Termii raises $3.65 million to reimagine digital communication in Africa
This startup imagines communications in Africa should be radically different. So they are getting their hands dirty, with fresh support worth millions of dollars. If things were up to Termii, a pan-African communication platform-as-a-service (CPaaS) startup, digital communication in Africa would be decades ahead, in terms of innovation. The YC-backed startup has the goal of reimagining communication between African businesses and their users—and it has just raised $3.65 million to achieve this. Coming off the back of a $1.4 million seed funding in January 2021, Termii’s latest capital raise—led by Africa-focused VC firm Ventures Platform—signifies investors’ confidence in the under-funded CPaaS sector. “Not many companies in this space are raising capital, but Termi is doing many things right. Our product is not a nice-to-have; it’s a painkiller,“ said Gbolade Emmanuel, the company’s CEO. The round welcomed participation from other investors including Fintech Collective, Launch Africa Ventures, Nama Ventures, Aidi Ventures, Ralicap Ventures, Now Venture Partners, Vastly Valuable Ventures, NOA Capital, Assembly Investors, Probability Ventures, Adamantium Fund, MyAsia VC, Uncovered Fund, and Afropreneur Angel Group. Angel investors such as Aubrey Hruby of Tofino Capital and Eamon Jubbawy of Onifido also wrote their way into Termii’s cap table. Founded in 2017 as a messaging product that allowed businesses to communicate with their users across multiple platforms, Termii has evolved its product suite to function as a one-stop shop that powers interaction between businesses and their users. If you’ve ever waited for an OTP text message when trying to make payment through a fintech gateway—such as Paystack’s—then chances are that you’ve experienced Termii in operation. Termii’s infrastructure powers the fast and secure messaging that allows users to interact with about 9,000 fintechs, including Moniepoint, Chipper Cash, and Piggyvest. Gbolade believes his startup’s function in the day-to-day activities of African fintechs is a prime advantage that is of interest to investors—such as Fintech Collective, the global fintech-focused VC firm that participated in the round. Termii claims its list of over 10,000 clients is filled up by businesses across several sectors, including logistics and healthtech. According to Gbolade, one of Termii’s propositions that won investors over was Termii Go, the company’s latest product which he described as a “game-changing unified communications app”. Set to be publicly launched this month, Termii Go is a step up from Termii’s usual stealth infrastructure operations. The app aggregates Termii’s extensive network of clients across Africa into the platform, enabling swift, real-time, engagements between businesses and users. For businesses, this combines a CRM tool with a mobile comms infrastructure. Termii Go also innovates over the usual text messaging that could be intercepted or accessed by rogue players, ensuring that sensitive information is not compromised even when a device gets lost or stolen. Through partnerships with phone manufacturers like Tecno and Infinix, the product is able to bypass third-party messaging gateways and ensure more instantaneous delivery of messages. Perhaps, the most exciting thing about Termii Go is that it plugs into existing mobile virtual operators to enable users to make and receive calls or access the internet through a globally responsive electronic SIM card. This bit remains a B2B play, expanding the scope and affordability of communication between teams. Speaking about the product over a call with TechCabal, Gbolade said, “There’s no product like ours in the African market. We are bringing world-class innovation to the communications sector which has historically been controlled by a few mega players. Our goal at Termii is to redefine communications and optimise it for Africans, and we’ve only begun to scratch the surface.” Revenue in the global CPaas market is projected to reach $34.75 billion by 2026, growing at a CAGR of 38%. In Africa, the market is still taking shape, dominated by players such as Termii, Africa’s Talking, Beem, and SendChamp. In terms of funding, Kenya’s Africa’s Talking takes the lead with over $8.6 million raised to date. But Gbolade dismisses the notion of having direct competitors. “With this new play, we’ve been able to zoom past our regular competitive landscape. What we have now are fractional competitors—players across different sectors who are offering some parts of our one-stop-shop solution,” he said. In a press release sent to TechCabal, Samantha Wulfson, an investor at Fintech Collective, said: “In conversations we had with African businesses, Termii’s solution was cited as the fundamental piece of their infrastructure powering day-to-day business operations. Termii has been a game changer throughout the industry in ensuring the delivery of OTPs and transaction-related messages with a higher degree of certainty than ever before, and is still only scratching the surface of their vision as a communication layer.” Gbolade told TechCabal that this “higher degree of certainty” is made possible through a proprietary internal technology called ICS, which works