Technology

Profitable altruism

Nadir Khamissa wants to make money by having a positive impact on people.


13 February 2017
Brought to you by
Nadir Khamissa, Hello Group. (Karolina Komendera)

“Don’t make me tell my life story – it’s too boring,” Nadir Khamissa says with a grin on his boyish face.

Ninety minutes later, he’s still talking about his life, and he was lying about it being dull. Khamissa has made a fortune as a world-class investment banker, lost it on an ill-timed telecoms venture, and recovered to make even more dosh. On the journey came an epiphany that life should be about making a difference, not making money - although only the people with money tend to say that.

Still, any cynicism about his altruism is dispelled after a few minutes in his company. He’s a charmer who’s honest rather than unctuous and takes great delight in making you laugh with stories of his escapades. He’s excitable and fast-talking, yet focused, and speaks without guile or any pretence of making himself sound less mistake-prone than he has been.

The kid who was 'a bit of a weirdo' in Laudium has grown up to become the co-founder of the massive Hello Group, with his brother Shaazim. But he’d hate the words `grown up’ because despite being 38 with four sons, he’s fuelled by a risk-taking appetite for adventure.

Scrapes and knocks
The brothers have had several scrapes and knocks since founding the business in 2005, which now has telecoms, financial services and distribution divisions.

They tried and failed with travel and media forays, and he waves his hands and laughs as he describes those ventures. “Hello Travel is dead – it was a terrible business! We lost some money in media and travel – it was a disaster. Some people need to trip over their shoelaces repeatedly to learn.”

Hello Group’s core offering is cheap international phone calls for migrant workers to call their families. The brothers spotted that need when Nadir was MD of global equity derivatives at Deutsche Bank in London and Shaazim was in Gauteng. It was vastly more expensive to call England from South Africa than vice versa, and they set about solving that issue. Their initial scheme was to launch prepaid calling cards that involved tapping a string of numbers into a pay phone.

Just as they launched, Telkom changed its payphone technology and rendered the service non-functional. Their money evaporated. But the knock was temporary. As mobile phones become cheaper, they switched to that market instead, and users can now make international calls from just 50c a minute.

“It sounds like we’re just giving people a cheap phone call, but it’s had a tremendously positive impact on people’s lives,” Khamissa says. “The opportunity for us to have a positive impact is what drives us more than the financial gain we get. Create a positive impact and the money follows.”

Serving the base of the consumer pyramid also led them to create Hello Paisa, a money transfer service for migrants. It’s like Kenya’s MPesa triumph, but this version works across 22 borders. “We pushed the regulations – they didn’t exist to do this. We worked with the Reserve Bank, which changed the regulations and we were the first recipient of this licence.”

Less than two years later, it’s South Africa’s largest cross-border money transfer company, shifting R330 million a month for 300 000 users.

A bit of craziness
Ask where the altruistic streak came from, and he says the most successful entrepreneur he knows is an Argentinian who told him that the entrepreneurial gene comes from a very dark place. “I don’t know what it is – whether it’s insecurity, a bit of craziness, dissatisfaction, or from something bad that’s happened – but I know I have it in me,” he says. “My mom will say I’m an angel, but my dad would tell you a different story.”

His parents opposed his initial plan to finish school and start a business, so an uncle was asked to talk him into a more stable future. His uncle thought his ideas were promising, but advised him to get a degree first as a fallback in case his entrepreneurial efforts failed.

Khamissa graduated in actuarial science because he reckoned it would be the highest-paying career. He worked his way up quickly in Deutsche Bank and conducted the biggest equity derivative transaction the bank had ever made. “I made a €140 million profit in one day and the bank threw a party for it, and it felt so shallow. I sat there thinking, is this my crowning achievement, taking money out of the pocket of a big private equity fund and putting it into the pocket of a bank? It felt so empty,” he says. “That point represented a change, where I shifted from building a business just to make money, to realising we have to have a higher purpose.”

Smart people
Hello Paisa is now going international, with offices in Mauritius, Zimbabwe, the UK, India and Dubai. Trying to conduct business in Zimbabwe without a physical presence is near impossible, he says. “The systems keep collapsing and they keep changing the rules, so it helps to have smart people on the ground.” Those smart people are also developing the software. “The best person to design software for the users and recipients isn’t someone sitting in an air-conditioned office in Johannesburg. It’s someone sitting on the ground in Harare,” he says.

The Indian office was also set up to tap into programming talents because the group struggles to find enough skills in South Africa. “We have 60 developers here who are very good, but we need more and India is a gateway to an enormous talent pool,” he says.


We’re not totally irresponsible – we want to make some money.

Nadir Khamissa


With Hello Mobile and Piasa now solidly established, restless Khamissa is embarking on a new adventure, Bedlam Inc.

“I’m allergic to the status quo. I struggle once things don’t change,” he laughs. “It’s my passion to build amazing businesses and to stay in the chaos and not have to settle into the routine of a stable business. The way I want to live my life is spending the next ten years leveraging technology to have a profoundly positive impact.”

Elephants don’t dance

The latest venture from the Hello Group is an incubation house called Bedlam Inc, named after the world’s first mental institute.

“I think the name suits my personality,” says Khamissa. “We welcome the crazy ones. We want the crazy people who have some insane idea and we want to back them.”

Bedlam will partly play the role of a venture capitalist, starting at a much earlier stage and with a refreshing disregard for financial payback.

“We are blessed with having built some really successful businesses, which gives us the freedom to explore these ambitions,” Khamissa says. “The past has been good and it’s given us a platform to do what we really want to do, which is be part of the future. With Bedlam, we will invest and build what can be exponential businesses.”

Many of the ideas will come from within the Hello Group, and others from external entrepreneurs. The criteria include that it must be a digital business, it must be borderless, and it must leverage technology to be truly transformative. Key areas will be artificial intelligence and machine learning, distributed technologies like blockchain, and perhaps an expedition into alternative energy. That could involve building a business around solar panels, coupled with a micro payment mechanism, so people could install a solar panel and let their neighbours buy the electricity it generates.

“We’ll brainstorm what problem a business or product solves and how we can turn it into an exponential success,” Khamissa says. “If we believe a problem is big enough and worth solving, we will put a team together of entrepreneurial people.”

That team will be expected to build and launch a prototype quickly to assess its potential. Its members will live and die by their new business, rather than being part of a company where they’ll get paid whether it flies or not.

“Bedlam isn’t focused on the spreadsheet and our first iterations will probably flunk, but we will learn from it. If it doesn’t work well, we’ll pull the plug and if it does work, we’ll back it completely. We’re not totally irresponsible – we want to make some money,” he says.

No biggie
Fledgling businesses will have access to the group’s resources in six countries and its deep relationships in the telecoms, retail and banking sectors.

One business already in the fold is Snode, which is developing new ways of strengthening information security. Existing network security specialists could do the same, but it takes a more agile player to face the risks, Khamissa believes. “Cisco can afford to experiment like we do, but our advantage is that we can fail and it’s not such a big deal, whereas if they fail, it’s a really big deal. Elephants don’t dance.”

He can’t stop smiling as he describes his plans, because he’s back where he thrives best – in the uncertain, experimental world of big potential and equally big risk. “I love this – it feels like homecoming,” he says. “We’ve built really successful businesses that generate cash and we want to invest that money intelligently, but by embracing risk and doing fun stuff. We only have one life, we’re not coming back. It’s about living your life so when you look back, you smile.”