YC-backed Miden has big ambitions in challenging virtual card space
Dom Okiemute and Ini Udoh started Miden to increase the speed of card issuance in Nigerian financial institutions. For a fintech startup, cards are essential to drive payment volume and grow customer base. However, issuing these cards can be complex and time-consuming because fintechs do not have the size and resources to join major card schemes like Mastercard, Visa, and Verve directly. To work around this, Fintechs partner with established banks that act as issuing partners. The average time to build a card integration system within a bank was about 6-12 months,say Okiemute and Udoh, who have a combined 13 years of experience building financial systems across Nigerian banks. Miden’s solution, which moves the wait time for cards from months to weeks, earned them a place in YC’s winter 2024 batch. Miden lets businesses issue virtual cards in USD and Naira through customizable and easy-to-use API—a drag-and-drop interface—and pre-built integrations with flexible customization options. According to its website, Miden has issued over 100,000 cards and operates in four countries. “Card penetration is directly proportional to financial inclusion in Africa,” Okiemute told TechCabal, emphasizing the link between card penetration and financial inclusion in Sub-Saharan Africa. The impressive financial growth in Latin America, partly driven by the success of Pismo and Pomelo, which focus on card payments, drives home his point. “We decided to go into the space and solve the problems,” he said. Getting into YC’s latest batch was the icing on the cake and validated their decision to build in stealth for six months. Now approaching its first year, it claims to serve 25 businesses while processing ₦3.5 billion ($3.2 million) monthly. The business also recently said it has $100,000 monthly recurring revenue (MRR). “We’ve been able to acquire not just users of other platforms, competitors now leverage our platform,” he said. Miden makes money by charging transaction fees on the cards they issue. It also charges subscription or usage-based fees for businesses accessing their platform and issuing cards. The business claims to have a 99% uptime. Miden’s speedy entry into the $134.4 billion card market has not been without its challenges. According to Okiemute, Miden has struggled to find talent to build its solution. “People with localized domain knowledge are scarce,” he said. While Miden’s plans are ambitious, the startup is playing in a field rocked by chargeback fraud, costing businesses hefty fees and potential shutdowns. In November 2023, Union54, a Zambian fintech shut down after an attempted $1.2 billion chargeback fraud. Additionally, fluctuations in the Nigerian currency pose risks for USD-based virtual cards. Looking ahead, Miden says it will expand its ambitions beyond virtual cards, aiming to become a full-fledged core banking provider offering physical USD cards and potentially other functionalities.
Read MoreDesperate measures? Binance limits USDT/NGN trading as Naira slide worsens
Binance, the world’s largest cryptocurrency exchange, placed limits on peer-to-peer transactions trading the USDT/NGN pair as the naira fell to record lows on Tuesday afternoon. The exchange, which acts as an escrow and allows Nigerians to trade the naira for USDT, a stablecoin pegged against the US dollar, claims the move protects users from fraud and manipulation. For its Nigerian users, the cryptocurrency exchange disabled the ‘sell’ feature, preventing them from selling USDT on its platform. Binance also limited Nigerian users’ buy option to a price of ₦1802. It is the second time in six months that the exchange is pegging USDT/NGN prices, following a similar move in December that saw the naira gain ₦300 against the dollar in one day of trading action. That momentum was short-lived. All eyes on CBN: Will Cardoso dare a mega rate hike to curb galloping inflation? “As industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance,” the exchange said in a blog post. In recent years, Nigerians have taken to Binance to buy cryptocurrency as a hedge against inflation and currency devaluation. Binance has also become crucial to price discovery in a country with “official” and “parallel” market rates. Pegging prices on Binance is linked to a belief that speculators on the exchange may be manipulating prices. “The only problem with [Binance] is the ability of users to quote rates very high above the market rate,” a crypto trader told TechCabal. With the ban on Binance, traders are exploring other options. At least three crypto traders told TechCabal they are moving to other peer-to-peer platforms to trade stablecoins. On Tuesday, the naira traded for as low as ₦2000 to 1 USDT on Kucoin, a Binance competitor. Two crypto traders who spoke to TechCabal said the volume of USDT transactions is not significant enough to affect prices. “We believe