intelligently to detect downtimes before they occur and direct traffic to alternative routes. Following its capital raise in 2021, Termii expanded to Algeria and launched operations there, but a tight regulatory environment forced the company to double down on other expansion zones, especially francophone Africa, where it is now deepening its roots. “With its recent fundraise, the company looks to further its expansion efforts, particularly in francophone Africa with a focus on Ivory Coast,“ the release reads in part. To make money, Termii operates a per-billing wallet system. Businesses preload the wallet which gets debited as calls and messages are sent to their customers. This model underscores the need for efficiency with the CPaas model, as businesses generally spend on customers before they’re onboarded. This means that an unreliable communications provider would incur customer acquisition costs for customers that could churn at their first contact with the business. For Termii, growing their adoption also means engaging the tech ecosystem. With its annual Termii Elevate programme, the startup brings developers, users, and stakeholders together to drive conversations on building world-class communications solutions. With technical founders—Emmanuel Gbolade and Ayomide Awe at the helm of Termii affairs, this move almost mirrors the playbook of Africa’s fintech giant, Paystack. But according to the CEO, “Termii
Read MoreTikTok’s sister app LetsChat wants to become the WhatsApp alternative for Africans, but users aren’t convinced yet
TikTok’s sister app LetsChat is expected to compete with WhatsApp and Telegram, but users believe the data-saving app isn’t a worthy challenger. When Yusuf Balogun first downloaded LetsChat after seeing its ads in online comedy skits, he had high expectations of the messaging app, which promises exciting features such as free voice and video calls, zero pop-up ads, and in-app games. But after a few days of using the app, he uninstalled it. “Though it was an interesting experience because it doesn’t consume data like other apps, I’m not sold on it,” he told TechCabal over a call. Launched in 2021 by Beijing-based tech firm and TikTok owner ByteDance, LetsChat was designed for young African users to compete with bigger rivals WhatsApp and Telegram. LetsChat’s entry into the African market has all the makings of a company looking not to keep up with the existing competition but to crush it. To pull this off, the Chinese app engaged influencers—including comedians—to spread its word. A check on Google PlayStore shows that the number of its downloads has exceeded five million. A worthy opponent? Depending on who you ask, young Africans want social content applications such as chat and video. WhatsApp is easily the most popular messaging app on the continent because of its features: voice and video-call functionality, group functions, stickers, and status updates. I used LetsChat for two days and consider it a direct challenger to WhatsApp, and it comes with more offerings. For example, the ‘”People nearby” feature allows you to connect with users in your present location, while “Lifie” captures real-time moments with a dual camera. From my experience, making voice and video calls on LetsChat—the selling point of the app—didn’t require data, but you’d need to turn on your data to stay connected. The calls weren’t seamless, but not bad for a two-year-old app. Like Yusuf, users who spoke to TechCabal confirmed that LetsChat has cool features but they stopped using the app for different reasons—chief of which were technical glitches. “My experience using the app was below average because of the jamming of calls and unrecognised numbers calling you. I think they need to work on the features. Sometimes when you make a call, it won’t show whether it’s ringing. They still have a long way to go,” Omojolade Michael, who used LetsChat for a few days, said. Susan, who has been using LetsChat since the beginning of the year, says she only uses it whenever she takes a break from WhatsApp. “My major problem with the app is that it keeps suggesting complete strangers to connect with. At least on WhatsApp, I have control over my contacts,” she said. For some, like Adam Opeloyeru, a digital marketer, these features make LetsChat unique. “I like the Lifie feature. Also, I can call 30 friends at the same time and be able to talk to them without any extra charges. There are also games on the app, just like iMessage. You know iMessage is designed for iOS phones, but for LetsChat, you can play games with anyone with the app,” he told TechCabal. Despite its appealing features, some see LetsChat facing an uphill struggle to retain users. “I won’t consider it a formidable competition to WhatsApp or Facebook Messenger. Even if WhatsApp isn’t an option, I’d still settle for Messenger. It could get better with time, but at the moment, I don’t see it as a close competition. The stakes are way too high,” Yusuf said. However, Adam is quite optimistic about the app’s success if the makers return to the drawing board. “They just need to upgrade those features to meet the expectations of people, and they need to do more research beyond the reviews on Apple Store and meet the users to know the kind of features they want,” he said.
