Exclusive: Nigerian PoS terminals will get fraud-flagging feature by end of Q1 2024
The Central Bank of Nigeria, through the Nigerian Electronic Fraud Forum (NeFF) is collaborating with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to create a new feature on PoS terminals that will flag fraudulent transactions at agents’ locations by asking for specific KYC details before processing some transactions. “We are at a very advanced stage, and we’re about to finish the technology side of it in terms of activating some features,” said Fasasi Sarafadeen Atanda, President of AMMBAN. He also noted that the Nigerian Interbank Settlement System is one of the drivers of the initiative. The collaboration effort is also driven by the Nigerian Electronic Fraud Forum, Lilian Phido, the head of Corporate Communications at NIBSS, told TechCabal. “Constant innovation within the industry underscored the necessity for the Central Bank to establish a dedicated body (named the Nigerian Electronic Fraud Forum) which consists of all key players and stakeholders to proactively work together in collaboration as an industry in ensuring the integrity of the payment systems across the nation,” said Phido. The feature will be prominently displayed on the PoS terminal agents across the country. After a meeting with NIBSS last week, AMMBAN hopes the feature will be ready for launch by the first quarter of 2024. There is also a coalition of security agencies, including the Nigerian police, Department of State Services (DSS), AMMBAN and NIBSS, to enable the easy tracking of fraudsters at agent locations. The coalition hopes to mandate a common identification system for the over 1.7 million banking agents on the AMMBAN database. There are also discussions for agents to be trained and certified, but other stakeholders take a dim view of this strategy. “The entry point of the fraud is not agent location but the fact that some accounts and wallets aren’t tied to real identities,” said Femi Omegbenigun, CEO of 3Line Card, a Nigerian payments company. “The fact that these accounts have underlying KYC issues means agents are not always aware that the money they are disbursing is proceeds of fraudulent transactions.” And while whistleblowing channels exist nationwide, agents have only sometimes used them, said the AMMBAN President. There have been occasions when banking agents raised issues with particular transactions they considered suspicious and reported to the banks, but the financial institutions failed to act. When the same issues were reported to security agents, they sometimes asked for money before taking action. “The individual agents are always discouraged from pushing that because you will end up wasting your money and resources,” Atanda said. While they wait for the new feature on the PoS terminals, Atanda says the agents have commenced the implementation of the BVN-NIN policy of the CBN. New customers must provide either a BVN or NIN or both to open an account.
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👨🏿🚀TechCabal Daily – DStv retains rights to WWE
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Soon, you may be able to control your phone or any device just by thinking about it…and it’s all thanks to Elon Musk. Yesterday, the billionaire announced that human trials for Neuralink’s first product, Telepathy, have begun and the first human test subject is recovering quite nicely and already showing promising signs. Musk says the initial users will be amputees. As Twitter sputters under his watch, one question hangs heavy: will Neuralink receive the focus it needs to navigate the ethical and technical minefield ahead? In today’s edition Nigeria investigates 17 data breaches DStv retains rights to WWE Chaka’s CEO finds a new path Miden gets selected for YC Inside Musk’s new Trust and Safety Centre The World Wide Web3 Opportunities Regulation NDPC reports 17 data breach cases being investigated The Nigerian Data Protection Commission (NDPC)—Nigeria’s data regulatory agency—had a busy 2023. In June 2023, it began investigating Zenith, GTB, Fidelity, Leadway Insurance and Babcock University for data breaches. By October 2023, it extended its focus to Opay, DHL and Meta. According to the NDPC commissioner, Dr Vincent Olatunji, the commission has gotten over 1,000 complaints, and after careful examination, 50 have been verified with 17 cases actively being investigated. What could get a company fined? The Nigeria data protection framework empowers NDPC and NITDA to fine entities violating the Act, with penalties directly linked to the severity of data protection breaches. Fines range from ₦2million ($2,100) to ₦10 million ($11,000), or 2% of the company’s annual gross revenue of the preceding year and are imposed for violations like neglecting compliance, mishandling breaches, or obstructing investigations. According to one report, Nigeria ranks as the 32nd most breached country in the first quarter of 2023, with 82,000 leaked accounts from January to March 2023, representing a 64% increase from the previous quarter. It’s doing its job: The NDPC’s moves are also translating to increased revenue and compliance. The commission has also earned over ₦400 million ($444,197) in revenue and according to Olatunji, more companies—from 103 to 163—are now embracing data privacy standards thanks to the NDPC’s targeted awareness campaigns and capacity-building initiatives. 