The hits and misses of Southern Africa tech in 2023
A wrap-up of TechCabal’s coverage of the southern Africa tech ecosystem. As a pan-African technology publication, TechCabal prides itself on offering coverage of the continent’s tech ecosystem beyond its headquarters in Lagos, Nigeria. In this end-of-year wrap, our Southern Africa correspondent, Ephraim Modise, looks back at the stories that made 2023 in the regions and how we covered them. This year, the region saw some hits as numerous funds were launched to support innovators, startups built products which addressed some of the region’s most pertinent socio-economic challenges, and regulators introduced frameworks which drove innovations. However, there were also several misses as cybercrime and online scams ran wild, layoffs and closures rocked the region, and C-Suite executives made some questionable business decisions. Read on to get a broader view of our coverage of the southern Africa region and how we stayed on top of all these stories and much more! Launch of funds Throughout 2023, several funds were launched to drive tech innovation in the region. These included the Convergence Partners Digital Infrastructure Fund, the Sasol greentech startups fund, the SA SME Fund, and Knife Capital’s $50 million Series A fund. Several startups in the region also raised a significant amount of funds amid a global fundraising crunch. These included Planet42’s mega $100 million Series A round, Naked Insurance’s $17 million Series B, TymeBank’s $77 million pre-Series C, and Stitch’s $25 million Series A. Startups solving pressing issues This year, TechCabal also covered startups and tech companies in the region which are solving pertinent problems in their respective markets. These included healthcare startups in South Africa, Whatsapp chatbot startups in the region, how startups are tackling South Africa’s cybercrime epidemic, as well as agritech, edtech, and mobility startups building solutions to address the region’s power supply issues. Ecosystem explorations Staying true to its mission to provide complete coverage of the pan-African tech ecosystem, TechCabal also explored other ecosystems in the southern African region outside South Africa. From Zambia’s emergence as a force in the list of pre-emerging ecosystems to Madagascar’s bid to make its name known in the African tech ecosystem, to Namibia’s mission to address the issues plaguing its ecosystem, our coverage provided readers with insights into what is happening in tech on the continent beyond the “Big Four.” Beyond ecosystem explorations, our coverage also delved deep into ecosystem activities that are positioning technology as the driver of socio-economic progress. This coverage included how South Africa continues to lead the continent in the race for data centre dominance, how short-term loans by telcos are driving financial inclusion in Botswana, how Zambia’s national debt restructuring will help grow its tech ecosystem, how WomHub is building an accelerator for women founders, and how the University of Cape Town produces the most startup CEOs on the continent. We also spoke to several investors who are betting on the region’s investors. These included Keet van Zyl of Knife Capital, Andile Ngcaba of Convergence Partners, Brenton Naicker of CV-VC, Francois Malan of Savant, Amina Patterson of Solve4X as well as Palesa Tabai of I’M IN Accelerator. Other hits TechCabal also covered numerous other areas of tech in southern Africa including the launch of PayShap in South Africa, Amazon’s launch in South Africa, how the region’s startups continue to lead exits on the continent, how private equity firms are coming to the rescue during the VC crunch, Innovation Collective’s mission to foster inclusion for Cape Town’s underprivileged founders, how Union54 made a comeback from an almost crippling chargeback fraud debacle, and how associations are trying to spearhead fintech growth in Botswana and South Africa. Layoffs and closures As with the rest of the world, southern Africa’s region was hit with macroeconomic challenges which forced several startups, tech companies, and other ecosystem players to scale down or completely cease operations. Crypto exchange Luno cut 35% of its staff, WhereIsMyTransport shut down while Naspers had to let go of 30% of its headcount. Still on Naspers, the company also shut down its Naspers Foundry fund which had invested in 12 startups. Cybersecurity and online scams had a field day ‘Twas the year that hackers and online scammers claimed victims almost with impunity in the region. In South Africa, hackers hit some of the country’s most well-known brands including Showmax, Shoprite, DisChem, Liberty Insurance, TransUnion, and even government departments. In Botswana, online scams had a field day, costing victims tens of millions of pulas while in Lesotho, the country’s central bank was hit with a security breach. Zimbabwe’s promising AI startup also saw a security breach which threatened its existence. Shoddy corporate governance Beyond startup challenges, TechCabal’s coverage of the region also touched on bigger tech companies whose lacklustre governance continues to erode shareholder value. We covered MultiChoice’s