Twiga’s pivot to asset-light model begins with acquisition of Kenyan distributors
Twiga Foods, a Kenyan B2B e-commerce startup, is shifting its strategy and pivoting after years of pursuing direct operations, including managing farms, delivery fleets, and supply chains. In April, Twiga acquired controlling shares in three local FMCG distributors: Jumra, Sojpar, and Raisons to cut costs and improve profits while figuring out how best to navigate Kenya’s scattered retail market. Kenya’s B2B FMCG trade is still largely informal, with fragmented supply chains, overlapping distribution networks, and, to some extent, minimal use of technology. Twiga, launched in 2014, once tried to fix this through vertical integration, building and owning the entire supply chain from farm to shelf. That approach was capital-intensive and operationally complex. The company now wants to merge traditional distribution with software and procurement systems while outsourcing physical operations to third-party operators. The three acquired firms will continue to run their existing businesses. Twiga says it will introduce its software stack, including warehouse management systems, route optimisation, and data tools, but will not take over day-to-day logistics. The original management of Jumra, Sojpar, and Raisons remains in place. “These acquisitions are a key step in our strategic transformation,” a Twiga spokesperson told TechCabal. “They enable Twiga to scale quickly and efficiently by leveraging these distributors’ market experience and operational capabilities. The integration creates mutual benefits: the distributors gain access to Twiga’s advanced Tech stack, business intelligence (BI)/data analytics, sales expertise, and institutional capital, while Twiga significantly extends its geographical reach and operational capabilities.” The acquisition gives Twiga access to eight distribution centres across Central, Coast, and Western Kenya. Instead of building new infrastructure, it will use existing facilities, while cutting costs. The company declined to disclose the value of the acquisitions or the revenues of the acquired firms. The new strategy avoids the failures of Twiga’s earlier commercial model, which forced the company to adjust its operations multiple times. The company once operated its commercial farms, worked directly with farmers, and managed much of the transport and delivery in-house. That model helped Twiga control quality and pricing and created high fixed costs. In 2023, the company shut down its farming unit, laid off staff, and began pivoting to an asset-light model. Twiga will focus on serving informal retailers (a shift from its earlier urban-only model), while the three acquired firms will continue with formal trade clients. Integration will not be immediate, Twiga told TechCabal. Joint procurement is planned for some product categories, but Twiga has not explained how decision-making will be shared across the four entities. One goal is to reduce supplier payment delays and improve cash conversion cycles, both of which have strained Twiga’s relationships with vendors in the past. Twiga likely believes that shared procurement and inventory visibility will ease pressure on working capital. The deal was financed by existing shareholders Juven and Creadev, suggesting that Twiga did not raise new external funding. It also points to a cautious investment environment, where investors prefer consolidation and lower-risk expansion over aggressive growth strategies. Twiga declined to comment on the details of the transaction. Twiga chose to reinvest, without revealing how much or when, instead of raising fresh capital, a move that signals investor unease over its delayed path to breakeven. Twiga’s ability to stabilise margins through decentralisation could determine how soon it attracts fresh institutional backing. Twiga describes the new approach as a hybrid model, “decentralised in operations to maintain agility and local knowledge, yet centralised in tech, BI and support processes, delivering optimal efficiency.” But the mechanics of that model remain unclear. Despite claiming that each firm runs its operations, Twiga does not disclose its influence over core functions like pricing, inventory management, and fulfilment. It did not disclose how to measure success in such a decentralised environment. Twiga is also reviewing the future of its main logistics base. On May 16, it confirmed to TechCabal that it may move out of Tatu City and is considering locations like Syokimau or Mombasa Road, which are closer to existing trade routes, which indicates a shift in priorities, possibly from long-term infrastructure projects to cost control and proximity to clients. The current base at Tatu City, while purpose-built, has been expensive to run and less efficient for last-mile distribution. Moving closer to Nairobi’s dense trade corridors could shorten delivery routes while reducing fuel and fleet costs. Twiga’s pivot reflects a broader trend among African startups. Many startups that raised large funding rounds between 2019 and 2023, peaking at $4.6 billion in 2022, are now under pressure to show profitability. Fintech giant Flutterwave is focused on profitability in 2025 ahead of its much-talked-about IPO. Grand narratives of disruption have been replaced by talk of discipline, focus, and operating leverage. “We are moving to a leaner, disciplined model with improved margins and working capital,” the company said. Whether this new approach can solve the long-standing issues in Kenya’s distribution sector remains to be seen. Managing logistics in Kenya involves more than software since it requires strong ground execution, local relationships, and adapting to volatile demand. Twiga is no longer trying to control everything. Whether it can coordinate effectively across semi-independent businesses or deliver better results under its new structure is unclear.
Read MoreUSPF launches coalition to drive inclusive learning in hard-to-reach communities
The Universal Service Provision Fund (USPF), an initiative of the Nigerian Communications Commission (NCC), will launch the USPF Impact Alliance, a coalition aimed at expanding inclusive education and digital access in Nigeria’s underserved communities. With a long-standing mandate to bridge Nigeria’s digital divide, the USPF has invested in over 2,500 educational projects since 2007. These interventions have delivered more than 100,000 computers and custom connectivity solutions to schools nationwide, enabling remote learning, boosting school enrollment, and supporting computer-based testing in even the most rural areas. The USPF Impact Alliance, launching Monday, May 26, 2025, in Lagos, will bring together key stakeholders from the private sector to co-create solutions that drive inclusive learning through technology. “The USPF Impact Alliance will lead innovation for universal service and access funds, accelerate digital inclusion in Nigeria, and guarantee the sustainability of the Federal Government’s investment in digital infrastructure in unserved and underserved communities,” said USPF Secretary Yomi Arowosafe. The Impact Alliance seeks to improve the sustainability of government investment in digital infrastructure, ensure optimal deployment of tech resources, and spark innovation at the intersection of education and connectivity. It also aims to accelerate Nigeria’s push toward inclusive digital literacy, ensuring that no community is left behind in the country’s technological transformation. For millions of Nigerians in hard-to-reach communities, this initiative could mean more than just internet access and unlock new opportunities for learning, empowerment, and upward mobility.
