Africa’s tech opportunity: Building trust as the catalyst for growth
This article was contributed to TechCabal By Kola Aina The African tech ecosystem is in the midst of transformation and a period of immense growth potential. While it presents unique challenges, the key to sustainable success lies in a powerful word – trust. Business is often said to move at the speed of trust, and in this landscape, trust is not just a desirable attribute but the cornerstone of long-term viability. It is the lifeblood of relationships between organisations and their stakeholders, defining a company’s ability to operate, lead, and thrive. With it, companies churn users less, and in an era “where everyone has a glass jaw,” can withstand crises better. Without it, credibility crumbles, and reputations falter. Conversely, trust provides the foundation for institutions to take informed risks, recover from setbacks, and build resilience over time. It underpins consumer confidence, attracts discerning investors, and determines whether nascent ventures thrive. In African economies that are sometimes froth with multiple taxation and inconsistent regulation, instead of waiting for the government to create an enabling environment that can accelerate trust in the economy, it’s incumbent on entrepreneurs to create little pockets of enabling environments within their firms and respective ecosystems to ignite trust and improve the relationships among their employees, investors, customers, and regulators. Consider this: a 2021 study by Klasha and TechCabal revealed a trust deficit between African businesses and consumers. Both parties harbor concerns about hidden charges, past negative experiences, online transaction security, return policies, product quality, delivery reliability, and inadequate consumer protection regulations. Among businesses, particularly SMEs, trust is often cultivated through relationships rather than transactions, highlighting the cultural importance of personal connections. These dynamics emphasize the critical need for African tech companies, especially as digital platforms, to prioritize trust-building as a core strategic imperative. Without trust, scale is limited. The financial services sector offers additional insights into trust as a dynamic. According to McKinsey’s 2021 report on the African financial services landscape, 67% of banked customers expressed greater trust in traditional banks than fintech companies. Although this gap has narrowed, key segments—including digitally savvy, middle-aged, and affluent consumers—remain wary. Common pain points include subpar user experiences, inadequate value-added services (such as advisory or estate-planning support), inefficiencies like slow complaint resolution, cumbersome applications, and limited financial tracking tools. These issues underscore the urgency for fintech and digital-first companies to embed trust-enhancing mechanisms into their platforms from inception. Paystack, a leading online payment provider, offers a compelling example of how trust can be cultivated and leveraged for growth. With its simple plug-and-play solution, Paystack enables merchants to start receiving payments within minutes of registration. Beyond this, it offers value-added services like invoicing, accounting integrations, and transaction dashboards, empowering SMEs to stay organised. Today, over 400,000 businesses rely on Paystack’s platform, a testament to the trust it has built through reliability, transparency, and customer-centric innovation. Another portfolio company, Piggyvest, is renowned for weathering various risks triggered by rumors and false narratives on social media. In these incidents, watching the platform’s millions of users defend a product they have grown to trust and love is always a joy! When you deliberately build trust, you inadvertently cultivate die-hard brand advocates and boost your net promoter score (NPS), a measure of customer loyalty and satisfaction that can be a powerful indicator of trust in your brand. A high NPS indicates that customers are satisfied with your product or service and trust your brand enough to recommend it to others, which is a strong testament to the trust you’ve built. This essay presents a practical framework for building trust in the African tech ecosystem. It equips founders with actionable insights to navigate the complexities of scaling in this unique environment. By prioritizing trust at every stage, from design to execution, founders can position their ventures for sustainable growth and long-term success. Beyond the hype: Building a foundation of trust Trust is earned by saying what we will do, sharing why, and delivering what we said we would – transparently. (Harvard Law School Forum on Corporate Governance). According to a 2024 PwC report, 41% of executives acknowledge that a lack of investor trust puts the cost of capital at risk, while 38% highlight its impact on access to capital and market value. This underscores a crucial reality: building trust isn’t just about satisfying customers – it’s the cornerstone of broader successes, influencing everything from financial stability to long-term growth. African founders can cultivate trust through four critical pillars: strong governance, robust financial processes, strategic branding, and exceptional sales and customer success. Establishing strong governance: The role of a solid board Governance forms the foundation of a trusted organisation. Strong governance provides the framework for accountability, strategic direction, and oversight, which are critical in inspiring confidence among stakeholders, especially in Africa’s complex regulatory environment. A robust governance structure is paramount. This goes beyond compliance; it’s about establishing a culture of transparency, accountability, and ethical conduct. A competent and independent board of directors, with diverse expertise and a commitment to long-term value creation will hold the executives accountable while helping to set the foundation for a trusted organisation that adheres to best practices. Having a board with reputable personalities also helps score extra points as they can add the benefit of their credibility to boost the company’s trust perception. Strengthening the finance function: Building financial discipline Financial management is the backbone of any trusted enterprise. It goes beyond merely keeping the books balanced; it instills confidence through transparency, forthrightness, and resilience. A company with a strong finance function can navigate uncertainty, attract investment, and reassure customers and partners of its stability. The 2023 Wimbart Investors Report highlighted that financial reporting is the top KPI for investors when engaging with founders. This emphasis stems from concerns about financial stability, sustainability, and the growing need for transparency, accountability, and robust performance monitoring to manage risks effectively. Without such reporting, decision-making would lack critical insights, increasing the likelihood of missteps and making business success nearly unattainable. A sound treasury management