that if proper steps are put in place, we will worry less about crypto being the issue but focus on other relevant sectors that will increase our USD inflows,” one person said. Since June 2023, the CBN has relaxed currency controls and released a raft of new policies intended to reduce speculation and aid efficient price discovery. However, a persistent liquidity problem and arguably poor communication continue to hamper the bank’s efforts. It has translated broadly to a lack of confidence in the apex bank as it scrambles for solutions that can provide stability. This week, the Debt Management Office increased the yield for Nigerian bonds by as much as 3% in the past month to mop up excess Naira liquidity and attract foreign investors. *This is a developing story
Read MoreDeFi adoption surges in Africa as Opera’s MiniPay surpasses 1 million users
This article was contributed to TechCabal by Conrad Onyango via bird story agency. The recent announcement by Opera MiniPay that it had signed up over one million users in Kenya, Nigeria, and Ghana just five months after its launch is the clearest indication yet of the rising popularity of decentralised finance, or DeFi tools, across the continent. “MiniPay makes it easier and more affordable for individuals across Africa to acquire, send and receive Mento cUSD stablecoins – simply by using mobile phone numbers,” said MiniPay’s product director, Charles Hamel. MiniPay is a self-custodial wallet for dollar stablecoins that offers cUSD, a stablecoin built on the Celo blockchain, and touted as “decentralised” so that its value is linked to a variety of currencies, which makes it more stable. Hamel explained recently at the Africa Tech Summit 2024 that the payment platform was integrated into the Opera Mini browser to provide African users with a more stable way to store and send money using digital assets. The move to decentralised finance in Africa is being driven by the double-whammy of high inflation rates and battered currencies. According to MiniPay, the cUSD offers multiple advantages, including mitigating currency volatility and providing a reliable store of value. “This is especially crucial in regions affected by hyperinflation and economic uncertainty, where stablecoins present a decentralised and accessible alternative to traditional financial services,” the payment platform said in a statement. Severe currency volatility across Africa has disrupted some of the continent’s strongest currencies including the Nigerian Naira and Kenya Shilling – both now considered among the world’s most undervalued currencies. According to Bloomberg data, the two currencies featured in a list of 10 that experienced the most devaluation in 2023, globally. The Naira was ranked the third most devalued currency in the world after losing 55% of its value against the dollar, while the Kenya shilling lost over 20% against the greenback in 2023. The Angolan Kwanza (-39%), Malawian Kwacha (-39%), Zambian Kwacha (-29%), Burundi franc (-27%), Congolese franc (-24%) also featured among the world’s 10 worst-performing currencies. Several other DeFi-backed startups in Nigeria and Kenya are getting noticed by investors. Canza Finance, a Nigerian Web3 Neobank that helps African startups with cross-border payments raised $2.3 million in January 2024 to expand Baki – its African DeFi platform. “With the help of Baki and stablecoins, Canza Finance aims to assist businesses in achieving dollar stability and overcoming traditional forex challenges. This will ultimately result in reducing transaction costs to just 1%, making it easier and more affordable for businesses to conduct cross-border transactions in Africa,” said Canza Finance in a statement. Canza has ambitions of Baki building the world’s largest non-institutional financial system. “Baki provides the ability to offer infinite liquidity at the official conversion rate, and natively quote assets in local currencies on chain,” Baki’s website states. Another DeFi startup, Jia, in May 2023 secured $4.3 million in seed funding. Jia, which is also looking at expanding the company’s operations in West Africa and Kenya, specialises in offering loans of up to $5,000 to small businesses to fill the gap left by other digital lenders and loan apps that usually do not offer credit exceeding $1,000. A group of affiliated DeFi organisations, the Africa DeFi Alliance, aims to deploy $100 billion in working capital to help close the African MSME Funding Gap. Their goal is to provide MSMEs with capital that is ten times cheaper than today’s commercial rates. “We believe that by uniting the many stakeholders in Africa and beyond who can unlock working capital to African MSMEs, we will actualise a future where an open infrastructure drives growth for vendors and more businesses at scale,” the alliance says on X. According to the World Bank, SMEs which account for 60% of jobs in Africa face a huge finance gap of $330 billion.
