Navigating the African tech media landscape for startups
The fact that you exist is not news… Occasionally, a crisis or controversy in the African tech ecosystem ignites debates among founders and influencers about the merits of local versus international media coverage. While it’s undeniable that sensational headlines can spread like wildfire, accusing the local tech media of a sole focus on the negative is neither fair nor accurate. At Wimbart, after eight years in the industry, I’ve come to understand a fundamental truth that also happens to be Wimbart CEO’s Twitter cover story: The fact that you exist is not news. Whilst raising over a million seed in funds could guarantee you coverage, whether you’ve launched a new product or expanded, journalists will always ask, “So what?” What’s the impact, the innovation, the human story? The African tech market is brimming with startups eager to share their narrative. At Wimbart alone, where we represent a modest fraction of African-focused companies, we often find ourselves amongst at least three different teams pitching to the same journalist in any given week. It’s important to recognise that journalists’ inboxes are inundated with up to 50, sometimes hundreds of pitches, on any given day. Recognising their hard work is crucial—they are the storytellers who have elevated our narratives, making international media platforms not only notice but also hire local teams to push the narrative further. When I began working in PR for African tech, capturing the attention of international media was a formidable challenge—it was H-A-R-D. We owe much to local publications that have tirelessly championed our stories; they deserve our gratitude, or “flowers,” if you will. Pitching a story that will resonate and secure media coverage is an intricate art. For those with in-house communications teams or a PR agency like Wimbart, there’s support to sculpt the narrative. Yet, we are aware that not all, especially early-stage startups, have these resources. If your pitches happen to be met with a rate card, it‘s an indicator that what is being pitched is perceived more as promotional than editorial content. There lies the distinction between what is known as “earned media” and “paid media”. In layman’s terms, earned media is akin to a badge of honour, granted for its intrinsic worthiness, whereas paid media is a lot more straightforward; it’s coverage that you pay to secure—zero thought required. Each serves a purpose but they are not interchangeable. So, you’re set on securing earned media coverage without resorting to financial outlay? Excellent decision. Below are some actionable steps that can elevate your story from just another pitch that ends up unread to headline-worthy news: Research publications and journalists Finding the right journalist for a media outlet to share your startup’s story should mirror the process of choosing the perfect business partner or founding team. It involves aligning your startup’s mission with the outlet’s editorial focus where possible, ensuring there is mutual interest and goals. This due diligence involves thorough research into their past work and identifying the journalists within a specific publication who champion themes that resonate with your venture. Whether it’s your company’s innovative approach to sustainability, significant funding achievements, or the founder’s unique profile, finding that match means you’re ready to pitch. Pitching to the right person transcends mere coverage; it becomes an opportunity to weave your story into their ongoing narrative. It’s about creating a partnership where your startup’s achievement and aspirations complement their storytelling, ensuring that your narrative gets shared and truly resonates with their audience, creating a meaningful impact. Attention-Grabbing Subject Email Your email’s subject line is the gateway to capturing a journalist’s attention, so make every word count. Imagine you’re crafting the editorial for tomorrow’s newspaper, it should be compelling enough to make anyone pause and take notice. Take inspiration from the impactful stories you see on major platforms titles like “How [innovation/company] is changing [industry]” are not just headlines, they are calls to curiosity. Use this approach to mirror each publication’s storytelling style in your email subjects. This not only piques interest but also shows you’ve done your homework and understand what resonates with their readership. Keep it punchy and to the point Keep your pitch concise and riveting. As highlighted above, journalists sift through a mountain of pitches daily, so you need to make yours stand out by hitting the key point right from the start, much like you’d share a piece of irresistible gossip with a friend. Highlight the most compelling aspect of your story immediately to grab their attention otherwise you risk losing it before the second paragraph—this could include striking data, a customer story, etc. If there’s depth to add, consider bullet points or a summary after your email signature. Alternatively, you could keep it in reserve for a follow-up, which is often required. Reading lengthy pitches can be daunting, but this strategy respects journalists’ time and piques their curiosity, significantly enhancing the chances of your story being featured. It’s about striking the perfect balance: being informative yet engaging, ensuring your message is not just another in the huge pile but a must-read. Build a relationship