Read MoreNigeria’s inflation slows in January after CPI rebasing
Nigeria’s inflation rate decelerated in January 2025 after the National Bureau of Statistics (NBS) implemented a rebased Consumer Price Index (CPI) that altered the weighting of key components in the inflation basket. Headline inflation eased to 24.8% in January, down from 34.8% in December 2024, reflecting the impact of the NBS’s new methodology, which reduced food’s weight in the inflation calculation from 51.8% to 40.1%. This adjustment softened the effect of rising food prices, even as underlying pressures remained. Before the rebasing, analysts had projected Nigeria’s inflation to remain elevated in early 2025, with expectations of a gradual decline later in the year. However, the revised CPI structure has introduced new variables that may reshape inflation dynamics. While food prices continued to climb due to supply chain disruptions and naira depreciation, the reduced weighting muted their impact on the overall inflation figure. Food inflation stood at 24.08% down from 39.84% recorded in December 2024. The rebasing also shifted the contribution of other expenditure categories, potentially smoothing out some of the inflationary spikes seen in previous months. However, structural inflation risks persist, particularly in energy and transport costs. Higher diesel prices and potential adjustments to electricity tariffs remain key concerns for businesses and households alike. Despite the lower headline inflation, analysts warn that the decline may not fully reflect price pressures on consumers, particularly for essential goods. With the rebased CPI now in effect, future inflation readings will offer a clearer picture of how Nigeria’s inflationary landscape is evolving. The Monetary Policy Committee (MPC) is expected to take a measured approach in response to the new inflation numbers. While a slowdown in inflation could provide some relief, uncertainties around food inflation and currency volatility may still keep policymakers on guard.
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The cost of going off-grid in Nigeria: From ₦400,000 to ₦20 million in 2025
Decades ago, satellite dishes and television antennas dotted rooftops across Nigeria. Today, rows of solar panels are becoming the new sight as Nigerians turn to alternative energy solutions as electricity tariffs increase. In 2024, the Nigerian Electricity Regulatory Commission(NERC) raised electricity tariffs for urban customers by 240%. Band A customers (neighbourhoods guaranteed 20 hours of electricity daily)—now pay ₦209/kilowatt-hour. For a three-person household on band A with basic appliances like air conditioners, refrigerators, and televisions, monthly electricity costs can reach ₦45,000 monthly, more than half of Nigeria’s new minimum wage of ₦70,000. In addition to the hike in electricity prices, fuel prices also quadrupled, putting further strain on households. In Akiode, a community in Lagos, residents want to be expressed downgraded from Band A over cost concerns. “Before Band A, five of us shared one meter, and we contributed around ₦10,000 or ₦15,000, and it lasted the whole month,” one resident said. “Now, we’re recharging daily or weekly. Sometimes, we spend ₦10,000 in one week. That’s money we used to spend on food. We can’t afford three meals a day anymore.” Solar power as an alternative With reliable grid electricity costing more than before and prices expected to rise even further as the federal government cuts electricity subsidies, solar is a sustainable alternative. There’s just one problem: the upfront costs. Solar systems can range from ₦400,000 for a basic setup to ₦20 million for a fully off-grid solution. The wide price gap represents the different power needs of households and the level of independence from the grid one seeks. For those just starting their solar journey, an entry-level system costing ₦400,000 offers a modest introduction to solar power. This mini power station includes an inverter and a 500wh(watthour) mini lithium-ion-phosphate battery but no solar panels. It’s designed to support up to 500 watts to power basic appliances like a fan, TV, laptop, and mobile phone. However, this system is unsuitable for long power outages, as the backup lasts only 3 to 5 hours. This setup is ideal for short power interruptions but falls short for extended periods without grid power. Mid-range solar systems: ₦1 million to ₦5 million At a price point of ₦1 million, a 1kVA solar system offers more reliability. It includes a 1kWh inverter and a 2.4kWh Lithium ion phosphate battery, and a 450-watt monocrystalline solar panel. This system can power up to eight lighting points, two fans, a TV, a laptop, and several mobile devices. With a backup time of 6 to 8 hours, it is more suitable for more prolonged outages, though there is still a limit to the number of devices that can run simultaneously. A lithium-ion-phosphate battery delivers three times the power of a lead-acid battery, even at high discharge rates, while maintaining a high energy capacity. Dry-power lithium batteries also have a higher energy density, with a weight-to-energy ratio (Wh/kg) of up to one-third that of lead-acid batteries. Lithium iron phosphate batteries are preferred to lead-acid batteries due to their performance and efficiency. They offer higher energy density, meaning they offer more power while being more lighter and compact. They also charge faster and operate at higher efficiency and also minimizing energy consumption. Unlike lead-acid batteries, lithium-iron-phosphate batteries require little to no maintenance and can handle deeper discharges without significant degradation. For ₦5 million, a 5kVA hybrid solar system provides an even more robust solution. This system has a 5kW hybrid inverter, a 5kWh lithium-iron phosphate battery, and 4.5kWh mono half-cut solar panels. It can support a variety of appliances, including 15 lighting points, two fans, two