Read MoreBreaking: Y Combinator’s third African pick is Ocular AI, a Zimbabwean startup
Ocular AI, a Zimbabwean AI startup that lets teams within organizations search, visualize, and automate workflows on a single platform, has been selected for Y Combinator’s winter 2024 batch. Ocular AI is the third African startup in this year’s winter batch after Cleva, the cross-border payment service, and Miden, the API-fintech provider. Founded in 2024 by Microsoft and Google ex-employees Michael Moyo and Louis Murerwa, Ocular AI was born from their firsthand experience after struggling with information scattered across many SaaS tools. The AI startup connects a company’s data from many apps, making finding and using information quickly easy. African PE dealmaker scores: Cardinal Stone sells i-Fitness stake for $12 million It is the first Zimbabwean startup to be admitted into Y Combinator. “We are very excited to be walking in the footsteps of giants like Stripe, Airbnb, DoorDash, OpenAI, to mention a few,” Murerwa said in a LinkedIn post. YC’s selection of Ocular AI is its first Artificial intelligence investment on the continent and signifies an important moment for AI in Africa. While YC has invested in AI startups globally this batch, Ocular AI is an opportunity to unlock the potential of AI in Africa. The startup serves organizations across various sectors, addressing a universal challenge of information accessibility and streamlining workflows. The AI startup joins a prestigious alumni network, gaining access to Y Combinator’s renowned mentorship, funding, and global network. YC’s selection will enable the startup to scale its innovative solution and empower teams across Africa.
Read MoreAfrican PE dealmaker scores: Cardinal Stone sells i-Fitness stake for $12 million
Cardinal Stone Capital, a Nigerian private equity firm, has sold its stake in i-Fitness, Nigeria’s most prominent fitness and gym chain, to Verod Capital Management, a private equity firm. It represents a complete exit for Cardinal Stone, allowing the PE firm to sell its 65% stake in i-Fitness for $12 million in a deal that valued the gym and fitness chain at $18.5 million, two sources with knowledge of the deal told TechCabal. The deal comes when questions about exit events in African startups continue to be asked. Exits in Africa’s private capital market fell by 73% in 2023 against a backdrop of inflation and currency devaluation across the continent. “This has been an extremely exciting and rewarding journey for us,” said Yomi Jemibewon, Managing Director of Cardinal Stone. “From believing in and supporting Foluso’s [iFitness’ founder] vision when others wouldn’t; to weathering the storm of a 6-month Covid-19 shut-down only three months after investing; and then exceeding our growth and impact objectives 12 months ahead of schedule.” Cardinal Stone, the first institutional investor in i-Fitness, typically invests between $5 million and $10 million in portfolio companies across various sectors in Ghana and Nigeria. The firm invested in iFitness in 2019, and by 2021, the fitness company said it had spent ₦2 billion on its operations when it opened its 10th branch in Lagos. In 2021, the gym had 8,000 members and projected it would reach 100,000 subscribers by the end of 2024. i-Fitness currently has over 26,000 active subscribers, meaning it must grow more than 4x to meet its projection. The gym has 21 branches in four Nigerian cities, with 18 branches in Lagos. Members can train in any of these branches with an app that serves as a pass into the gym. The gym offers its members high-end equipment, personal trainers and yoga instructors, making it a standout in Nigeria’s relatively small fitness industry. Launched in 2015, i-Fitness operates with different subscription fees across its branches. In Lagos, Port Harcourt and Abuja, Nigeria’s commercial hubs, subscribers pay a monthly subscription fee of ₦24,890 ($15.5) while new subscribers pay a one-time fee of ₦18,896 ($11.76). In Ibadan, Nigeria’s second-largest city, the subscription fee drops to ₦19,890 ($12.38). Rand Merchant Bank Nigeria Limited (RMB) and CardinalStone Partners Limited (CSP) acted as joint financial advisors on the sale, while Udo Udoma & Belo-Osagie (UUBO) acted as legal counsel to Cardinal Stone on the transaction.