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. Streaming DStv retains rights to WWE Multichoice is back in the ring! Remember last week when Netflix inked a $5 billion deal to become the new home to WWE’s Monday night wrestling show? DStv announced today that it’s retaining the right to stream WWE events in Africa. Multichoice makes a comeback: The Netflix deal, spanning 10 years, throws all WWE content—SmackDown, NXT, WrestleMania, SummerSlam, Royal Rumble, WWE documentaries, and original series—on the streamer. Per MyBroadBand, the Netflix deal will not affect MultiChoice’s contract with the WWE. How so? The Netflix deal only covers specific territories, US, Canada, Latin America, excluding South Africa and other African countries where DStv holds the rights. This allows DStv’s existing contract to remain valid in its geographical region. Yes, and: The move could also push more subscribers to DStv as some of Netflix’s 1.2 million African users who looked forward to streaming WWE will now have to find another alternative. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Startups Chaka’s CEO exits five months after Risevest merger Tosin Osibodu, the founder of Chaka—a digital trading startup—has departed the Nigerian startup five months after its acquisition by Risevest. Osibodu is now the Executive Director of Sales for Alpaca, a company working on trading stocks and crypto. Meanwhile, Eke Urum, the founder of Risevest—a Nigerian digital asset manager—is now the main CEO of the combined companies—Chaka and Risevest. ICYMI: TechCabal exclusively reported in September 2023, that Risevest fully acquired Chaka in a deal that saw Chaka and Risevest remain separate products. With Osibodu exiting Chaka after the merger, it is unclear if both companies will remain separate in the merger. However, even though Osibodu left Chaka, he’s still part of the team as a shareholder and advisor. Osibodu will work to deepen Alpaca’s footprint in Africa, the Middle East, and Europe. The firm currently powers over 130+ investing services for neobanks and wealthtechs. In October 2023, Alpaca secured $15 million in funding from Japanese financial conglomerate SBI to help Alpaca expand its business in Asia. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → Funding Nigerian startup Miden, selected for YC winter 2024 batch At a time when Y Combinator which has backed over a hundred African startups like Flutterwave and Stripe is scaling back investments from Africa, Miden—a startup that simplifies business payments with instant virtual cards (USD & Naira)—has made it into the YC winter 2024 batch. Miden joining the batch comes after Cleva, a cross-border payment service was also selected for the W2024 batch. A Kenyan travel startup is reportedly the third African startup in the batch. A significant decline in African startups: After YC’s winter 2022 batch which comprised of 24 African startups, fewer African startups have been accepted into the global accelerator. Its Summer 2022 batch had just eight African startups, a 63% decline from the previous cohort. It seems YC is now backing a maximum of three African startups, a change likely implemented since the 2023 winter batch which saw the accelerator welcome only three African startups—Vault Pay (DRC Congo), ChowCentral (Nigeria), and Eden Care (Rwanda). This isn’t YC’s first foray into supporting African fintech innovation. The 2022 winter batch saw promising startups like Grey (Nigeria), Bloom (Sudan), Plumter (Nigeria), Nash (Kenya), and Lenco
Read MoreExclusive: Chaka founder Tosin Osibodu exits company after Rise merger
Tosin Osibodu, the founder of Chaka, a Nigerian startup that allows retail investors to buy shares from the NYSE and other foreign stock exchanges, has left the business five months after Rise acquired the company. Per his LinkedIn page, Osibodu has joined Alpaca, a company that develops APIs for trading stocks and crypto. Eke Urum, the founder of Rise, is the sole CEO of the recently merged companies. “[Urum] has integrated to build a sum greater than its parts. I’m really excited about the future roadmap of both entities under his leadership,” Osibodu said in a LinkedIn post. Urum, who introduced himself to Chaka users as the new CEO a few weeks ago, told TechCabal that Osibodu is still a shareholder in the company and will continue in an advisory role. “Before he transitioned to Alpaca, we went through a process during which he gradually handed over the day-to-day decision-making of Chaka to me,” Urum told TechCabal. Urum says he is also well supported by former employees of Chaka. “One of them is primarily driving operations with me.” Both founders previously told TechCabal that while Chaka’s ownership and cap table will be updated, its products will remain separate. Osibodu’s departure raises questions regarding whether Chaka and RiseVest will continue to remain separate products or merge. Chaka was founded in 2019 to allow users to buy shares of publicly traded companies in Nigeria and the United States for as little as $2. It became the first trading startup to receive a digital sub-broker licence in March 2021. As Executive Director of Sales for Alpaca, Tosin Osibodu will be working to deepen Alpaca’s footprint in Africa, the Middle East, and Europe. The firm currently powers over 130+ investing services for neobanks and wealthtechs. “We are hoping that a three-way partnership [with Rise, Chaka, and Alpaca] will come out of this new working relationship,” Urum told TechCabal.
