Airbus to launch drone hub for high-altitude satellites in Kenya
This article was contributed to TechCabal by Bonface Orucho via bird story agency. European aircraft manufacturer Airbus, through its high-altitude satellite building subsidiary, AALTO HAPS Ltd., plans to set up its first communication hub for its high-altitude drones (Zephyr) in Kenya’s Laikipia County. A news report by Bloomberg indicates it will roll out operations in the country “at the beginning of next year and begin serving customers in the third quarter.” Tom Guilfoy, vice president for AALTO PORT operations, explains therein that Kenya is being considered for the port because of “the weather, the wide open spaces, the uncongested airspace, the stable government, the economic environment, and the well-educated, young, tech-savvy population.” Besides the promise of creating close to 1,000 job opportunities, the hub will also encourage local internet adoption. This high-speed internet technology could revolutionise accessibility and internet speeds as conventionally known. Notably, Airbus will work with telecommunications service providers in the country to facilitate accessibility rather than directly selling to customers. Also, the Bloomberg report explains that the officials have already met with Safaricom Plc and Telkom Kenya Ltd. and that it targets being an internet provider for 3% of the country, especially those in remote areas. Airbus is, however, awaiting approvals from the country’s aviation, meteorological, and communications authorities before full rollout and subsequent commissioning. Earlier communication from Airbus on its website shows it will formally roll out commercial operations for the drones in 2024. Zephyr is a fixed-wing High Altitude Platform Station (HAPS) UAV boasting a stratospheric range of about 20 kilometres above Earth, making it the lowest Earth-orbit satellite network, considering existing offerings such as Elon Musk’s SpaceX, which operates some 550 kilometres above the Earth. Details on AALTO’s website explain the technology’s extensive game-changing high speeds and connectivity ranges, such as the “coverage of 7,500 square kilometres, which is the equivalent of up to 250 towers on the ground.” The Zephyr drones can spend as many as 200 days in flight and up to 64 days and nights in the Stratosphere. With these unique capabilities, they could replace mobile phone towers. The developers also explain on the website that HAPS will operate on a direct-to-device (D2D) model boasting a latency of less than ten milliseconds and 5G non-terrestrial internet connectivity, making it an ideal option in Africa. AALTO HAPS plans to build between 50 and 75 of these drones annually. World Bank data shows more than 50% of people in Africa had no broadband internet access in 2022. Airbus joins a growing list of global internet tech companies setting their sights on the Stratosphere to revolutionize high-speed internet uptake. The race to provide fast and reliable internet services to remote areas has intensified in Africa. The announcement of Amazon’s Project Kuiper, the rollout of Starlink’s satellite internet offering in Africa, and Safaricom’s agreement with AST SpaceMobile, which offers space-based internet connections on regular mobile devices, are some of the latest developments signalling a surge in activity in this emerging technology. Amazon is partnering with Vodafone to extend Project Kuiper’s broadband to global communities with limited access and is considering additional services for businesses, including backup connectivity and support for isolated infrastructure. In October, Rwanda’s government teamed up with Japanese investor SoftBank Corp. for a test transmission of a video stream to Japan over HAPS 5G using an unmanned aerial vehicle positioned in the Stratosphere. The successful test involved delivering 5G connectivity on a solar-powered HAPS UAV prototype situated in the Stratosphere at a maximum altitude of 16.9 km for approximately 73 minutes. Also, SpaceX’s Starlink continues to ramp up reach and distribution in Africa, with the latest additions being in Benin, increasing its offering to seven countries on the continent. It recently partnered with online retailer Jumia to drive its satellite internet offering across the continent, starting with Kenya and Nigeria. Even in critical markets, such as South Africa, where market access for major companies such as Starlink is limited due to legal hurdles, emerging players promise to leverage high-altitude technology to offer high-speed internet from space. According to My Broadband, OneWeb, a French satellite operator and Eutelsat subsidiary, “is set to introduce its low-earth orbit (LEO) broadband service in South Africa, its first market on the continent.” All these developments could fast-track the uptake of mobile internet and increase internet speeds in Africa. Already, existing data shows Africans are hungry for higher mobile internet speeds. The GSMA’s State of Mobile Internet Connectivity 2023 report shows that more than half of global 4G network expansions last year occurred in Africa, increasing from 58% in 2021 to 65% (excluding North Africa).