seemingly never-ending struggles including plummeting share price, written-off losses on Kingmakers, inglorious exit from Malawi as well as Canal+’s seemingly looming takeover of the broadcaster. We also covered the drama of the love triangle between MTN, Telkom and Rain, MTN passing load shedding costs to clients, the dramatic exit of Naspers’ CEO Bob van Djik, the greylisting of South Africa by the Financial Action Task Force (FATF), Botswana’s microfinancier Letshego’s declining profits, as well as Starlink’s struggles with regulators in Zimbabwe and South Africa. Other misses Other no-so-good ecosystem happenings that we covered included how a so-called Facebook rapist escaped from prison in South Africa, the trend of failing incubators and accelerators in the region, startups exiting too early as they fail to raise follow-on capital, the region’s shortage of technical talent, internet disruptions in Zimbabwe during elections, complaints against InDrive operators in Botswana, why CEOs in the region struggle to raise capital, as well as South Africa’s mission to introduce stringent tax requirements for remote workers. What to expect in 2024 in southern Africa tech With 2023 in the rearview mirror, we brought you coverage which kept you abreast of everything tech in the Southern Africa region and, in 2024, we will do even more. Stay tuned as we
Read More
How you read TechCabal this quarter
2023: Ending well, launching forward Coming into 2023, we had ambitious goals about the breadth of our coverage across news, products and events. Twelve months later, we’re sitting with the results of our lofty dreams, and we couldn’t be more grateful for how far we’ve come. One of our goals was to pay closer attention to the geography of our readership and ask critical questions to guide our coverage. It’s been particularly gratifying to see our readership in South Africa, Kenya, Ghana, and the US grow collectively by 307.94%, from 249,808% in 2022. Our story on Chowdeck hitting ₦1 billion in order value was picked up by Y Combinator. Our tech-career newsletter, Entering Tech, started this year with 23K readers and it’s closing with over 60K readers. Our analytical forecast newsletter Next Wave has grown to over 50K readers, up from where we were at 31K in January. We maintained a two million-strong readership for tow quarters running. In our top-10 most-read stories for the quarter were the Dash, Zazuu, and Pivo shutdowns; and Fidelity Bank blocking transfers to some neobanks. It’s interesting to note how these stories are all about happenings in the payments space. In 2024, we will be doubling down on our reporting in the financial services sector: we will be asking the revealing questions about business models in the sector, regulations, retail and SME lending, remittances, and wallets. Edutech This quarter, we were interested in the intersection between tech and education. We told the story of the evolution of edtech startup uLesson from an extra-lesson service for pre-university students to an online tertiary institution, Miva University. We also brought you the inspiring story of visually impaired software developer Victor Ekwueme, whose work is fostering tech inclusion for disabled persons. The people behind your favourite startups Startups are run by human beings who put their heart, love and ambition into building strong businesses. This quarter, we asked: who are the minds calling the shots at some of our most prominent startups? Here they are for Piggytech, and for Eden Life. Get to know them! Events In October, TechCabal hosted over 2,000 persons for two days at our flagship tech conference in Lagos—Moonshot. Were you one of them? You can read everything we wrote about it here and watch videos from the event on our YouTube channel. And wait: next year, Moonshot will be back and bigger. It will be for three days, from October 9–11! Click here to join the waitlist for Moonshot 2024. We didn’t just host an event, we were guests at some: Next Fintech Forum in Abidjan, Africa Tech Festival in Cape Town, Africa Fintech Summit in Zambia, Norrsken Africa Week in Rwanda, and Africa Startup Conference in Algeria. From the Africa Startup Conference, read our special TC Daily dispatch from Algeria, and also Ganiu Oloruntade’s report on Algeria needing to open up to drive innovation on the continent. Ephraim Modise was our man at the Africa Tech Festival and he wrote about how Africa can replicate Estonia’s startup success. We’ve actually discussed this topic at length on Next Wave, with a focus on Kenya. Read that here. We also attended an investor summit in Uganda and wrote about the country’s push to become central to innovation in East Africa. Thank you, over and over! We can’t have told these stories without your readership, feedback, and engagement. As we go into 2024, we will continue to deliver excellent reporting on tech and business on the continent, and we hope you’ll join us for the ride! Is something interesting happening in your area that might interest us? Email us at team@techcabal.com. Happy new year in advance! Muyiwa Olowogboyega Kelechi Njoku We’d love to welcome you at Moonshot in October 2024. Click here to join the waitlist!