before pitching Fun fact: My path to landing my first big feature was paved not just by an intriguing story, but more so by the relationship I had nurtured with the journalist well ahead of the time I needed to pitch my client’s news. It’s crucial to start building these connections early, long before the urgency to disseminate your news arises. This can be done by demonstrating a sincere interest in their work, engaging in meaningful conversations, and extending your assistance, such as connecting them with a speaker, without immediately anticipating a return; it can remarkably shift your stance from that of an outsider to a respected collaborator. I’ve found that the most fruitful relationships are those where communication can be as simple as sending bullet points over WhatsApp. Yet, reaching this level of informality and trust with journalists requires an investment of time and genuine interaction, moving you from just another contact in their inbox
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Patient capital, diverse exits: Verod-Kepple’s vision for the future of African startups
Armed with a $45 million war chest, the Verod-Kepple Africa Ventures (VKAV) leadership team—Ory Okolloh, Ryosuke Yamawaki, and Satoshi Shinada—have decades of experience operating and investing in Africa between them. Yamawaki founded Japan’s embassy in Botswana in 2008 but left after two years because “there’s no equity upside to being the founder of an embassy.” He then moved to Mitsui, one of the largest investment houses in Japan, just as the company was expanding into Africa. After an MBA from Berkeley, he launched Kepple Africa Ventures with Shinada, who joined after investing in energy and infrastructure projects in West Africa for seven years. Over the next three years, they invested in over 100 African startups. “We are not afraid of making mistakes, but we fear not learning anything due to lack of execution and speed,” was Kepple’s mantra as it invested between $50,000 and $150,000 in each pre-seed and seed-stage startup it backed. Following the full deployment of its $20 million fund in 2021, Kepple Africa, which deliberately structured itself as a “hands-off” fund from a portfolio support perspective, was effectively shut down to align with a new focus on growth-stage startups. (Yamawaki and Shinada still monitor, track and report on Kepple Africa portfolio companies.) The pair then partnered with Ory Okolloh, a tech and investment professional in Africa with experience at Google and Safaricom, to start Verod-Kepple Africa (VKAV), a venture capital fund that is partnered with Verod Capital, a Lagos-based private equity firm. The firm’s average ticket size is between $1 million and $3 million and it has invested in 11 growth-stage startups, like Moove (a Kepple Africa portfolio company), Shuttlers, Chari, and Julaya. While Verod-Kepple has shed the seed-stage investing and speed that Kepple Africa was known for, it still retains the Japanese connection of its predecessor as it invests in growth-stage startups at the Series A and B stages. The venture capital firm typically brings on its limited partners, mostly Japanese companies, as co-investors in deals and, in some cases, eventually sets up an acquisition event for its portfolio startups for its investors. TechCabal spoke to all three partners for this interview as they shared their investment thesis and why they are backing African startups. Venture capital firms and private equity firms differ in their approaches to investment. Why did you partner with Verod Capital? Shinada: As the ecosystem matures, more startups are in the growth phase. They’re facing many issues, like governance, operation, hiring, finance, financial reporting, etc. These things are managed much better by Private Equity funds. They have significant stakes in their portfolio companies and try to make a turnaround quickly. They are very hands-on and focused on improving the performance of their portfolio companies. We thought we [could] institutionalise that kind of experience and knowledge in the VC context if we kept investing in the growth phase of the startups. [Our partnership] also coincided with when we decided to move up from seed investments to Series A and Series B investments. From Verod’s perspective, I think they wanted to diversify their asset class. Also, as part of their value add to their portfolio companies, they were looking for more tech solutions to improve the efficiency and productivity of their portfolio companies. Read also: Verod Capital buys out Cardinal Stone’s stake in iFitness Kepple invested in many early-stage startups in just three years. Now Verod-Kepple has backed 11 growth-stage startups in two years. What are some of the challenges faced by early-stage startups and late-stage companies? Shinada: For early-stage startups, the biggest hardship is adapting the reality of the African market to investors’ expectations as a tech company. Startups need to focus on African problems if they want to monetise. But on the other hand, many investor perspectives are shaped by global trends. I think that’s why, between 2020 and 2021, lots of money flew into African copies of global business models that were assumed to be asset-light and tech-driven. It didn’t work because, in Africa, it’s more important to create transactions than to get revenue share by tapping into existing transaction flows with tech solutions. For later-stage companies, exits are a big headache. To