Read MoreThis investor is balancing impact investing and getting returns on her investments
In the course of her work helping venture capital firms across the world gain access to deal flows from Africa, Surayyah Ahmad realised that these local ecosystems lacked structure, affecting the quality of said deal flows. This pushed her to return to Nigeria from London in 2022 to do the work of fostering collaboration and building funding pipelines within the local ecosystem, especially in northern Nigeria, through her accelerator, TechTankLabs (TTLabs). According to Ahmad, her focus on the northern tech ecosystem is simply strategic. Nigeria’s population is expected to match that of the United States by 2050, becoming the third-largest country in the world, and a large number of that population will come from the northern part of the country. “This is a ready market for anything,” she shared. “We want to make sure that we start to harness the potential now, not in the next 20 years.” In November, Ahmad, alongside Sanusi Ismail, the founder of Kaduna’s first tech innovation hub, CoLab, announced the launch of Aduna Capital, a $20 million fund targeted at discovering and nurturing early-stage tech founders across Africa, with a focus on regions like northern Nigeria. One of the main challenges of the northern tech ecosystem is a lack of access to funding as there are not enough VCs in the region, according to this report. On the other hand, investors from other regions are typically wary of investing outside the Lagos tech bubble. This puts entrepreneurs building in the north in a tight position, with many resorting to dev shops and prioritising being contractors for the government over pushing to scale their startups. “There are a lot of businesses in Abuja, but they get carried away with contracting and doing dev shops,” Ahmad shared. “Dev shops were the highest category of companies in our survey, which makes sense that people are developing software for the government.” However, Ahmad believes this trend is slowly changing as the ecosystem is increasingly seeing more people who recognise the need to have scalable products that are not government-dependent. She believes that it’s important to invest in them. According to Ahmad, the right time to invest in some of those outliers is right now because a couple of success stories will result in a multiplier effect for the ecosystem. “We’re already starting to see success stories with Sudo Africa, which raised $3.7 million; and Flexi Saf, which is bootstrapped to over a million dollars in revenue,” Ahmad said over a call. “These kinds of successes send a message to others, or even employees that work there, that they can build and scale their products. The cycle continues and this is how we’ll start to see a more vibrant ecosystem.” Ahmad is also hopeful that this growth will be facilitated by the presence of Nigeria’s new minister of communications, innovation and digital economy, Bosun Tijani. Tijani recently launched the 3MTT programme to train three million tech talents, simultaneously giving smaller tech companies the chance to apply to facilitate trainees. “Having one of our own who understands the pain of the ecosystem is great, and I can see that he’s already opening things up with the 3MTT programme, giving smaller companies the chance to apply as trainers,” said Ahmad. “This is automatically going to catalyse the ecosystem both in Abuja and nationwide, simply because some of these companies will have that initial market that they need to gain some traction and to be able to raise for the funding.” Beyond funding, another key challenge of the northern tech ecosystem is a lack of cohesion. This means that it is often difficult for entrepreneurs to connect with other stakeholders to gain knowledge or access to opportunities and resources. Currently, there are only about 40 key ecosystem entities, including accelerators, VCs and incubators operating from the region. This is something that Ahmad struggled with in her early days in the ecosystem. She shared that a lot of growth and funding opportunities were only discovered later in her journey. She told TechCabal: “As a young founder, I wish I knew the kind of support available to me out there as a founder—all the accelerators or incubators or programmes. It is very sad, but it’s also the reason why we’re making sure that founders within the ecosystem here can access support, even if not from us, but from other incubators and accelerators available within the space.” In the next five years, Ahmad is looking to grow TTLabs to become a major pipeline for deal flows from the region and connect underserved founders around the country to VCs in Africa. Their fund, Aduna Capital, is targeting a 5–10x investor return, striking a balance between impactful investments and lucrative returns for investors.