Read MoreAfter introducing a blockchain act, Nigeria’s first move is to tax 10% of crypto profits
In a surprising move, the Nigerian government has introduced a new law that will create a tax on cryptocurrencies. Crypto traders say that it might not work. In 2021, the Central Bank of Nigeria banned cryptocurrency trading. Now, in 2023, on the eve of its departure, the Buhari-led government, with its history of being averse to crypto, surprisingly introduced a new law to tax gains on digital assets like cryptocurrency. The crypto tax comes from a series of amendments to the 2022 Finance Act. According to the Finance Act, there is now a 10% tax on profits on digital assets. Section 3(a) of the Capital Gains Tax Act is amended by inserting the phrase “digital assets” after the word “debt” as follows: “Subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including options, debts, digital assets, and incorporeal property generally.” According to Adewale Ajayi, a partner at KPMG, digital assets include cryptocurrencies, non-fungible tokens, and other tokenised assets. Although the amendment comes as a surprise to crypto traders, it has been in the works for a long time. Nigeria’s 2023 budget comes with a debt service cost of ₦6 trillion—31% of the budget—and a budget deficit of ₦11.34 trillion—more than 5% of the GDP. To remedy this, the government is looking for new sources of revenue, and with over $260 million worth of crypto transactions concluded last year, a tax on crypto assets might come in handy. “We woke up to see it in the news” “How can you tax what you have not recognised or created a policy for?“ a puzzled Obinna Iwuno told TechCabal. Iwuno is the president of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), a body comprised of private players in the Nigerian blockchain ecosystem and recognised as one of the stakeholders involved in the drafting of the national blockchain policy. “If you want to tax crypto,” he continued, “and it’s okay to do that because crypto generates economic activity that can contribute to the country’s GDP, you must first create a framework and gather stakeholders around a table for adequate policy formation. SiBAN knew nothing about this move from the beginning. Like everyone else, we woke up to see it in the news.” Last month, when Nigeria announced that it was introducing a national blockchain policy, most crypto enthusiasts didn’t budge. They generally cared less about the news, as crypto was still outlawed by the government. TechCabal reported then that the blockchain policy had lofty ambitions that excluded crypto. But in a later conversation with one of the bill’s stakeholders, we learned that the government was ready to “adjust its strong stance against crypto”. It may now be getting clear how these adjustments will play out, especially with this latest move: a 10% capital gains tax on digital assets, including cryptocurrency. How will the tax work? Wale*, a crypto trader, told TechCabal that for the tax to work, the government would have to partner with international exchanges and licence crypto traders. “If the government wants me to pay a tax on crypto, they have to legalise us and allow the exchanges to open offices in Nigeria. [The government] can’t be taking money from us if we are banned, and I have to fly to Dubai or Singapore if I have issues with the exchanges,” he said. Yesterday, Nigeria’s Securities and Exchange Commission directed Binance Nigeria Limited to immediately stop soliciting Nigerian investors in any form whatsoever. According to an anonymous source at the Federal Inland Revenue Service, Nigeria’s tax authority, the plan to enforce the tax is still in the works and will be decided by the Joint Tax Board, as either the FIRS or state bodies can enforce the tax. The Joint Tax Board was created in 1961 to ensure uniformity of standards and the application of taxes in Nigeria. Iwuno asserted that