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217+ startups, ₦11B fraud, and $3B valuations: Insights from the 2025 Nigeria Payments Report
This article was originally published on TechCabal Insights, and was written by Victoria Olaonipekun– Analyst, TechCabal Insights. Zone, a regulated blockchain-powered payment infrastructure company, has released the Nigeria Payments Report 2025 in partnership with TechCabal Insights, the research arm of pan-African publication TechCabal. This second edition builds on the insights from 2024, which tracked how the COVID-19 pandemic spurred a surge in digital payments, with e-transaction values doubling to over ₦1.25 quadrillion. It also charted the rise of Nigeria’s fintech sector—over 200 startups accounted for 42% of all tech funding, driving financial inclusion to 76%. The 2025 report builds on these trends. From open banking and AI-powered fraud detection to blockchain-based innovations, it maps Nigeria’s fast-evolving payment landscape and highlights what lies ahead for the continent’s largest digital economy. It highlights standout players and milestones across the payments ecosystem. Moniepoint adapted quickly to stricter KYC rules while deepening mobile money adoption. Flutterwave, valued at $3 billion, remained a market leader despite a major ₦11 billion fraud incident, underscoring industry-wide security concerns. Banks are deepening collaboration with fintechs on open banking and AI-driven fraud detection, while regulators like CBN drive innovation with diaspora accounts and real-time compliance checks. Despite a funding slowdown, VCs still bet big on Nigeria, injecting $140 million in H1 2024 alone. Key Findings from the 2025 report: Explosive growth: E-payment channels, including POS, mobile money, USSD, and RTGS, are driving a 70% year-on-year rise in transaction volumes, led by fintechs delivering innovative, user-focused solutions. Regulatory momentum: Initiatives from the Central Bank of Nigeria (CBN), including the Payment Systems Vision (PSV), open banking guidelines, and new diaspora account categories (NRNOA/NRNIA), are fostering a more secure and inclusive ecosystem. Cross-border expansion: Nigerian fintechs such as LemFi and Rise are leveraging annual remittance flows of over $20 billion to scale Africa’s global payments influence. Persistent Challenges: Infrastructure gaps, fraud threats, and a 54% dip in overall African fintech funding underline the need for sustained investment. “This edition reflects how quickly collaboration among banks, fintechs, and regulators is reshaping our economy,” said Olayiwola Osoba, VP of Marketing and Communications at Zone. “But bold moves in risk management and cross-border innovation will be key to maintaining momentum,” he added. According to the CEO, Obi Emetarom, Zone processes over ₦100 billion in transaction value each month, totalling more than ₦1 trillion annually. He is highly optimistic about the prospects of payments in 2025, following regulatory approval of its decentralised PTSA model that is expected to spur widespread adoption. “Our ambitious target for 2025 is a 20x growth, meaning the current annual volume would become the monthly average by the end of next year, marking a major scale-up in operational capacity and network usage,” he said. What’s next for Nigeria’s payment ecosystem in 2025? Scaling AI-powered fraud detection and RegTech partnerships (e.g., SmileID, Dojah) Using open banking and AfCFTA frameworks to grow cross-border payment solutions Bridging the fintech funding gap to solidify Nigeria’s lead on the continent Download the full Nigerian Payment Report 2025
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👨🏿🚀TechCabal Daily – MaxAB-Wasoko acquires Fatura
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! This isn’t an ad, I swear. I just really like the thing. One of my colleagues once uploaded their exam prep materials to NotebookLLM and had it spin out a podcast version to study on the go. I also once used it to transcribe an entire interview, and it did it flawlessly. Now, Google’s rolling out a mobile app for the tool, making it even easier to work smarter, not harder (or at least sound like you do). And while we’re talking Google, try searching “askew.” The page tilts like it just heard some spicy office gossip. You’re welcome. – Faith MaxAB-Wasoko acquires Egypt’s Fatura Bolt flirts with fare negotiation, backs off quietly UBA makes agent banking comeback with 46,000 PoS terminals China plans to establish electric vehicle (EV) factories in Nigeria World Wide Web 3 Events E-commerce MaxAB-Wasoko acquires Egypt’s Fatura in its first post-merger move L-R_ Aladdin ElAfifi, CEO of EFG Finance, an EFG Holding company and Belal Megharbel CEO of MaxAB-Wasoko. Image Source: MaxAB-Wasoko. Nine months after its merger, MaxAB-Wasoko made its first big move: acquiring Egyptian B2B marketplace Fatura from EFG Finance. With the acquisition, EFG Finance will join MaxAB-Wasoko’s shareholders and its credit rails will come in handy as the B2B e-commerce company will look to introduce a credit line to its business. Fatura was a smart choice. While MaxAB built warehouses and delivery fleets to digitise Egypt’s supply chain, Fatura focused on being a lean marketplace—connecting 600+ wholesalers with retailers across 16 cities. That gives MaxAB-Wasoko faster, cheaper access to new cities, including five where it didn’t operate before. It’s a way to grow without heavy infrastructure. But the bigger opportunity is lending. MaxAB-Wasoko already finances 9% of its sales. With EFG Finance—and Fatura’s retail network in hand—it can offer credit to more merchants. That matters because margins from lending (since it involves fewer infrastructure setups, although it is risky) often surpass those from logistics. Moving goods is capital-intensive with tight profits, but embedded finance—like offering credit—gives higher returns with lower overhead. Plus, providing financing in e-commerce could keep customers loyal, as they depend on platforms that support their growth. This isn’t just MaxAB-Wasoko’s strategy. Across Africa, B2B platforms are following this path: after raising series A, Nigeria’s OmniRetail is expanding embedded finance across West Africa after processing ₦1.3 trillion ($810 million) in OmniPay transactions in 2024; MarketForce offers Buy Now, Pay Later (BNPL) to help merchants access goods on credit; and Morocco’s Chari integrates fintech to support unbanked shop-keepers. These moves show a broader trend: B2B commerce in Africa is evolving from just supplying shops to building the pipelines and capital flows that power informal retail economies. For a sector where distribution has historically been king, these e-commerce companies are rewriting the rulebook with credit access. Seamless Global Payments With Fincra. Issue accounts in NGN, KES, EUR, USD & more with one integration. Send & receive funds seamlessly across borders; no more banking hassles or complex conversions. Create an account