Read MoreBreaking: Y Combinator latest African pick is Miden, a Nigerian API-fintech startup
Miden, a Nigerian startup that allows businesses to issue virtual cards to their customers through its API, has been selected for Y Combinator’s winter 2024 batch. Miden is the latest Nigerian startup in this year’s winter batch after Cleva, the cross-border payment service. Miden, which provides both USD and Naira virtual cards for businesses, launched in 2022 to solve the operational challenges businesses face managing traditional payment methods, like high transaction fees, complex paperwork, and slow card issuance times. The company’s API-based platform allows businesses to instantly issue virtual cards (USD and Naira denominations) at scale. Per its website, Miden has issued over 100,000 cards and is present across four countries. YC seems to be backing remittance startups on the continent for this year’s winter batch. Cleva, the first disclosed startup, creates dollar accounts to help individuals and businesses receive international payments. YC made a similar bet in its 2022 winter batch, selecting Grey, a Nigeria startup providing foreign accounts for users; Bloom, a Sudanese startup; Plumter, a Nigerian API provider for cross-border payment; Nash a Kenyan fintech for borderless and Lenco, a Nigerian fintech. In 2023, the accelerator selected Vault Pay, a payments infrastructure company from DRC Congo, Nigeria’s food delivery startup ChowCentral and Rwanda’s Eden Care. *This is a developing story
Read MoreFintechs brace for competition as Nigerian banks charge into digital lending market
Nigerian traditional banks are making a push into the digital lending market in a move that will pitch them against their digital competitors. For the banks considering this move, a standalone digital lending app means they can acquire customers from smaller banks with high interest rates. Customers of other digital lenders may also be there for the taking, considering that most traditional banks have the cheapest lending rates in the market. On January 17, TechCabal reported that Access Holding Plc, the parent company of Access Bank, received approval in principle from the Central Bank to launch Oxygen X, a standalone lending product. While Access is the first holding company to make a play for standalone digital lending, other banks are in talks to spin off standalone digital lending services, a highly-placed industry source told TechCabal. “Banks may launch their apps, but they don’t have the mastery of execution that fintechs have,” said the source who asked not to be identified. “Banks will possibly drop the ball. I am not betting on any banks to win in the market.” That argument isn’t new. When traditional banks began a push into fintech, the consensus from fintech insiders was that the banks didn’t have the operational chops to mount a challenge. But Habari Pay, the fintech arm of Guaranty Trust Holding Company (GTCO), posted profits of ₦1.3 billion in the first half of 2023, according to GTCO’s financial report. It also may be premature to write off the big banks given that QuickCredit, arguably the most innovative lending product in the last few years, has come from the banks. Will banks change their approach to retail lending? While one of the core mandates of commercial banks is to lend, they don’t give out a lot of loans, especially to individuals and small businesses (retail lending). Rather than serve a mass market with a high risk of defaults, banks would instead give loans to high-quality borrowers such as salary earners with credible employers. A former bank executive argues that the entry of traditional banks into the digital lending market will only be a game-changer if the banks abandon the old lending and leverage data philosophy. “For me, the big question is, what will be different? What is the play? Is it lower rates and faster returns? One advantage banks have is that they can unlock customers’ data to make lending decisions,” he said. Nigeria’s digital lending market is dominated by startups like Carbon, FairMoney, and OPay, serving a growing mass of digital-first customers. There are about 211 licensed digital lenders in Nigeria, according to the country’s digital lending regulator, the Federal Competition and Consumer Protection Commission (FCCPC). The selling point for these startups is the simplified lending process, allowing people to get loans in a few minutes and less stringent KYC requirements. But easier means more expensive. Many digital lenders offer loans with interests as high as 30% per annum, while banks like GTBank—through its digital lending platform QuickCredit—offer around 21%. The difference in interest rates often comes down to the cost of financing. While traditional banks have trillions of Naira in customer deposits to lend from, fintech startups often draw on debt or venture funding. Beyond this, digital lenders don’t have as many data points to make loan decisions, meaning slightly more risk. These risks are baked into the interest rates. The cost of loan recovery is also one key issue lenders have to deal with. As one industry insider put it, traditional banks “can’t do the rough things,” referring to some digital lenders’ questionable loan recovery methods. One thing is clear: traditional banks offer lower interest rates to beat fintechs. Whether they can change their lending strategies remains to be seen.
