Madica plans to invest $6 million in African pre-seed startups. Here is how
Brenda Wangari, head of portfolio success at Madica, shares more insights on the program which aims to invest $6 million in 30 African pre-seed startups over the next three years. Madica, which stands for Made In Africa, is an investment program launched in December 2022 by global venture capital firm Flourish Ventures. Focused on backing pre-seed-stage startups, the program offers funding, technology support and mentorship to underrepresented founders across the continent. To achieve this mandate, the program is looking to invest $6 million in up to 30 African startups, each receiving up to $200,000 in exchange for equity, availing the much-needed funding. The initial investment phase is scheduled to run for three years. Some of Madica’s requirements for interested founders include having to be working on their idea full-time, having a minimum viable product, and having received little or no institutional funding. To understand more about the program’s investment philosophy, on this episode of Ask An Investor, TechCabal caught up with the program’s head of portfolio success to get more insights into the workings of Madica. TechCabal: Please share more background on how you ended up in the VC industry. Brenda Wangari: My journey started around ten years ago at Co-Creation Hub while I was part of the AIESEC Nigeria team. I was immersed in the vibrant ecosystem and had the opportunity to work on many exciting projects, including an idea challenge in partnership with Sussex University, targeting university students with ideas on solving education and unemployment challenges in Nigeria. Once back in Kenya, I dabbled in tech reporting. I was an operator at two startups and pivoted to being a supporter for five years at Village Capital and now a venture capitalist. I have always been curious about how investors make investment decisions, so to answer this question, my career journey is a natural progression. What does your role at Madica encompass? BW: Madica offers a 12-18 months structured support program for all companies we invest in. I take care of the day-to-day running of this. My role involves keeping a pulse on what our portfolio companies are up to and providing them access to resources they need as they build their businesses. Being a founder can be a lonely journey, so I am always keen to maintain an active community of support that our portfolio can tap into. As an early-stage investor, what is Madica’s investment strategy? BW: We care about supporting African founders who have traditionally been overlooked and under-represented in the venture capital funding space. They would typically be considered risky investments based on their sector choice, gender, geographical location, and education status. Has the current VC downturn in any way altered this investment strategy? BW: We recognise that the market downturn hasn’t been easy, especially for founders looking for investment capital to keep their lights on. While our strategy has not changed, we are keen to back founders who can efficiently use investment capital to build resilient businesses. From the early stage pitch decks you receive, what would you say are the constant lacking elements? BW: I will distil this into three things. At the stage at which Madica invests, the team composition is most important to us. While we have seen some very good decks, we’ve also come across some with little to no information on the team to convince us that they have the expertise and understand the problem they are trying to solve. Secondly, it’s supply and demand. What is the real problem the company is trying to solve, and is it important enough that customers are willing to pay for it? At the very early stage, showing some traction is essential evidence, especially if entrepreneurs believe the market is big enough to provide an investor with good returns. Thirdly, the unique selling proposition (USP) is essential. What makes the company exciting? Is there enough in the product to make people interested and willing to pay for it? The harsh reality is that some ventures are simply not venture-backable. They might be too similar to what already exists or even require a different type of funding that’s not venture capital. How can startups address those to position themselves to be attractive for VC investment? BW: We see many founders treat talent as an administrative function instead of a strategic one. How a founder positions their team is critical to how an investor evaluates them. What makes the team the best at solving the problem? Do they have lived experience of the problem? Do they have differentiated skill sets? Do they have a deep understanding of your product and the value chain? A strong team from the onset will help build investor confidence, especially if their skills align with your business milestones. What would say are the things that early-stage startups get right in Africa? BW: Startups on the continent are very clear about the challenges in their communities