Read MoreNigeria’s tech ecosystem scored major policy wins in 2023, but it could win better next year
2023 was a remarkable year for Nigeria’s tech ecosystem. Despite the decline in venture funding, layoffs, and shutdown of some startups, the ecosystem scored some major wins from the policy side. We saw the introduction of policies aimed at supporting startups and innovation. The appointment of a member of the tech ecosystem into the federal cabinet also created a new level of validation. This leaves a trail of both opportunities and unforeseen challenges for next year. In March, Nigeria became the first country in Africa to adopt open banking regulations that allow banks to share customer data with third-party service providers—fintechs and mobile money operators. This move promised increased data sharing and innovation, empowering consumers with control over their data. However, the initial excitement was dampened by a proposed plan by Nigeria’s Central Bank to centralise open banking operations through the National Inter-Bank Settlement System (NIBSS). The apex bank would later rescind the decision following pushback from industry stakeholders. Also in March, Osun state made headlines after cancelling right-of-way fees, allowing telecom companies and internet providers to lay fibre optic cables for free. The move was aimed at attracting startups to set up shop in the state. Osun also unveiled plans to domesticate the Nigerian Startup Act. The Nigerian government also launched a $618 million fund under the Investment in Digital and Creative Enterprises (iDICE) initiative to promote innovation and entrepreneurship in the digital, technology, and creative industries. May came with a twist as Nigeria’s Central Bank revoked the operating licences of more than a hundred financial institutions across the country for non-compliance. One of the affected banks is the Softcom-owned digital bank Eyowo. Another remarkable event in May was the last-minute attempt by former Nigeria’s minister of communications and digital economy, Isa Ali Pantami, to amend the already passed Nigeria Startup Act, just days before ex-president Muhammadu Buhari’s tenure ended. Similarly, a controversial bill that seeks to ascribe new powers to the National Information Technology Development Agency (NITDA), Nigeria’s governing body for information and technology, passed a public hearing at the Senate, despite pushback from stakeholders. In June, President Bola Tinubu signed the Nigeria Data Protection Bill 2023 into law. The new law provides a legal framework for protecting and regulating personal information in the country. In another development, following the unification of the exchange rate, the central bank announced new rules that allow beneficiaries of diaspora remittances to receive payments in naira. The move birthed new opportunities for fintechs and traditional banks. But on the flip side, the new FX regime affected how Nigerian startups report revenue to their foreign investors. In August, Bosun Tijani, co-founder of CCHub—adjudged to be one of the most influential tech incubators on the continent—was named Nigeria’s minister of communications, innovation, and digital economy. His appointment brought a new wave of optimism for Nigeria’s growing tech ecosystem which now has a seat at the table. In October, the minister formally unveiled his plans to train 3 million technical talents in four years. In the same month, OPay, Meta, and DHL were investigated by Nigeria’s Data Protection Commission (NDPC), for alleged data privacy violations—claims that the companies denied. In November, the minister flagged off the pilot phase of the ambitious plan to train 3 million technical talents. A total of 30,000 will be trained in three months. The same month, the Nigerian government launched its Startup Support and Engagement Portal thirteen months after its Startup Act was signed into law. The portal will facilitate the labelling of Nigerian Startups and the registration of venture capitalists, angel investors, accelerators, incubators, and innovation hubs. Other benefits include tax incentives, access to financial resources, and fund management as well as collaboration with relevant government agencies. In December, Nigeria’s Central Bank removed a two-year restriction on cryptocurrency transactions but introduced stringent guidelines for financial institutions. Ultimately, 2023 was a year of regulatory highs and lows for Nigeria’s tech ecosystem. One thing is clear: the ecosystem will be counting on one of its own to push policies and programs to spur its growth. More importantly, collaboration and engagement with the government are a no-brainer.
Read More
A Next Wave of 2023’s Next Waves
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 24 December, 2023 In no order, here are 5 top picks from the 51 Next Wave editions we published this year. Hey friend! Thank you for sticking with the Next Wave team throughout the perma-crisis of this year. We published 51 Next Wave editions this year. In the second half of the year Joseph Olaoluwa and Kenn Abuya, both senior reporters at TechCabal, joined me to write these Sunday letters, and we crossed the 50,000 subscribers mark. Some of you wrote to tell us what you liked about particular Next Wave editions. Some wrote almost full-length replies with suggestions, questions, and additional insight. We enjoyed reading your thoughts. Knowing you read this newsletter makes it worthwhile! 2023 has been a year of maturing for everyone who is part of the progress of Africa’s technology and venture capital industry. And there has been no lack of schadenfreude or “I told you so”. To wrap up this year, we’re bringing back five Next Wave editions that are neither a complaint nor an I told you so. Happy re-reading! 1. A modern retail wave is building up across Africa One of our long reads this year was this piece about how supermarkets and small malls are springing up across parts of Africa and leading in the formalisation of the retail business on the continent. I wrote: “Small-scale modern retail in Africa will not completely replace open markets in Lagos, souks in Cairo, or storied markets like Karatina in central Kenya. But a subtle shift that can become a major marker of African retail is underway.” Africa’s Coming Retail Revolution was written in the middle of September. Two months later in November, the Economist published Africa’s Supermarket Revolution. It felt good to be ahead 2. The hard limits of retail digitalisation in Africa Early in the year, our friends at DFS Lab contributed this gem on why digitising Africa’s vast retail sector is tougher than most people expect. As we’ve seen from news coverage on the subject, this essay has borne itself out. “Once you factor in acquisition and distribution costs, these models break and are forced back to serving those living on $10/day or more, which are only 5% of the continent’s population,” Chernay Johnson former director of research, DFS Lab, wrote. “Unless you’re able to