Mxit: The Rise & Fall of Africa's Most Popular Social Network

Multiple failed Startups, then stumbling on what could’ve been a billion-dollar idea, selling the idea for $70 Million, Getting a New CEO who throws a $75 000 lavish party just to fire a large number of employees afterward, then hitting 50 Million Users in 2011 and shutting down in 2015. Joining the graveyard of failed tech startups that had the potential to rival the biggest tech companies in the world. This is the wild Story of Mxit, the $70 Million disaster that was Africa’s failed Facebook.

Mxit was founded by Herman Heunis who was born on a sheep farm in Namibia. He would later leave Namibia to go study computer engineering at the University of Stellenbosch in South Africa. He started his own company called Swist Group Technologies. The company specialized in building software solutions for big companies such as Vodacom, Telkom, and other telecommunications companies in South Africa.

Mxit was Officially launched in 2005 as a paid service, yeah that didn’t work out imagine paying to use Facebook it was a decision so bad that 4 months after the launch they only had 40 Users in Total. They subsequently relaunched the app as a free service.

Mxit used viral marketing tactics to target 16 - 21-year-olds, within a few months of Mxit going free they had reached 90 000 users, and just 18 months after their initial launch they had hit 1.6 Million Users. At this point, they were gaining about 7 000 new users daily. At the time the average cost of a message in South Africa was about 30c (South African Currency), Mxit on the other hand was free to download and free to use with an internet connection. Their only charge on the platform was a 1 - 2c messaging fee for any messages sent in chatrooms. Another huge benefit was the length of the messages you could send, with SMS people were limited to only 160 characters compared to Mxit messages which could contain about 2048 characters.

Also After compression, message file sizes on Mxit were less than a single kilobyte meaning after factoring in data costs it was still way cheaper than using SMS. By January 2007, Mxit had more than 3 Million Users. And was having 11 000 new user sign-ups daily at this point. Soon after they would introduce ads onto the platform which proved very popular amongst big companies.

By August 2010 they had reached 20 Million Users in 120 countries. Herman Heunis the founder of Mxit would at this point start to look for buyers to sell Mxit to.

He managed to sell Mxit for a rumored figure between 40 - 70 Million dollars. It was sold to an investment company called the world of Avatar which was run by a man named Allan Knott-Craig.

By August 2011, Mxit had 48 million users. Around this time Mxit begin receiving serious competition from Facebook, Whatsapp, Instagram, WeChat, and even BBM.

By 2010 Andriod phones following the lead of Apple were also becoming more popular and more importantly cheaper with each passing year. In fact by 2011 Mxit still didn’t have a native app for smartphones.

So like any other sane Tech CEO joining a company, he throw a lavish party costing around $75 000 then soon after proceeded to lay off employees. After this whole saga, he doubled down on the feature phone market and invested about $7 Million into rolling out Mxit to the rest of Africa.

In 2012 Mxit would launch Mxit Moola which is the slang term for money, Moolas were basically digital tokens people could purchase to use on the platform to buy things like gaming skins and pay for music streaming, but there was one problem - according to how much they had invested in the platform they would need to sell more than 500 billion Mxit Moolas to just break even.

By January 2014 Mxit had dropped to having less than 1 Million active users on its platform. In that same year Mxit scored a 0 out of 7 for secure messaging by the Electronic Frontier Foundation. For context, Facebook scored 2 out of 7, It's safe to say that Mxit simply didn’t prioritize security on its platform. Mxit would later be shut down in 2015.

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