while taxing crypto itself is not a wrong move, over-taxing could bleed out an infant industry that is still taking shape. “The crypto industry in Nigeria is still a baby, and over-taxing or taxing it too early can kill it,” he said. When asked if the taxation could confer some form of legitimacy on crypto, Obinna said, “We can’t assume what they have not said. They’ll have to come out clear.” Davizoe Effiong, the CEO of BEI Consultancy, a Nigeria-based blockchain consultancy firm, told TechCabal that a tax on crypto gains would crash the adoption of cryptocurrency in the country. According to him, capping the tax profit at 5% would not (completely) demotivate players and allow for the continued vertical trajectory of crypto adoption in the country. “If the government wants to earn revenue from crypto, it must put skin in the game and really get involved. One way to do this is by insuring the deposits of crypto exchanges—akin to how it does for banks—so that crypto adopters can be reassured of the safety of their funds. They can also support crypto operators with loans and generally grow the ecosystem by making it more attractive to international players,” Effiong said. Like is the custom of Nigerian government agencies, this act may take forever to be enforced—if it ever is. Nigeria’s new president, Bola Tinubu, promised an administration that is bullish on crypto and blockchain technology. It will be interesting to see how his administration responds to enforcing this act. However, a harsh reality remains: by law, every crypto trader or “hodler” would have to give the government a tithe of their earnings, even while the government ban on crypto remains. *Name(s) have been changed to protect our sources
Read MoreKPMG: Higher taxes key to fulfilling Tinubu’s GDP growth targets
Independent auditors have warned President Bola Tinubu that raising the Gross Domestic Product (GDP) to an average of 6% is ambitious and unattainable for him Nigerians will pay more taxes if President Bola Tinubu’s goal of growing Nigeria’s Gross Domestic Product (GDP) by an average of 6% in the next four years is to be achieved. That’s the view of analysts from the audit advisory firm KPMG Nigeria. The auditors also added that Nigeria risks increasing its debt burden should Tinubu go all out to bring his inauguration speech- where he made this overambitious promise- to fruition. During his campaign, the president promised double-digit GDP growth. Last month, Tinubu removed fuel subsidy and spoke about plans to unify the nation’s exchange rates. The report, authored by Partner/Chief Economist KPMG Nigeria, Yemi Kale and Associate, Research and Insights KPMG Nigeria, Olanrewaju-Afuye Busayo, stated that Nigeria’s growth since 2019, has been fragile, not growing fast enough to contain population growth. The analysts have projected Nigeria’s growth in 2023 to hover between 2.7-3.2%. “Thus, if we assume a GDP growth of 3% in the first year, the economy will then have to grow by an average of 7% for the subsequent three years and moving growth from a forecasted 3% in 2023 to at least 7% in 2024 and afterward seems overly ambitious. “At the same time, attaining a 6% real GDP growth on average from 2023 to 2026 means growing the value of real GDP from ₦74.6 trillion in 2022 to ₦92.5 trillion by 2026 representing an increase of ₦17 trillion in 4 years. However, within 12 years, 2010 and 2022, real GDP grew by about ₦17 trillion, which will have to be replicated in just four years and within a much more challenging macroenvironment that cuts across the fiscal, monetary, external, and real sectors,” the report explained, justifying its position. “We are of the opinion that an average GDP growth rate of between 4-4.5% at the best is more feasible in the next 4 years. Even this will require the country to get its policies right and keep consistent faith with macroeconomic reforms,” the note explained.
