Exclusive: MTN, Globacom strike deal to settle ₦2 billion interconnection fee debt
MTN Nigeria and Globacom (Glo), two of Nigeria’s leading telcos, have ended a 15-year-long dispute over interconnection fees after MTN agreed to accept ₦2 billion to settle the interest payment instead of the ₦3 billion initially demanded, one person familiar with the negotiations told TechCabal. The interconnection debt on which those interests accrued was settled earlier, the same person said. The agreement follows efforts initiated by the Nigerian Communications Commission (NCC) at the behest of Glo. In January, Glo faced the threat of disconnection by MTN Nigeria and was given 21 days by the NCC to settle its debt or risk seeing its 61.5 million subscribers blocked from calling MTN lines. Exclusive: CBN targets six months for recertification of PoS terminals to fight fraud Glo’s interconnection fees debt grew over the year because it often paid substantially less than the bill it racked up. There have been multiple threats from MTN and Airtel Nigeria to disconnect Glo over the years, with MTN disconnecting Glo for five days in 2019. The recent disconnection process began in November 2022 due to an accumulated debt owed to MTN Nigeria by Glo, and MTN sought NCC’s approval for a disconnection, eventually receiving it in December 2023. A source at NCC said the new executive vice chairman plans to do things differently by ensuring all telecom operators comply with the market rules. *This is a developing story
Read MoreExclusive: CBN targets six months for recertification of PoS terminals to fight fraud
The Central Bank of Nigeria (CBN) plans to recertify all active POS terminals across the country, two sources familiar with the conversation told TechCabal. Part of that process will include an update to issuing terminal identification numbers (TID) — a unique eight-digit identifier — and collecting information such as BVN and tax identification numbers from POS agents. “This means you must request TID for each merchant with their details and wait for NIBSS to generate it before they can assign a terminal to that merchant,” one person familiar with the CBN’s plans said. Before now, mobile money operators like Opay or Palmpay typically requested TIDs in bulk to assign terminals quickly, but recertification will mean acquirers (banks and mobile money operators) have to register each TID separately. Registration requires the provision of an address, BVN or Tax Identification Number (TIN), business name, and F1 Code of the acquiring bank. The validation of a POS terminal delivered to a particular location would be handled by licenced Payment Terminal Service Providers (PTSPs) like Interswitch, ETOP, or CitiServe. “Banks will typically select and map each terminal registration with a particular PTSP that sets it up, deploys, and continues to support the merchant. PTSPs are also the bridge to terminal procurement from the OEM as banks/acquirers were not allowed to engage directly with OEM for procurement,” a product manager at a fintech startup said. While there is no timeline given by the CBN for the commencement of the recertification exercise, TechCabal learned that the Nigerian Interbank Settlement System (NIBSS) was mandated by the CBN to come up with a geofencing plan that ensures that terminals are not used outside the locations where they are registered. The terminals, once certified, can only be used in the location where it is deployed. If the POS terminal is used outside the address or location, NIBSS will disable it. While the timeline of recertification is unclear, mobile money agents will be asked to provide additional information as part of their KYC to enable them to operate Tier-3 accounts. A Tier-3 account allows transactions of up to ₦1 million, and customers can hold up to ₦1 billion in deposits. Before now, agents were allowed to operate any level of tiered accounts provided that proper KYC was done and necessary documentation was achieved. Tier-1 accounts are the most popular among agents because they require minimal documentation to open and operate. The recertification is likely to push agents towards operating more Tier-3 accounts. The plan also mandates the audit of agents and review of their processes by acquirer banks, Super Agents, and MMOs to align with the proposed recertification program and beyond. Mobile money operators who spoke to TechCabal on condition of anonymity said they are still trying to get clarification on some of the features of the certification exercise for POS terminals.