and regions. They are in touch with the gaps and are aware of the transformative power of technology to provide leapfrog solutions. Whether it is access to medical care and professionals, solving supply chain gaps for SMEs, or providing educational materials to youngsters in distant places using low-tech solutions, there is a thirst and an eagerness that startup founders on the continent possess. That willingness to learn means that when provided with information and the right resources, these founders can grow their solutions exponentially. What is the future of early-stage investing in Africa? BW: There is still a bright future ahead for early-stage investment in Africa. With venture capital and private equity still relatively new on the continent and backing some fascinating tech innovations, it proves there is promise. With Madica playing its part, we will unearth gems across sectors on the continent with solid and viable solutions that more investors will find worth investing in. What role does Madica hope to play in that future? BW: Madica sees itself as a catalyst in the African ecosystem. We see ourselves not solely as
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👨🏿🚀TechCabal Daily – 54gene shuts down
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning ChatGPT now has access to the internet. Since its November 2022 launch, OpenAI’s ChatGPT has been limited to events that occurred before or by September 2021. Yesterday, OpenAI announced that the chatbot had finally been unleashed and it can now browse the internet to provide real-life information. ChatGPT will now move faster than Internet Explorer and provide up-to-date information. The feature is only available for paid users for now. In today’s edition 54Gene shuts down Sendy appoints Peter Kahi as administrator MTN in court battle with ex-CEO The World Wide Web3 Opportunities Acquisitions 54gene shuts down its operations Image Source: TechCrunch 54gene, a Nigerian genomics startup that raised $45 million in three funding rounds, is shutting down. Founded in 2019 by Dr. Abasi Ene-Obong, 54Gene aimed to enhance global pharmaceutical research by providing crucial genetic data on Africans. By July 2023, however, the company started its shutdown process. By September, its website was inaccessible, and its long-standing public relations agency confirmed that it had severed ties with 54gene. Here’s what went wrong: In 2021, 54gene ventured into diagnostics, creating Seven River Labs. The project initially enjoyed success through COVID-19 testing, generating over $20 million in revenue. However, lavish spending, without considering the realities of the diagnostics space, led to dire consequences. Genomics, as a field, demands substantial capital and 54gene faced financial challenges that strained its operations. Notably, the company still owes money to suppliers of some of its medical equipment, according to sources familiar with 54Gene’s business. The startup further plunged into disarray with several leadership transitions which started when Ene-Obong stepped down as CEO in October 2022. Ene-Obong was succeded by Teresia Bost who was also a former legal counsel for the company. By mid-2022, it had run out of money, slashed salaries, and instituted layoffs. From 2022 to July 2023, the company underwent three CEO transitions, including Ron Chiarello, who assumed the role in March 2023 but departed in July. Chiarello also confirmed that financial instability played a crucial role in the company’s downfall. This crisis also revealed questionable spending practices by former executives. Bost’s salary, for example, was slashed from $330,000 to $175,999 upon review, while other claims of financial insolvency emerged. What now? The company is now looking for buyers to take over its assets, including its biobank—a collection of biological samples that could be especially useful for research. However, legal issues will complicate the company’s closure amid claims that several creditors remain unpaid. Furthermore, Bost has filed a lawsuit against the company, alleging discriminatory behaviour and a hostile work environment with Chiarello as a defendant in the suit. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Logistics Sendy appoints Peter Kahi as administrator Peter Kahi. Image Source: The Standard Peter Kahi is the man wearing the cape for financially embattled Sendy. Earlier this week, Sendy, a Kenyan logistics startup entered into administration. For the uninitiated, this means that an individual will take over the startup and provide financial recommendations as the company tries to untie itself from the financial web. Peter Kahi of PKF Consulting has now been tasked with the job of helping the company figure out their current financial situation. Kahi is no stranger to this role. He was an administrator in the now-defunctNakumatt supermarket in 2018, andBritania Foods Limited in 2021. Kahi, with over 25 years of experience in conducting forensic and consultancy assignments, has previously worked for Ernst & Young as a partner