Read More
Binance is illegal in Nigeria
Lire en français Read this email in French. Editor’s Note Week 23, 2023 Read time: 5 minutes Hello hello everyone While you settle in for the long weekend, read a few of this week’s most interesting tech stories from the home front and abroad Pamela Tetteh Editor, TechCabal. Editor’s Picks Binance is illegal in Nigeria In a circular published yesterday, Nigeria’s Securities and Exchange Commission directed Binance Nigeria Limited to immediately stop soliciting Nigerian investors in any form whatsoever. Learn more. Is Tingo a scam? Tingo appears to be tango-ing in a web of lies. Hindenburg research group accused the NASDAQ-listed agri-fintech company of being an “exceptionally obvious scam.” Learn more. Twiga prunes its staff Twiga Foods is saying “Go big or go home.” Last year, the agritech fired 211 full-time salespersons and replaced them with “free agents”. There are also 2000 people waiting in line to replace these free agents if Twiga fires them for underperforming. Learn more. MTN is set to go off-grid Telecom operator MTN is looking for a way out of South Africa’s load shedding as the country’s power instability is taking a toll on its business. Now the yellow telco is preparing to go green with off-grid renewable energy. Learn more. Mara’s second layoff After a 21 million dollar fund raise, Web3 startup Mara has laid off its staff for the second time. This new wave of layoffs comes six months after it let go of nearly half its staff last year. Learn more. Bolt offers the drivers on strike more cash Fuel prices are touching the sky in Nigeria, and Bolt drivers have gone on strike to compel Bolt to increase its minimum fee to ₦2000. However, Bolt refused. Instead, it is offering them a bonus of ₦6,000 with terms and conditions to stop the strike. Learn more. Chipper Cash lays off COO In its third round of layoffs so far, Chipper Cash let go of more of its workforce last week, and this time, even the COO was affected. So far, the fintech has laid off over 150 staff members in a bid to restructure and focus on core products. Learn more. TC Daily Get the most comprehensive insights and stories about Africa’s tech and business ecosystem. TC Daily goes out every week at 7 AM (WAT). Sign up now. Tinubu suspends CBN governor Eleven days after his inauguration, Nigeria’s president, Bola Ahmed Tinubu, has suspended the governor of the country’s apex bank, Godwin Emefiele. Learn why. Nigerian banks get a discount Nigeria’s Inter-Bank Settlement System (NIBSS) has reduced the cost of transactions for Nigerian banks. However, this reduction in fees will not be extended to the bank customers. Learn more. Jumia goes offline Jumia is going offline in rural areas. On its 11th anniversary, the ecommerce company announced that it will be expanding its offline sales model (J-force) to rural areas in Uganda. Learn more. Another pricey Apple Apple unveiled a mind-blowing mixed reality and 3D camera headset this week. It costs $3499, so don’t start digging into your couch cushions for loose change. Good thing it won’t come out till 2024; you can start saving now. Read more. Who brought the money this week? This week, Helium Health, a Nigeria-based health tech company, received $30 million in Series B funding in a round led by AXA IM Alts. Nigerian logistics company Haul247 raised $3 million in seed funding. The round was led by Alitheia Capital, with participation from Investment One. What else to read this weekend? Sudan’s war is crippling its budding tech ecosystem. DFIs are playing in alleviating the pain of VC downturn in Africa. Missed GITEX in Morocco? Here is what you need to know. MTN’s MoMo is one year old but still has a lot more growing to do. Look at the state of mental health in the South African tech startup ecosystem. Why do African governments struggle with the digitalisation of public services? Written by: Ngozi Chukwu & Written by: Hannatu Asheolge Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
Read MorePresident Tinubu’s suspension of CBN Governor Godwin Emefiele raises legal questions
President Tinubu suspended the CBN governor in a move reminiscent of Sanusi Lamido’s removal as CBN governor in 2014. Once again, the move has thrown up questions about whether the President has the power to suspend the CBN governor. In an unexpected move on Friday night, President Bola Tinubu suspended the Governor of the Central Bank, Godwin Emefiele. In a statement that has now been published by several publications credited to the Director of information at the Office of the Secretary to the Government of the Federation SGF, Emefiele’s suspension was “sequel to the ongoing investigation of his office and the planned reforms in the financial sector of the economy.” Since Emefiele’s tenure as CBN governor ends in June, it is a surprising move that will now raise legal questions. In 2014, President Goodluck Ebele Jonathan suspended the then-CBN governor, Sanusi Lamidoo Sanusi. Many called that suspension illegal, citing the CBN Act. Section 11 of the CBN Act provides for the cessation of appointment by a CBN Governor, Deputy Governor and Director of the CBN. Section 11 (2) ( c & f) of the Act stipulates that “the Governor, the Deputy Governor or Director shall cease to hold office in the Bank if he- [c] he is guilty of a serious misconduct in relation to his duties under this Act; or [f] is removed by the President; PROVIDED that the removal of the Governor shall be supported by a two-thirds majority of the Senate praying that he be so removed” Against this background, many argued that Sanusi’s suspension