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👨🏿🚀TechCabal Daily – Kippa transfers agency banking product KippaPay to Bloc
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Starlink is still illegal in Ghana! Yesterday, the country’s National Communications Authority released a circular cautioning anyone reselling the satellite internet device or related services to stop. It is not just in Ghana. Last Tuesday, South Africa’s telecommunications industry regulator, the Independent Communications Authority of South Africa (ICASA), also made a similar announcement, discouraging the use or provision of Starlink’s services in the country as it is unlicensed. In today’s edition Kippa transfers agency banking product KippaPay to Bloc Fuse Network launches $10 Million grant for web3 fintech WIC Capital raises $1 million for West African businesswomen Meta testing over 20 new AI features for FB, IG, and WhatsApp Funding tracker The World Wide Web3 Events Fintech Kippapay transferred to Bloc Kennedy Ekezie-Joseph, founder and CEO at Kippa Kippa, a Nigeria fintech, has transferred the operation of its agency banking product, KippaPay, to Bloc. Why? Kippa shuttered the operations of KippaPay in October after the naira devaluation meant that the fintech couldn’t keep up with buying point-of-sale (POS) terminals which its banking agents used. The fintech would not have been able to recover those expenses without increasing the fees it charged its agents. KippaPay has now been incorporated into GPay, Bloc’s payment subsidiary. Taking full control: Bloc confirmed via email today that KippaPay’s Android terminal and mobile app are now fully operational again. Additionally, it provided guidance on how to resume using the agency banking platform. However, service is yet to be fully restored to the Linux terminals which processes payments from POS. Merchants have also been told to return their POS devices to Kippa. According to a source close to the situation, those who don’t return the POS devices will not be onboarded as GPay users. Lights out: Bloc’s takeover of Kippapay is an unusual move. Kennedy Ekezie, a Kippa cofounder, claims that Kippa is still the owner of the product. 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. Funding Fuse Network launches $10 Million grant programme Mark Smargon, founder and CEO of Fuse.io Fuse Network, a blockchain payments provider, has launched a $10 million grant programme dedicated to supporting startups and businesses interested in Web3 payments globally. With a particular focus on emerging markets like Africa, Fuse Network wants to bridge the gap between the growing interest in Web3 and the lack of resources and infrastructure needed for businesses to adopt these innovative solutions. Crypto adoption thrives in Africa: Countries such as Kenya, Nigeria, South Africa, and Tanzania rank among the top 20 in the Global Crypto Adoption Index, with a transaction volume comprising retail-sized transfers at 7%, surpassing the global average of 5.5%. The grant programme is now open for applications and seeks to support businesses that are building and utilising Web3 payment technologies. Zoom out: Fuse Network actively supports projects in decentralised finance (DeFi), non-fungible tokens (NFTs), and the gaming sector. Additionally, the network provides a blockchain payments API platform—Fuse Charge—granting businesses and developers access to advanced payment capabilities. Introducing Discount Codes Boost sales with percent-based, fixed rate, and free shipping discounts when you sell with Paystack Storefronts and Product Links. Get started here → Funding WIC Capital raises $1 million to empower women entrepreneurs in West Africa Evelyne Dioh Simpa, managing director of WIC Capital WIC Capital, a Senegalese investment fund has secured a $1 million loan from FSDAi Nyala Facility, a UK investor focused on sub-Saharan Africa. With a commitment to supporting women-owned businesses, this loan will fuel WIC Capital’s mission to provide financing, create innovative products and provide targeted mentoring and training to women entrepreneurs in Senegal and Côte d’Ivoire. Understanding the issues: In Senegal, a mere 3.5% of businesswomen have access to credit from traditional financial institutions. This lack of funding hinders growth and limits their ability to contribute to the local economy. In April 2022, WIC Capital secured a $1.6million investment fund for female entrepreneurs based in Francophone Africa, including Senegal and Côte d’Ivoire. Although the amount to be invested in these individual businesses is still unknown, the $1 million loan will aid WIC Capital in significantly expanding its reach and impact. Bluechip Data and AI Summit Join us at the #BluechipDataandAISummit: Building an Effective Data and AI Solution. Shape the future of your business and industry with data-driven intelligence, innovative solutions and sustainable growth. Secure your seat today. Social media Meta adds new AI features for social media Image source: Meta Meta wants you to have the coolest experience on social media. Through Meta AI, the company’s AI bot capable of answering questions and generating images, Meta has added features to allow for more fun for its users. Reimagined features? Users in group chats can now recreate AI images using prompts through the “reimagine” feature. To use reimagine in group chats, users need to first create images using the “/imagine” prompt on Meta AI. After creating the images, friends or foes in the group could add spice to it when they press and hold the image and then suggest another text prompt. Meta AI will automatically generate a new image afterwards. That’s not all: Meta is also rolling out Reels in Meta AI Chats, where the AI chatbot can share video responses in the form of reels to a user query. Say you’re planning a trip to Tokyo with friends in your group chat, you can ask Meta AI to recommend the best places to visit and share Reels of Tokyo’s top sites to help you decide which attractions are must-sees. How to use the new features? To start enjoying all the fun, start a new message and select “Create an AI chat” on WhatsApp, Facebook or Instagram. You can also access any of the features by typing “@MetaAI” in a group chat, followed by what you want help with, e.g “@MetaAI/reimagine a tsetse