for free & go global today. Get the best African tech newsletters in your inbox Country Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia and Herzegovina Botswana Bouvet Island Brazil British Antarctic Territory British Indian Ocean Territory British Virgin Islands Brunei Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Canton and Enderbury Islands Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos [Keeling] Islands Colombia Comoros Congo – Brazzaville Congo – Kinshasa Cook Islands Costa Rica Croatia Cuba Cyprus Czech Republic Côte d’Ivoire Denmark Djibouti Dominica Dominican Republic Dronning Maud Land East Germany Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories French Southern and Antarctic Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Honduras Hong Kong SAR China Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Johnston Island Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau SAR China Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Metropolitan France Mexico Micronesia Midway Islands Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar [Burma] Namibia Nauru Nepal Netherlands Netherlands Antilles Neutral Zone New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island North Korea North Vietnam Northern Mariana Islands Norway Oman Pacific Islands Trust Territory Pakistan Palau Palestinian Territories Panama Panama Canal Zone Papua New Guinea Paraguay People’s Democratic Republic of Yemen Peru Philippines Pitcairn Islands Poland Portugal Puerto Rico Qatar Romania Russia Rwanda Réunion Saint Barthélemy Saint Helena Saint Kitts and Nevis Saint Lucia Saint Martin Saint Pierre and Miquelon Saint Vincent and the Grenadines Samoa San Marino Saudi Arabia Senegal Serbia Serbia and Montenegro Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Korea Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syria São Tomé and Príncipe Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu U.S. Minor Outlying Islands U.S. Miscellaneous Pacific Islands U.S. Virgin Islands Uganda Ukraine Union of Soviet Socialist Republics United Arab Emirates United Kingdom United States Unknown or Invalid Region Uruguay Uzbekistan Vanuatu Vatican City Venezuela Vietnam Wake Island Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe Åland Islands ?> Gender Male Female Others TC Daily Events TC Scoop <!– Next Wave –> <!– Entering Tech –> Subscribe Ride-hailing Bolt flirts with fare negotiation, backs off quietly Image Source: Wunmi Eunice/TechCabal Bolt quietly tested a fare negotiation feature in Nigeria between November 2024 and February 2025—mirroring inDrive’s popular model that lets riders and drivers agree on prices
Read MoreA first-time fund manager is raising ₦100 billion to fund Africa’s data infrastructure gap
I first met Samuel Efosa-Austin, the chief technology officer of a Lagos-based health insurance startup, at a class for venture capital enthusiasts. As we learnt about venture capital fundamentals, he wasted no time in telling the class about his one-year plan to raise ₦100 billion for his fund, the ECO fund, to back companies trying to solve Africa’s data infrastructure gap. His approach to raising a fund in local currency and his focus on data projects piqued my interest. For many years, the topic of raising capital in local currency has been discussed in Africa’s venture capital industry, but very few have embarked on it. Those in favour of raising capital locally, like Efosa-Austin, often rely on the logic that raising capital from local backers reduces the pressure of FX mismatch (when startups that raise in dollars struggle to provide exits due to exchange rate fluctuations) and keeps the rewards for African innovation within the continent. “This fund is our proof of concept. If we show that you can raise in naira, build a resilient data infrastructure, and generate both social and financial returns, we unlock a whole new asset class for African capital,” Efosa-Austin said. But it will not be easy. When you ask investors to give you long-term capital in local currency, you are asking them to be exposed to unpredictable devaluation. The venture capital industry is famously high-risk and high-reward, and asking investors to fund a risky asset class that can see returns eroded by 50–70% in dollar terms over the fund’s life is a tough ask. Next Wave: Ghana just showed Africa a future of venture capital There’s also a shallow limited partner (LP) base of investors willing to take venture capital risk, especially as pension funds and insurance funds rarely invest in local private capital. Some startups also prefer to raise in dollars because they have essential dollar-based costs like cloud bills, but Efosa-Austin told me that his fund will only invest in companies that have costs in naira and is relying on a growing wave of global companies accepting local currencies for services. “What I hope this fund demonstrates is simple, but powerful. Africa can fund its future in its currency; that verified data is infrastructure, not overhead; and that impact and returns are not opposites. They’re a flywheel,” Efosa-Austin said. For this week’s column, I spoke with Efosa-Austin to understand how far he has gone with fundraising, why he decided to embark on this journey, what success looks like for him, the importance of local capital, his investment track record, and ideal investments. This interview has been edited for length and clarity. What inspired you to raise a naira-denominated fund focused specifically on data infrastructure? The inspiration for this fund came from years of navigating the digital and economic terrain in Africa and realising one fundamental truth: Africa cannot build a sovereign digital economy without owning its data infrastructure. We’ve seen firsthand how innovation, talent, and even funding exist in pockets across sectors—health, agriculture, fintech, and governance—but they consistently hit a wall. That wall is the lack of verified, local, and trusted data infrastructure. The push for a naira-denominated fund was not a financial tactic; it was a strategic necessity. Too many of our innovations are built on infrastructure we don’t own and are funded by capital that doesn’t understand our context. This fund is a deliberate pivot to local capital, local control, and local value capture. The target multiple on the fund is 4X as businesses that will be funded will be vetted by the management team and board of advisors of the fund as due diligence is key to ensure safety of funds and potential of returns. Was there a particular event that convinced you that local capital was the key to unlocking this space? There wasn’t one “event”—there were systemic breakdowns. The talent gap: Brilliant young Nigerians trained in AI and data science, with nowhere to deploy locally. The carbon gap: Africa holds carbon sink value but lacks the verification infrastructure to monetise it. The mindset gap: Our economies continue to wait for foreign validation before investing in their innovation. In