was illegal. Tobi Balogun, a legal practitioner in Lagos, told TechCabal, “In the case of Sanusi Lamido v. President & Ors, it was decided by the Federal High Court that while the President cannot unilaterally remove the Governor, he can exercise some form of disciplinary control which includes suspension over him. The matter was not appealed.” Balogun added, “In the real sense, suspending the CBN governor as a disciplinary measure is meant to be exercised with the approval of two-thirds of the Senate. What is clear is that the President cannot outrightly and unilaterally remove the CBN governor. However, we understand that suspension more or less operates as a removal because there’s no path for him to regain office.” A move that can affect the markets Governor Emefiele’s time as Central Bank governor has been a mixed bag. Appointed under President Goodluck Jonathan, he remains the only Central Bank governor ever to serve two terms. However, since 2015, the CBN began to pursue pro-agricultural policies, which turned out to be controversial. One such policy was Anchor Borrowers Scheme. He is also rightly criticized for questionable monetary policy and an inability to exert the CBN’s independence, leading to record borrowing levels to the FG called Ways and Means. Those ballooning loans and 22% inflation have meant that Emefiele’s legacy as governor will be unflattering. His time as governor has also coincided with an increasing lack of transparency at the bank. The apex bank has not published its financial results since 2018. Chuwkwudalu Akabogu, a finance expert, told TechCabal, “The CBN is an independent body and is supposed to be run as one. Despite this, I expect the market to react positively as the CBN under Emefiele has been marred by several allegations that have weakened investor confidence. The market has eagerly anticipated this move.”
Read MoreNigeria’s central bank governor under investigation following suspension
After two recessions, a botched naira redesign scheme, and different economic policies that saw Nigerians counting their losses weekly, Godwin Emefiele, Nigeria’s central bank governor, has been suspended by the president. Godwin Emefiele, the governor of the Central Bank of Nigeria (CBN), has been suspended from office by the country’s president, Bola Ahmed Tinubu. The suspension takes immediate effect, as contained in a statement from the office of the secretary to the government of the federation (SGF). According to the statement, the office of the central bank governor is under investigation in relation to the planned reforms in the financial sector of the economy of the new administration. Emefiele’s suspension comes 11 days after the inauguration of Nigeria’s new president. Read more: President Tinubu’s suspension of CBN Governor Godwin Emefiele raises legal questions Emefiele has been directed to hand over affairs of the CBN to Folashodun Shonubi, deputy governor, Operations Directorate. “Mr Emefiele has been directed to immediately hand over the affairs of his office to the deputy governor (Operations Directorate), who will act as the central bank governor, pending the conclusion of investigation and the reforms,” the statement reads in part. The suspended CBN governor served under the former president, Muhammadu Buhari, for eight years. Before his suspension, Nigeria went through two recessions and an inflation rate that steadily increased to about 22.04%. Emefiele also instituted a naira redesign policy meant for Nigerians to swap old naira notes with newly redesigned notes. This policy caused a cash crunch in the country bringing the country to its knees due to the unavailability of cash for transactions. It was not stated how long the suspension will last or how when the investigations are expected to conclude. What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
Read MoreIsraeli AI startup Ravin launches operations in South Africa
Israeli AI startup RavinAI is pursuing expansion of their fleet management product offering with entry into the South African market. Israeli-based AI startup RavinAI is launching operations in South Africa through a partnership with Alder Grove Automotive, a South Africa fleet management company. RavinAI offers AI-powered visual inspection across the fleet, rental, used car, and insurance industries. Using computer vision and AI, Ravin’s technology claims to automate the vehicle inspection process, ensuring fleet managers run more profitably, more efficiently, and with reduced risk. It then produces a condition report which allows for a more efficient fleet repair maintenance process. “We are excited to be partnering with Ravin on their entrance into the South African market,” said Vernen Pillay, managing director at Alder Grove Automotive. “Ravin’s technology has so much potential for the market, even beyond fleet management which itself is very important. It can be used for car buyers to inspect vehicles for purchase, insurance claims inspections, port and shipping monitoring, etc. and we aim to assist in maximising its usage here in South Africa.” For Ravin, co-founder and CEO Eliron Ekstein stated that the demand for AI vehicle inspection was the reason for the decision to enter the South African market. “Our entry into the South African market – following our recent launch in Australia and New Zealand – is further proof of the need for solutions such as ours, which brings the vehicle inspection process firmly into the 21st century. We look forward to working closely with Alder Grove Automotive to improve the experience for its customers across South Africa,” he said.