exit, they need to understand what attracts global investors and also, from the perspective of public stock market investors, make an IPO happen. There has been a lot of misalignment between what investors are looking for and what African businesses are doing. No global investor is looking for a single business model with a single market exposure because Africa is risky. Investors are looking for a pan-African, broader, and more convenient index to diversify their exposure to emerging markets. You have a diverse range of companies in your current portfolio. How do you assess which companies get to be in the Verod-Kepple portfolio? What’s your investment strategy? Yamawaki: We always look for scalable and untapped opportunities that address some of the biggest frictions in Africa. We have three pillars on our website that represent the lens through which we see those opportunities, to make sure these opportunities are large enough and scalable. Firstly, infrastructure. We want to back businesses that try to solve friction for the general public that should have been provided by the government. Shuttlers is one: public transportation is perhaps a human right, but there is no reliable and affordable solution for it [in Nigeria]. Secondly, inefficiency solvers. This is solving friction for businesses. For this, we have Julaya. The last pillar is homegrown solutions. But we have revised that to market creators. Market creators refer to those creating economic opportunities for people based on the changing dynamics of the overall African economy, for instance, increasing GDP. When it comes to assessment, we look at the deal to see whether the opportunity falls under these pillars very well. We don’t want to invest in models replicated from other parts of the world or businesses that just have a tech layer. We want to back businesses and founders that tackle deep issues and problems in
Read MoreSouth Africa is reinventing cricket using AI
This article was contributed to TechCabal by Bonface Orucho via bird story agency. A digital makeover for South Africa’s cricket ecosystem could be in the works, leveraging artificial intelligence and blockchain technology to increase the popularity of the sport among fans while creating new revenue streams for fans, players and brands. Results of a pilot collaboration between LootMogul, an Indian sports technology company, Cricket South Africa and the Durban Super Giants have revealed an increase in fan engagement with cricket gaming platforms, pointing to the potential impact digitisation could yield for the sport. According to Vibhu Srivastava, the digital marketing head at LootMogul, “it indicates the significant potential for future business opportunities.” Results from the month-long pilot were unveiled on February 23 by LootMogul. After deploying an AI, blockchain and metaverse-led strategy, an average of 4.05 million platform visits were recorded in one month. These translate to 48,177 average new monthly games played and a 242.5% rise in the number of games played per month. The collaboration sought to bridge the boundaries between the physical and digital worlds of cricket, offering a holistic and immersive experience to fans. Notably, the partnership with the duo involves creating digital twins of South African stadiums, players, and all features of the sport. The digital maps are packaged as games on websites and applications, allowing fans to experience a virtual yet realistic experience of being in the heart of cricket action. According to LootMogul, the interactive gaming platform feature facilitates fans’ engagement with the sport beyond live matches, creating a year-round connection with the sport. Cricket South Africa and LootMogul announced the partnership on December 5, while the deal with the Durban Super Giants was announced in January when LootMogul was unveiled as the official Cricket Metaverse Gaming Partner. South Africa has been a major force in the world of cricket ever since the first visit by a touring British test side, in 1888. Targeted with sanctions during the country’s Apartheid era, cricket took off after 1994 as a sport for all South Africans and the country currently stands at number five in the world test rankings and number three in the one-day international (ODI) rankings. However, domestically, the sport languishes behind others like football and rugby as a spectator sport and Cricket South Africa is looking to improve the sport’s fanbase. The digitisation drive, anchored on technology and the use of AI, promises to strike a connection between fans and the sport, leading to an increased appeal for the sport among the fans. The opportunity for fan growth in South Africa is clear from the global rise in the sport’s popularity, with cricket’s inclusion in the 2028 Olympics in Los Angeles underscoring an expanding global influence. “This is a leap into the future of cricket. It is not just about enhancing the game; it is about revolutionising the fan experience,” SA Cricket’s Chief Executive Officer, Pholetsi Moseki, remarked in December during the rollout of the programme. The use of AI in cricket is the latest addition in Africa to what has been a growing application of AI in sports, from player analytics to statistics assessment to game management. The successful initial application of AI in cricket in South Africa also points to the potential in other countries on the continent where cricket is a major sport, such as Zimbabwe, Namibia and Kenya.