short, we realised we cannot outsource the infrastructure of the future. We must fund it ourselves with our currency, with our conviction. [newletter] How far along are you in raising the fund? We are currently in active discussions with several potential LPs like family offices with a legacy interest in nation-building and innovation, corporate institutions exploring ESG-aligned investments, and development finance institutions (DFIs) with a mandate to scale climate and civic infrastructure, and we are preparing to engage state-backed pension fund managers who are under pressure to diversify portfolios in impactful local assets. These conversations are progressing intentionally. This isn’t a numbers game. It’s about curating the right LP base that understands Africa’s infrastructure timelines, respects local dynamics, and shares our belief in data as a long-term utility. What has been the biggest challenge in convincing local capital providers to back data infrastructure projects? Perception and legacy thinking. Most local capital providers still see data as a “tech product” or “software idea”, not a backbone infrastructure like roads or energy. They don’t yet grasp that verified data systems—data centres, edge networks, civic platforms—are utilities, not luxuries. There’s also a high-risk perception, rooted in decades of failed IT projects or imported platforms with little local ownership. Part of our work has been education and reframing. We are showing the commercial potential of verified data, the economic impact of localised platforms, and the durability of civic technology infrastructure. What has your personal investment or operating track record been in this space? I didn’t wake up one day and decide to raise a fund. This is the result of over a decade of building, failing, learning, and rebuilding in Africa’s digital economy. I’ve been on the ground, building platforms like The ECO Platform, which isn’t just another civic tech tool. It’s an AI-powered, verified data engine designed to map and solve real
Read MoreMaxAB-Wasoko makes first post-merger move with acquisition of Egypt’s Fatura
In its first post-merger move, MaxAB-Wasoko, the B2B e-commerce giant formed from the 2024 merger between Kenya’s Wasoko and Egypt’s MaxAB, has acquired Fatura, an Egypt-based B2B e-marketplace, from EFG Finance. The deal is a fresh push to consolidate retail and supply chain technology across African markets. As part of the acquisition, EFG Finance has become a key shareholder in MaxAB-Wasoko and sits on the company’s board. The value of the transaction was not disclosed. The acquisition deepens MaxAB-Wasoko’s footprint in Egypt, where Fatura has built an asset-light digital marketplace connecting over 626 wholesalers to retailers in 16 cities, according to a statement seen by TechCabal. Five of those cities will be added to MaxAB-Wasoko’s network. With Fatura fully integrated, the company claims its retail platform offers a broader product assortment and regional coverage. “The acquisition of Fatura is more than a growth play,” said Belal El-Megharbel, CEO of MaxAB-Wasoko. “It’s the realisation of our ambition to become the go-to, one-stop shop for retailers throughout Africa.” The deal marks the first strategic move by MaxAB-Wasoko since both companies completed an all-stock merger in August 2024, which created one of Africa’s largest B2B commerce platforms, jointly led by MaxAB’s Belal El-Megharbel and Wasoko’s Daniel Yu. At the time, the companies promised to use their combined strengths to build a regional player to tackle fragmented supply chains and widen access to financial tools for small retailers. Unlike MaxAB-Wasoko’s supply chain-heavy model, which controls distribution end-to-end, Fatura runs an asset-light marketplace connecting suppliers to retailers. It also has a history of fintech operations under Tanmeyah, an EFG Holding subsidiary. MaxAB-Wasoko plans to layer its embedded financial services into the Fatura network, including credit access for stock purchases. Fatura is projected to contribute around 25% of MaxAB-Wasoko’s Egypt revenue by the end of 2025. Get the best African tech newsletters in your inbox Country Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia and Herzegovina Botswana Bouvet Island Brazil British Antarctic Territory British Indian Ocean Territory British Virgin Islands Brunei Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Canton and Enderbury Islands Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos [Keeling] Islands Colombia Comoros Congo – Brazzaville Congo – Kinshasa Cook Islands Costa Rica Croatia Cuba Cyprus Czech Republic Côte d’Ivoire Denmark Djibouti Dominica Dominican Republic Dronning Maud Land East Germany Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories French Southern and Antarctic Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Honduras Hong Kong SAR China Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Johnston Island Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau SAR China Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Metropolitan France Mexico Micronesia Midway Islands Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar [Burma] Namibia Nauru Nepal Netherlands Netherlands Antilles Neutral Zone New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island North Korea North Vietnam Northern Mariana Islands Norway Oman Pacific Islands Trust Territory Pakistan Palau Palestinian Territories Panama Panama Canal Zone Papua New Guinea Paraguay People’s Democratic Republic of Yemen Peru Philippines Pitcairn Islands Poland Portugal Puerto Rico Qatar Romania Russia Rwanda Réunion Saint Barthélemy Saint Helena Saint Kitts and Nevis Saint Lucia Saint Martin Saint Pierre and Miquelon Saint Vincent and the Grenadines Samoa San Marino Saudi Arabia Senegal Serbia Serbia and Montenegro Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Korea Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syria São Tomé and Príncipe Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu U.S. Minor Outlying Islands U.S. Miscellaneous Pacific Islands U.S. Virgin Islands Uganda Ukraine Union of Soviet Socialist Republics United Arab Emirates United Kingdom United States Unknown or Invalid Region Uruguay Uzbekistan Vanuatu Vatican City Venezuela Vietnam Wake Island Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe Åland Islands ?> Gender Male Female Others TC Daily Events <!– Next Wave –> <!– Entering Tech –> Subscribe The combined entity, which is valued at over $500 million, now operates in Egypt, Kenya, Tanzania, Rwanda, and Morocco, supports a network of 450,000 merchants and serves an estimated 65 million consumers. Wasoko exited Zambia, Uganda, and Zanzibar shortly before the merger. While the new company still hasn’t announced a formal name, it appears to have settled on Wasoko-MaxAB. The combined entity told the TechCabal in August 2024 that it planned to complete the integration of the two platforms and staff within 60 days of the deal.