TVs, a washing machine, an inverter air conditioner, and a fridge. While all appliances cannot run simultaneously, careful scheduling allows for flexible use, providing backup power for 8 to 12 hours after sundown. In 2024, social media strategist Agboola Sodiq spent ₦4 million on a 2.5kVA inverter system with six 400Watt solar panels. The system uses a pylon tech 5.12kWh lithium battery and powers two televisions, two deep freezers, 15 lighting points, 5-10 laptops, four standing fans, and a washing machine. Before his solar setup, Sodiq spent up to ₦300,000 per month on fuel and electricity bills. Since switching to solar, he spends only ₦30,000 to ₦50,000 on fuel every six months. “I haven’t used my generator since the solar setup. Now, I spend ₦40,000 on electricity bills annually. I’ve saved ₦1,720,000 in just six months.” High-end solar systems: ₦10 million to ₦20 million For those with higher power demands, a 10KVA hybrid solar system that costs between ₦10 million and N20 million offers the potential for full-day electricity. This system includes a 10kWh hybrid inverter, a 10KWh lithium LiFePO4 battery, and 9kWh solar panels, enough to power 25 lighting points, four fans, two TVs, a microwave, and other household appliances. It offers a 12 to 15-hour backup, ensuring power is available throughout the day, even for larger households. At the high end of the scale, a ₦20 million investment offers a 15KVA hybrid solar system. This system features a 12kW hybrid inverter, 33kWh lithium ion phosphate batteries, and 11kWp solar panels, making it suitable for residential and commercial setups. It can power a wide array of devices simultaneously, including three inverter air conditioners and three fridge/freezers, and provides backup power of 15 hours after sundown, allowing for off-grid living with careful energy load management. The accessibility barrier While the global cost of solar equipment has steadily decreased, particularly with a 20% drop in lithium battery prices from 2023 to 2024, Nigeria’s exchange rate fluctuations can dampen these price reductions. As Rotimi Thomas, CEO of Sunfi, explains, “Despite the global decrease in solar prices, fluctuations in the naira exchange rate sometimes offset these benefits. However, the growing variety of solar equipment in Nigeria is helping to offer more price options.” Flexible financing options, such as microloans, pay-as-you-go systems, and partnerships with solar companies, are increasingly being offered to help Nigerians overcome the financial hurdle. Furthermore, government incentives and subsidies for renewable energy adoption are
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👨🏿🚀TechCabal Daily – More Monie, more returns
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning We’re still open to applications for features. We’re seeking deeply reported features on innovative startups, the business of tech, policymaking around innovation, and the intersection of culture and technology all across Africa. Send a pitch to kay@bigcabal.com. For more on what to include in your pitch, please check out our pitch guide. How Oui Capital made 53x return from Moniepoint investment Kenyan banks expect defaults on personal loans in Q1 2025 Investor confidence drives Nigerian banking rally Airtel Nigeria raises voice and data tariffs by 50% World Wide Web 3 Opportunities Venture Capital What kind of exit should make a headline? Oui Capital’s 53x win on Moniepoint L–R: Olu Oyinsan and Francesco Andreoli, investors at Oui Capital/Image source: Oui Capital What kind of exit should make a headline? 50x, 100x or 2,000x? Don’t rack your brain too much because my editor swears you should never ask the reader too many questions. Since we’re breaking all my editor’s rules, I’ll hit you with numbers. Consider this: Naspers made a $32 million investment in Tencent in 2001 that returned something like $100 billion. If your math is wonky, that’s a 3,200x return. Facebook’s earliest backers (hello, Peter Thiel) made about 2,000x on their investments. Now, go ahead and relive that moment you almost bought Bitcoin at $20,000 but didn’t. We’ll wait. While those numbers make Silicon Valley look like a sure thing, some of Africa’s exits have happened—albeit with more secrecy. Enter Oui Capital. This early-stage African VC made a modest $150,000 bet on Moniepoint (initially called TeamApt)—a fintech startup that, at the time, was just another hopeful in a crowded market. As managing partner Olu Oyinsan recalled of founder Tosin Eniolorunda, “His understanding of banking technology stack and payment infrastructure was impressive. I knew he was up to something exciting.” Convinced that Moniepoint’s $12 million post-money valuation was a bargain, Oui Capital bet on the team’s engineering prowess to solve high transaction failure rates. Again, think of when your favourite coin was at $2,000—you blinked and missed the ride. Fast-forward a few years: Moniepoint reaches unicorn status with a valuation north of $1 billion and raises a cool $110 million in its Series C round. Oui Capital sold some shares in a secondary transaction, turning their initial seed into roughly $8 million—a jaw-dropping 53x return that returned their debut fund 2x and left investors blushing. Secondary transactions, by the way, occur when existing shareholders sell their shares to another investor, rather than the company issuing new ones. This isn’t just about avoiding failure; it’s a compelling argument for supporting VCs who genuinely understand the African market. While Silicon Valley investors pop champagne over exits that break the internet, African players like Oui Capital show that success doesn’t need flashy headlines but conviction and local insight. Their story proves that sometimes the right investments, made with an in-depth understanding of local dynamics, can yield outsized returns. So next time you’re crunching exit multiples and wondering what kind of exit should make a headline, remember: the biggest wins might just come from “small bets” in Africa. Now, drink some water, get back to work, and let this story remind you that game-changing exits are possible when you invest with local expertise. If you’ve made 53x, please skip this story. If you haven’t, fix up, stat: You can read our in-depth article here. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Banking Kenyan banks expect defaults on personal loans in Q1 2025 Image source: Google The long-winded talk around lending rates in Kenya do not appear to have an end in sight. Kenyan commercial banks say they expect to see higher loan defaults in Q1 2025 due to the reduced disposable income of Kenyans. This will push banks to tighten credit guidelines for borrowers in the real estate, personal, and household sectors, as they fear a repeat of 2024’s surge in non-performing loans. Kenya’s inflation has been accelerating over the past three months, surging by over 50 basis points (bps) from 2.75% to 3.28% since November 2024, adding to the financial strain on households. Despite this acceleration, the CBK has cut benchmark interest rates four consecutive times since August 2024, as the rate remains within its target range. The apex bank has also urged commercial banks to lower their lending rates as it tries to stimulate economic activity and ease the burden on borrowers. In December 2024, no commercial bank—except for Access Bank Kenya, which maintained a rate lower than its peers—had reduced lending rates. However, a few banks began complying after the Kenya Bankers Association (KBA), which represents 46 banks, agreed to lower rates. To hasten banks up, the CBK threatened to impose daily fines for non-compliance. In January, more Kenyan commercial banks started lowering lending rates, signalling a gradual alignment with the CBK’s goals. Tightening credit guidelines around borrowing will reduce the risk of incurring bad loans. With this, banks can filter the wheat from the chaff in their credit risk evaluations. Historically, banks have leaned on Credit Reference Bureau (CRB) reports, risk-based pricing, and sector-specific exposure limits to manage lending risks. However, opportunities still exist for borrowers with solid financial histories or innovative business models to negotiate better terms or access alternative financing. This creates a more balanced lending environment where banks’ financial books don’t suffer, and borrowers with high credit ratings gain a pathway to grow businesses in asset-financing sectors that rely on Kenyans being creditworthy. You can now Pay with Opay on Paystack Checkout Paystack merchants in Nigeria can now accept payments from over tens of millions of OPay users through Paystack Checkout. Find out more here→ Banking Investor confidence drives Nigerian banking rally Image source: Tenor Nigerian banking stocks are on fire. Since
Read MoreNCBA Loop is reinventing neobanking by pioneering Kenya’s embedded finance revolution
Kenya’s digital banking landscape is shifting, and NCBA Loop is leading this transformation. Launched as a digital bank in 2017, Loop has pivoted to a broader financial infrastructure model, embedding credit and payments directly into transactions. This evolution aligns with a global shift toward embedded finance, where banking services integrate into everyday commercial activities rather than as separate processes. Loop’s new model enables users to take loans and buy items in the same transaction—removing the traditional separation between lending and payments. Instead of applying for a loan before making a payment, credit becomes an automatic part of the transaction, mirroring the success of Safaricom’s M-PESA overdraft facility, Fuliza, and the growing Buy Now, Pay Later (BNPL) trend in Kenya. “We are both developing our solutions and observing trends here at home and in other parts of the world that we consider relevant,” said Eric Muriuki, CEO of Loop, in an interview with TechCabal. Loop, one of Kenya’s earliest digital banks, helped popularise neobanking in the country. However, the market has grown, with well-funded competitors like Ecobank-backed Fingo, Branch MFB, Umba, and Payless. In response to these competitive pressures, Loop is expanding beyond digital banking into a payments and credit infrastructure model. “Payments and credit will not be two different businesses, particularly short-term credit, because short-term credit is typically used to pay for something,” Muriuki explained. “You see a bit more embedding of credit into payment journeys.” Businesses also benefit from embedded finance, particularly in trade and commerce. “If you want to pay a supplier in China for imported goods, that payment transaction can have a credit structure embedded into it,” Muriuki added. Loop’s shift toward embedded finance mirrors a trend across industries where payments, credit, and insurance integrate into wider commercial transactions. APIs and improved internet access are enabling the creation of sector-specific financial solutions in agriculture, healthcare, and education. “You’ll see more language like financial infrastructure,” Muriuki said. “I could be an agri-tech company integrating technology into agriculture, but I then use financial infrastructure as a service, plugged into my agri-tech solution. That technology helps me register farmers, issue fertiliser, and distribute seeds—but the payments and credit linked to those transactions are services I consume from a financial infrastructure provider.” The future of neobanking in Kenya Muriuki predicts that while the distinction between neobanks and traditional banks will persist, the boundary will become thinner. Digital platforms will continue gaining market share in consumer banking, especially among a new generation of digitally native customers. Unlike older customers who transitioned from traditional banking to digital services, these users begin their financial journey in the digital space. They interact with multiple financial service providers through apps rather than maintaining a relationship with a single bank. For corporate clients, embedded finance will reshape value chains. Businesses will still maintain relationships with traditional banks, but their financial operations will be deeply integrated with digital platforms. However, regulatory constraints—particularly around deposit protection—will ensure that banks remain a central part of the financial system, even as fintech-driven solutions distribute capital more efficiently. “Of course, corporates will remain corporates—that won’t change much,” Muriuki said. “But as ecosystem solutions gain prominence, you’ll see that porous boundary I was talking about, where corporates remain in banking, but their value chain is firmly established on the digital platform side. That line will never fully disappear because regulation will keep it in place.” Loop’s transformation highlights the broader direction of Kenya’s financial sector. As embedded finance gains traction, the role of banks is shifting—from standalone service providers to integrated financial infrastructure powering digital commerce.