fundamentally innovate around your cost structure, B2C marketplace models selling food and necessities potentially break under this logic.” Partner Content: Web Summit Qatar is partnering with The FutureList to invite top African tech startups to exhibit in Doha in February 2024. Read all about it here. 3. The mental price of being a founder Entrepreneuring in Africa will take a toll on the health of the people brave enough to attempt it. Physical health problems are bad enough, but the unseen mental scrimmage that early-stage entrepreneurs face daily can be more paralysing. In a year where well-funded companies have fallen apart due to mismanagement, outright fraud, an inability to raise funding, or even leadership fights, Joseph Olaoluwa reminded us that tech bros and sisters are human beings too. 4. What has $15 billion of investments in African startups taught investors? In the last eight years, African startups have received at least $15 billion in venture capital investments. Briter Intelligence data puts this figure at $20 billion since 2013. When risk money is invested we are supposed to learn what works, what doesn’t work and how to create outsize returns in a market system. Outsize returns do not only have to be capital gains, although that is desirable and the primary motivation in many cases. But the best metric to measure outsize returns is the social impact of a venture, in a market system. Twenty years ago, we saw the mobile revolution take off and create a sea change by facilitating communications. As we approach the first decade of institutional venture capital in Africa, we need to find the boldness to share data, knowledge and lessons. Partner Content: Sparkle MFB, the fintech founded by Uzoma Dozie of Diamond Bank fame is launching its lending product Read all about it here. 5. Is francophone Africa taking the stage? In 2021, Wave, a fintech founded in Senegal became the first $1 billion+ company in Senegal, and the first to emerge outside of the Big Four—Nigeria, South Africa, Egypt and Kenya. Three of the Big Four have the English language as one of the languages used in official documents in business, generally. So when Wave raised a $200 million war chest, it was guaranteed to get attention. If any African company raises $200 million, it’s huge news. But investors, including the IFC, putting $200 million into a company in Senegal has arguably done, for francophone Africa, something akin to what Stripe’s acquisition of Paystack in 2020 did for Nigeria. It put a spotlight on the mostly unheard progress of technology in the region. People sat up and took notice. Bonus This overview series of the tech ambition and opportunity in Tunisia, Mauritius, Rwanda, Ethiopia and Kenya. And this essay on how to sell the “Invest in Africa Message”. Partner Content: WeTech, the community for women in Nigeria’s tech ecosystem hosted their first conference earlier this month. Here’s what it was all about. You can also browse the full archive of 2023 Next Waves. Do let us know which Next Wave edition was your favourite? Happy holidays! Abraham Augustine, for team Next Wave Partner Content: 2023 has been a wild ride for everyone. If you’re a founder, please share your thoughts on the outlook of tech in Africa. Click here to start. Only 1 week is left for startups
Read MoreWasoko and MaxAB say merger will create a clear e-commerce leader with tens of millions of runway
A planned merger between MaxAB and Wasoko, the Tiger Global-backed Kenyan e-commerce startup, will make the new entity a clear leader in Africa, leaders of both firms told TechCabal. According to Daniel Yu, CEO of Wasoko and Belal El-Megharbel of MaxAB, the deal which is still in preliminary stages is expected to be finalised in the first quarter of next year. The merger is already being touted as the largest private tech deal in Africa. Wasoko was last valued at $625 million after it raised $125 million last year. The firm says it has received $113 million out of that investment. El-Megharbel of MaxAB declined to disclose the valuation at which his firm raised $40 million in October 2022. Both executives declined to comment on their valuation expectations for the new company. “This is not a new discussion; this is really about a friendship and partnership that has been ongoing for years, and for us, it’s about taking things to the next level,” Yu said, adding that the combined company will have more “runway with tens of millions of dollars on the balance sheet.” The deal will be structured as an equity consideration, which means that existing shareholders simply get a share of the new company upon completion of the merger. It gives wiggle room for investors who backed both companies and potentially allows VC firms to preserve most of the valuation at which they purchased their stake in either of the firms. According to Daniel Yu of Wasoko, independent investors and board members on both sides are part of the talks. Wasoko and MaxAB have raised almost $245 million from venture capital investors. “This is a super tough business to crack. It requires a specific type of talent and well-capitalised companies to be able to crack it,” MaxAB’s El-Megharbel told TechCabal. “Before 2001, over 10 companies were trying to do what Amazon was doing. After a crisis hits there usually emerges a clear winner,” he added. Bringing both firms together would help them maximise their chances to come out tops. Between 2019 and 2022, venture capital investors poured money into entrepreneurs building tech companies that focused on bringing Africa’s informal wholesale market for consumer goods online. Dubbed ‘B2B e-commerce’ as opposed to the direct-to-consumer e-commerce model of Jumia and Souq.com (acquired by Amazon), B2B e-commerce was described as more suited for the African experience because its primary customers were street shops and small retailers in African cities and towns.More recently, B2B e-commerce has struggled, and to startups in the space, including Wasoko have laid off hundreds of staff and paused expansion plans. In social media chatter on X (formerly Twitter) and private conversations on WhatsApp and Telegram seen by TechCabal, investors and founders speculated that one or both firms were struggling, hence the merger. El-Megharbel and Yu dismissed those concerns. “The market is used to these deals happening in these specific incidences, so this is they just haven’t seen another way of doing this,” El-Megharbel said, “We and Wasoko have approached this at a point when we did not have to do it because once you have to do it, the companies are struggling at that time. Daniel and I are mature and humble enough to figure out that if we wait longer than this, it would probably be uglier for both companies or at least for one of them. The sooner, the merrier for this deal to happen.” “Shareholders on all sides are extremely excited about what is happening,” Wasoko’s Yu said. “This is a 1 plus 1 equals 3. This transaction will establish us as the clear B2B e-commerce leader in Africa.”