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Jumia’s Q1 2025: More orders, less money, tougher market
This is Follow the Money, our weekly series that unpacks the earnings, business, and scaling strategies of African fintechs, e-commerce, telcos, and financial institutions. A new edition drops every Monday. Jumia is losing less money; this is good. But Jumia is also making less money, which is bad in a market where competitors are scaling aggressively with deep pockets and subsidised models. This raises a key question: Is the e-commerce giant on the path to profitability or just survival? According to Jumia’s Q1 2025 financial report, revenue fell to $36.3 million in Q1, a 26% year-on-year decline (18% in constant currency). Yet it also posted its lowest after-tax loss since its 2012 launch, and reiterated its target of achieving profitability by 2027. The numbers reveal a central tension in Jumia’s current strategy: while losses are shrinking, so is the revenue. The company is cutting costs, but the more urgent question is what it’s cutting — and whether that tradeoff is sustainable in the face of rising competition and a high inflation rate. Leaner, but not necessarily stronger To get closer to profitability, Jumia has slashed marketing spend, exited unprofitable markets like South Africa and Tunisia, and shifted focus from high-margin Business-to-Business transactions to everyday, low-ticket consumer purchases. It’s also doubling down on cost-effective channels like Search Engine Optimisation (SEO), Customer Relationship Management (CRM), local radio, and the JForce agent network — its grassroots sales force targeting rural and underbanked populations. “We are getting more business-to-consumer (B2C) orders now, and even though the revenue might not be as large, at the end of the day, it is translating into a cleaner balance sheet for us,” a Jumia spokesperson told TechCabal. The company also highlighted solid performance in Côte d’Ivoire, Ghana, and Kenya, in addition to its largest market, Nigeria. But this leaner strategy is unfolding amid a fiercer battlefield, one where Jumia no longer faces just local or regional competition, but global platforms like Temu operating at a scale and subsidy level it may not match. The Temu effect Temu, a Chinese e-commerce giant, is fast becoming Jumia’s most disruptive challenger. With ultra-low prices, a direct-to-consumer shipping model, and a massive marketing budget, Temu is not just competing — it’s reshaping the rules of the game. “Jumia’s path to profitability appears challenging due to a lack of clear catalysts for growth,” said Oluwatobi Akapo, a former business development manager at Jumia Nigeria. “Increased competition in Nigeria and economic headwinds like high inflation and currency devaluation in Egypt complicate matters.” Temu’s model connects African consumers directly to Chinese manufacturers, bypassing local intermediaries, and relies on Chinese state-subsidised shipping and a vast manufacturing ecosystem to drive prices down. While deliveries can take 10 to 15 days, the cost advantage is often too large to ignore. Is faster delivery enough? Jumia’s logistics are among the most robust on the continent, with same-day or two-to-five-day delivery across most Nigerian cities. Temu, on the other hand, often takes up to two weeks. But consumers are making calculated tradeoffs. Temu, which started operating in Nigeria in November 2024, often sells the same category of products for 30–70% less than Jumia. A Bluetooth earpiece priced at ₦15,000 ($9.35) on Jumia might cost just ₦8,000 ($4.99) on Temu — shipping included. “I bought a smartwatch on Temu for ₦11,000 ($6.86) at a discount price that would’ve cost me almost ₦20,000 ($12.47) on Jumia,” said Ibukun Adebayo, a student in Osun state. “It took 15 days, but I planned ahead. I’d do it again.” This kind of logic is hard to combat with speed alone. In non-urgent categories like fashion, electronics accessories, and household goods, Jumia’s logistics edge becomes a nice-to-have, not a decisive factor. Jiji: The informal contender While Jumia and Temu duel in the formal e-commerce space, Jiji — a classifieds platform — is dominating the informal end. Jiji claimed over $50 billion in Gross Merchandise Value (GMV) across seven African markets in 2024, up from $10 billion the year before. These figures reflect listing values, not completed transactions, but they signal a shift in consumer behaviour. Jiji appeals to budget-conscious buyers by enabling direct negotiation with sellers over WhatsApp or in-person meetings, especially for high-ticket items like electronics, furniture, and vehicles. In contrast, Jumia’s GMV dropped four percent to $720.6 million across its nine markets. That drop highlights a critical reality: Jumia’s competition isn’t just coming from global tech giants — it’s also coming from local platforms operating entirely outside the traditional e-commerce value chain. Mixed fortunes across markets Jumia’s regional performance shows diverging trends. Marketplace revenue dropped 30% to $18.1 million and first-party sales declined 21% to $17.8 million, driven by corporate demand softening and steep currency depreciation in Egypt. Nigeria, however, continues to offer hope. Jumia is expanding into northern Nigeria, where e-commerce penetration is still relatively low. Orders from outside major cities now account for 58% of total volume, up from 50% a year ago — a sign of real traction in rural areas. Jumia also launched a new business line: Jumia Delivery, a third-party logistics service in Nigeria. The company plans to scale it to Kenya, Ghana, and Senegal. It’s a strategic move to diversify revenue beyond its core e-commerce operations — and potentially unlock more margin-efficient growth. But whether this logistics play can scale without soaking up capital remains to be seen. More orders, less value Jumia processed 5.1 million orders in Q1, a 12% increase from the previous year. But average order value fell, and GMV declined 11% to $161.7 million. That drop reflects a deliberate shift toward smaller purchases — a volume game. “It’s a classic tradeoff: high-ticket items for high-frequency, low-ticket transactions,” said Lagos-based analyst Abimbola Adewale. “It’s a retention bet.” That bet may be paying off as Jumia’s repurchase rate rose to 45% in Q4 2024, up from 40% a year earlier — a sign of increasing customer stickiness. But sustaining that momentum requires ensuring the customer experience doesn’t degrade as costs are cut. Speed vs price:
Read MoreBolt tested inDrive’s fare negotiation model in Nigeria; here’s how that went
Caught between mounting driver demands for lower commissions and the growing popularity of inDrive’s fare-negotiation model, Bolt quietly piloted a “negotiate” feature in select Nigerian cities from November 2024 to February 2025. The feature, which allowed riders and drivers to agree on fares upfront, aimed to address persistent complaints about opaque pricing and shrinking driver earnings. But after a few months, the company shelved the experiment, with “no plans to introduce the negotiate feature more broadly.” “At Bolt, we’re constantly exploring new ways to improve the rider and driver experience across our markets,” a Bolt spokesperson told TechCabal in an email response. “Between November 2024 and February 2025, we conducted a limited-time pilot of a fare negotiation feature to better understand how flexible pricing models might impact user experience and platform dynamics.” The test comes after the ride-hailing platform introduced a flexible pricing system in May 2024, allowing passengers to offer higher fares to drivers to increase their chances of getting rides during periods of high driver demand. Bolt’s decision to drop the negotiate feature suggests the pilot failed to meet the company’s internal benchmarks. Possible internal metrics may have included user adoption rates, rider and driver satisfaction, impact on trip completion times, changes in average fare, and overall platform safety and security. If the negotiate feature did not improve key metrics, or worse, led to more disputes, longer wait times, or increased off-app transactions, Bolt would have little reason to proceed. With drivers already informally negotiating fares, the company likely concluded that formalising the process offered limited benefits and introduced new risks, especially around pricing consistency and platform safety. “My assumption is that the feature didn’t solve the problem the way they imagined it, and it also doesn’t impact revenue,” said Ayodeji Audu, a Lagos-based mobility analyst and co-founder of EV mobility company Reown. Get the best African tech newsletters in your inbox Country Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia and Herzegovina Botswana Bouvet Island Brazil British Antarctic Territory British Indian Ocean Territory British Virgin Islands Brunei Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Canton and Enderbury Islands Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos [Keeling] Islands Colombia Comoros Congo – Brazzaville Congo – Kinshasa Cook Islands Costa Rica Croatia Cuba Cyprus Czech Republic Côte d’Ivoire Denmark Djibouti Dominica Dominican Republic Dronning Maud Land East Germany Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories French Southern and Antarctic Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Honduras Hong Kong SAR China Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Johnston Island Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau SAR China Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Metropolitan France Mexico Micronesia Midway Islands Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar [Burma] Namibia Nauru Nepal Netherlands Netherlands Antilles Neutral Zone New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island North Korea North Vietnam Northern Mariana Islands Norway Oman Pacific Islands Trust Territory Pakistan Palau Palestinian Territories Panama Panama Canal Zone Papua New Guinea Paraguay People’s Democratic Republic of Yemen Peru Philippines Pitcairn Islands Poland Portugal Puerto Rico Qatar Romania Russia Rwanda Réunion Saint Barthélemy Saint Helena Saint Kitts and Nevis Saint Lucia Saint Martin Saint Pierre and Miquelon Saint Vincent and the Grenadines Samoa San Marino Saudi Arabia Senegal Serbia Serbia and Montenegro Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Korea Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syria São Tomé and Príncipe Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu U.S. Minor Outlying Islands U.S. Miscellaneous Pacific Islands U.S. Virgin Islands Uganda Ukraine Union of Soviet Socialist Republics United Arab Emirates United Kingdom United States Unknown or Invalid Region Uruguay Uzbekistan Vanuatu Vatican City Venezuela Vietnam Wake Island Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe Åland Islands ?> Gender Male Female Others TC Daily Events <!– Next Wave –> <!– Entering Tech –> Subscribe Bolt’s fare negotiation was widely seen as a calculated response to mounting pressure from drivers over its 20% commission and a perceived lack of platform support. Drivers have staged repeated protests against Bolt and Uber in major cities, including coordinated strikes in Lagos and Abuja since 2021, demanding lower commissions. The feature was also introduced in response to growing competition from inDrive, which surged in popularity in 2023—due to shrinking customer pockets and fuel hikes—by capitalising on its simple, cash-based, negotiable fare model. The company, which launched in Nigeria in 2019, has attracted many price-sensitive riders and drivers who want flexibility. However, Bolt still retains the lead in Nigeria with a 66% market share, according to Queva Advisory, a Nigerian management consulting firm. “I would have loved it if the negotiate feature was left permanent. It is something we’ve been asking for,” said Celestine Finbar, a Lagos-based Bolt driver who has used the platform for over four years. “After they slashed commissions, we were barely surviving. Negotiation gives us more control, like we’re finally being heard.” Pricing remains the biggest priority for ride-hailing customers in Lagos, regardless of new features. “If I can negotiate on both Bolt and inDrive, my decision still comes down to whichever is cheaper and closer,” said Muktar Oladunmade, a frequent user of both platforms. Globally, alternative ride-hailing models are gaining traction. In India, ride-hailing startup Namma Yatri has prompted Uber and Bolt to introduce a subscription-based system, where drivers pay a fixed daily fee instead of
Read MoreUBA makes agent banking comeback with 46,000 PoS terminals