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👨🏿🚀TechCabal Daily – A huge Deel
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning If you found yourself logged out of Facebook yesterday, don’t be alarmed; your account hasn’t been hacked. Three Meta-owned platforms, Facebook, Instagram and Threads, were offline for two hours yesterday, affecting millions of users across the world. While Meta is yet to reveal what caused the outage, users across the world are slowly regaining access to their accounts. In today’s edition Inside the company beating Lagos’ traffic jams Binance exits Nigeria Canal+ offers MultiChoice $2.9 billion Deel acquires South Africa’s PaySpace The World Wide Web3 Opportunities Fintech Inside the company easing Lagos traffic jams In Lagos, losing your cowry card is synonymous with almost the start of a bad day. For a city rocked by traffic, commuting in Lagos is extreme sports. Not only are Danfos—the iconic yellow buses—expensive and slow. The buses are less comfortable for passengers and are often traffic-bound. Bus Rapid Transit (BRT) buses, however, are an alternative to this dread. Relaunched in 2018, the buses provide commuters with a more comfortable way to travel with dedicated BRT routes—helping them dodge the city’s dreaded traffic jams—and fewer stops, helping them to cover more ground quickly. In 2020, through a partnership with Touch and Pay Technologies, commuters of the BRT buses began using Cowry cards, for payments. Now the the fintech says it processes 500,000 daily payments worth almost one billion niara monthly. How have cowry cards become a permanent item in the wallets and purses of Lagosians and its many exploits in the state? Dig deeper here. 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. Crypto Binance discontinues naira services Binance, the world’s largest cryptocurrency exchange, is exiting the Nigerian market. Yesterday, the company announced that it would halt Naira deposits after March 5, and withdrawals by March 8. Any remaining Nigerian Naira (NGN) balances in users’ Binance accounts will be converted to USDT. Additionally, by March 7, all current NGN spot trading pairs will be removed, and the Naira will cease to be an accepted payment method on Binance Pay—Binance’s payment solution. Why? Binance shut down its Nigerian Naira (NGN) services due to ongoing regulatory scrutiny in the country—a decision that affects roughly 10 million Nigerian users. The company had previously disabled the ‘sell’ feature and limited Nigerian users’ buy option to a price of ₦1,802 ($1.15) involving the USDT/NGN pair as the naira fell to record lows in February. A regulatory scrutiny: The exchange’s troubles escalated following a ban on Binance’s website last week after Nigeria’s Office of the National Security Adviser (NSA) arrested two Binance executives upon their entry into the country. Nigerian authorities accused Binance of participating in “illegal transactions” and imposed a substantial fine of $10 billion, but the company denied any knowledge of such penalties. The challenges coincide with Yemi Cardoso, Nigeria’s CBN governor, revealing that “illicit flows” totalling $26 billion had passed through Binance Nigeria from undisclosed sources and users. The governor also hinted at the likelihood of stricter regulations and forthcoming actions from security agencies. In other countries like Kenya, the East African country is responding to its greylisting by the Financial Action Task Force (FATF) by pushing for new regulatory reforms, with the Blockchain Association of Kenya (BAK), a crypto advocacy group, leading the charge. The reform will introduce a regulatory sandbox to vet and license crypto entities within the country. Streaming Canal+ ups Multichoice acquisition bid by 20% Canal+ is in an unrelenting race to acquire South Africa’s MultiChoice, the leading pay-TV company in Africa. After MultiChoice rejected an initial offer of R105 ($5.52) per share, Canal+ has enhanced the deal to R125 ($6.59), representing a 20% increase per share. This values MultiChoice at $2.9 billion and comes one day after the company was granted an extension until April 8, 2024, to make its offer. Maxime Saada, Chairman and CEO of Canal+, expressed confidence in their understanding of the value of MultiChoice and announced a collaboration agreement between the two entities, with MultiChoice granting exclusivity to Canal+. What’s next? MultiChoice will form an independent board to evaluate the offer. The Public Investment Corporation (PIC), the second major shareholder in MultiChoice, will also play a part in the decision. By April 8th, Canal+ must submit a formal offer, and both companies are working with financial advisors to finalise the deal. Why a deal still seems likely: The extension of the buyout, along with the exclusivity agreement and Canal+’s raised offer, signifies a serious attempt at acquisition. The integration of both companies’ operations forms a pay-TV powerhouse with an expanded reach of almost 50 million subscribers and potentially increased resources for content creation. This has the potential to benefit both companies and subscribers. However, the final offer price and terms may vary from the current proposal as negotiations progress and financial advisors become more involved. 