Read MoreNigeria flips the script: Crypto transactions resume with stringent customer checks
Nigeria’s Central Bank has removed a two-year restriction on cryptocurrency transactions as it introduces stringent customer KYC and anti-money laundering checks. The CBN banned banks from crypto-related transactions in 2021, citing money laundering and terrorism financing concerns. The regulator has now reversed that ban and taken a positive posture towards digital currency assets, issuing new guidelines to financial institutions for crypto transactions. “Things are going to be more transparent. People are going to gravitate towards licensed platforms, and very importantly, we would have fewer cases of customers losing money,” said Buchi Okoro, CEO and co-founder of Quidax, a Nigerian crypto platform that offers exchange and over-the-counter trading services. Based on the new guidelines released on Friday, banks must obtain the bank verification number (BVN) of all directors and owners of crypto businesses that use their services. The rules also mandate cryptocurrency companies to secure a license from the country’s capital markets regulator, the Securities Exchange Commission (SEC). Earlier in May 2022, the Security Exchange Commission issued rules on offering and collecting digital assets. Per the SEC rules, virtual assets service providers (VASPs) such as crypto exchanges must have at least ₦500 million ($553,000) in capital and be registered with the CAC. “The guidelines are not perfect, but there are some things that have to be in place to bring much-needed confidence to the industry,” Okoro said. Crypto companies wanting to issue tokens must submit a white paper to the SEC and wait for 30 days to find out if they can release those tokens in Nigeria. According to CBN’s latest guidelines, banks are still prohibited from holding, trading, and transacting in virtual currencies on their account. Experts say that due to the volatility of crypto funds, implementing checks across the board makes perfect sense to safeguard customer funds. The apex bank said its new guidelines align with global standards to regulate the use of crypto in the country.
Read More
2023 wrapped: lessons, fears and hopes from 23 tech leaders
2023 was a year etched with many challenges in the tech ecosystem but also some triumphs. TechCabal spoke to 23 leaders in the ecosystem about the year – wisdom they gained from hardship, and visions that are still as clear as day, even through uncertainty. Now, as we round up, these are their lessons from 2023 and their predictions of what the ecosystem will be in 2024. 仙人掌年 or Year Of The Cactus Lanre Ogungbe, CEO at Prembly If it doesn’t work, don’t force it. It’s important to know when to quit or shut down a business instead of trying fruitlessly to make it work. Continue reading… More than ever, this year emphasised how critical it is to be ahead of policies. KYC is very policy-driven, and trailing behind policies can be gravely consequential. One needs to derisk against policy changes. One also needs to derisk against economic shocks; while we predicted the economic downturn, we underestimated its magnitude. 2024 Outlook: Things won’t get better until Q3 2024 regarding fundraising. We may not see as much funding as we used to for a long time. However, I think that the economy will pick up quickly next year. We will also see a lot more silent mergers. There will also be a new generation of founders who are more experienced in managing their businesses, who focus on unit economics, and who will provide technology that solves real-life problems. Ifeoma Nwobu, COO at Sendstack 2023 taught me to thrive in chaos. There are a lot of variables that can throw your plan off at any time, so we had to learn how to adapt while maintaining excellence and peace of mind. Continue reading… 2024 Outlook: Whatever we faced as a collective ecosystem in 2023 will only worsen in the next year. I am not trying to be a prophet of doom, but I think that sometimes we need to acknowledge how the patterns in economic situations work. I still think there will be a lot of growth just the way some plants grow in hard environments. My advice to everyone is to be a cactus this coming year. Samuel Okwuada, CEO at Remedial Health Running a sustainable and profitable venture will never be unfashionable. The past few years have made me question whether the tech ecosystem understands business. We were building businesses with no business model and plans to raise [funds] continuously. Continue reading… This year showed that the fundamentals of business can never change. 2024 Outlook: A tougher year ahead for the economy and African startups. But there are a lot of problems to solve, so we will see a new crop of startups. However, resilience will be key. Sethebe Manake, Founder and Managing Director at GoSmartValue The adage, “Expect nothing and prepare for everything,” is very real for startups in the region. We have seen some awesome African startups fold this year for various reasons, making survival a critical priority for us. These times call for us to put our heads down, build and deliver. The beauty contests are over! Continue reading… 2024 Outlook: The appetite for local solutions and collaborations with corporations and multinationals is increasing, a great indicator that the industry is poised for evolution. We are excited about the future. Jessica Hope, CEO at Wimbart 2023 was not an easy year for the company, but we remained intact and delivered some great campaigns, brought on new clients and welcomed back old clients. This is because we stayed true to our mission and quality levels. That’s a big learning for the year: continue to focus on the work, and the company will survive in the most testing times. Continue