United Bank for Africa (UBA) Plc, one of Nigeria’s biggest banking groups, is making a comeback in Nigeria’s booming Point of Sales (PoS) payment market by rolling out 46,000 upgraded terminals to win back small businesses and retail merchants increasingly served by fintechs. Once a major player in the country’s PoS market, UBA is now racing to reassert itself amid rising competition from fintechs like Moniepoint, OPay, and PalmPay. The group has deployed over 6,000 Redpay PoS terminals since January 2025, with another 40,000 expected in the coming months. In 2024, Nigeria’s PoS market processed ₦79.5 trillion ($49.7 billion) in transactions, up from ₦2.3 trillion ($1.44 billion) in 2018, according to the Nigeria Inter-Bank Settlement System (NIBSS). That 3,356.5% surge has largely been driven by fintechs, who built extensive agent networks and won merchants over with instant settlements, faster devices, and flexible onboarding. However, with Redpay, UBA has engineered a catch-up, combining the speed of fintechs with the trust and reliability of a bank. For many merchants, that hybrid may be a better long-term value proposition. “Merchants commend the terminals’ ease of use, transaction speed, 100% success rate for transfers, and enhanced visibility,” Olukayode Olubiyi, UBA’s head of digital banking, said in an email to TechCabal. “They added that flexibility and reliability have significantly improved their daily operations.” Omobolanle Salami, a Lagos-based merchant who sells perfumes, told TechCabal that since switching to UBA’s free terminal in February from Moniepoint, she can now easily monitor transactions and perform settlements remotely via her laptop or phone – a crucial improvement for the retailer. “While Moniepoint allows on-terminal transaction viewing, Redpay offers the added convenience of remote access,” Salami said. “This transaction visibility empowers me to make better business decisions, such as allocating more products to specific stores and advising customers on banks with less downtime for transfers.” Get the best African tech newsletters in your inbox Country Afghanistan Albania Algeria American Samoa Andorra Angola Anguilla Antarctica Antigua and Barbuda Argentina Armenia Aruba Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin Bermuda Bhutan Bolivia Bosnia and Herzegovina Botswana Bouvet Island Brazil British Antarctic Territory British Indian Ocean Territory British Virgin Islands Brunei Bulgaria Burkina Faso Burundi Cambodia Cameroon Canada Canton and Enderbury Islands Cape Verde Cayman Islands Central African Republic Chad Chile China Christmas Island Cocos [Keeling] Islands Colombia Comoros Congo – Brazzaville Congo – Kinshasa Cook Islands Costa Rica Croatia Cuba Cyprus Czech Republic Côte d’Ivoire Denmark Djibouti Dominica Dominican Republic Dronning Maud Land East Germany Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Ethiopia Falkland Islands Faroe Islands Fiji Finland France French Guiana French Polynesia French Southern Territories French Southern and Antarctic Territories Gabon Gambia Georgia Germany Ghana Gibraltar Greece Greenland Grenada Guadeloupe Guam Guatemala Guernsey Guinea Guinea-Bissau Guyana Haiti Heard Island and McDonald Islands Honduras Hong Kong SAR China Hungary Iceland India Indonesia Iran Iraq Ireland Isle of Man Israel Italy Jamaica Japan Jersey Johnston Island Jordan Kazakhstan Kenya Kiribati Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Macau SAR China Macedonia Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Martinique Mauritania Mauritius Mayotte Metropolitan France Mexico Micronesia Midway Islands Moldova Monaco Mongolia Montenegro Montserrat Morocco Mozambique Myanmar [Burma] Namibia Nauru Nepal Netherlands Netherlands Antilles Neutral Zone New Caledonia New Zealand Nicaragua Niger Nigeria Niue Norfolk Island North Korea North Vietnam Northern Mariana Islands Norway Oman Pacific Islands Trust Territory Pakistan Palau Palestinian Territories Panama Panama Canal Zone Papua New Guinea Paraguay People’s Democratic Republic of Yemen Peru Philippines Pitcairn Islands Poland Portugal Puerto Rico Qatar Romania Russia Rwanda Réunion Saint Barthélemy Saint Helena Saint Kitts and Nevis Saint Lucia Saint Martin Saint Pierre and Miquelon Saint Vincent and the Grenadines Samoa San Marino Saudi Arabia Senegal Serbia Serbia and Montenegro Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Georgia and the South Sandwich Islands South Korea Spain Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Sweden Switzerland Syria São Tomé and Príncipe Taiwan Tajikistan Tanzania Thailand Timor-Leste Togo Tokelau Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Tuvalu U.S. Minor Outlying Islands U.S. Miscellaneous Pacific Islands U.S. Virgin Islands Uganda Ukraine Union of Soviet Socialist Republics United Arab Emirates United Kingdom United States Unknown or Invalid Region Uruguay Uzbekistan Vanuatu Vatican City Venezuela Vietnam Wake Island Wallis and Futuna Western Sahara Yemen Zambia Zimbabwe Åland Islands ?> Gender Male Female Others TC Daily Events <!– Next Wave –> <!– Entering Tech –> Subscribe Another merchant in Lagos, Dhikrulahi Hammed, who uses Opay, Moniepoint, and Redpay terminals, claimed that Redpay offers greater flexibility and security on the go. “Redpay’s remote transaction monitoring on phones/laptops is a significant advantage for security and tracking earnings to prevent discrepancies,” said Hammed, who deals in the sale of electronics. He added that even though Moniepoint also allows monitoring, Redpay’s remote mobile access when away from the shop is a key differentiator. According to UBA, the new Redpay terminals have processed over ₦25 billion ($15.6 million) in transaction value since January, with adoption especially strong among SMEs in urban and peri-urban areas. “Although retail merchants such as supermarkets and pharmacies are also benefiting from improved transaction reliability and uptime,” Olubiyi said. UBA’s PoS rollout comes at a time when the gap between traditional banks and fintechs is widening in customer satisfaction. A 2024 KPMG report ranked fintechs ahead of banks across various stages of the customer journey, especially in transaction speed, platform reliability, and feature variety. UBA is betting that a more integrated solution—one that pairs payments with banking services—can bridge that gap. “Redpay combines a user-friendly interface with backend inventory and store management, all tied into UBA’s wider retail ecosystem,” said Onyebuchi Akosa, the group’s chief information officer. “We also offer the trust, reach, and regulatory stability that many fintechs can’t replicate.” Security is another key focus. With fraud on the rise across PoS platforms, UBA says its new devices are Payment Card Industry Data Security Standard (PCI-DSS) compliant