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. Acquisitions US HR firm Deel acquires PaySpace Since Stripe acquired the Nigerian fintech company Paystack for over $200 million in October 2020, African companies have seen continued interest from global firms. This is evidenced by private equity firm Medius Capital’s $100 million acquisition of expense management firm Expensya in 2023, and BioNTech’s $713 million purchase of InstaDeep, an AI firm founded in Tunisia. And now Deel, the American HR company is acquiring PaySpace, a 20-year-old Africa-based provider of payroll and HR software, for an undisclosed amount. This marks the third high-profile acquisition of an African company by a global player within the last 18 months. Launched in 2007 by the Clark brothers (Bruce, Clyde, and Warren) alongside George Karageorgiades, PaySpace,
Read MoreCanal+ makes improved $2.9 Billion bid to buy MultiChoice
Canal+, the French pay-TV giant owned by Vivendi SE, has increased its offer to buy MultiChoice to $2.9 billion, a week after a regulatory panel mandated the French broadcaster to make an offer to MultiChoice’s ordinary shareholders. The new bid translates to an offer of 125 rand per share, a 20% increase from the initial offer of 105 rand, per reporting from Bloomberg. MultiChoice has a fiduciary responsibility to inform its shareholders about the new offer. South Africa’s Takeover Regulation Panel (TRP) has issued Canal+ a 25-business day extension which lapses on the 8th of April, to submit a mandatory bid to purchase shares of the pay-TV company, Multichoice. Canal+ has stated that it will comply and respect the panel’s decision. Since 2020, the French company has increased its stake in MultiChoice from 20.1% to 35.01% in February 2023. Per South African law, a more than 35% stake would require Canal+ to make a mandatory offer to MultiChoice shareholders. In February, MultiChoice, which has a market capitalisation of $2.15 billion, turned down a non-binding acquisition offer by Canal+. MultiChoice told shareholders at the time it considered the offer undervalued.
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YC-Backed Touch and Pay processes 500,000 daily payments with Cowry cards in Lagos
Nena Okon dreads going to work. Like many Lagosians, the 26-year-old content creator lives on the mainland but works and rents camera equipment on the island—a busy district that hosts many businesses. She gets to work using the ubiquitous Lagos danfos, which are often expensive and slow. In September 2023, Bus Rapid Transit (BRT), a popular public-private metro partnership, became available on Okon’s route, coinciding with a time when the service was enjoying an upgrade. While BRTs have been in Lagos since the late 2000s, they got a refresh in 2018, introducing newer buses. In 2020, Cowry cards, a little-known product by Touch and Pay Technologies, an even lesser-known company, was launched. In four short years, the Cowry card has become an important feature of commuting in Lagos. The fintech is solely responsible for accepting payments on Lagos’ intracity transport system, including the BRTs and Lagos Ferries. TAP is also the payments technology provider for the recently launched Lagos Blue and Red Lines, an intracity metro rail that stretches over 45km. Key Takeaways Touch and Pay technologies has 3.8 million users The Y-Combinator-backed firm wants to raise another $4 million in funding Their revenue in two months was ₦1.9 billion Cowry card, a contactless payment technology, allows commuters to pay for bus and train rides using near-field communication (NFC). The card retails for ₦500 in Lagos and has a wallet feature on Playstore for account top-up and airtime. The app also has a pay-with-phone feature but that remains an unpopular feature. Most commuters top up their cards from their bank accounts or through agents. Cowry Card The Cowry cards have two advantages, said Okon, who is now a regular user. First, it creates an easier checking-in experience, removing the rowdiness and commotion that is a feature of commuting with the danfos while ensuring buses are less crowded. Additionally, the Cowry cards, which users can fund ahead of their commute, are doubly useful as Lagos state introduces more mobility options–last week, the city launched its 37km red line, a train network that stretches from Agbado to Oyingbo. In Nigeria, where railway officials have been accused of ticket scalping on federal government-run trains, digital payments reduce corruption by city transport workers. The YC-backed company behind Cowry cards Cowry card technology is the brainchild of Touch and Pay Technologies, or TAP, a startup founded in 2017 by Olamide Afolabi, Michael Oluwole and Kabir Yabo to support payments for mobility services in Lagos. “People don’t like that they have to worry over bus fare, battle bus conductors and go through rough days. They just tap, the amount is deducted and they move on,” Afolabi, TAP’s CEO, said. Governor Sanwoolu using the Cowry card on the Blue line 3.8 million users in Lagos use Cowry cards to complete 500,000 trip payments daily, the company shared. TAP takes a 5-10% commission