Read MoreNigerian fintechs rush to reassure users as misinformation spreads over regulatory clampdown
Nigerian financial services companies are racing to reassure users after a memo from the Nigeria Inter-Bank Settlement System (NIBSS) asked banks and mobile money operators to delist unlicenced fintechs from directly accepting consumer deposits. The memo affects companies that own superagents, payment solution service providers (PSSPs) or switching licenses. By regulation, financial services with only these licenses cannot directly accept consumer deposits, particularly through bank transfers. According to the Central Bank of Nigeria, over 100 entities currently hold these licenses in Nigeria. Over the last few years, some of these companies have expanded to offer more financial services directly to consumers. They avoided regulatory enforcement by securing relevant licenses such as mobile money or microfinance banking licences, which allow them to accept deposits. Nigerian fintechs such as OPay, PalmPay and PiggyVest’s Pocket App each operate with a mobile money license; while Moniepoint owns a microfinance bank, a switching and a superagent licenses, allowing it to operate a digital banking platform and a network of offline agents to provide cash-in and cash-out services across the country. Other companies have partnered with banks to offer deposit services building on top of an open-banking architecture that has led to the rise of virtual accounts and the “pay with bank” feature for accepting consumer payments. This year, Paystack announced its partnership with Titan Trust Bank, a licensed commercial bank, to offer virtual accounts and terminals allowing merchants to accept payments with bank transfers for multi-person businesses. Nevertheless, some companies with superagent, payment solution service providers (PSSPs) or switching licenses have styled themselves as deposit-taking institutions without an accompanying license or relevant bank partnership. The memo from NIBSS directly targets such companies, and it could lead to a purge of these services from the list of approved institutions when consumers make fund transfers. New directives and misinformation The memo from NIBSS has triggered misinformation in Nigeria’s public space. One list circulating on social media caused a stir after it claimed that several approved mobile money services and payment companies would be affected by the NIBSS order. “The recent NIBSS circular has zero impact on our services because we are not deposit-taking like a bank,” Flutterwave, a licensed payments service provider, explained in a tweet posted on Thursday. “We wanted to reassure you that the recent NIBSS circular does not impact Paystack-Titan or any other Paystack services,” Paystack wrote on X, formerly Twitter. “We developed Paystack-Titan in partnership with Titan Trust Bank in a way that allows the service to operate compliantly, and it passed review from NIBSS,” the company added. “Moniepoint MFB is a CBN-licensed Microfinance Bank, Moniepoint, which also holds a switching license, said. “As such, we are a deposit-taking financial institution.” “Your funds are safe and secure,” Opay told customers on Thursday. “OPay is a Mobile Money Operator (MMO) licensed by the CBN and insured by the NDIC… the focus [of the NIBSS memo] is on Payment Service Solution Providers, Switches and Super Agents.” Other Nigerian fintech companies, such as PalmPay and Nomba, the Y Combinator-backed startup providing financial services to small businesses, have also informed customers that the NIBSS memo has no impact on their services. PalmPay is licensed as a mobile money operator, allowing it to hold deposits. Nomba says it works with only licensed partners to facilitate consumer transactions. The purge of unapproved deposit-taking institutions could happen over the next few days or weeks. However, it is unclear if NIBSS or the CBN will proceed with additional enforcement action.
Read MoreExclusive: Kippa transfers agency banking product KippaPay to Bloc
Kippa, the Nigerian fintech backed by investors like Saison Capital and Horizone, has transferred the operations of KippaPay, an agency banking product it shut down in October, to Bloc, a Nigerian fintech preparing to launch banking services. KippaPay will now be integrated into GPay, a payment subsidiary Bloc owns. “[You can think of it as a handshake agreement as [Kippa] still owns the product,” Kennedy Ekezie, the cofounder of Kippa, told TechCabal during a phone call. He also shared that despite Bloc taking over the product, Kippa Pay still belongs to Kippa. “The deal with Bloc was closed weeks ago,” Kennedy Ekezie, the cofounder of Kippa, told TechCabal on a phone call. “After speaking with several other companies, we chose to go with Bloc because they showed the most ability to provide immediate support for our merchants.” Kippa shut down KippaPay after June’s Naira devaluation dramatically increased the cost of buying the POS terminals its banking agents use. In an intensely competitive market, those costs would have been impossible to recoup without raising the commission it charged its agents. Bloc emailed existing users today, confirming that full service has been restored on KippaPay’s mobile app and Android terminal. It also shared instructions on resuming transactions on the agency banking platform. Per the same email, service has not been fully restored to Linux terminals, which facilitate payment through the handheld POS device. A source close to Kippa told TechCabal that merchants had been directed to return their POS devices to Kippa. “Those who have not will be onboarded as GPay users,” they said. TechCabal reached out to Bloc for comments but did not receive a response at the time of this report.