Read MoreNext Wave: Innovation theatre
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 28 January, 2024 We reached the max tolerance for innovation theatre. What comes next? Entrepreneurs, investors, an uncritical media, and government are guilty of what Steve Blank, the Stanford University professor of entrepreneurship, calls “innovation theatre”—a body of initiatives we do and promote to signal that innovation is happening, but which doesn’t translate to significant business value or economic impact. Innovation theatre is pretty easy to spot, but in good times, most people are content to live and let live. When things take a bad turn, though, theatrics tend to disappear in a huff. It’s why people are losing faith in things like acceleratorships, and why more venture capital investors are struggling with an identity crisis and narrative collapse. Innovation theatrics are not unique to Africa, and these days, it is common to call it out. What is replacing it, though, is a cynical defeatism that is no better, if not simply worse. The chart below is popular in Nigerian tech circles. It is from a 2020 article by Jake Kendall, one of our friends at DFSLab, and it became popular in 2022 after Stears used the chart in an article and more recently in 2023. It’s a brilliant read and a good addition to resources for framing your thinking and approach to African markets as an investor or a founder. But I have always been bewildered by the viral conversations that it sparked on social media. The key lesson for most seemed to be, “Africans are poor. Don’t waste your time”, and similar statements. For me, the key takeaway of the chart (and the entire piece) is simply that we’ve reached a maximum tolerance level for efficiency and sustaining innovations that rode the mobile/smartphone boom in Africa. Kendall’s article did a great job of sketching the broad contours for consumer business modelling. But if an entrepreneur building a consumer product looks at it and decides to go build something on a B2B model instead, it tells me two things: (1) Technology is only marginally relevant to what she was working on. (2) The type of innovation being proposed is simply an attempt to profit from naked arbitrage in supply chains by offering what the late Clay Christensen called, “efficiency innovation” or “sustaining” innovation. This is not to say that one cannot build a good business on top of that economic model—it is possible. However, I believe it’s a mistake to let just that outline the definitive shape of your vision for consumer markets if you are a founder or an investor. Why? Because you may just be confusing the naturally limited market of innovation that improves a product, for the more intensive creation process of innovation that creates new markets. And I’ll be frank. “Market creating innovation” is a hard thing. That is why the examples are few and far between. Innovation that creates markets What was the purchasing power of Africans when mobile telephony first took off on the continent? I’m still looking for the answer, but if I were a betting man, I’d wager it was significantly lower than the figures from the 2011–2015 PovCal data upon which (most of) the earlier mentioned chart is based. The arguments of today about low purchasing power are strangely similar to the arguments of then. In the 1990s Africa was a poor continent, and the time did not look right for mass-market telephony. The difference, though, was not just the new cellular technology operating over the GSM standard. There was also institutional reform in telecoms governance at the political level. And, most importantly, what made it all workable was the new type of distribution, pricing and services that met latent demand. Kendall and the DFSLab team are quite right when they say that the fortune is probably at the middle of the pyramid where people earn between $4 to $8. Taking 2022 quarterly results from MTN Group, Africa’s largest telecommunications company, average revenue per user (ARPU) across its 17 African markets has a mean value of $3.5 in pure dollar terms, i.e. not adjusted for purchasing power parity. MTN and its peers certainly did not start their business targeting a mean ARPU of $3.5 across Africa. It was certainly much lower when the company started. So, simply targeting the same ARPU to make your business economics work or investment thesis work in the long term appears to be flawed to me, regardless of whether it’s consumer or business-to-business. The major exception to this is if what you are creating and advocating for is an efficiency or a sustaining innovation. And if it is, we should be clear about it upfront. 2023 was a watershed year for African technology startups. It was the year Instadeep got acquired by BioNTech for $682 million in Africa’s largest-ever acquisition deal. It was the year tech startups in Africa shed more than 1,500 jobs in industry-wide layoffs as 15 startups which raised $214 million in funding shut down. It was the year African startups raised $2.748 billion across 500 deals. And more! It will be remembered as the year that reset the trajectory (hopefully) for the better. Download the full report from our research team at TC Insights to learn more. Every innovation that created or unlocked new markets has been epochal or at least a part of a mega-trend or supercycle. We seem to have forgotten this. Supercycles are, in the world of commodity trading, a decade(s)-long period of extraordinary prices where old price expectations are reset and new anchors weighed. For our purposes, a supercycle is the early buildup of long-term consumer trends and economic activity where the key metric