on fares and remits the remainder to city authorities. “The commission we receive varies for different states. In some cases, it’s less than 10% and others less than 5% depending on the volume, value and buying power [of state customers],” he added, noting that customers in some states don’t want to spend up to ₦200 for a 30-kilometre ride. The fintech is already expanding to Oyo, Ogun, Edo, and Kano. While TAP talks up its digital infrastructure, it also uses physical agents at bus terminals to sell cards to first-time users. Most card balance top-up transactions are completed in person with these same agents. TAP has raised around $4 million in venture funding from Unicorn Growth Capital, a New York VC firm, and another undisclosed funding amount from True Capital Management, a San Francisco-based multi-family office, according to Crunchbase data. In January 2021, the startup was accepted into Y Combinator, the storied accelerator program that boasts successes like Stripe, Flutterwave, and Paystack. TAP is looking to scale to over 10 million customers and is planning to raise $4 million in a new Series A round of funding which it expects to close by 2024.” But TAP is not the first startup to attempt to solve payments in Nigeria’s transportation sector. Gona, a China-based startup, attempted to digitize fare payments for danfos. And in the past, some startups had huge success providing digital platforms for bike hailing. But these efforts never really scaled, in the case of bike hailing, were killed by city regulators. However, TAP has had a successful run, in no small part due to increased investment in transport infrastructure by the Lagos State government. Cowry Card was launched in 2020 when Governor Babajide Sanwoolu commissioned the Abule Egba-Oshodi BRT route. It has remained in partnership with the state government since then, although it claims it has never received an investment from the state. The BRTs transported 7.4 million passengers between the start of August and the end of September 2023 and transported an additional 17,543 commuters through the ferries, collecting ride fares of nearly N2 billion during this period, according to a statement from the Lagos state government. “One thing is clear: our electronic payment platform [Cowry] is assisting us to gather useful data which will allow us to plan transport services to the teeming people of Lagos State,” said Abimbola Akinajo, Managing Director of the Lagos Metropolitan Area Transport Authority (LAMATA), which runs the city’s mobility services. TAP is looking forward TAP is currently on the expansion path and is making inroads into Ghana. “Ghana is an essential market and a public transport market,” Afolabi says, pointing out that Ghana has a lot of structural similarities with Nigeria. He also believes customer behaviour is similar across both markets. “In Africa, we have a lot of mobile money penetration if you go to Kenya and other countries, [and] If we can succeed in Ghana with mobile money penetration, we will be able to repeat the same model in other countries with mobile money penetration.” While TAP’s website shows the company offers NFC services for health services, event management, and identity tools, Afolabi said
Read MoreWeb hosting startup WhoGoHost rebrands as GO54 as it pursues continental expansion
WhoGoHost, a Nigerian web hosting company, is rebranding as GO54 as the company seeks to expand across Africa. GO54 combines the idea of ‘GOing online,’ with the number 54, symbolising the company’s goal to expand its services across all 54 African countries, WhoGoHost said in a statement. As part of the rebranding, the company will now become a comprehensive digital solutions provider for small businesses. “The name signifies two key things; our evolution beyond domains and hosting. The new name also signifies ambition. We are not just a Nigerian business. We are now building for Africa,” Toluwani Adejuyigbe, the CEO of GO54, told TechCabal. Founded in 2007, GO54 provides domain solutions, hosting, marketing tools, and website builder products. The company says it serves over 130,000 customers in Nigeria, its primary market. Following the rebrand, GO54 will allow users to access an AI-powered website builder, email marketing, bulk SMS, link-in-bio products, and payment links. GO54 has big ambitions to become Africa’s largest digital infrastructure company as it goes on a partnership and acquisition spree. In September 2023, the company acquired SendChamp, a cloud communications startup that powers online messaging for African businesses for an undisclosed amount. That acquisition gave GO54 access to SendChamp’s customers and its customer support solutions. However, expanding across the continent comes with its fair share of challenges, such as low internet penetration in some markets and competition with international giants. But GO54 said it has a competitive strategy thanks to its local strategy. The company will offer local currency payments, localised customer support, and invest in tech talent development. “We are inspired by the opportunity to be driving market education and awareness of the benefits of digital adoption for individuals and their businesses,” Adejuyigbe said.