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How Oui Capital made a 53x return on an early $150,000 investment in Moniepoint
Three years before Oui Capital, an early-stage African venture capital firm, invested $150,000 for a 1.2% stake in Moniepoint, managing partner Olu Oyinsan met Tosin Eniolorunda, Moniepoint’s CEO, and immediately knew there was something different about him. “His understanding of banking technology stack and payment infrastructure was impressive. I knew he was up to something exciting,” Oyinsan recalled. Convinced that Moniepoint’s $12 million post-money valuation was a bargain given its traction and financial discipline, Oui Capital joined investors like Global Ventures, Soma Capital, and Kepple Africa in Moniepoint’s 2021 undisclosed Series B round. “We thought the team was incredibly strong in terms of engineering,” Oyinsan said. “We bet that superior engineering would solve the major problem at the time, which was high transaction failure rates and we were correct.” A month before that round, Eniolorunda told TechCabal that Moniepoint was on its way to becoming a unicorn. Three years later, when it finally became a unicorn, Oui Capital partially exited its $150,000 investment, making $8 million—enough to return twice its first fund to investors. There might not have been a more opportune moment for Oui Capital to return the fund— a rare feat for VC firms—as it might raise its third fund this year. The fund currently backs 22 startups and invests up to $500,000 in African early-stage startups. TechCabal spoke to Oyinsan to understand how the firm met Moniepoint’s founders, made the investment, and built its first fund. This interview has been edited for length and clarity. You invested at a $12.5 million valuation. How did you negotiate your entry terms, and what key elements of the deal worked in your favour? The deal was undervalued. This was during the 2019–2020 boom when valuations were high. At the time, $12.5 million was a reasonable valuation given Moniepoint’s traction and growth rate. The company was already doing between $700k and $1 million in revenue and valuation multiples were at an all-time high here. The two things that worked in our favour were that the company was relatively new to VC funding and we would have been able to set it on the path to multiple funding rounds. Also, the founders were very pragmatic and valued getting quality investors over valuation numbers. You believed in Moniepoint from the first day. What gave you that conviction? They had something no one else had, and they understood how to build for businesses. The team had matured through their earlier work, so this wasn’t day one of their journey—it was just a new direction. Their DNA also matched ours. Back then, success often meant coming from an Ivy League school or being a YC-backed founder. TeamApt was among the first companies to reach this stage without YC, proving my thesis that great founders exist outside the conventional circles. At that time, the major fintechs raising big rounds were YC-backed—Paystack, Flutterwave, Kuda, and PiggyVest. Many investors followed that pattern: if you weren’t YC, you didn’t get a high valuation. But we moved on conviction. We saw the opportunity, and we went all in. I went beyond just investing—I did advisory work, helped create the first investment memo, and set up the data room alongside a Deloitte consultant I hired. The goal was to establish a funding trajectory: seed, Series A, B, and so on. Companies that skip stages often struggle. Even if you have Series B-level metrics, investors hesitate to write a big check if you’ve never raised capital before. That’s because investors play a role in passing companies along to the next funding stage. At what point did you know that Moniepoint would be a fund-returning investment? Was there a specific point that changed everything? We had strong conviction in this company from day one, we accurately predicted how big this could get. We had written in our initial investment memo that we believed that COVID-19 would change the game for Moniepoint. The company grew about 1000% during COVID followed by the cashless policies of the CBN that helped them grow about 100% every year. We knew we were on to something at this point. It was a matter of time. You sold some shares in the $110 million Series C round. Why then? Why not hold for longer? And how did you decide how much to sell? It was a concept of crystalising our gains while still leaving enough ownership to demonstrate our continued belief in the growth of the company to maximise future upside. We sold enough to return the entire fund and satisfy limited partners (LPs) while keeping the rest to enjoy the ride and the rest of the Moniepoint story. Was there any pressure from LPs to cash out? There was some pressure from LPs especially the Nigeria-based ones who are unfamiliar with venture capital as an asset class. For many of them, Oui Capital was their first investment in a VC fund. Most Nigerians gravitate towards shorter-term investments because of how rapidly government policy and economic indices sometimes change. Some of the global investors did not mind a longer holding period. But it’s our job as fund managers to find a good balance in the interest of our LPs and