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Next Wave: The case for local car manufacturing in asset financing
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 04 Febuary, 2024 Asset financing was meant to help the mobility sector progress, but it has encountered a few problems. Could local manufacturing re-balance the model? Owning a car should never have to be a luxury, especially if you hope to venture into the ride hailing business. But in Nigeria, car ownership is slowly getting out of reach. There are several factors responsible for this. Nigeria, with an estimated population of 200 million, does not produce cars. Per data from the nation’s statistics office, the country boasts over 12 million registered vehicles, of which almost 90% are imported, representing a motorisation rate of just 0.06 vehicles per person. Vehicle importation is denominated in dollars, a currency that Nigeria’s naira has weakened against in the last few months ever since President Bola Tinubu’s reforms. The naira is currently the worst performing currency in the world as it exchanges somewhere around ₦1,400–₦1,500 to the greenback. But that is not the only factor that makes owning a vehicle out of reach. Anyone hoping to import cars has to contend with cumbersome clearing processes at the ports and import duties placed on used and new vehicles. Vehicle importation may yet again suffer another hike after the Nigerian Customs Service adjusted the foreign exchange for tariffs and duties upwards by 42.5% to 1,356 per dollar, making importation another headache for prospective car owners. The direct impact of these policies are borne by ride hailing drivers who are quite unfortunate to be working in the automotive industry where a lot of their expenses— fuel and spare parts—are determined by whatever the value of the naira trades in comparison to the dollar. These drivers seem to be losing a battle even before they begin to put their cars on the road. Prior to now, drivers naturally opted for the hire purchase option which allows them to make a downpayment, and then, at their own pace, settle overtime. Most of these hire purchase moves occur in Nigeria amongst friends and family. For drivers unable to make any significant downpayment due to the fact that they have no capital, the asset financing model came in as a quick fix. Vehicle-financing firms like Moove and LagRide, the Lagos state ride hailing platform, set up a rent to own model to help drivers. The value of imported vehicles into Nigeria. Chart by Mobolaji Adebayo, TC Insights Moove partnered with ride hailing startups like Uber to offer Suzuki Alto or S-Presso to drivers. Although the Suzuki vehicles used in the Uber Go category typically sell for $13,500 (₦12.1 million) in Ghana and are sold for $21,500 (₦19.2 million) in Nigeria by Suzuki, Moove rents them out to the drivers for $25,450 (₦22.8 million). At a daily remittance rate of ₦9,400 ($10.43), it would take a driver 41 months (three years and five months) to complete their payments. LagRide offers a similar model which allows drivers to make a downpayment of ₦700,000 ($776.49) for brand-new GAC vehicles (SUV and Sedan options). Drivers spread the rest of the payments across four years by making daily payments of ₦8,900 ($9.87). However, the asset financing scheme hasn’t had a smooth run. Asides from safety reasons where the Suzuki S-Presso model reportedly fared poorly in at least one crash safety test, drivers have also claimed the offered cars were overpriced and came with a difficult payment structure. In 2023, some of the complaints were reported in local media, and some of them are referenced here and here. To be clear, the asset financing model is not an exceptionally flawed model. People take car loans or loans to fund some purchases like phones, mortgages or vehicles in other parts of the world. Besides, the asset financing model is offering new car models instead of second-hand cars that local hire purchase models usually parade. Drivers disagree with this model, as they worry that the car’s value (albeit newly purchased) may depreciate at the end of a long repayment period which is usually 3–4 years on average. Nigerians are not really used to buying things on credit; they’d rather save to own. This author argues that Nigeria runs a largely cash-driven system where people are expected to have cash for every transaction as credit is unavailable. A source at M-Kopa told me Kenyans are different, as they tend to favour installmental payments more. This article here lends credence to that fact. 2023 was a watershed year for African technology startups. It was the year Instadeep got acquired by BioNTech for $682 million in Africa’s largest-ever acquisition deal. It was the year tech startups in Africa shed more than 1,500 jobs in industry-wide layoffs as 15 startups which raised $214 million in funding shut down. It was the year African startups raised $2.748 billion across 500 deals. And more! It will be remembered as the year that reset the trajectory (hopefully) for the better. Download the full report from our research team at TC Insights to learn more. Can local car manufacturing companies help? Can local manufacturing sort the asset financing problem? My colleague Abraham Augustine states that building the case for local manufacturing is not easy. To be fair, cars are only assembled in Nigeria by some local players like Innoson and Ford. However there are few newly assembled Nigerian car brands that could lower the long repayment plan offered by vehicle financing firms. An Innoson sedan car known as Innoson Carris is quite affordable, between ₦4.5 million to 6 million, lower in price than Suzuki and GAC alternatives. Three years ago, Innoson offered its IVM Caris, IVM Smart, IVM Kenga, and IVM Connect at a starting