Read More👨🏿🚀 TechCabal Daily – B.TECH denies hack
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning 2023 was a watershed year for African tech. $2.748 billion was raised across 500 deals, and this includes Africa’s largest-ever acquisition deal: Instadeep’s acquisition by BioNTech for $682 million. In more sombre news, over 1,500 tech workers were laid off in Africa in 2023, while 15 startups which raised $214 million in funding shut down. Learn more about the major trends that shaped African tech in 2023 by downloading The State of Tech in Africa report here. In today’s edition Access completes third acquisition of the month B.TECH denies data breach Livestock Wealth insists its licence is valid Ten Nigerian startups awarded $11,000 Which sector got the least funding in 2023? The World Wide Web3 Opportunities M&As Access completes third acquisition of the month The African tech ecosystem continues to witness significant M&A activities—one of the trends we highlighted in our State of Tech in Africa report. In 2023, 30 acquisitions took place, including Bitmama’s acquisition of PayDay. Commercial banks are however way ahead of startups in this M&A game. Take Nigeria’s Access HoldCo, for example. Over the weekend, the bank completed its third acquisition of the month. It acquired Nigeria’s second-largest independent pension fund manager, ARM Pensions. Over the past two years, the company has made six significant acquisitions ranging from its 2021 acquisitions of the Mozambiquan and Botswana arms of BancABC to the 2022 acquisition of Finibanco Angola. These strategic acquisitions have helped the bank expand into new countries. More than traditional banking: ARM will be Access’ third acquisition this month—with Zambia’s Atlas Mara and Megatech Insurance as the first two—and the third overall that showcases the bank’s strong venture into other plays like insurance and pension. In 2022, Access HoldCo solidified its position in the $34.9 billion pension market with the acquisitions of Sigma Pensions and First Guarantee Pensions. Over the weekend, the company also revealed that it had received all regulatory approvals from the Nigerian Pension Commission and the Federal Competition and Consumer Protection Commission to acquire ARM Pensions. Now, ARM’s four million customers will move to join the one million customers registered under Access’s pension plan. 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. Cybersecurity B.TECH denies data breach Last Friday, a cybercriminal known as “Tanaka” leaked a database which allegedly contains the personal information of over 200,000 users of Egyptian consumer retailer B.TECH. The database, which is about 20MB in size and contains over 200,000 lines of data, includes emails, dates of birth, addresses, phone numbers, genders, and city of residence. According to cybersecurity tracker HackManac, the hack actually occurred over a year ago, in February 2023. It never happened? B.TECH says a data breach never happened. In a statement it shared with The Enterprise yesterday, the company said it “firmly denies all circulated allegations of a recent data breach”. Millions at risk: The allegations are concerning as B.TECH is one of Egypt’s leading consumer retailers with over 50 million customers across 130 cities. While the company has reassured its users, stating that their HackManac says they should apply caution moving forward. The big bucks in data: While South Africa still records some of the highest cyberattacks on the continent, Egypt has received its fair share of hackers with Lockbit, an infamous cybercriminal group, hacking Fawry last year. These hackers make money: by demanding a ransom from the company which costs an average of $1.82 million and by selling the data to other phishing groups which attack and defraud the users by pretending to be legitimate companies. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Startups Livestock Wealth’s insists its licence is valid The News: Livestock Wealth, a South African agritech platform which allows investors to buy cattle and farmland, faces accusations of operating without a financial service provider (FSP) licence from the Financial Sector Conduct Authority (FSCA). Despite the allegations, the startup’s lead investor, Mineworkers Investment Company (MIC), claims it conducted thorough due diligence. The startup is also disputing the FSCA’s allegations, and claims to have the necessary credit provider licence. Background: Livestock Wealth gained traction through AlphaCode Incubate, a programme supporting black-owned financial and tech startups. They received initial funding in 2016 and an additional R2 million ($106,000) grant in 2019 after pivoting their model to become the cattle farm operator and supplier to a major retailer. AlphaCode, in a statement to TechCabal, also claims it investigated Livestock Wealth in 2019. Why it matters: The licensing issue raises concerns about investor protection and transparency in Africa’s fledgling tech ecosystem which has seen a fair bit of scrutiny in the past year. MIC’s stance of following due diligence could reassure potential investors, but the FSCA’s investigation casts a shadow on the company’s compliance. The accusations come at a critical juncture for Livestock Wealth’s expansion into farmland investing. The outcome of the FSCA investigation and potential penalties could significantly impact their trajectory. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → Funding Ten agritech startups awarded $11,000 from 4IRTA The year 2022 saw an estimated 17 million Nigerians grappling with critical food insecurity, and an estimated 25 million Nigerians were likely to be food insecure between June and August of 2023, according to October Cadre Harmonise, a government-led and UN-supported food and nutrition analysis. Nigeria’s recognises the critical threat of food insecurity and has prioritised cultivating 500,000 hectares of land across Nigeria. In line with this vision, the Ministry of Communications, Innovation, and Digital Economy, last
Read MoreTakealot appoints new CEO as Amazon arrival looms
Takealot Group has announced the appointment of Frederik Zietsman as new CEO. Takealot, the South African e-commerce group that reported $808m in revenues for 2023, has announced Frederik Zietsman as its new CEO effective from February 1, 2024. Takealot group owns the online platforms takealot.com, Superbalist, and Mr D. Zietsman replaces Mamongae Mahlare who was CEO from October 2021. Mahlare is moving to the position of executive chair of Takealot group. Zietsman was CEO of Takealot.com from 2021. “The streamlining of the leadership between the group and Takealot.com will reinforce resources around its flagship online retail and marketplace platform and bring stronger alignment and focus in delivering on its key growth objectives,” Takealot said in a statement. In 2018, Africa’s biggest company by market capitalisation Naspers acquired Tiger Global Management’s stake in Takealot, effectively owning 96% of Takealot. Per Nasper’s latest financials, Takealot group’s gross merchandise value (GMV) and revenue grew by 15% and 9% over the last year, respectively. The company also reduced trading losses by as much as 85%. Takealot facing regulatory crackdown and Amazon arrival Amazon announced in October 2023 that it will launch its marketplace in South Africa in 2024, looking set to challenge Takealot’s dominance. Although the company did not cite the arrival as the reason for the executive shuffle, Takealot would be looking to get its best bets at the helm to fight off the global e-commerce giant. Former CEO Mahlare has constantly reiterated that Takealot actually looks forward to the imminent arrival of Amazon. Amazon enters a South African e-commerce market fraught with regulatory complications. In July, the country’s competition regulator released a report outlining the findings of an investigation into competitive practices of some leading online platforms. For Takealot, the regulator stated that the platform faced a conflict of interest on its site as its retail division competes with the marketplace sellers leading to behaviour that has disadvantaged sellers. As a remedial action, Takealot was ordered to segregate its retail division from its marketplace operations, preventing its retail services from accessing seller data and unilaterally stopping sellers from competing for certain brands.
Read MoreExclusive: Moniepoint processed more than 5 billion transactions in 2023
Moniepoint, one of Nigeria’s biggest payments startups, had a triumphant 2023 despite the multiple issues that plagued the country’s financial services industry. The fintech startup averaged 433 million monthly transactions across its web, mobile, card and in-person payment channels and closed the year with 5.2 billion transactions, according to an internal company presentation seen by TechCabal. The value of those transactions was over $150 billion. It represents a 205% increase from 2022, when the startup processed 1.7 billion transactions worth over $100 billion. Moniepoint’s numbers are impressive compared to the transactions NIBSS — operator of Nigeria’s real-time payment infrastructure — handled in 2023. According to data seen by TechCabal, NIBSS processed 9.6 billion transactions, which were worth ₦600 trillion. Moniepoint’s numbers (5.2 billion) represent almost half of the transactions NIBSS processed, emphasising how 2023 was Nigeria’s best year for digital payments since 2020. However, looking eastward, Moniepoint’s transaction volume is dwarfed by MPesa, Kenya’s largest payment processor. The Kenyan payment giant processed 12.93 billion transactions from April to September 2023, more than double Moniepoint’s 2023 numbers. This might explain why Moniepoint is expanding to Kenya. Access HoldCo in final stages of regulatory approval to acquire ARM Pensions Moniepoint: From a small startup to a payment behemoth Moniepoint has grown from a little-known banking software development company that developed products for Nigerian banks to a payment behemoth. The startup says it currently has more than 2 million business