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Dispatch from Algeria
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Hey there! TechCabal travelled to Algeria to cover this year’s African Startup Conference. The conference has been running from December 5 to December 7. About 3,000 people are attending and the venue, CIC Algiers, is the biggest international conference centre in Africa. We are sending you this newsletter to give you all you need to know about Algeria’s tech ecosystem and the crucial conversations happening at the conference. Enjoy! Event Dispatch from Algeria African Startup Conference in Algeria Seventeen hours after we hopped on a flight from Lagos, we were finally at an immigration desk in Algiers. Despite the big names in town for the second edition of the African Startup Conference, the immigration officials seemed to be hearing about the conference for the first time. “You should visit Algeria again, but for tourism,” the official tells us as she waves us on. It’s one of the few times I hear anyone speak English at the airport. Arabic and Berber are Algeria’s official languages. Before now, if anyone had asked me about Algeria, I’d definitely have drawn a blank. Algeria is what that friend on Twitter who never shuts up about being an introvert thinks he is. This country has largely “kept to itself and deliberately avoided outside attention,” one investor born and raised in Algeria told me. Some of the people at the conference But it’s 2023, and not much can be achieved if a country insists on being an “omo get inside”. So Algeria is attempting to build a new persona as it attempts to diversify its economy and attract foreign investment. One way to meet that second goal is by growing its tech ecosystem, ranked 114th globally by Startup Blink. This year’s edition of the African Startup conference—the first edition was held in 2022—is a way to kickstart that growth. From December 5 to December 7, TechCabal will cover the conference and speak to African ministers of technology and innovation, investors, and some of the early builders in Algeria. Two conference officials told us there are about 3,000 people attending this event and the venue, CIC Algiers, is the biggest international conference centre in Africa. A key part of our Algeria visit is to give you all the actionable information about Algeria’s tech ecosystem, the stage it is in, where it plans to go, who its key figures are, and the crucial conversations happening this week. A stage at the African Startup Conference in Algeria The state of play in Algeria: The country’s high literacy rate (80%), population (44.9 million), per capita income of around $4,000, and proximity to Europe means there’s a lot of promise here. Also, the Algeria Startup Fund, which is managing $411 million in state funding and $17 million of its own, invests in pre-seed stage to Series A startups. It’s finding joy in the logistics sector and expects that new regulations will open up fintech and allow neobanks to give legacy banks a run for their money. Logistics is big business here, Mohammed Moussaiou, the business development manager of the Algeria startup fund tells me. Think last mile, exports, and moving goods across six African countries. Yassir, one of Algeria’s most recognisable startups that we covered last year is a ride-hailing and food delivery service that claims to have eight million users across seven countries. There is also Heetch, which one student described as the Algerian version of Uber. Cash is king: A new law that finally permits fintechs to handle payments was only passed in July, so cash is the main way to pay. Supermarkets and malls sometimes reject cards to avoid bank charges. Being so cash-reliant has its downsides, especially for a country with a youthful population (30% of total). That youthful population does a lot of freelancing, but receiving payments for their work can be difficult. Newer regulation is expected to also solve this problem. Freelancing is huge in Algeria among young people—who make up around 30% of the total population—mostly graphic designers, UI/UX designers, and technical support staff. And the government sure supports this: there are no taxes on freelancing. I would take up freelancing if I had my way. Tomiwa Aladekomo, the CEO of Big Cabal Media and Yacine El-Mahdi Oualid, the country’s minister of knowledge economy, startups and micro-enterprises Who to watch out for: Yacine El-Mahdi Oualid, the country’s minister of knowledge economy, startups and micro-enterprises, believes bringing African tech stakeholders together will play a critical role in opening up the country. A panel that featured ministers of technology and their representatives from South Africa, Tunisia, Botswana and Nigeria discussed how they’re thinking about driving innovation on the continent. There’s also a memorandum of understanding that’s going to be signed today by these ministers. We’ll bring you all the details at the signing! Oswald Guobadia, managing partner at DigitA, who spoke to us on the sidelines, believes the African Startup conference is critical to bridging the gap between regulation and innovation. Bonus: Why does it feel like African countries are making a push for tech investors every week I open the TechCabal website? I hear someone in the back ask. Fresh from our coverage of Uganda and Rwanda, my working theory is that more African countries are looking at the investments pouring into Africa’s “Big Four” and thinking to themselves, “We can achieve that too.” 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. Introducing Discount Codes Boost sales with percent-based, fixed rate, and free shipping discounts when you sell with Paystack Storefronts and Product Links. Get started here → Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $43,760 – 1.14% + 24.57% Ether $2,233 – 2.06% + 17.29% Holo $0.002036 + 14.88% + 29.05% Terra Classic $0.0002201 – 2.69% + 225.26% * Data as of
Read MoreFuse announces $10 million grant programme for Web3 startups
Fuse Network has launched a grant programme aimed at enabling startups and businesses access Web3 payment systems. Fuse Network has announced a $10 million grant aimed at supporting businesses to access Web3 payment systems. The grant programme encompasses funding and infrastructure support. Eligible grantee businesses include businesses looking to build and use Web3 payment technologies. According to data by Chainalysis, sub-Saharan Africa has the smallest crypto economy of all regions, accounting for 2.3% of global transaction values between July 2022 and June 2023. In that period, the region received an estimated $117.1 billion in on-chain value. However, in terms of volume, countries like Kenya, Nigeria, South Africa, and Tanzania had some of the highest grassroots adoptions in the world and ranked in the top 20 Global Crypto Adoption Index. Figures show that transaction volume made up of retail-sized transfers in Africa is at 7%, against the global average of 5.5%. Although African blockchain startups raised $474 million in 2022 to build solutions for the increasing adoption of the technology—up 429% in a year—this is still a pittance relative to the rest of the world. Although the Fuse programme will be aimed at businesses across the world, according to CEO Mark Smargon, there will be a keen focus on enterprises in emerging markets like Africa. “In Africa, we already see very interesting businesses which have innovative Web3 use and business cases and need those solutions to reach customers better. We are excited that this program will facilitate this scaling,” Smargon told TechCabal. The programme is currently open for applications and interested businesses, and startups can sign up on the Fuse website. Founded in 2019, Fuse Network supports various projects in DeFi, NFTs, and gaming sectors. It also provides a blockchain payments API platform which enables businesses and developers to have access to advanced payment capabilities.