I think we did just that. Returning a first fund is incredibly rare. If you had to distill your success into three core investment principles, what would they be? Good portfolio construction. You can invest in a unicorn and still not return your fund. The key factors are: how much you invest, when you invest, the valuation at entry, and your ownership stake. When writing a check, you should already have a rough idea of how it will play out. In our investment memo, we projected that the company would reach a billion-dollar valuation, and the expected return was mapped out. That’s portfolio construction: ensuring that if things go well, the outcome justifies the risk. In venture capital, you decide whether to take riskier bets early or enter later with a higher amount. If you come in at Series
Read MoreAirtel Nigeria joins MTN to raise voice and internet plans by 50%
Airtel Nigeria, the country’s second-largest telecom operator, has raised the prices of its internet and voice plans by 50% one week after a similar hike by MTN Nigeria. With the new pricing, Airtel’s cheapest monthly data plan is now 2GB for ₦1,500, replacing the previous 1.2GB plan that cost ₦1,000. Other changes include 3GB for ₦2,000 (up from 1.5GB at ₦1,200), 4GB for ₦2,500 (previously 3GB at ₦1,500), and 8GB for ₦3,000 (up from 4.5GB at ₦2,000). Bigger plans have also been adjusted, with 10GB now costing ₦4,000 (previously 6GB at ₦2,500), 13GB for ₦5,000 (up from 10GB at ₦3,000), 18GB for ₦6,000 (previously 15GB at ₦4,000), and 25GB for ₦8,000 (replacing the former 18GB plan at ₦5,000). The adjustment continues a broader trend of telcos reviewing prices after the Nigerian Communications Commission (NCC) approved a 50% tariff increase on January 20, 2025. MTN Nigeria, which was the first r to implement the increase, got public backlash after the telco adjusted three of its data plans by more than 50%. While MTN Nigeria said its hike did not exceed the NCC-approved target and was merely removing subsidies from its special plans, the company later issued a letter of apology to its subscribers. Airtel Nigeria implemented a 25 kobo flat rate per second of calls, according to a company representative who spoke to TechCabal. One-minute call on the network cost around ₦15 an increase from ₦11. The tariff increase was not reflected in many of the daily and weekly plans. Subscribers can still buy the one-week 5GB plan for ₦1,500The Airtel Unlimited plans like ₦20,000 for 200GB in 30 days plus 10GB daily upon exhausting main data, and ₦30,000 for 300GB in 30 days are still available.
Read MoreNigerian banking stocks surge 12.24% as lenders raise over $662 million in new capital
Nigerian banking stocks have surged since January 7 after several major lenders raised over ₦1 trillion ($662 million) from the stock market to meet new capital requirements. The NGX Banking Index, which tracks banking stocks, was up 12.24% at market close on Friday, February 14, according to data compiled by TechCabal. GTCO’s share price closed at ₦63.45 on Friday (up 12.90% since January 7) while Zenith Bank shares closed at ₦51.60 (up 4.03% since it announced its raise). The rally in banking stocks comes amid a broader wave of renewed investor confidence in Nigeria’s economy. While global markets remain volatile, Nigeria has quietly attracted foreign investment, bolstered by currency reforms and other measures aimed at stabilizing Africa’s largest economy. The country is seeing increased inflows after painful but necessary reforms to restore stability. According to Bloomberg, Nigeria’s sovereign risk spread has fallen to its lowest level since January 2020, erasing the premium accumulated during the pandemic and economic strain that followed. Banking sector capitalization and market response In March 2024, the Central Bank of Nigeria (CBN) raised the minimum capital threshold for banks tenfold, excluding retained earnings from qualifying capital. This prompted major lenders to tap the stock market for additional funding to meet the new requirement before the 2026 deadline. Since the announcement, GTCO, a banking group with a market capitalization of ₦1.85 trillion, has raised ₦209 billion in the first phase of its recapitalization plan. On January 27, Zenith Bank followed suit, securing ₦350.4 billion through a rights issue and public offer. While these two banks alone have raised over ₦559.4 billion, other financial institutions have also secured funding, pushing the total above ₦1 trillion. Two market analysts suggest that the rally in banking stocks is also fueled by expectations of improved profitability and stability in the sector. With additional capital, banks are better positioned to expand lending and improve their balance sheets. “The banking stocks will likely continue to remain stable,” said Azeez Lawal, managing director of TrustBanc Asset Management Limited. “But we will not see growth in banking stocks not until they release their audited financial statements and announce dividend payments.” Despite the positive momentum, industry experts caution that sustaining the rally will depend on macroeconomic stability and regulatory clarity. January often sees increased stock market activity, suggesting that the observed growth may not entirely reflect underlying market fundamentals.