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👨🏿🚀TechCabal Daily – MultiChoice floats above the Canal
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Our State of Tech in Africa report has been out for a couple of weeks now. In it, we dive deep into trends that defined Africa’s tech ecosystem in 2023. From a steady M&A incline, to a decline in VC funding, the SOTIA report will give you actionable insights into the business and human impact of African tech. If you’ve read the report, can you let us know if we deliver on this promise? Please take two minutes to fill out our survey here. In today’s edition MultiChoice rejects $2.5 billion acquisition offer Senegal shuts down its internet again Tingo parts way with 40 contractors KoBold strikes copper in Zambia M-Pesa gives unregistered users new deadline The World Wide Web3 Opportunities Streaming Multichoice rejects Canal+ $2.5 billion acquisition offer Last week, Canal+, a French broadcasting company set its sight on acquiring all outstanding shares in the pan-African broadcaster, MultiChoice, for R105 ($5.65) per share—an increase from the broadcaster’s current share price of R79 ($4.25). In a statement to the Johannesburg Stock Exchange, MultiChoice rejected the offer stating that Canal+’s offer “undervalues the Group and its future prospects”. What’s the deal with Canal+? Canal+, owned by media conglomerate Vivendi, began acquiring MultiChoice shares in 2020, continually increasing its stake in the South African company, and has offered to buy Multichoice for $2.5 billion hinting at its global expansion ambitions. The recent offer aimed to capitalise on MultiChoice’s struggling share price, which has dipped nearly 50% in the past six months. Currently, Canal+ owns 32.6% of MultiChoice’s shares, and South African law dictates that a shareholder exceeding a 35% stake in a company triggers a mandatory offer requirement. However, Canal+ might only be able to hold a maximum of 20% of voting rights, as the law also limits the foreign ownership of South African broadcasters to 20%. A potential takeover battle? In October 2015, Vivendi, Canal+ parent company acquired minority stakes in gaming firms Gameloft (6.2%) and Ubisoft (6.6%), eventually increasing ownership to 10% in both. Vivendi executed a hostile takeover of Gameloft, obtaining over 30% before persuading other shareholders to sell. By June 2016, Gameloft had become a Vivendi subsidiary. Vivendi might attempt the same play with MultiChoice. In response to Canal+’s accumulating stake, MultiChoice has also sought regulatory intervention, requesting a ruling on whether a mandatory offer must be extended to all ordinary shareholders. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Internet Senegal shuts down internet after delayed presidential election Senegal’s internet shut down for the third time in nine months has left citizens feeling more disconnected than ever. The latest shutdown follows President Macky Sall’s decision to postpone the presidential elections slated for February 25. The government has cited “hateful messages” on social media as the reason for the shutdown, following the same approach as the earlier shutdowns. ICYMI: This isn’t Senegal’s first rodeo with internet blackouts. In June 2023, Senegal shut down its internet after an opposition leader, Ousmane Sonko, was sentenced to two years in prison after a prolonged legal dispute since 2021, in a high-profile moral corruption case. In July 2023, the internet was shut down again to “prevent disturbances” after Ousmane Sonko was arrested for inciting rebellion against the government. While residents attempt to circumvent the restrictions through WiFi, the economic impact of the shutdown is significant. Reports suggest Senegal lost $300,000 per hour during the previous internet disruption in June, and Sub-Saharan African countries incurred $1.74 billion in losses due to such shutdowns in 2023. A concerning trend: Internet shutdowns have become a prevalent tool for African governments seeking to control information flow. In the past two years, governments in the Republic of the Congo, Niger, Uganda, and Zambia have cut off internet access during election periods. Official narratives often justify shutdowns as measures to curb violence, maintain public order, or prevent the spread of misinformation. However, the shutdowns may be used to silence opposing voices, restrict freedom of expression and hinder transparency. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Layoffs Tingo parts ways with 40 contractors About nine months ago, Tingo made headlines after a US-based research team called the company “an exceptionally obvious scam.” Since then, the company has made media rounds a couple of times and it’s all for the wrong reasons. Despite Hindenburg’s allegations that the company’s fintech, agritech and telecoms businesses were failing, the company declared sales of $977 million for H1 2023. Three months later, the US Securities and Exchange Commission (SEC) halted sales of its stocks to protect investors. More recently, in December, its founder, Dozy Mmuobuosi was charged with securities fraud by the same agency. Now, it appears the company’s duplicity is also extending to its workers. Last week, the fintech laid off 40 contractors who helped onboard new users and resolved issues on TingoPay, its digital payments app. According to the affected staff, Tingo denied December and January salary payments. A fair fall? Tingo did not provide any reasons for the terminations, directing affected employees to its HR outsourcing firm, HR Indexx for clarification. The outsourcing HR Indexx disabled comments on their WhatsApp group, leaving employees without further explanation. So far, neither Tingo nor HR Indexx have responded to requests for comments. Big Tech KoBold strikes copper gold in Zambia KoBold, a California-based mining company backed by heavyweights like Bill Gates and Jeff Bezos, has discovered a massive copper deposit in Mingomba, Zambia. KoBold uses artificial intelligence to identify critical mineral deposits crucial for battery metal production, including copper, lithium, nickel, and cobalt. The mining company invested $150 million
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“An exit is an exit”: Three things we learned from the State of Tech in Africa report launch
On Friday, January 26, TechCabal Insights released its much anticipated State of Tech in Africa Report for Q4, 2023. The report shed light on the realities of funding in 2023 with insights on how investors and players in the tech ecosystem can navigate through the funding winter and come out thriving. To launch the report, TechCabal Insights had its first TC Live event of the year hosted by Timi Odueso, TechCabal’s Senior Editor, Newsletters, and featuring Mobolaji Adebayo, analyst at TechCabal Insights; Moses Kemibaro, a digital media strategist; Nadayar Enegesi, co-founder and CEO of Eden Life, and Ory Okolloh, partner at Verod-Kepple Africa Ventures. The event was packed with highlights and action points that serve as an invaluable resource for participants. Here are three that stood out for us:2023 was a reality check—leave your entitlement at the doorFor Nadayar, the silver lining behind the 2023 investment cloud was that it served as a reality check for investors. While acknowledging that most information is private and within companies, he noted the challenges startups face, including regulatory threats, macroeconomic headwinds, and funding cuts. He commended the resilience of African founders despite limited global funding. As challenging as things were, he insisted that “it could have been a bigger bloodbath.” Nadiyar advised on the need for companies to reinvent themselves, a sentiment that Moses shared when he noted that companies are pivoting, with a stronger emphasis on more B2B and less B2C models. “We should be thinking of how to prioritise profitability and sustainability and move away from an entitlement mentality towards funding.” Debt funding is great for African tech—but it should be localised Last year, there were 45 recorded debt deals in Africa, and for Ory, it’s a good thing noting, “While debt funding is sector agnostic, I think it’s a great development. However, there are challenges in how it’s currently structured.” Ory believes there’s a mismatch of instruments since much of the equity funding could be structured as debt instead, particularly working capital and assets, because it otherwise creates a premature dilution for founders who have no skin left in the game by the time they get to Series A or B. Another challenge she notes is that the debt coming in is in US dollars, which is tough in light of multiple devaluations affecting local currencies. She maintained that rethinking around exploring local currency debt will help grow startups while protecting them. An exit is an exit—take whatever wins you canAs much as it’s great to hear news about emerging tech unicorns, current realities require a different focus. Investors consider mergers and acquisitions a lifeline, with exits becoming rarer. This point was expanded on by Ory, who said, “It doesn’t matter how big an exit is, an exit is an exit. It might not be the 10x you hoped for, and it could even be a down round, which constitutes a challenge. But you must remember that this is a tough environment. So, if this merger and acquisition option gives a founder time to breathe, go for it.” She added that for earlier investors, this option creates liquidity. “In a few years, people will say VC doesn’t work in Africa because we have not had enough liquidity. Remember, these are people who are putting in money expecting a return. Maybe what will change is that the return expectations shift, but we don’t want to be in a place where you put your money in and get nothing out.” Ory also tasked us with building transparency and what she calls an “M&A muscle” to make it more viable. She suggested that TC Insights build an index of M&As and secondary markets that could be a helpful resource for investors. Other interesting subjects were discussed around expansion strategies, data protection, artificial intelligence, regulation and compliance, consumer behaviour, and switching costs. You can catch up on the full event by clicking this link.