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👨🏿🚀TechCabal Daily – Twiga Foods in $3m cloud services dispute with Incentro
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Nigeria’s regulators are set to close the year with a bang that will send shockwaves across the country’s payment ecosystem. The Nigerian Inter-Bank Settlement System (NIBSS), which facilitates instant electronic payment, has directed banks, mobile money operators, and all payment service providers to stop letting users deposit money into fintech platforms that are only licensed for transfers and not to hold deposits. This may affect popular companies like CrowdForce and Nomba. Read all about it here. In today’s edition Court drama over Twiga Foods’ debt Kenya finally gets YouTube Music and YouTube Premium MTN COO to step down Tappi secures $1.5 million funding The World Wide Web3 Job openings E-commerce Twiga Foods and Incentro dispute over $3 million cloud services contract Kenyan e-commerce platform, Twiga Foods and Incentro, a Google Cloud reseller, are entangled in a legal battle over a $3 million cloud services contract. The Kenyan court in Nairobi has given both parties five months to resolve the dispute arising from unpaid invoices and a bonus delay totalling $450,000, as claimed by Incentro. However, Twiga claims the owed amount is only $94,000. What dispute? The conflict emerged as Twiga transitioned from high growth to profitability, leading to payment delays on its three-year cloud services contract with Incentro. The $3 million contract at the heart of the dispute committed Twiga to using Google Cloud Services over three years through Incentro. In October, Incentro reportedly sought $261,878 in owed bills from Twiga, a claim now exceeding $450,000. This includes a $92,000 bonus from Google, withheld due to Twiga’s delayed work sign-off. The contract’s intricacies involve Incentro’s obligation to pay Google Cloud’s Africa distributor, DigiCloud, the $3 million balance unless Twiga and Google Cloud cancel the contract. Who do we believe? Twiga, still using Google services but not through Incentro, is in talks with Google Ireland Limited. Twiga CEO, Peter Njongo, stated that the company has paid a 50% deposit of the amount it believes is owes, yet Incentro claims non-receipt of the transfer. The court, after an initial missed deadline for invoice reconciliation last week, is set to hear the case on March 13, 2024. Zoom out: Amidst this, Twiga Foods announced last week that it raised “significant capital” from existing investors, to settle its debts with 100 vendors. 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. Media YouTube launches YouTube Music and YouTube Premium in Kenya Music lovers in Kenya can now enjoy ad-free music and background play with the launch of YouTube Music and YouTube Premium in the country. The services, which offer a premium music and video experience, are now available for subscription in Kenya, joining Ghana, Egypt, Nigeria, South Africa, Senegal, and Algeria where YouTube Music and YouTube Premium are available. Pricing and plans: In Kenya, YouTube Music (Individual) is priced at KES 419, while the YouTube Music Family plan costs KES 669. For an all-inclusive package, the YouTube Premium Bundle is your go-to at KES 499, while the Premium Family plan is available at KES 949. YouTube Premium is all of YouTube and YouTube Music without interruptions. This means that Premium subscribers can now enjoy uninterrupted video playback without ads, continue listening to audio content even when the app is minimised, and download videos for offline viewing. They will also have access to a premium version of YouTube Music, allowing them to listen to music offline and without ads on the standalone YouTube Music app. Is it truly ad-free, tho? There have been rants about how YouTube has been unfriendly to its users by filling the platform with too many ads, pushing them to use ad blockers. The platform is now filled with pre-roll and mid-roll ads, making it hard to watch anything without interruptions. Per The Verge, the platform “launched a global effort” in October to encourage users to allow ads or try YouTube Premium. But the video-sharing platform is reportedly not letting people pay for YouTube Premium either. Sidebar: This announcement comes shortly after another subscription service,Netflix, ended its free plan in Kenya, which aimed to convert its free plan users into paying customers. YouTube Music faces competition from key players like Spotify and Boomplay, both of which are already established in Kenya. Spotify entered the Kenyan market in February 2021, while Boomplay marked its entry into East Africa by establishing a Kenyan office in August 2016. Introducing Discount Codes Boost sales with percent-based, fixed rate, and free shipping discounts when you sell with Paystack Storefronts and Product Links. Get started here → Telecom MTN COO to step down MTN’s current COO; Jens Schulte-Bockum There is a new boss in town! Jens Schulte-Bockum, MTN’s chief operating officer, will