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👨🏿🚀TechCabal Daily – Lockbit has been locked up
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning We’re curious, how are SMEs holding up in this period? Is there a mental model you’re using to keep the pressure of inflation at bay as a business owner? You can tell us about it by sending our features editor an email at oluwatobi@bigcabal.com. In today’s edition Kenyan Bolt drivers demand fair compensation FairMoney’s second acquisition? Lockbit has been locked up Neuralink makes a breakthrough The World Wide Web3 Opportunities Mobility Bolt drivers in Kenya demand fair compensation Bolt drivers in Kenya are once again voicing their concerns. During a recent engagement event hosted by Bolt in Nairobi, the drivers said they want to be consulted before Bolt makes any pricing changes on the platform. They also underlined the necessity of accurately pinned locations for seamless navigation and requested reimbursement for parking fees incurred during operations. Additionally, concerns were raised regarding the quality of customer service provided by the platform and the need for fair compensation commensurate with their efforts. Issues such as the certificate verification process lasting two weeks, existing trip cancellation policies, and safety measures were also discussed. Furthermore, Bolt’s delivery riders advocated for a minimum cap of Sh200 ($1.37) on delivery charges to ensure equitable earnings. Recurring issues? Some of these issues aren’t new. By November 2023, Bolt had expelled 5,000 drivers over six months over safety concerns—including scuffles between passengers and drivers. Kenya’s transport authority froze Bolt’s license renewal in October, demanding a safety plan and answers on “illegal” commission charges before granting approval. After meeting the demands, Bolt got its licence renewed. Bolt responds: In response to drivers’ complaints, Bolt’s country manager, Linda Ndung’u, pledged to provide regular training to ensure high-quality services from drivers and acknowledged flaws in the certificate verification process. She committed to reviewing the pricing model to address driver concerns and compensation. If this sounds vaguely familiar, it’s because Bolt, last year, opened a driver-engagement centre in Nairobi to address some of the existing concerns drivers have been pushing for. At the time, Ndung’u had said the centre would help solve driver complaints in a timely manner, but so far, it looks like nothing has changed for Kenyan Bolt drivers. Access payments with Moniepoint You don’t have to take our word for it. Give it a shot like he did Click here to experience fast and reliable personal banking with Moniepoint. M&As FairMoney is looking at its second acquisition with Umba In the African fintech landscape, M&A conversations are becoming more prevalent, reflecting tightening VC funding and the challenges faced by many startups in meeting growth targets and managing unit economics. And FairMoney, a Nigerian fintech, knows a bit about that. Last year, it acquired PayForce in a cash-and-stock deal worth $15 million. Ten months later, FairMoney appears to be taking another bold step towards growth as the fintech is reportedly in talks to acquire Umba, a neobank with operations in both Nigeria and Kenya, for a $20 million all-stock offer. It’s all still in the early stages and both companies are hush-hush about it. What’s in it for both fintechs? For FairMoney, acquiring Umba presents a strategic opportunity to streamline its entry into the Kenyan market without navigating Kenya’s tricky licensing pathway which took Umba three years! By leveraging Umba’s existing infrastructure and customer base in Kenya, FairMoney could rapidly expand its reach and tap into new markets. The $20 million all-stock deal offered by FairMoney aligns closely with Umba’s total fundraising of $17 million since its inception. In this context, FairMoney’s offer could provide Umba with much-needed financial stability and a path towards future growth. FairMoney, backed by investors like Tiger Global and DST, has raised over $60 million. The fintech has also diversified its product offerings over the years and added other financial services, such as debit cards, transfers and payments after it launched as a digital lender in Nigeria six years ago. 