reading… 2024 Outlook: 2023 was turbulent; I think the first part of 2024 will be too. In some ways, this is a course correction, and in other ways, we’ll all be adjusting to a new normal of slimmed-down budgets, but not a reduction in quality of work. Jude Dike, CEO at Get Equity Never leave anything to chance, and things can always get worse. A good example is the current exchange rate. Many people speculated N1000 as the point of doom, and not enough people considered it could get worse. Continue reading… 2024 Outlook: I think the venture downturn is slowly reversing, I think there will be a lot of local involvement more than before. This is because valuations are no longer “unreasonable,” and more VCs are getting more money. However, I think most of these investments will be in naira. Uzoma Dozie, CEO at Sparkle The real eye-opener in 2023 was how crucial it is for everyone in our financial services space to pull together against cybercrime. We’ve got to team up, share what we know, and keep these fraudsters at bay. That’s how we secure our systems and give… Continue reading… our customers a safe space to do their business. We also need to tighten up our security and stick to the rules we set. Different players in the industry, chasing different goals – be it boosting valuations, increasing transactions, or growing customer bases – have kind of let critical standards slip. So, as we step into 2024, it’s high time we all get on the same page with standards to foster trust and a healthier business environment. 2024 Outlook: 2024’s looking like it’s going to be quite the bumpy ride. We’ll likely see more businesses struggling due to the economic challenges we’re facing. But, those with solid structures and foundations should be able to weather the storm. Investors are going to get pickier. They’ll look beyond just the size of a business. They’ll be checking out the quality, the systems in place, governance, and resilience against tough times. I’m also betting big on AI, particularly generative AI, as a game-changer. Any business that’s not investing in AI is going to miss out. It’s all about being truly digital, not just in the front-end stuff but deep in the backend too. This helps not just in sniffing
Read More
👨🏿🚀TechCabal Daily – Drivers protest Ghana’s new tax
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF It’s kind of rare to hear African founders talk about their failure at all or with sobriety. Delivery platform DropX recently shut down and the founder, Praise Alli-Johnson, wrote about what went wrong in the business, and why. Also, if you were laid off from a tech startup this year, please take this survey. In today’s edition Drivers protest Ghana’s new tax iSchool raises $4.5 million Cowrywise denies layoffs South Africa’s Competition Commission expands tech probe Funding tracker The World Wide Web3 Job Openings Mobility Ride-hailing drivers protest Ghana’s new tax Ghana’s ride-hailing scene faces a bumpy road as drivers push back against a new tax on commercial vehicles. The country’s revenue authority is set to implement a Vehicle Income Tax (VIT), slated to launch in January 2024, requiring drivers to pay quarterly taxes based on their earnings. Tax details: Per Ghana’s Revenue Authority, ride-hailing vehicles fall under “Class A” and will pay 12 Ghana cedis quarterly, totalling 48 GHC annually. Also, ride-hailing companies like Uber, Bolt, and Yango will need to verify drivers’ VIT compliance before allowing them on the platform. Drivers cry foul: Drivers say the proposed VIT will put a strain on their already-burdened incomes, asserting that the tax should be paid by ride-hailing companies rather than individual drivers. This isn’t Ghana’s first attempt at taxing ride-hailing companies. In April, a levy was introduced by Ghana’s Driver and Vehicle Licencing Authority (DVLA) on every trip. However, the move faced public backlash. In September 2019, online drivers halted their services collectively, expressing their objection to what they deemed as “modern-day slavery” imposed by operators of ride-hailing applications. The drivers accused ride-hailing companies of lowering trip fares despite consistent increases in fuel prices, negatively impacting their earnings. Zoom out: Notably, Ghana has a low tax-to-GDP ratio compared to other African countries. Per a report by the Organisation for Economic Co-operation and Development (OECD), Ghana’s tax-to-GDP ratio in 2021 (14.1%)—its highest ever—was lower than the average of the 33 African countries in 2023 (15.6%). Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Funding iSchool raises $4.5 million From L to R VentureWave’s Alan Foy, iSchool’s Mostafa Abdelmoneim, Ibrahim Abdullah and Muhammad Gawish and VentureWave’s Brian Martin. iSchool has raised $4.5 million in a funding round. The funding round was led by VentureWave Capital, an Irish VC with contributions from OneStop Capital UK, Website Investment Network, and Oraseya Capital, the Venture Capital arm of the Dubai Integrated Economic Zones Authority. iSchool will use the funding to expand into six new countries in the MENA region and scale its online learning platform across sub-Saharan Africa. iSchool: Launched in 2018, the edtech platform teaches AI, VR, app development, game development, and web development to students aged between 6 and 18 via gamified classes. Muhammad Gawish, Ebrahim Youssef, Mustafa Abdelmon’em and Osama Ghareb—co-founders of iSchool—set out to build a solution for the 100 million students that lack access to technology education curricula or programmes in the MENA region. Zoom out: iSchool claims it has over 26,000 live learners and has delivered over 1,000,000 hours of training to its students across 35 schools. In addition to expanding into