Read MoreCan streaming platforms solve Nollywood’s distribution problem?
In recent years, international streaming platforms have placed Nigerian films in front of global audiences, yet filmmakers still grapple with piracy and a local audience that cannot afford their films. The Nigerian film industry is one of the fastest growing in the world, with about 2,000 movies produced yearly. However, the industry’s high productivity does not necessarily translate to real financial benefits for its professionals as its distribution problem makes it difficult for filmmakers to recoup their investment in filmmaking. Nollywood has transitioned through various forms of distribution, from the VHS to VCDs and then cinemas, each channel coming with its own challenges. Now, the industry has the opportunity to distribute its movies via international streaming platforms like Netflix, Prime Video, and Showmax. Streaming services vs the box office Netflix pays Nigerian filmmakers between $10,000 and $90,000 for streaming rights per film, on average, although the amount occasionally goes up, depending on the director, film budget, and projected numbers. For originals, Netflix pays as high as ₦1.4 billion ($3.8 million), like in the case of Genevieve Nnaji’s 2018 film, Lionheart. In contrast, the highest-grossing movies in cinemas, like Omo Ghetto, made up to ₦636 million ($848,000). Rather than pay for individual films, Prime Video strikes licensing deals with production companies. Between December 2021 and January 2022, the platform struck multi-year deals of undisclosed amounts, with leading production companies Inkblot Productions and Anthill Studios giving it exclusive rights for all theatrical productions by these companies. Showmax employs a different tactic where they share revenue from advertising and sponsorship rather than an upfront payment. Xavier Ighorodje, a writer and producer in Nollywood, shares that, while cinema releases generate more money, compared to the VHS and VCD distribution model, the direct-to-streaming route has put even more money in the pockets of filmmakers. “To make money in film, before now, you had to go to the cinemas to have your films played. You had to pay the cinemas a certain percentage for showing your film as well as the distributors who take your film to these cinemas. For example, if you budget ₦150 million on creating a movie that makes ₦300 million, you haven’t made a profit because the cinema alone takes a large percentage—up to half—and the distributors also take about 20–25%. However, with streaming platforms, you can go straight to the platform to have them stream your film and pay only your middlemen. This means that you get to keep more of the net profit,” Ighorodje explained. There are thousands of films produced daily, but only very few of them make it to the big streaming platforms. This leaves a large number of other—often smaller—filmmakers without many viable options for distributing their films. While cinemas are an option, foreign movies get more attention in them, taking over 75% of the market share. International platforms and Nigerian problems Crime will evolve to the level of innovation, and piracy has proven that. While, in the past, filmmakers struggled with pirated VCDs and DVDs, their new-age counterparts have to deal with another form of crime: illegal streaming and download sites. With platforms like Netflix and Showmax charging a monthly subscription as low as ₦1,200 ($2.5) to access films on their platforms, there is still a large percentage of the Nigerian population who find that too expensive. This has given rise to illegal streaming websites and Telegram groups in Nigeria where popular films are recorded from streaming platforms and then uploaded for other users to download straight to their devices. This costs the industry about $2 billion in losses annually. Karima, who enjoys watching Nollywood films, gets a lot of the films she watches from Telegram. “There are different Nollywood movies now on different platforms that you have to pay for. How many platforms am I going to subscribe to? I can’t afford to pay for multiple streaming channels and so, sometimes, I just download from Telegram.” Alheri, another film enthusiast in her mid-40s, says her problem is subscription payments. “I can afford to pay for Netflix, but I don’t know how to pay for it. When I downloaded the app, my card kept getting declined and I do not know why. I heard that only people with dollar cards can successfully pay, but I don’t have one.” Netflix revealed in January 2023 that it has lost 39,000 already-active subscribers and about ₦250 million ($330,000) as Nigerian banks suspended international