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. Cybersecurity Cyberterrorist group Lockbit has been locked up Every day for the thief hacker, one day for the owner. The news: In one of the most significant disruptions of the cyber-criminal world, the UK’s National Crime Agency (NCA) has nabbed the World’s largest criminal ransomware group, Lockbit. Lockbit? In 2020, the world first witnessed Lockbit, a ruthless ransomware group whose eponymous software spread like wildfire. Traced back to Russian-language forums, the group’s true origins remain shrouded in mystery. What’s clear is the devastating impact they’ve had, leaving a trail of over 2,000 victims worldwide, amassing over $120 million in ransom payments, and demanding even higher sums. The group’s tactics involve encrypting sensitive data and holding it hostage, forcing organizations to pay for its decryption. While the group has been predominantly disruptive in the United States hitting more than 1,700 American organisations, African companies were not left out of its onslaught. Lockbit in November last year attacked Fawry, a leading provider of e-payments and digital finance solutions in Egypt. The ransomware group encrypted files and also allegedly exfiltrated data from the e-payment provider. Fawry confirmed in a news report that addresses, phone numbers, and dates of birth, were leaked. Hacking the hackers: The NCA, in collaboration with international partners, yesterday infiltrated Lockbit’s system and carted away its data. The police group seized 34 of Lockbit’s servers, arrested two members, froze 200 cryptocurrency accounts, and shut down 14,000 “rouge accounts” used for their operations. Per UK laws, punishment for ransomware attacks includes facing a fine, imprisonment of more than 5 years, or both depending on the severity of the offence. Accept fast in-person payments, at scale Delight your customers by allowing frontline staff and sales agents confirm bank transfers, instantly. Learn more → Innovation Neuralink makes
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Check your 2024 JAMB exam centre, date, and time online
Preparing for the Joint Admissions and Matriculation Board (JAMB) exam involves more than just studying; it’s also crucial to know the specifics of your examination schedule. Here’s a detailed walkthrough on how to check your 2024 JAMB centre, date, and time when you need to. How to check your JAMB exam centre, date, and time You can use any of the following methods: 1. Use the JAMB Portal Navigate to the official examination slip checking segment on the JAMB portal at https://slipsprinting.jamb.gov.ng/PrintExaminationSlip Input your JAMB registration number, phone number (GSM), or email into the provided field. Click on the “Print” button to generate your exam slip, which contains comprehensive information about your exam centre, date, time, and subject combinations. If you see something like, ‘Examination Slip Printing not allowed’, it means the slips are either not yet made available for access or there’s a network issue. If you think any of the two shouldn’t be hindering you, then endeavour to visit the nearest JAMB CBT registration centre to complain. 2. Stay updated via email During the registration process, you provided an email address. Regularly monitor your inbox for messages from JAMB, as they often communicate exam details via email some days before your exams to give you ample time to prepare. 3. Watch out for SMS updates Ensure your phone is readily accessible, especially in the two weeks leading up to your exam. JAMB would usually send updates directly to your mobile device, including exam centre information and scheduling details. 4. Visit a JAMB CBT registration centre If any of the above options do not work for you to check your JAMB exam centre and other details, please endeavour to visit an accredited JAMB registration centre. You will potentially get your issue resolved there. Essential items to check and bring to the JAMB 2024 examination centre Preparing for the exam day goes beyond checking your exam centre and knowing your exam details; it also entails gathering the necessary items for a smooth experience. Here’s what to pack: 1. JAMB registration/examination slip This document is your ticket to the exam hall and contains critical details about your registration and exam schedule. 2. Valid government-issued identification Ensure you bring an acceptable form of ID, such as a National Identity Card or International Passport, to verify your identity. 3. Writing materials The JAMB 2024 is a CBT exam. However, for those especially sitting for subjects requiring calculations, you may need to write. While writing materials are typically provided at the exam centre, it’s wise to carry your pens and pencils as a backup. Please note: While you may bring items like your phones for communication with your friends and family before and after the exam, electronic devices are strictly prohibited during the exam. So plan on how you’ll keep the device safe during the exam or keep it at home. Final thoughts These detailed steps and being adequately prepared will help you navigate the process of checking your JAMB exam centre, date, and time with ease. Remember to stay informed, gather the necessary items, and approach the exam day with confidence.
