Startups built upon instant messaging foundation

18th June 2020  

By Edoardo Gava

Instant messaging is becoming a strategic tool for development among new companies. Not surprisingly, WhatsApp, Facebook, and WeChat are competing to attract more users and to keep them longer on their platforms, offering new user experiences and more services (the latest on the list are instant payment systems). These platforms are additionally trying to attract companies to work with them (i.e. Whatsapp Business).

Initially, firms started using instant messaging apps to communicate directly with their customers, mostly as a customer service and for marketing purposes. Today, not only more and more businesses in different industries are adopting these tools, but there are entire companies that are building their "interface" on messaging platforms.

The reality is that more users stay on WhatsApp & co and spend a longer time using their services. The latest messaging app usage statistics show that WhatsApp has 2.0 billion users worldwide, and Facebook Messenger 1.3, while WeChat recently hit the 1 billion mark. These apps combined represent the top three in almost every country in the world. It is easy, therefore, to understand why companies want to interact with their customers directly on an instant messenger, as they are probably present in one (or more) of those applications.

The massive adoption of chatbots is providing a considerable contribution in this regard, making it so easy for companies to offer all kinds of communication to their users. A significant example in the field is Yellow Messenger, that operates a conversational AI platform adopted by companies (including Accenture, Flipkart, and Grab) to communicate with employees and customers. The startup has recently closed a $20 million round to proceed with its international expansion.

As mentioned before, companies are also building their entire service and "interface" on these apps. With chatbot solutions it is simple also to interact with potential customers and make them purchase directly on the chat. It is faster and much more straightforward than downloading an app, logging-in, and finishing all the procedures on a different platform.

There are two interesting examples to cover this topic. The first one is Chutney (also selected in the most  recent Y-combinator batch), which is building an Indian marketplace for vegetables and fruits directly on WhatsApp. The startup believes that the gap between Indians having an internet connection (450 million) and the ones buying online (150 million) is mostly caused by the complexity and variety of eCommerce and marketplaces. For this reason, each user of Chutney will be able to order on WhatsApp and pick up its package directly on a close local store the day after (reducing logistics costs).

Another remarkable example is Zelf, which has created an encrypted chatbot that handles users' finances and transfers money via Facebook, WhatsApp, Telegram, and Viber. Since April, the fintech has reached over 350,000 users across France and Spain, that have signed up to its waiting list ahead of the launching.

Zelf has no app and physical card but also no "offboarding" (user cannot withdraw cash). Instead, users will be able to transfer money to other people or pay in shops via a virtual Mastercard, which already integrates with Apple Pay and Google Pay (allowing both online and offline shopping).

It is swift to open an account (just a matter of seconds). After clicking on the login launch link, a new conversation with Zelf will be created on WhatsApp or Facebook, issuing users their IBAN account number and virtual card. This solution is utterly lean and fast, since users do not even need to prove their identities until they have moved over £150 (called by Zelf "light KYC approach,” which falls still within European regulation). Usually, the registration and approval, even on digital banks, can require some hours or days. Zelf users can instead use the service almost immediately without leaving their favoured app. On the startup side, this kind of service is built to cut every "interface" costs (both physical and digital), potentially boosting its path to profitability.

Other sectors will likely have the opportunities to develop their business on an instant messenger. An example could be the food industry, with its restaurateurs taking reservations, orders for delivery, and even receiving payments by customers on WhatsApp or Facebook. Similarly, also the travel and hospitality industry could see hotels "cutting the middleman" and "chatting" directly with their customers about reservations, check-in, and out.

It is sure too early to compare these examples to what happened with apps in the recent past. Surely, it will be intriguing to see how this new ecosystem built on messaging platforms will attempt to further integrate with the "real and tangible" businesses.