Read MoreOutsourced and owed: 40 Tingo Mobile contractors laid off despite unpaid salaries
Forty contractors who worked for Tingo Mobile, a fintech startup facing fraud charges in the US, have been laid off despite not being paid their salaries in December and January, three of the affected employees told TechCabal. The affected contractors, who supported new users with onboarding and resolved issues on TingoPay, a digital payments app, were laid off on a call with Tingo Mobile and HR Indexx (HRI) in the first week of February 2024. HR Indexx blamed the non-payment of salaries (N100,000 net monthly) on Tingo, according to messages seen by TechCabal. “Given the substantial amount involved, totaling in millions, HRI currently does not have the funds readily available to cover the salaries while awaiting payment from Tingo Mobile,” a message from HR Indexx read. HR Indexx did not immediately respond to TechCabal’s request for comments. When the contractors turned to Tingo Mobile for an explanation, they were redirected to the outsourcing company. “HR Indexx has disabled comments in the WhatsApp group where we coordinate our activities so that we will no longer complain about the money,” an employee said. Senegal shuts down mobile internet two days after postponing Presidential elections Tingo Mobile did not immediately respond to an email from TechCabal requesting comments. “On the layoff call, [HRI] said we should go and learn other skills and start applying for other jobs,” said another affected employee. In December, the US Securities and Exchange Commission alleged that Tingo Group fabricated its financial statements and misled investors. Tingo Mobile is one of the subsidiaries of Tingo Group, the company and was the subject of an explosive report published by Hindenburg Group, the famous American short seller. The SEC formally launched an investigation into Tingo Group and suspended trading in the shares of the second subsidiary, Tingo Foods PLC.
Read MoreSenegal shuts down mobile internet two days after postponing Presidential elections
Senegal temporarily suspended mobile internet on Monday morning, upping the tension in a country often described as one of the continent’s most stable democracies. Monday’s internet suspension, days after President Macky Sall postponed Presidential elections slated for February 25, is the third internet suspension in Senegal in the last nine months. The government blamed ‘’the dissemination of several hateful and subversive messages relayed on social networks shutdown’’ for the shutdown following the same approach as the earlier shutdowns. Protests erupted on Sunday after President Macky Sall announced on Saturday that Presidential elections would be postponed for six months. ‘’Senegal’s government has again taken the abusive decision to shut down mobile Internet across the country. The implications are wide-ranging. People underestimate how many things in our daily lives are dependent on mobile internet,’’ Tidjane Deme, general partner at Partech, shared on X. Political uncertainty in Senegal has worsened since June 2023 when Ousmane Sonko, a popular opposition leader, was arrested. Since his arrest, at least two prominent opposition candidates have been arrested, while others have been attacked by the police. Residents in Dakar have taken to social media to share that they have had to use WiFi to access the internet. The Senegalese government arrested five people for selling Starlink terminals without the required licence or authorisation in August. According to some estimates, Senegal lost $300,000 per hour due to the June shutdown. Sub-Saharan African countries lost $1.74 billion to government-induced shutdowns in 2023, according to a report by Top1vpn. Since the 2011 Arab Spring, internet shutdowns have become a frequent way African governments have sought to establish control. At least ten countries had internet shutdowns in Africa last year.