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👨🏿🚀TechCabal Daily – Race to the bottom
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning We’re still open to applications for features. We’re seeking deeply reported features on innovative startups, the business of tech, policymaking around innovation, and the intersection of culture and technology all across Africa. Send a pitch to kay@bigcabal.com. For more on what to include in your pitch, please check out our pitch guide. Analysts reluctant to predict January Inflation Kenyan commercial banks race to lower lending rate as Central Bank threatens fines Airtel Money’s play to win Kenya’s fintech and telecoms market World Wide Web 3 Events Economy Analysts reluctant to predict January Inflation Image source: TechCabal Analysts are holding off on forecasting Nigeria’s January 2025 inflation rate due to the National Bureau of Statistics’ (NBS) recent rebasing of the Consumer Price Index (CPI). The rebasing, which sets 2024 as the new base year, adds new items to the composition of the inflation basket to reflect the consumption pattern of citizens. The NBS planned to release the rebased inflation report for December 2024 at the end of January 2025, but failed to do so. Without a clear base from the revised index, analysts say making accurate predictions is impossible. Despite raising interest rates six consecutive times in 2024, inflation surged to 34.8% in December. The rebased CPI index may result in lower inflation because the weighting of food, which accounts for the majority of household spending and contributes more than half of the CPI basket, has been cut to 40.1% from 51.8%. Before the rebasing, analysts expected inflation to remain elevated through mid-2025 before easing, potentially closing the year at 28%. This forecast was based on anticipated exchange rate stability (₦1,550–₦1,650/$), base effects, and a waning impact from fuel subsidy removal. However, the rebased index could upend these projections. The rebased CPI index could temper inflation readings, but without clarity on its full impact, analysts remain cautious. In the meantime, expectations lean toward a hold stance from the Monetary Policy Committee (MPC), regardless of inflation’s movement. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Banking Kenyan commercial banks to lower lending rate as Central Bank threatens fines Image source: Google On February 14, the Central Bank of Kenya (CBK) gave us a masterclass on power play. After months of resisting the CBK’s four consecutive cuts to the benchmark interest rate, commercial banks are now hastily adjusting their lending rates following the apex bank’s threat of imposing daily fines for non-compliance. The CBK’s intensified pressure has left Kenyan banks scrambling to lower their rates, marking a significant shift in their stance. Despite the central bank’s repeated efforts to ease borrowing costs, many banks had delayed passing on these benefits to customers, resulting in a widening gap between the CBK rate (10.75%) and actual lending rates. Now, faced with the prospect of hefty penalties, banks are finally falling in line. The CBK is enforcing stricter measures. Banks that fail to adjust could face fines of KES 20 million ($154,619) or three times the monetary gain from higher rates. Additionally, bank officials risk personal fines of up to KES 1 million ($7,730). Leading lenders—including KCB, Equity, Cooperative Bank, I&M, and DTB—have responded by slashing rates by one to four percentage points. Equity Bank, in particular, has made three reductions in six months, positioning itself as the most responsive to CBK’s directives. Loans could become more affordable for borrowers. However, with the average lending rate still at 17.22%—an eight-year high—access to credit remains a challenge. The high rate of non-performing loans (NPLs) could leave banks wary of borrowers, leading to more scrutiny during borrowing processes. While the intense due diligence could solve the problem of bad loans, it will also likely reduce borrowing activity, taking the goal of stimulating economic participation further away from the apex bank. Yet, it is a good thing. The rate of compliance—although forced—signals that banks are willing to set aside differing opinions, and work with the regulator to achieve a common goal. You can now Pay with Opay on Paystack Checkout Paystack merchants in Nigeria can now accept payments from over tens of millions of OPay users through Paystack Checkout. Find out more here→ Fintech Airtel Money is making a play to win the Kenyan fintech and telecoms market Image Source: Airtel Money Airtel Money is making an aggressive play for Kenya’s mobile money market by refunding 100% of bank transfer fees as airtime. Unlike past promotions, this airtime won’t expire, making it a strong incentive for users to move money through Airtel instead of its dominant rival, Safaricom’s M-Pesa. This isn’t Airtel’s first attempt at using refunds to lure customers. In 2023, its “Rudishiwa Transaction Fee” programme, which refunded withdrawal charges as airtime, helped push its market share from 6.6% to 7.6%. Now, by extending the model to bank transfers, Airtel is hoping to build on that momentum. But will this strategy work? Mobile money dominance isn’t just about pricing—it’s about habit and accessibility. While Safaricom’s M-Pesa remains the default for most Kenyans, Airtel has been expanding its agent network and bundling financial incentives with mobile services, such as its new “Smarta Bundles.” The question is whether customers see enough value in switching or if M-Pesa’s extensive reach and convenience still outweigh Airtel’s price incentives. The real test will be Safaricom’s response. If M-Pesa holds firm, Airtel could gain ground among cost-conscious users. But if Safaricom counters with its own pricing adjustments, Airtel’s competitive edge could be short-lived. Either way, the battle for Kenya’s mobile money market is heating up, and customers stand to benefit. Expand with Cedar Money Expand your business globally with Cedar Money! Our cross-border stablecoin solutions offer fast, secure, and reliable transactions, simplifying payments and fueling growth. Unlock seamless global trade today. Visit www.cedar.money to get started! CRYPTO TRACKER The