accounts on its platform, most of which are business accounts. In August 2023, Moniepoint ventured into the personal banking space. At the time, Ope Adeyemi, Moniepoint’s senior vice president for channels and sales tools, told TechCabal that the fintech had 800,000 POS terminals actively used daily nationwide. The startup currently runs its ubiquitous agency banking product, Moniepoint, an online payment gateway Monnify, and its personal banking product. Through these products, users can pay for bills and airtime, transfer money to bank accounts or POS devices, and pay with cards. Business owners can also manage their businesses with the startup’s features, like tax management, compliance, payroll and expense management, and receiving loans. Moniepoint’s business customers are in different sectors. Still, the majority of their business users come from the retail sector (38.29%), food and drinks (17.77%), oil and gas (9.11%), IT and electronics (6.12%), beauty and personal care (4.5%), and agriculture (4%). Moniepoint’s bird-eye view When you process these many transactions daily, you can get a birds-eye view of how Nigerians move money daily. Sundays are the peak time for food purchases in Nigeria, typically between 7-8 p.m., according to company data seen by TechCabal. Nigerians also bought ₦100 worth of airtime 63 million times, making it the most popular amount for airtime transactions. Nigerian election periods are usually mired with violence, and 2023 was no exception. The fear of this violence leads Nigerians to stock up on food and other provisions. According to Moniepoint, this also extends to bill payments. The day before Nigeria’s 2023 general elections, it processed the highest bill payments for cable and electricity subscriptions in an hour.
Read MoreExclusive: We did our due diligence, says Livestock Wealth investors
Livestock Wealth’s lead investor has stated that it did the requisite due diligence before investing R10 million (~$530,000) into the company. The agritech startup, which allows investors to make investments in livestock and farmland, is accused of operating without licensing by South Africa’s financial services regulator. Mineworkers Investment Company (MIC), which has a net asset value of over R7 billion, (~$373 million) has stated that it performed due diligence before investing in embroiled South African agritech startup Livestock Wealth. The startup is facing allegations of operating without licensing and using another entity’s license number by the Financial Sector Conduct Authority (FSCA). The startup has disputed those allegations. In October 2022, MIC, through its Khulisani Ventures investment arm, invested R10 million (~$500,000) into Livestock Wealth for a 5% equity stake as part of the startup’s seed round. “We followed our internal due diligence process for MIC Khulisani Ventures,” said Oren Fuchs, senior stakeholder manager at MIC. “The matters raised by the FSCA were not flagged in this initial process.” According to its website, MIC Khulisani Ventures is a R150 million (~$8 million) early-stage investment vehicle that invests inblack-owned innovative, high-growth businesses in South Africa. It invests up to R30 million (~$1.6 million) in such startups. MIC added that it has engaged the company’s management team to fully understand the matter and how they plan to resolve it. Another investor also says due diligence was done In 2019, as part of Rand Merchants International’s AlphaCode Incubate program, Livestock Wealth received a R2 million (~$106,000) additional grant as part of the program’s enterprise supplier development (ESD) initiative which sought to support early-stage, high-potential, black-owned financial services and/or technology firms. When the startup initially joined the incubator in 2016, it was a crowd-farming platform that connected cattle farmers to retail investors and received an unspecified amount of grant funding. According to Dominique Collet, founding partner of AlphaCode, after the initial grant funding, Livestock Wealth was considered for additional funding and extensive due diligence was conducted. Collet adds that Livestock Wealth had pivoted its business model with the company becoming the farmer that leases and operates the cattle farms, to ensure that the cows were managed in farms that they have complete control of. With these controls in place, they had become a supplier to a large retailer of beef. “At the time of conducting the legal and regulatory due diligence in 2019, it was not determined that Livestock Wealth required a [financial service provider] licence to conduct the activities it was conducting at that time. It did require a [credit provider] licence which they had,” Collet said in a statement to TechCabal. The due diligence, according to Collet, also concluded that Livestock Wealth held sufficient insurance to cover the services they were offering per regulatory requirements. Livestock Wealth allows users to invest in individual cattle or pregnant cows and claims to provide returns of between 10-15% per annum from the sale of meat. The startup earns a commission with each transaction. The accusations come at a time when the startup is expanding its model to farmlands.
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