Read MoreNigeria’s Central Bank slashes forex backlog estimate by $4.8 billion
After months of speculation around Nigeria’s FX backlog, Nigeria’s Central Bank Chief has said the country’s “valid forex backlogs” stand at $2.2 billion. The CBN arrived at the figure after subjecting the initial claims of the $7 billion to a long audit. On Monday, Yemi Cardoso, the Central Bank Governor, told Arise TV that the $7 billion figure was audited by Deloitte and around $2.4 billion in “invalid claims” were discovered. According to Cardoso, some infractions include not having valid import documents, claims from entities that didn’t exist, beneficiaries and account parties who got more foreign exchange than they asked for and some who did not ask for forex but got it. “We are not paying these claims if it is not a validly constituted request,” Cardoso said. And while Cardoso claimed the arrears owed to airlines had been paid, the airline association IATA said there was still $700 million unpaid. “What remains is about $ 2.2 billion to be settled, and I am confident. We would clear all of that very shortly,” he added. Last week, the CBN issued new policy directions to stabilise the Naira after a week of volatility. The apex bank aims to unify prices and close the disparity between the official FX window and the parallel market.
Read MoreMultiChoice expectedly turns down $2.5 billion offer from Canal+
MultiChoice, the pan-African broadcaster with a market capitalisation of $2.15 billion, has expectedly turned down a non-binding acquisition offer by Canal+, the Vivendi-owned pay-TV company. MultiChoice told shareholders it would not entertain the offer of R105 per share, a 40% premium on MultiChoice’s then-share price. “After careful consideration, the Board has concluded that the proposed offer price of R105 in cash significantly undervalues the Group and its future prospects,” MultiChoice said in a statement to the Johannesburg Stock Exchange. Canal+ tests the waters with a bid to buy MultiChoice It is unlikely that Canal+ will consider the rejection as a sign to end its pursuit of MultiChoice, having begun increasing its stake in the company since 2020. Additionally, Vivendi, Canal+ parent company, is familiar with the complexities and intricacies of hostile takeovers, having engineered at least two similar takeovers. The French broadcaster continues to mop up MultiChoice shares as it pushes its way to the 35% limit, according to a regulatory filing seen by TechCabal. MultiChoice share price has plunged by almost 50% in the last six months Per South African law, a stake of more than 35% would require Canal+ to make a mandatory offer to MultiChoice shareholders. “MultiChoice has also requested the [regulator] to make a ruling as to whether a mandatory offer must be made to all holders of ordinary shares in [MultiChoice],” another filing made on Monday morning said. “A further announcement will be released if there are further developments.”
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African startups raised $83 million in January 2024
African startups got off to a sluggish start in 2024, raising just $83 million across 31 disclosed deals in January, according to data from Africa: The Big Deal. This marks a steep decline from the $545.1 million raised in 20 deals during the same month in 2023, representing an 84.8% year-on-year drop. The January 2023 fundraising activity was, however, heavily influenced by a single large deal: the $443 million acquisition of AI company Instadeep by BioNTech. Excluding this outlier, African startups in January 2023 raised roughly $99.1 million, bringing the YoY decline to a more moderate 16.2%. This suggests that the underlying growth of the African tech ecosystem remains relatively stable, despite the headline-grabbing funding slowdown. Image source: TechCabal/Timi Odueso The three sectors with the highest funding are agritech with $26.3 million in raises, cleantech with $18.1 million, and healthtech with a modest $13.5 million. Various sectors—most notably fintech—within the ecosystem have observed a decline in funding compared to the sums raised in previous years. With a global funding winter in tow, investors are increasingly focusing on startups with proven track records of traction and growth, leaving fewer resources available for testing the waters. Three of the four logistics startups—Bosta, FriendlyM and Roboost—who raised funds in January 2024 were from North Africa, or Egypt specifically. Last year, logistics startups received a fair bit of interest as the fourth sector with the highest funding at $205 million. While only a fraction of this funding came from North Africa, Egypt’s logistics sector may see increased interest this year