step down at the end of his tenure in March 2024. Schulte-Bockum became COO of MTN in 2017. During his tenure, Schulte-Bockum worked on the group’s digital services platform, the Ayoba super app, and the API marketplace capability Chenosis. Schulte-Bockum who was formerly at the helm of Vodafone Germany will take up a non-executive director position on the boards of MTN South Africa, MTN Nigeria, and Bayobab. Who is the new COO? Schulte-Bockum will be replaced by Selorm Adadevoh, the current CEO of MTN Ghana. Adadevoh previously held key positions in Digicel Group—CEO, COO, and global director for mobile financial services—Millicom, and Tigo in Ghana. Lights out: The key leadership appointment marks a new era for MTN. Headquartered in South Africa, the telco was considering closing shop in three African markets—Liberia, Guinea-Bissau, and Guinea-Conakry—last month. MTN noted that these countries made paltry contributions in revenue—1.6%—to the telco giant. The telecom only holds a small portion of the market share in each of these nations. 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Read MoreNigerian regulator clamps down on unlicensed deposit-taking fintechs as fraud concerns mount
The Nigeria Inter-Bank Settlement System (NIBSS) has raised concerns over unlicensed financial services companies posing as deposit-taking institutions, in a sign that the industry is looking to step up regulatory enforcement following outcry over fraud and lapses in customer verification processes by payment providers. In a memo to banks, fintechs and other payment providers, the Nigeria Inter-Bank Settlement System (NIBSS) warned that companies holding switching, payments processing, and superagent licenses are non-deposit-taking institutions and should not be listed as beneficiary institutions when customers attempt to make bank transfers. Superagents, payment solution service providers (PSSPs) and switches are three crucial players providing payment infrastructure and offline distribution that have accelerated financial inclusion over the last decade. The PSSP license category authorises companies such as Paystack, Flutterwave and eTranzact, to operate digital gateways for card payments and money transfers by everyday consumers and enterprise customers. “Listing [these] institutions… as beneficiary institutions on your NIP funds transfer channels contravene the CBN Guidelines on Electronic Payments,” said Ngover Ihyembe-Nwankwo, executive director of business development at NIBSS, wrote in the memo sent Dec. 5. NIBSS — which operates Nigeria’s ubiquitous instant payments system used by all financial services providers — ordered commercial banks, mobile money operators and microfinance institutions to disable outward fund transfers into wallets operated by these firms. A switching license allows fintechs, such as Remita, HabariPay, TeamApt (also called Moniepoint) and Interswitch, to quickly settle transactions without relying on the real-time infrastructure provided by NIBSS. And the superagent license, used by Y Combinator-backed Nomba and Interswitch Financial Inclusion Services Limited (also called Quickteller Paypoint), has been a pivotal category driving financial inclusion, authorising companies to build a network of retail agents armed with a point-of-sales device to provide payments services across the country. By regulation, superagent companies rely on banks to secure POS devices and digital wallets for consumers. According to the Central Bank of Nigeria (CBN), there are nearly 50 superagent companies in Nigeria, at least 75 PSSP license holders and a little over a dozen switching companies. However, over the last few years, as fintechs expand, many of these companies now offer deposit-taking services. Excluding commercial banks, payments service banks and microfinance institutions, there are less than two dozen financial institutions, namely mobile money operators, licensed to accept and hold consumer deposits directly, according to the CBN. But on consumer payments apps, including bank apps, the list is much larger and includes dozens of unlicensed deposit-taking companies, such as superagents and switches. “Switches, PSSPs and [superagents] may process outward transfers [from wallets] as inflows to Banks but are not to receive inflows as their licenses do not permit them to hold customers’ funds,” NIBSS wrote in the memo The latest order could purge several fintechs away from consumer payments apps as banks and fintechs tighten scrutiny over illicit fund transfers and concerns over weak verification processes by other companies. In October, TechCabal reported that Fidelity Bank, a major commercial bank, had temporarily restricted consumer fund transfers to neobanks, such as Moniepoint, Kuda, OPay, and PalmPay. While the bank declined to comment on the issue, industry insiders cited rising fraud and customer verification as precursors for the action. Financial services companies are also proposing other initiatives to strengthen security and anti-fraud measures in the industry.