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Next Wave: Ghana just showed Africa a future of venture capital
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 18 May, 2025 Ghana just showed Africa a future of venture capital Image | Digit Insurance It is all about pension funds. Towards the end of last month, Ghana became the first African country to mandate that local pension funds invest at least 5% of their assets in domestic private equity and venture capital firms. With over $6.7 billion in pension deposits, this directive could unlock a $337 million funding pool for Ghanaian firms by the end of 2026. Ghana is not the only African country with laws linking pension funds to private capital; countries like Nigeria, Botswana, and South Africa also have regulations that cap how much pension funds can allocate to alternative investments. However, these caps have largely failed to incentivise actual investment. Many African pension portfolios remain heavily skewed toward government bonds and bank deposits, prioritising capital preservation and liquidity. Ghana faced a similar challenge; despite allowing up to 25% of pension assets to be invested in alternative funds, only 0.58% was allocated before the recent directive. Ghana has shifted the equation entirely by making something go from permissible to mandatory. The question is no longer whether pension funds can invest in innovation; what happens when they do? What could go right? The potential benefits of Ghana’s directive are massive. In 2023, South Africa’s government raised the cap on private equity from 10% to 15% of a retirement fund’s portfolio and created a separate 45% bucket for infrastructure investment. Within a year, local pension & endowment funds increased their commitments to local private capital from $216 million to $344 million [pdf], leading to a surge of investments in SA’s struggling energy sector. Next Wave continues after this ad. Moonshot is back, and this year, it’s about moving from resilience to results. With the theme Building Momentum, the 2025 edition explores how Africa’s digital economy can shift gears into scale, structure, and long-term growth. Expect more honest reflections, sharper insights, closed-door roundtables, and conversations that don’t end when the panels do. Watch the 2024 highlights. Early bird discount now available Reserve your spot here! If Africa’s ten largest pension funds similarly mandated Ghana-style floors rather than caps, over $13 billion would flow into Africa’s venture capital industry within five years, tripling the continent’s 2024 VC haul. When competent fund managers have enough money to invest in the best businesses, compelling evidence shows that it creates jobs, deepens capital markets, and generates returns. In America, the home of Silicon Valley’s tech giants, EY found that private equity supports more than 26 million U.S. jobs and 5% of America’s $27 trillion GDP. In emerging markets, the effects have been even more pronounced. According to this study, which pooled data from emerging economies across 16 years, a 10% increase in pension-funded assets equals a 0.5% increase in GDP yearly. For African countries that have experienced slow GDP growth, that extra half-point compounds into a noticeably larger economy in just one decade. Pension funds, which invest in local currency, could also slash FX-benchmarked exit expectations for businesses that earn in local currency. The past couple of years have seen some of the sharpest devaluations in Africa’s biggest markets, leading to several startups struggling to warrant further investment given underwhelming dollar performance. Next Wave continues after this ad. Nigeria’s digital payment space is evolving fast. Are you keeping up? Our latest report highlights key shifts, challenges, and opportunities across the country’s payments ecosystem. Donwload the report now. Local money also picks the best local ideas. African VC firms have turned to foreign DFIs for capital because, unlike their global counterparts, they have limited access to funding sources like pension and endowment funds. Without this alliance, Africa’s private capital markets will be much smaller. Still, it has also led to fund managers being incentivised to back business models that might not translate into viable business models on the continent but help serve the DFI’s mandate. Pension funds, which have a fiduciary responsibility to millions of pensioners, will ideally pick fund managers with a demonstrated pattern of finding the best businesses. Imagine if Moniepoint were funded by a pension fund. Allocating even a small portion of long-term institutional capital to private markets can yield outsized benefits for innovation. It funds new ventures, accelerates the commercialisation of R&D, and enables startups to scale locally rather than being forced to seek capital abroad. In 1979, the U.S. clarified the “prudent man” rule, allowing pension plans to invest in risky assets like venture capital. In the eight years that followed, pension funds’ share of U.S. venture capital funding surged from around 15% to over 50%. This influx of capital played a pivotal role in igniting the Silicon Valley boom and a wave of transformative technological innovation. African pension funds tend to mostly back government-issued bonds or fund bank deposits, and while these investments are low-risk, they are also low-reward. Private capital can be a way to diversify the pension fund’s portfolio, and the potential outsized returns are a good return stream. In the U.S., private equity achieved the highest 10-year returns of any asset class for 165 U.S. pension funds. Even though private capital is riskier in isolation, in a multi-asset portfolio, a small allocation can reduce overall volatility by spreading investments across different asset classes. The added benefit that pension funds investing in the local private capital market presents by making fundraising easier for fund managers abroad alone is worth consideration. One investor told me that general partners often get asked why local capital is not backing the continent’s venture capital industry when they raise money abroad. Pension fund investing would signal confidence and
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