six other countries in the MENA region, iSchool expanded its global access by planting itself in Ireland. The team in Ireland will support its online coding education offering. Introducing: BookingPress integration BookingPress helps you manage your appointment bookings end-to-end on WordPress. Get paid online via Paystack when you use BookingPress. Learn more → Layoffs Cowrywise denies layoffs as five employees depart the company Co-founders of Cowrywise, Edward Popoola and Razaq Ahmed Cowrywise, a Nigerian fintech app known as a diverse investment platform, is shaking things up, with five departures across its marketing, engineering, and customer success teams. While the Y Combinator-backed company insists that these role terminations were not layoffs but part of an annual “performance review”, insiders close to the company say the layoffs were due to “internal restructuring and evolving business needs”. Also, another source with knowledge of the matter says Cowrywise will evolve in the coming years and will become more of a finance company than a fintech company. Generous exit packages: The affected employees were provided with exit packages that included an unconventional move of paying three months’ salaries instead of the standard one month, challenging the typical practice associated with performance-related dismissals. While the company insists the terminations weren’t layoffs, numerous tech companies have recently taken similar measures, shedding light on the challenges faced by startups amid the country’s current macroeconomic conditions. Last week, Chipper Cash cut 15 jobs in its fourth round of layoffs, six months after the company axed nearly a dozen roles. Regulation South Africa’s Competition Commission seeks feedback Image source: Techpoint The Competition Commission is seeking feedback on its inquiry—Further Statement of Issues (FSOI)—into differences between South African media publishers and major tech companies (Apple, Facebook, Google) through the Media and Digital Platforms Markets Inquiry (MDPI). After reviewing the initial submissions, the commission added six more themes in which the FSOI will investigate. ICYMI: Six months ago, the commission—which is responsible for regulating competition practices in South Africa—examined the competition between popular online platforms, like Google and Facebook. Now the commission is back with its findings and what it thinks needs to be changed. What did it find? It acknowledged that the rise of digital platforms has significantly impacted traditional news media organisations and their revenue streams in recent years. But it also maintained that there are reasons to believe that the existence of market features within digital platforms that distribute news media content restricts and impedes competition. Also, the commission found that Google’s strong dominance and business approach makes it difficult for smaller platforms to get noticed and gain users. The commission recommended that Google implement new “site units” to display
Read MoreThe use of AI in the news business: Why newsrooms need stringent AI policies
AI tools in news development are here to stay. They are powerful tools that also need robust policies to guide their ethical use. If there is one technology that became very popular in 2023, it is generative artificial intelligence (AI) and chatbots. Breakthroughs in AI have led to the tool’s use in many fields, including education and journalism. In newsrooms, these tools have been pivotal in translating articles into different languages, proofreading, and crafting headlines, to mention a few. However, the use of AI in reporting, whether in print or online, has not been smooth because things have gone wrong before. There have been instances where writers have published articles with factual inaccuracies. Another case is when reporters, not understanding that their craft is built on intellectual honesty, try to pass off AI-generated content as their own. To the keen eye, it is quite easy to spot such articles. Other issues have also come up, and they are based on professional anxiety. Is AI cheaper than hiring human reporters? Does it make sense for newsrooms to save costs by using the technology in place of seasoned reporters? These are serious questions, but they do not have easy answers. Media companies acknowledge using AI tools widely According to this report that interviewed 105 media companies across 45 countries, over 75% of participants use AI in news gathering, production, or distribution. About a third have or are developing an institutional AI strategy. That’s not all; newsrooms vary in their AI approaches based on size, mission, and resources. Some focus on interoperability, others take a case-by-case approach, and certain organisations aim to build AI capacity in regions with low AI literacy. Approximately a third feel their companies are prepared for the challenges of AI adoption. The report adds, “There are concerns that AI will exacerbate sustainability challenges facing less-resourced newsrooms which are still finding their feet, in a highly digitised world and an increasingly AI-powered industry.” It is an approach that will be adopted widely in the coming days considering the media business is attempting to save costs while keeping productivity high. Eric Asuma, CEO of Kenya’s business publication Kenyan Wallstreet, told TechCabal, “Looking ahead to 2024, my prediction centres on the role of artificial intelligence in the evolution of new media. I foresee a shift in which innovative use of AI will become instrumental in enhancing newsrooms, particularly in discerning and interpreting trends, especially within the financial media space. We will be unveiling an exciting initiative in Q1 2024 along these