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Carbin Africa takes on the ‘messy middle’ in Lagos’ car market
Despite soaring inflation and a crumbling local currency, car dealer Precious Okoedion says no week goes by without a car sale at any one of his three dealerships across Lagos State, Nigeria. Okoedion says many of these sales—over 30 since 2023—have been facilitated through the auto tech platform, Carbin Africa. Launched in 2023 by two ex-Cars45 employees, Femi Oriowo and Fawaz Abdul, Carbin Africa is digitising car inventory and sales processes for car merchants and dealerships in Lagos, Nigeria’s biggest car market. Before joining Carbin Africa, Okoedion says he was just a “street trader working with Cars45,” where he first met and established a relationship with the Carbin Africa co-founders. Since joining the platform, a wide variety of merchants, dealers and their inventory have since opened up to him. “A client will walk in here and say, okay, he wants [a Lexus] RS350, I don’t have it. I can quickly log into Carbin Africa and get what I want,” says Okoedion, in the Yaba outlet of his business, Okopi Auto Limited. Beginnings Oriowo’s path to founding Carbin Africa began when he was an OLX merchant serving as a middleman between Computer Village vendors and end buyers. He recalls passing by several car dealerships to and from the popular computer hardware market on the Lagos mainland, and thinking that selling cars on an online marketplace was not too far-fetched. Once, buoyed by youthful courage, he entered into one of the dealerships and asked the owner if he could list the inventory on OLX and earn a commission. “I was really confident in those days,” Oriowo says in his office in the heart of Yaba, Lagos’ famed tech cluster. The dealer agreed to the arrangement, providing him with photos and specifications of the inventory. Within a week, he’d sold his first car, he said. In a complete move towards car sales, Oriowo joined Cars45 after it launched in 2016 and built a merchant network with classmates from the University of Lagos where he was studying to become a geophysicist. He says they spread out at Cars45’s five retail centres across Lagos and he set up a corporate bank to process their sales centrally. Then they “started to sell cars aggressively,” he says, at least 25 per month. Eventually, because of the traction they had, Oriowo says he secured a 30-car monthly consignment deal from Cars45 management at the time. The deal was contracted on condition that he could find a physical lot for the consignment. Fawaz Abdul and Femi Oriowo launched Carbin Africa after participating in 54Collective’s Gen F Venture Studio program Together with his crew, the dealership initially operated from Abdul’s grandmother’s backyard before Cars45 offered to co-fund a proper car showroom. But before business could fully kick off there, COVID-19 lockdowns happened, followed closely by management changes at Cars45, summarily ending the agreement. Oriowo says they adapted by reducing inventory with the capital they had and partnering with dealers to sell their inventory for commissions—₦50,000 per car. “They (dealers) really loved it because they only had to worry about buying the cars; they did not have to worry about selling,” Oriowo says. It was this collaboration with dealers combined with previous experience working as merchants on Cars45 that revealed challenges and market gaps which ultimately led to Carbin’s founding, Oriowo says. Unique selling point Carbin Africa is one of several online platforms that have launched since 2010 to ease the buying and selling of cars in Nigeria. To buy a car in Nigeria prior to 2010, you needed to visit any of several small and medium sized dealerships, or find listings in a newspaper, or attend a car auction, or know someone who had a car they were looking to sell. Marketplaces like Cheki—whose Ugandan and Kenyan operation Cars45 acquired in 2021, OLX, and Jiji facilitated the move online connecting anyone who wanted to buy or sell a car. Later startups like Cars45—which launched in 2016 and was acquired by Jiji in 2021—introduced, as its standout feature, verification and inspection services which were sorely needed in a low-trust market prone to fraud. In Lagos, the car market relies heavily on middlemen, according to Richard Odoboh, one such middleman who has been using Carbin Africa since it launched. These middlemen, or auto merchants as Carbin refers to them, know where you can find a good Nigerian-used Toyota Camry or who deals in good UK-used vehicles—used vehicles, valued at an estimated $1.24 billion, comprise about 90% of the car market in Nigeria. In the best case scenario, they know how to verify the authenticity of car vehicles or where to avoid buying a car. In 2018, five West African countries made up the top 10 importers of used light duty vehicles from Europe in 2018. Source: Compiled by UNEP based on data from the European Commission- Eurostat Comext Database, 2019 Their operations though, like your neighborhood tuck shops, are highly fragmented. It is unclear, for instance, how many of such middlemen there are exactly in Lagos. Oriowo says there’s likely around 10,000 across the country with a large percentage stationed most of the time in Lagos. These middlemen or auto merchants are Carbin Africa’s prime target customers. Oriowo argues that while end users might make a purchase, on average, once every few years, a middleman might sell two or three cars per month. By bringing together car dealers—which Carbin Africa defines as established brick and mortar dealership with at least five cars in their inventory and a dedicated staff to interface with the startup—Carbin Africa makes available to the them a large variety of cars to trade in. “I get cars from Carbin and then clients from Jiji,” Odoboh says, adding that he’s sold about 15-20 since joining the platform in 2023. He says he’s made as little as ₦50,000 and as high as ₦1 million in individual commissions. The platform is also solving for what Oriowo says remains a challenge for middlemen or auto merchants who use existing marketplaces: obsolete listings
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