Editor’s Note

A brutally sluggish month for African startups, the continent squares up to Big Tech and layoffs continue to be a drag—April could not end sooner for some in the tech ecosystem. 

It wasn’t all grey clouds though; Kenya saw some positive investment news, bagging $390 million in April, while South Africa’s $250 million on top of Amazon’s plan to invest $1.8 billion until 2029, could lift the country’s mood.

A lot happened in East Africa in April, where Kenya has taken a step in the right direction by reversing its 30% ownership law. This, after President William Ruto vetoed the rule, choosing to encourage investors. Meanwhile, the East Africa country also launched its first operational earth observation satellite, onboard a SpaceX rocket. Let’s dig in!

1. Funding: Q2 is off to a slow start

In April 2023, there were 23 fully disclosed* raises made by African startups, totalling $129.8 million. 

Compared to April 2022, this shows a 68% decline. Looks like Q2 is off to an even slower start. It is however a significant increase from March 2023 where the total amount raised was $66 million. 

The top three sectors from April are fintech, cleantech and agritech. Fintech leads with $45.5 million (30.4%), cleantech with $37.9 million (25.3%), and agritech with $37.6 million (25.1%). 

Image source: Timi Odueso/TechCabal

Per region, South Africa led April’s deals with 49.1% of the total deals, about $63.7 million. East Africa comes second with 31.3% of the deals while Central Africa makes an appearance for third place with 13.9% of the deals, all of which come from Altech Group’s $18 million debt financing round.

Image source: Timi Odueso/TechCabal

The top 5 disclosed deals of the month are:

Kenyan agritech Victory Farms’ $35 million raise.

South African fintech Peach Payments’ $31 million Series A raise.

DRC cleantech Altech Group’s $18 million raise.

South African fintech PayMeNow’s $14 million raise.

South African fintech Decentral Energy’s $12.1 million raise.

*Note: This data is inclusive only of funding deals announced in April 2023. Raises are often announced later than when the deals are actually made. This data also excludes estimated grants from accelerators like Techstars or Y-Combinator. 

2. Crypto: Zimbabwe goes after gold 

April found Zimbabwe announcing plans to launch a gold-backed digital currency. The country needs $100 million worth of gold to kickstart the project which it believes will save its declining currency.

Meanwhile, in East Africa, Kenya is considering enforcing a new regulation that will force all crypto platforms in its regions to pay a 1.5% duty on every transaction they process. There’s already a pending 20% excise tax on crypto transactions in Kenya, and if both pass, it could mean double trouble taxing for Kenya.

3. Africa + Big Tech: Kenya pushes against Meta

Big tech companies got an earful in cases heard in Kenyan courts. 

Last month alone, Meta lost two separate cases in Kenya. In the first, a court dismissed its claim that Kenya had no jurisdiction to hear cases against Meta. That court also prohibited the tech company from using any third-party content moderators. 

In the second, a court granted two Ethiopians leave to sue Meta outside Kenya in a case that could cost Meta $1.8 billion. 

4. Regulations: Kenya reverses 30% rule

Early in April, President William Ruto reversed a rule that mandates that foreign companies must have at least 30% Kenyan ownership to operate in the country. The rule was implemented in 2020 to encourage Kenyan participation in the ICT and science and technology sector through equity ownership. Per Ruto, the rule is slowing down investments in Kenya’s ecosystem.

5. Acquisitions: Autocheck acquires Autotager

Nigerian automotive company Autochek completed its sixth acquisition in two years in April 2023.

In an undisclosed deal, the company acquired a majority stake in AutoTager, an Egyptian automotive technology company, as part of its expansion into Egypt.

6. Layoffs/Shutdowns: Copia Global and Lazerpay

Layoffs continued globally into April 2023 and Africa was not left out.

Nigerian crypto startup Lazerpay announced it was shutting down after months of failing to raise the funds it needed to stay afloat. 

Meanwhile, Kenyan e-commerce company shut down its Ugandan operations in a scaledown move. The company, which raised $50 million in January 2022, also laid off 350 employees.

7. Investments: South Africa gets $1.8 billion from Amazon; Kenya gets $390 million for tech

Startups may not be getting as much funding, but tech ecosystems are certainly getting a boost.

In April, two sizeable investment announcements targeted at South Africa were made. First, Amazon announced plans to invest $1.8 billion in its cloud services in the country by 2029. Cassava Technologies also pledged a total of $250 million in investment in South Africa through its business units—Liquid Intelligent Technologies, Africa Data Centres, and Distributed Power Africa.

The World Bank Group announced a whopping $390 million investment to help Kenya finance its Digital Economy Acceleration Project.

8. Cybersecurity: Flutterwave hacked twice; Navias suffers hack

In April, sources revealed to TechCabal that fintech Flutterwave was hacked twice. In this second set of hack allegations, culprits transferred a total ₦550 million ($1.2 million) from the company’s accounts. The sources alleged that, much like the first incident on February 5, the perpetrators used monies fraudulently obtained from Flutterwave accounts to buy USDT on the crypto platform Binance.

Kenya’s biggest online retailer Naivas, meanwhile, suffered a ransomware attack in April from cyber criminals who are now threatening to leak some of its data. 

9. Space: Kenya launches first operational satellite

April also saw Kenya launch Taifa-1—its first operational satellite.

Launched aboard the SpaceX Falcon 9 rocket in California, the satellite—tested and developed by Kenyan engineers—will reportedly be used to provide data on areas like agriculture and food security for Kenya, a country suffering a severe drought that’s affecting over 5 million people.

10. Global: CashApp founder murdered in the US

In sombre news, CashApp founder Bob Lee was murdered in California, US, on the morning of April 3. 

Another tech founder and friend to Lee, Nima Momeni, was arrested, arraigned and charged with the murder days later.