lines.” All serious media companies need to develop an AI policy Reporters will continue using AI in newsrooms, but its use must be managed well. Following the launch of ChatGPT and other chatbots, more newsrooms, such as the Financial Times (FT), The Atlantic, and USA Today, have developed guidelines on how AI can be used in the news business. These policies have been put in place because media companies understand the importance of AI tools and would want to preserve journalistic ethics and values. In its AI policies, broadcaster Bayerischer Rundfunk (BR) says it uses it to improve user experience by responsibly managing resources, improving efficiency, and generating new content. The company also contributes to discussions about the societal impact of algorithms while fostering open discourse on the role of public service media in a data society. The BBC says it is dedicated to responsible advancements in AI and machine learning (ML) technology. “We believe that these technologies are going to transform the way we work and interact with the BBC’s audiences—whether it is revolutionising production tools, revitalising our archive, or helping audiences find relevant and fresh content via ML recommendation engines,” BBC clarified in its AI policy. Others such as FT are pushing for honesty. “We will be transparent, within the FT and with our readers. All newsroom experimentation will be recorded in an internal register, including, to the extent possible, the use of third-party providers who may be using the tool,” FT says. And why is this important? Well, setting up AI usage policies in media companies for news and story creation is key to maintaining transparency, upholding journalistic standards, and addressing potential biases. It ensures responsible and ethical deployment of AI technologies in the media industry.
Read More
Naira Nightmare: What’s driving Nigeria’s latest cash crunch?
At an Automated Teller Machine (ATM) in an Alimosho branch of First Bank, Nigeria’s oldest bank, angry customers bicker in a queue as they attempt to withdraw cash ahead of the holidays. Most have been here for hours, temporarily closing their shops and businesses to get cash. As the heat gets worse, fighting breaks out every few minutes. Their anger is understandable because, for four months, Nigerians suffered a cash crunch after the country’s Central Bank began a puzzling currency redesign. From January to April 2023, the ill-advised and abrupt decision to phase out Nigeria’s old ₦200, ₦500 and ₦1000 notes depressed commerce and saw productivity drop to pandemic levels. Months after Nigerians thought they were finally past the cash crunch, they have returned to a familiar uncomfortable situation. At least three tier 1 Nigerian banks have limited daily cash withdrawals to between ₦10,000 and ₦20,000 per customer, driving an even madder rush for cash. On the other hand, ATMs are either not dispensing cash or are limited to a single ₦10,000 withdrawal per customer. What’s causing the latest cash crunch? “It is the CBN that is responsible for this cash scarcity. We are not getting enough from them,” Punch Newspaper quotes an anonymous banker as saying. “They are just causing unnecessary suffering for the masses.” The Central Bank, on the other hand, has blamed the current cash scarcity on commercial banks and individual customers. “There is cash out there,” said Hakama Sidi Ali, CBN’s Acting Director in Corporate Communications. “The CBN is giving to banks, except that most of this cash is in the hands of individuals. All these panic withdrawals, hoarding is ongoing.” A queue at Stanbic Bank, earlier in the year. Image Source: Google Another CBN official blamed the current scarcity on panic withdrawals. One source with extensive knowledge of the CBN’s operations told TechCabal that there was either an element of hoarding involved or people were cautiously holding on to money over fears that the old notes may still be phased out by January 2024. “It’s a chain, the money goes out and comes back into CBN, and that’s the process. The cycle is being disrupted, and somewhere the chain is broken. People are either not depositing money, or there’s some hoarding happening,” the person said. While some fintech startups saw a boost in transactions and customer acquisition during January’s cash crunch, Nigeria remains a cash-heavy economy, and the scarcity of Naira notes puts a strain on people and businesses. “The POS people don’t have money, that’s why I am queuing here,” said an exhausted Kemi Adelayo. She points out that people spend otherwise productive hours in these queues daily. As the holidays draw closer and bank holidays are imminent, these queues will likely worsen. POS operators refuse to be cast as villains Unlike the cash crunch earlier in the year, many Nigerians are now sidestepping POS/mobile money agents because of their high commissions. “To withdraw ₦10,000 at a POS agent, you’ll pay a commission of ₦400. Some POS operators even charge ₦800,” said John Sunday, a customer who had been waiting at the ATM for over an hour. “If you have time to spare, come and battle it out at the ATM rather than giving POS operators.” At least two other bank customers shared the same sentiment as John. Three POS operators told TechCabal that the availability of cash determined their pricing. The average withdrawal charge for ₦5,000 has increased to ₦200 from ₦100. “It is so difficult to get cash, and I cannot let people finish the little I have. That is why I increased the price,” Abdulganiyu Saheed said. Deborah, another POS operator, said she did not increase her charges because she still receives cash from the banks and does not have to buy cash from market women as it occurred in the first quarter of the year.
Read More