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BREAKING: Binance to discontinue all Naira services amid regulatory troubles
Binance, the world’s largest cryptocurrency exchange, is disabling all its Naira services from March 8 amid the company’s regulatory troubles in Nigeria, the company shared in a statement on its app. The company, which is at the center of a crypto crackdown in the West African country, will stop naira deposits after March 5, while withdrawals will end on March 8. “Any remaining NGN balances in users’ Binance accounts will be automatically converted to USDT,” the exchange said in a statement on Tuesday. Binance will also delist all existing NGN spot trading pairs on March 7. The naira will be removed from the list of supported payment options on Binance Pay, the exchange’s payment solution. Binance made the statement via its app The exchange’s decision comes amid Nigeria’s crackdown on the global crypto exchange. Last week, the office of the National Security Adviser (NSA) arrested two of the company’s executives after the pair flew into the country following a ban on the company’s website. Authorities have accused Binance of benefiting from “illegal transactions” and imposed a $10 billion fine on the company, according to a presidential aide. The cyrpto exchange has denied knowledge of the fine. Two weeks ago, Binance placed limits on peer-to-peer transactions trading the USDT/NGN pair. It was the second time in six months that the exchange placed restrictions on trading as the cryptocurrency exchange disabled the ‘sell’ feature and limited Nigerian users’ buy option to a price of ₦1802. The company’s struggles come after the Central Bank reversed its stance on crypto companies last year. At the time, the move was viewed as a positive posture towards digital currency assets but recent moves by regulators have called that outlook into question. *This is a developing story
Read MoreUS HR firm Deel acquires PaySpace, a 20-year-old SA payroll provider
Deel, the American HR company valued at $12 billion, is acquiring PaySpace, a 20-year-old Africa-based provider of payroll and HR software, for an undisclosed amount, per a TechCrunch report. This marks the third acquisition of an African company by a global company in the past year and a half. The financial details of the deal are undisclosed, but the acquisition is the largest Deel has made to date. This acquisition will further solidify the African presence of Deel, which has been providing services in all African countries except four—Congo Republic, Democratic Republic of Congo, Guinea-Bissau, Liberia, and the Central African Republic—through its native technology or that of other partner companies, including PaySpace. Prior to the acquisition, PaySpace, a Johannesburg-based startup, had been providing payroll services for Deel in 10 African countries. This acquisition grants Deel—which previously had just 5 payroll engines of its own—full ownership of the 45 payroll engines that PaySpace has built over the past 15 years, according to Deel CEO Alex Bouaziz. [ad] “Our internal team was dying to acquire them and have the ability to do on-the-spot calculations. Theirs is one of the best technologies we’ve ever seen … We had to do a lot of convincing,” Bouaziz told TechCrunch. Founded in 2007, PaySpace established itself as a cloud-based solution to address the inefficiencies of traditional payroll and HR software. The brainchild of Bruce, Clyde, and Warren Clark—brothers—alongside George Karageorgiades, the platform caters to over 14,000 customers across 44 countries across Europe, Latin America, the Middle East, and Africa. According to managing director Sandra Crous, PaySpace has been growing by over 30% annually. This acquisition allows Deel to strengthen its footprint in Africa. [ad] It also signals the interest of global firms in Africa. Other similar acquisitions include private equity firm Medius’s $100 million purchase of expense management firm Expensya, Stripe’s purchase of Nigerian fintech Paystack, and BioNTech’s £562 million acquisition of InstaDeep, an AI firm founded in Tunisia. Got a tip? You can contact the authors of this article at ngozi@bigcabal.com. TechCabal protects the confidentiality of its sources.