with the growing success of mobility startup Swvl which recorded its first-ever net profit of $2.1 million last year after recording $161 million in losses in 2022. Image source: TechCabal/Timi Odueso 2. Investments: EIB makes its third African injection, and Accelerate Africa and T-vencubator debuts While funding is pretty much the same since last year, Africa’s tech ecosystem investment space saw both new and old faces in January 2024. Early on in the month, the European Investment Bank (EIB) made its third investment in an Africa-focused venture. This time, Seedstars was the lucky choice with a $30 million check. The venture says it will distribute 50% of the funds across francophone Africa with selected startups set to receive between $250,000 and $2 million. Seedstars also received an additional $10.5 million from the African Development Bank (AfDB) later in the month. On the strategic side, two-time unicorn founder Iyin Aboyeji and investment powerhouse Mia von Koschitzky-Kimani teamed up to launch what media houses are now terming “The YC of Africa”. The venture is Accelerate Africa, a Nigeria-based accelerator which will provide 10 pre-seed and seed-stage startups with business and product development expertise with the aim of pitching to investors. Finally, Egypt saw the launch of a VC Firm-Incubator hybrid with T-vencubator, a firm that wants to invest in “exceptional talents shaping Egypt’s future”. 3. M&As: Access Holdings closes three acquisitions in one month Last month, the parent company of Nigeria-based commercial bank, Access Bank, taught startups a lesson on acquisitions. Access Holdings completed three acquisitions within the space of a month. In the second week of January, it announced that it had completed the acquisition of Zambia’s Atlas Mara more than two years after it announced the merger. Less than a week later, it completed the acquisition of insurance brokerage company Megatech Insurance. One of its most significant acquisitions was ARM Pensions, Nigeria’s second-largest pension fund manager, which received regulatory approvals just days before the end of the month. These acquisitions, long anticipated, underscore Access’ strategic expansion across the continent. 4. Pivots: Kippa and Zilla jump ship Ecosystem players who contributed to our 2023 Wrapped article noted that 2024 will see more startups move towards better business models. We saw a bit of that in January with two startups pivoting. Zilla, which launched as a buy-now-pay-later product in 2021, changed gears and pivoted to cross-border payments last month. Sources close to the company said it faced challenges with helping customers understand the BNPL model. Next, Kippa, which faced a $31,000 internal fraud case, announced that it would move from fintech to edtech. The company, last year, moved its agency banking product KippaPay to another startup, and now, it’s launched an edtech platform that will allow users to create courses using AI. 5. Shutdowns: Cova shuts down, and Woven knits itself back together While some startups pivoted, some wound their activities up. In a January 24 email to users, asset management platform Cova announced that it would cease operations by February 10. While Cova’s management is yet to give specific reasons for its shutdown, citing only “several factors” in its email, CEO Oluyomi Ojo had mentioned in a 2021 interview that users were still adapting to the concept of a startup that helps users transfer asset ownership in the event of their death. The startup raised $800,000 during its run. Another startup, Woven Finance, was also in the news for shutting down. The Nigeria-based startup sent an email announcing its shutdown plans, but later rescinded the claim, stating that the email was sent in error. 6. Stepdowns: Peter Njonjo, Ashkay Grover, Tosin Osibodu, and Duke Ekezie, step down As we waved goodbye to startups in January, some CEOs also bid farewell to their companies. Cellulant CEO Ashkay Grover who joined the group in 2021 stepped down to focus on personal matters. The company had reportedly effected a third round of layoffs just one month before Grover’s exit. Kenyan agritech Twiga Foods also parted ways with its co-founder and 10-year CEO Peter Njonjo who stepped down from the company’s board. TechCabal’s investigation indicates that Njonjo was forced out by investors who bailed the company out of a lawsuit with a $35 million investment. Tosin Osibodu, co-founder and CEO of Chaka also exited the company to focus on a new venture, Alpaca. Chaka was acquired by Risevest last year, and Osibodu left the company in the capable hands of Risevest CEO Eke Urum. Finally, Kippa’s co-founder Duke
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