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3 easy ways to access JAMB recommended novel for 2024
This year, the Joint Admissions and Matriculation Board (JAMB) has introduced a modern approach to accessing the Use of English exam literary reading text. Unlike previous years, JAMB is not distributing hard copies of the reading material. Instead, candidates will have access to it through digital means, ensuring convenience and efficiency. Here are three convenient ways to get the JAMB novel for 2024: 1. Get JAMB novel for 2024 through QR Code received via Email Upon completing your registration for the JAMB exam, you will receive an email containing important information, including a QR code. This QR code serves as a gateway to access the reading text. Simply scan the QR code using your smartphone or any QR code scanner app, and it will direct you to the digital version of the JAMB 2024 novel. This method allows candidates to access the text anytime, anywhere, as long as they have their smartphones handy. 2. Get recommended QR Code on Registration Slip Along with your registration confirmation slip, JAMB will provide a QR code that grants access to the 2024 novel for the mandatory Use-of-English exam. This slip is essential for exam day and contains crucial details about your examination schedule and venue. By scanning the QR code on your registration slip, you can easily access the reading material beforehand, allowing ample time for preparation. 3. Get JAMB novel for 2024 through JAMB Portal After completing your registration, log in to your JAMB portal using your registration details. Here, you will find a section dedicated to exam resources, including the reading text for the Use of English exam. The portal provides a centralised platform for candidates to access all relevant information regarding their examination. Simply navigate to the designated section, and you will be able to view or download the reading text hassle-free. Final thoughts on getting JAMB novel for 2024 JAMB has transitioned away from distributing hard copies of the reading text, it has implemented digital solutions to ensure accessibility and convenience for candidates. By utilising QR codes via email and registration slips, as well as accessing the JAMB portal, candidates can effortlessly obtain the necessary reading material for the 2024 examination.
Read MoreAll eyes on CBN: Will Cardoso dare a mega rate hike to curb galloping inflation?
Olayemi Cardoso, Nigeria’s Central Bank Governor, will chair a monetary policy meeting next week, the first since he was appointed in September 2023. The consensus among three analysts who spoke to TechCabal is that the CBN will elect to raise interest rates in response to worsening inflation. Headline inflation reached a 27-year high of 29.90% in January 2024. Only Zimbabwe (34.8%), Congo (42.5%), Sierra Leone (52.16%), and war-torn Sudan (63.3%) have higher inflation rates. In a meeting in early February, Cardoso said he expects inflation to moderate to 21.4% in 2024 using CBN’s inflation-targeting policy; next week’s MPC meeting will be a stern test of the bank’s ability to match talk with action. Bloomberg analysts expect an interest rate increase of 500 basis points. However, Basil Aba, a co-founder at Veriv Africa and policy analyst, believes the CBN will take a more moderate path and increase rates by 100 basis points instead, from 18.75% to 19.75%. “It is difficult to see how raising rates can make an impact,” Aba argued in an email response. “Nigeria’s inflation is a cost-push inflation buoyed by a steep increase in energy costs across the board, frequent energy scarcity, a nationwide food supply shortage problem, an illiquid power generation value chain, foreign exchange scarcity,” he added. Mayowa Badejo, a partner at 213 Capital, an investment and risk advisory firm, believes inflation will only moderate after the naira begins to strengthen. It’s a nod to Cardoso and the CBN’s other troubles, like a volatile Naira that has resisted every policy thrown at it. The central bank hiked open market rates to 19% from under 12% to mop up excess liquidity and has tweaked the rules for oil companies to repatriate FX from Nigeria, but the Naira’s slide has only worsened this week. Cardoso, who previously dismissed the impact of monetary policy meetings, is under pressure to deliver stability. This week, an aide of President Tinubu urged Cardoso to consider the “political implications” of the CBN’s policies.
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Next Wave: What’s driving M&A deals in Africa?