and for KPMG as a director. An arduous task? Sendy’s directors have now relinquished power to Kahi as he now controls the company’s business and properties. Kahi has asked all parties owed by the company to submit such a claim in writing alongside necessary evidence to Kahi for review by October 19, 2023. Events Get early-bird tickets for the Moonshot Conference! Tickets are still selling out fast for the gathering of the most audacious players in Africa’s tech ecosystem. You and your friends can get an exclusive discount to secure your seats if you haven’t yet. Get your tickets today. Telecoms Former CEO in battle with MTN GIF Source: Zikoko Memes MTN is battling its past. Ahmad Farroukh, former CEO of MTN South Africa, has taken MTN to court over the non-payment of his R18.8 million ($1 million) severance pay. Zoom in: Farroukh, who left the company in 2015, alleged after he wrote to MTN to demand his severance pay in 2021—which he had been owed for six years. He then received a letter from MTN’s executive chairman Phuthuma Nhleko that he did not qualify for his severance due to the company’s change of policy. According to the telco, severance would only be paid if the contract is not renewed or if mutual separation occurs. Farroukh however alleges that he left the company on a peaceful note, and that MTN did not communicate the change in policy to him. The end-of-service agreement originated from Investicom, a company where Farroukh previously worked before its acquisition by MTN in 2006. Instead of a pension plan, Investicom provided an end-of-service payment to employees who left the company. According to local media, the dispute has been going on since Farroukh left the company. Farroukh had tried to resolve the issue amicably before turning to the court. Zoom out: Farroukh’s case raises bigger questions about corporate accountability and employee treatment. The date for the first hearing is set for October 16, 2023. Apply for the Female Founders Growth Programme FSDH Merchant Bank has partnered with the IFC (of the World Bank) and WEAV Capital for a female accelerator and investment readiness programme for female founders. Selected startups will partake in a world-class Investment Readiness Programme designed to support high-potential female-led tech companies to raise capital.
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🚀Entering Tech #41 – There’s work in stock for marketing talents
Some founders believe that marketing talents should wear many hats. 27 || September || 2023 View in Browser Brought to you by Issue #41 Founders say marketers should wear many hats Share this newsletter Greetings ET people Before we get into this week’s edition, which is the second part of a series, I need to ask a favour. We’re always telling you what to do. It’s time to return the favour and teach us instead. Could you take a few minutes to fill our survey? We’d like to know what you think and how we can improve. Now, onto to today’s edition where founders tell us why marketing talents should do more than they’re paid for at work. by Timi Odueso & Faith Omoniyi. Tech trivia Some tech trivia to get the brain juices flowing. What does “AIDA” , which represents the stages of consumer engagement in marketing, mean? In email marketing, what is the average open rate percentage for a well-performing email campaign? A quick recap In the last edition of #EnteringTech, we spoke to different marketers and got their perspectives about how marketing talents take on multiple roles in tech startups, and are often under-compensated. While the marketers suggested workarounds to budgetary constraints in hiring marketing talents, several others advocated that marketers should be compensated duly for their efforts. In today’s edition, startup founders are pitching in. All of the CEOs we spoke to all agree that marketing talents are an integral part of their startup’s growth, however, several limitations remain. What founders think Olamide Olayinka, CEO of Kashbase, believes that it is nearly unavoidable for a marketing talent to take up multiple roles in a startup setting. Olayinka cited a startup’s lean structure and tight budget as a cause. Babatunde Akin-Moses, CEO of Sycamore sides with Olayinka on this view. “For most growing companies and startups, it will be hard to have one person simply dedicated to content building. Usually, the person will handle social media, and a bit of digital marketing too.” Anthony Itaigbe of Izesan believes that it is important for content marketers to wear multiple hats due to the importance of their job in painting a picture of what a startup represents to the public. Itaigbe is of the opinion that content marketers should take on whatever form that helps drive home a startup’s message to the public. Olamide Olayinka, Babatunde Akin-Moses, and Anthony Itaigbe Several founders agreed that budget is indeed a limiting factor when hiring marketing talents. However, according to the founders, having a workaround is important. For Akin-Moses of Sycamore, his workaround involves taking