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Can embedded insurance in African lending help close the financial inclusion gap?
Image Source: The Future of Commerce Africa has long grappled with the challenge of financial exclusion, leaving millions marginalised from accessing basic banking and insurance products. 14 million households and individuals are pushed into poverty every year due to out-of-pocket health expenditures or catastrophic health expenses from a lack of health insurance, especially during emergencies. Africans also spend over a tenth of their earnings on healthcare payments every year. These occurrences, while not directly stemming from financial exclusion, deepen the financial divide and compound the challenge. Insurance, a safety net against risks and a tool to increase financial resiliency remain underutilised on the continent. In most African markets, insurance penetration is below the two per cent mark. Accessing insurance has been daunting for many Africans due to factors such as high premiums, complex policies, and limited accessibility, especially for the informal sector. From unpredictable market fluctuations and natural disasters to personal accidents and health emergencies, the absence of insurance leaves millions exposed to financial ruin at the slightest of setbacks. For those operating on razor-thin profit margins, the impact of such risks can be devastating, pushing families into poverty and stifling economic growth. In light of this, embedded insurance has emerged as the key to addressing this vulnerability by integrating insurance seamlessly into the financial transactions and activities of the informal market. Embedding insurance within lending products, savings schemes, and payment platforms tailored to the needs of the informal sector, enables individuals and businesses to gain access to a safety net that protects against a range of risks. Whether it be crop insurance for smallholder farmers, micro-health insurance for street vendors, or asset protection for artisans, embedded insurance offers tailored solutions that cater to the unique needs of the informal market. “Africa is not lacking in insurance, they are not just focused on the informal market,” said Ted Pantone, CEO of Turaco, at a recent edition of TechCabal Live in partnership with Turaco and One Acre Fund on Friday, February 23, 2024. Another significant contribution of embedded insurance is its ability to mitigate risks for both lenders and borrowers. In Africa, economic volatility is prevalent, lenders often face uncertainty in extending credit to underserved populations. Embedded insurance offers a solution by providing lenders, microfinance institutions, and asset-based financing companies with a safety net against default risks, thereby encouraging them to offer loans to individuals and businesses who were previously deemed too risky. This not only expands access to credit but also empowers entrepreneurs and small businesses to invest in their futures, fostering economic growth and stability. Moreover, embedded insurance enhances the resilience of borrowers by protecting them against unforeseen events that could derail their financial progress. Whether it be crop failure for farmers, illness for individuals, or accidents for entrepreneurs, these unexpected challenges can push vulnerable populations deeper into poverty. However, with embedded insurance, borrowers have a shield against such adversities, ensuring they can weather financial storms without falling into a cycle of debt or destitution. A point emphasised by Hephzibah Chepng’eno, Product Strategy Director, One Acre Fund. “Having affordable insurance is a path to building resilience, growing assets, and improving the financial ability of customers to repay loans.” Furthermore, embedded insurance fosters financial literacy and inclusion by simplifying the insurance process and promoting greater awareness among borrowers. By embedding insurance seamlessly into lending platforms, borrowers are exposed to insurance products and their benefits, demystifying the often-complex world of insurance. This not only encourages uptake but also equips individuals with the knowledge and tools to make informed financial decisions, empowering them to protect themselves and their families against risks. Borrowers no longer have to deal with the complex process of dealing directly with insurance companies. “Insurance languages are mostly complicated and complex for the layman to understand. People need to understand how insurance works easily,” said Pantone on the improvement of financial services accessibility as a result of embedded insurance. Prominent innovators have taken on the task of comprehending the financial challenges and creating resilience for the informal market as we see in the case of embedded insurance and lending solutions for farmers in East Africa. However, for embedded insurance in lending to flourish in Africa, there is a need for concerted efforts from various stakeholders to create an enabling regulatory environment that fosters innovation while safeguarding consumers’ interests. This article is part of the TechCabal Live series brought to you by TechCabal in partnership with Turaco and One Acre Fund. Turaco seeks to provide inclusive insurance solutions for emerging markets while One Acre Fund supplies smallholder farmers with everything they need to grow their way out of poverty.
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