transactions from naira cards. Unlike in the case of DVD retailers who receive payments directly in cash, these illegal streaming sites get paid in internet currency—traffic. This traffic translates into revenue through ad placements. Has streaming impacted Nollywood’s stories? Being able to have Nollywood films on global streaming platforms has propelled the industry into placing its best foot forward in terms of the quality of movies released. Ighorodje believes that filmmakers have had to improve the quality of their films in order to be on global streaming platforms, which is great for the industry. “We have improved our shooting style and cinematics in order to measure up to international standards and compete on a global scale which is good for the business,” he shared with TechCabal. Donald Tombia, a screenwriter, agrees with Ighorodje and believes that filmmakers now tell more daring stories, all thanks to international streaming platforms. “Now we can create the kinds of films we want without being afraid of censorship. There are stories you want to tell and you already know that the Nigerian Film and Video Censors Board (NFVCB) will put restrictions on them. An example is Gangs of Lagos, which did fantastic on Prime Video. If that movie was released to cinemas alone, it wouldn’t have gone as far without being banned or having some parts censored, considering the central themes.” Netflix launched in Nigeria as a streamer in 2016, as part of its plan to expand into 130 countries. Fifty, a drama directed by Biyi Bandele, was among the first set of films to be streamed on the platform
Read MoreTingo Group denies Hinderburg reasearch allegations, appoints independent counsel
Nigerian fintech, Tingo Group, says the allegations made by Hindenburg research group are false and a deliberate attempt to damage its reputation. The company has also appointed an International law firm, White & Case LLP, to manage the situation. Tingo Group, a NASDAQ-listed agri-fintech company accused of being an “exceptionally obvious scam” by the Hindenburg research group, has publicly denied all the claims. In a press release shared on its website, the company said, “Tingo categorically refutes all the allegations and misinformation outlined in a report published by Hindenburg Research earlier today,” the statement reads in part. “The report, which contains numerous errors of fact, together with misleading and libellous content, appears to be a deliberate attempt to undermine the positive work that Tingo Group is undertaking across various worldwide markets.” In another press release, Tingo also announced that it has engaged White & Case LLP, a leading international law firm, to conduct an independent review and report to its independent directors concerning allegations contained in the report published by Hindenburg on June 6, 2023. The fintech company also maintains that it complies with the laws of every country it operates in and “maintains the highest standards of corporate governance.” Tingo also claims that Hindenburg Research did not attempt to verify the allegations made against the company. “The Company can confirm that no attempt was made by Hindenberg Research to verify the allegations or otherwise make genuine inquiries concerning the information provided in the report before its release,” the press release read. While Hindenberg Research spotted “red flags” in Tingo’s financial statements, the company [Tingo] maintains that its “accounting records are accurate and correct and that its financial results are accurately reported within its financial statements and its SEC filings.” “Tingo Group will respond in detail to the allegations made by Hindenburg Research in due course, but for the avoidance of doubt, the company believes the report published [yesterday] is a deliberate attempt to damage its reputation maliciously and unlawfully through the issuance of false, misinformed and distorted information for Hindenburg Research’s own financial gain and at the expense of the Company’s shareholders,” the statement concluded. In a move to lend credibility to some of Tingo’s operations, the All Farmers Association of Nigeria (AFAN), per a Sun report, noted a noteworthy progression in its lease and service agreement with Tingo Mobile Limited, a significant provider of mobile and fintech solutions in Nigeria. As of today, AFAN reports that an estimated 11 million of its members have adopted Tingo Mobile’s smartphone and fintech applications, including the Nwassa platform, as part of their daily operations. What do you think about our stories? Tell us how you feel by taking this quick 3-minute survey.
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