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 18 February, 2024 The African tech ecosystem is no stranger to Mergers and Acquisitions. South Africa has had great success in closing these kinds of deals and according to Digest Africa, the value of mergers and acquisitions in the African tech ecosystem was $504 million in 2018. 24 out of those 39 deals were in South Africa. Tshepo Magagane, an investment banker, explained that M&A deals are frequent because South Africa has mature companies that are now rechanneling funds into the start-up tech scene. “Capital markets and our banking system are also playing a supportive role,” Magagane said. Merger and Acquisition deals between 2019 and 2023. Chart by Stephen Agwaibor, TC Insights As the funding for African startups declined to a two year low by 2023, a number of Nigerian startups announced more M&As, seeking more lifelines for their tech-led businesses. A data tracker said the market for acquisitions dropped to 26 deals in November last year, however Statista predicts that the transaction value in the Mergers and Acquisitions market for Nigeria is projected to reach $198.50 million in 2024. In the not so distant past, international companies who wanted to make inroads into Africa were responsible for M&A activity. Stripe’s gateway into Nigeria was via the Paystack exit which cost $200 million, which it used to expand into Africa. Visa, a payment behemoth, also made its move into Nigeria by acquiring a minority stake in Interswitch, a Nigerian digital payments firm, which helped boost its valuation to unicorn status. Partner Content: Read: Announcing the $5m Core Africa Innovation Fund which is empowering local Web3 builders here. Between last year and this year, more M&A activities among local Nigerian startups started to make waves in the ecosystem. Notable among the deals include marriages between WhoGoHost, a Nigerian cloud infrastructure company and SendChamp, a cloud communications startup. The acquisition, which combined cash and equity, was an acquihire, requiring both founders of SendChamp, Goodness Kayode and Damilola Olotu to assume new roles at WhoGoHost as Chief Product Officer, and Chief Technology Officer respectively. Others included Risevest acquiring Chaka, distressed PayDay acquired by Bitmama and more recently Carbon acquiring Vella Finance. Apart from PayDay’s acquisition most of the M&A deals have one recurring theme through them; the actual figures were not made public. As an aside, the financial implications are important for record-keeping and to evaluate the growth of the ecosystem. Take this as a worthy digression anyway. Next Wave continues after this ad. Talent PEO Africa launches in Kenya, offering comprehensive HR solutions for businesses. From EOR services to recruitment and HR consulting, we simplify operations for seamless growth. Partner with us to tap into Kenya’s talent, navigate regulations, and achieve success. Contact us at www.talentpeo.com or kenya@talentpeo.com. There are many arguments for tech startups opting for M&As. While the general theme that accompanies them are usually premised under opportunities to maximise economies of scale and foster cross-country expansions, there are other unexpressed motivations. In this article, Victor Basta, co-Head at DAI Magister argues that some companies do not consolidate simply to save themselves from shutting down. He told TechCabal that some consolidations may be done in the middle of a funding glut with heavy concerns on raising newer rounds. As far as Mergers and Acquisitions go, the best case scenario is a consolidation of two evenly matched tech startups who combine to deliver outsized returns to the market and become a market leader while at it. The idea of becoming a market leader can obliterate the competition—quite a number of startups do the same thing; however, if the merger brings more value to consumers, why not? From the outside in, the mergers of Chaka and Rise and most recently Carbon and Vella Finance looks like a real attempt at improving the worlds of wealth management and digital lending respectively. As Ngozi Dozie notes in his substack, the Carbon and Vella marriage was a perfect match. This is not Carbon’s first time making an acquisition. It acquired Amplify, a payments company for an undisclosed fee in 2019, relying on its architecture for success in the payments business. This new marriage with Vella Finance is expected to continue Carbon’s ambitions into expanding more financial services to more customers. Next Wave continues after this ad. TechCabal is taking Moonshot Conversations to Nairobi! We’re excited to invite you to our inaugural edition of Moonshot Conversations 2024 in Nairobi, Kenya this Friday, February 16th. Join us for an evening of discussion around all things AI, with cool demos from innovators doing interesting stuff with AI. It promises to be an evening filled with networking opportunities and fun at our post-event mixer. If you are an AI expert, enthusiast, regulator, or innovator within Kenya’s tech ecosystem, this is an experience not to be missed. Hurry now and register by clicking on the link below, we cannot wait to welcome you. And more! It will be remembered as the year that reset the trajectory (hopefully) for the better. Register now! However, with great and exciting news, comes some caveats. Sheharyar Khan, a finance expert, argues on LinkedIn that the success of an M&A is a futuristic expectation of three years. According to him, “If a business is able to retain the majority of its customers three years after an acquisition, this is a positive indicator that the acquisition was successful.” This means that a long wait lies ahead of us, especially with recent acquisitions. However, founders can score bonus points if they acquire related businesses. Nonetheless, only time will tell. Till then, let’s be optimistic. Joseph Olaoluwa Senior Reporter, TechCabal Thank you for reading this
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