Read MoreGlobal wealth and VC funding
Economic markets and government policies affect global wealth distribution. Major world powers like the US, China, and Japan are heavily involved in making some of the key policies that affect the law of demand and supply and, extensively, global wealth distribution. One such entity is the United States’ central bank, the US Federal Reserve. The US Federal Reserve’s monetary policy decisions, such as interest rate adjustments and quantitative easing measures, can stimulate or slow economic activity, affecting liquidity and investment availability for startups. VC funding provides capital to early-stage startups with high-growth potential, influenced by this global economic liquidity. To understand this, let’s consider global wealth as a big jar of coins, and that jar represents all the money in the world. When the US Fed decides to make it easier for people to get money, it is like adding more coins to the jar because lower inflation frees up more money for investment and VC funds. On the other hand, when the US Fed decides to make it harder for people to get money, it’s like taking money out of the big jar; this means less money is freed up for limited partners (LPs) and investors to invest with. The Federal Reserve’s monetary policy can influence venture capital (VC) funding by making it easier or harder for VCs to invest in startups. How this affects LPs In essence, the US Fed’s monetary policies act as a significant driver of global wealth and, consequently, VC funding. Policies like these determine the rate at which limited partners provide capital for VC firms to fund businesses. For instance, when the borrowing cost is high, the interest rate tends to be high. LPs may decide to pursue other forms of investment that guarantee them low expenditure and better returns. Here, government bonds, commodities or stocks make a lot of sense for them. But in low interest economies, investing in bonds isn’t too clever, as yield is low. Instead, they grasp on straws and invest in companies that VCs analyse to succeed, and hand them capital. They can make a lot more money from equities and business stakes. In a nutshell, global economic health plays a role in VC funding. VC funding boom in the 21st century Between 2020 and 2021, VC funding experienced unprecedented growth due to the Fed’s expansionary monetary policies, resulting in increased valuations and startup activity. In 2021, funding peaked at $345.4 billion, breaking the previous record set by 2020. Some key activities that shaped these strong performances were: US Fed’s expansionary monetary policy at the time. In stark comparison to 2023, the US Fed fund rate was drastically reduced between February to April 2020, from 1.58% to 0.05%—stimulating the economy and landscape for VC funding. Remote work and the SaaS boom produced more founders and startups. VC firms had amassed considerable capital in the years leading to 2020. This ample supply of cash enabled VCs to actively pursue and invest in promising startups. An estimated 20% of funded companies were successful after raising in 2020. This gave VC firms more confidence to pursue deals in technology, fintech, and health-tech startups. Blockchain’s stock skyrocketed during and after COVID. Investors wanted a piece of that pie. The drive for early adoption of technologies backed to be the next big thing increased investment activity. The performance of the stock market, particularly in the technology sector, reached record highs during this period. This success fuelled investor confidence in the potential of early-stage startups, further incentivising VC funding activity. VC funding challenges overtime One major challenge for VC funding, however, has been the decline in global liquidity and increasing risk aversion among investors. This has made it more difficult for VC firms to raise capital from investors, which has in turn reduced the amount of money available to invest in startups. Despite these challenges, there are still opportunities for startups to attract VC funding. Let’s take a look at the trend last year. The AI boom The artificial technology (AI) industry in tech is experiencing a boom now, thanks to key players like Google, Microsoft, and recently, OpenAI. Generative AI was obviously the clear breakthrough trend for VC funding in 2022. That trend continued in 2023. VCs continue to place bets on artificial intelligence leading the future of technology. In October 2023, out of 100 companies that raised, 22% were Gen AI startups. Sectors that traditionally led raising rounds like IT, business and financial services, and healthcare all fell behind by 35% in 2022. This could potentially point towards the future of investment tilting towards AI technology. Thankfully, the place of innovation will never be overlooked by investors. Startups innovating in these sectors like finance, healthcare, and education are still getting funded. But the new trend is with companies that are using artificial intelligence for industry solutions in finance, healthcare, and education. Global wealth prediction Credit Suisse predicted global wealth of emerging economies to grow by 6.5% over the next five years. During this same time, Statista has also forecasted inflation to reduce to 5.79% as early as 2024 and 3.83% by 2028. This would allow economies to operate open markets. With this, the US Fed is expected to lower borrowing costs soon and turn the lever for more expansive monetary policies. This will in turn recreate all the occurrences that happened in the 2020–2021 VC funding boom. Here’s what the prediction might look like: Fed will reduce the federal fund rates—although we may not get as low as the central bank’s 2% rate just yet. SaaS startups are still moon-shooting in 2023—we’re still seeing the trends in healthtech, fin-tech solutions, blockchain, artificial intelligence, and more. With more companies documenting their APIs, the barrier to SaaS startup founding is getting lower, and this means more innovation from founders in a few years. Low inflation will open up more funding from LPs that VC firms can use to invest in companies. Specialised VC funds in cleantech, for example, quickly shaping the VC landscape. How to
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