially making sure that you are monitoring and tracking the student’s progress throughout their university degree. I can’t tell you how much money is being put into these scholarships or other funding initiatives for students, but there isn’t good monitoring and tracking of how the students are performing. Once you’ve got that pillar intact, you’re able to then easily detect students who are struggling academically or struggling with personal issues.
Our second pillar is if they are struggling academically, to provide them with additional support academically in the form of private tutoring. But then of course, you might be struggling with personal issues, may be struggling with direction, not too sure what career to follow, etc. That’s where our peer-to-peer mentorship comes in. Then lastly, the final pillar that we do, is provide additional career guidance through our career readiness initiative. If you look at it, it’s quite a simple model and it’s quite intuitive, but at the heart of it, we believe that’s the model that protects streams of students that go to university and other tertiary institutions.
Dropout rates were brought down from 50% to 10% and zero in some years
We took a very patient journey, which is actually very unique for young people, and founders. I studied business science. It’s not like I studied education or anything like that. So, the model that we set up that we created was structured with our very first partnership. We sat down, designed the model and tweaked the model along the way. We said let’s give it a try for three and a half years. We started midyear and the model was so successful that scholarships that originally had a 50% dropout rate, by the end of the three or four-year pilot, success rates were around 90% year-on-year. For a couple of years, our success rate was around 100%. So, we started with that pilot. That was around 2013, 2014. We ran those pilots and were comfortable with the results we got. Then my co-founder and I said, there’s a commercial opportunity and in 2018, we registered the business as a separate entity and started to start looking for other sponsorship clients. Since then, that one client has turned into roughly 22 clients that we’re working together with in partnership to try and solve this problem.
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Tweaking the business to find the right investor
Around 2018 started putting together the business plan to pitch to venture capitalists. In 2019, we were hunting for some sort of capital injection. It was extremely difficult. For a lot of reasons that black founders will speak about, which is just that black founders generally struggle to raise capital. I think that it is what it is and it is tough. So, it was difficult but I think our issue was then compounded by the fact that we’re an impact business. So, as much as the commercial gains are important and the impact is also an extremely important element of it. The pure VCs don’t necessarily speak that language. That significantly reduced the sort of pool of funders that we could speak to. So, that was really tough. Our preferred funder, [E Squared Investments] had some requirements that they wanted to see from us, which was tough on us. So we said, that’s too difficult. Like, let’s just go to the pure VCs. At the end of 2019, I said maybe the preferred funder is onto something and maybe we should listen to what they are trying to say to us and we started to put together a plan that would appease their requirements, which I think were very powerful because they set the philosophy with how we run our business.
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