a chance on someone with less experience, or employing a marketing talent that fits within his budget. For Olamide, it’s freelancers to the rescue. According to him, while budget might be a restriction, Kashbase does not compromise on marketing strengths. To navigate work that requires a marketing expert, the startup hires freelancers or marketing experts on a part-time basis. The pros and cons of many hats Having a marketing talent handle multiple operations has both advantages and disadvantages. According to Akin-Moses, some of the advantages include cost savings, better alignment and speed. Olayinka believes that one benefit this offers is that if a startup hires a great marketing talent they could help establish a framework. “If your initial hire is a great fit, they can help establish a solid foundation for the team. For instance, when we had to define our brand’s personality, tone of voice, go-to-market strategy, and overall brand essence, it was more manageable because we were a small team; one person led the conversation and everyone had something to contribute and the alignment was quick. When new intakes come on board, they could seamlessly fit in, into the existing framework.” On the flip side, marketers who spoke to us in the previous edition attest to the fact that having one marketing talent take on multiple roles could easily wear out the person and affect their level of output.” Akin-Moses agrees, “The challenges are the possibility of burnout and not having specialised output since one person is doing many things.” All of the founders we spoke to all agree that having marketing talents wear multiple hats in startups is inevitable. While this may wear out the marketing talent, some founders suggested some workarounds to help alleviate the stress off the marketing talents while helping them manage their tasks effectively. Olayinka believes to curb the fatigue that arises from one person handling multiple tasks is to have a clear plan for expanding the team. “If you start with one person handling everything, it’s important to plan for expanding the team to enhance the effectiveness of your marketing efforts and ease the workload.” For Otaigbe, the workaround involves striking a delicate balance. “There should be some dynamism, you don’t have to wear multiple hats all the time, it could be a temporary thing. But there is value and dedication, so it’s important for marketing talents to find a delicate balance,” he said. From the various conversations we’ve had with both founders and marketers, having marketing talents take on multiple roles in startups is inevitable. Due to a startup lean structure, founders have resulted in hiring generalists within their budget who have a grasp of multiple marketing skills. However, a careful line needs to be drawn between burdening marketers with too many tasks and undercompensating them. Attend the Moonshot Conference Tickets are still selling out fast for the gathering of the most audacious players in Africa’s tech ecosystem. You and your friends can get an exclusive discount to secure your seats if you haven’t yet. Get your tickets today Ask a techie Q. As an accountant, how can I stay relevant in the tech space? Are there courses I should take? What specialization do you think I should go for? Great question. To stay relevant in the tech space as an accountant, you can take several steps, including pursuing specific courses and considering relevant specializations. Here are some recommendations:
Read MoreExclusive: After raising $45m in two years, 54gene is shutting down
54gene raised $45 in three funding rounds to achieve the extraordinary for African genomics. But four years on, the company is shutting down in a cloud of controversy. Genomics startup 54gene has initiated the winding down of its operations, sources connected to the company confirmed to TechCabal. The company started the process in July 2023. By September, its website was no longer available, and the PR agency that represented it for much of its existence told TechCabal they no longer work for 54gene. This disclosure comes after unconfirmed reports about the collapse of the company. Founded in 2019, 54gene was co-founded by Dr. Abasi Ene-Obong, who helped the company raise $45 million across three funding rounds. The company set out to provide crucial genome information on Africans to help improve the drug discovery processes of global pharmaceutical companies. Per TechCrunch, “Less than 3% of genetic material used in global pharmaceutical research is from Africa…54gene has been at the forefront of bridging this divide in the global genomics market.” But less than four years into its creation, the company fell into disarray, and Ene-Obong, the CEO, was replaced. Over the past year, 54gene has had three CEO changes, including Ron Chiarello, who became CEO in March 2023. Chiarello left the role in July. “Unfortunately, the company could not continue to operate financially, and it began to wind down in July,” Chiarello told TechCabal. It is the first official confirmation from anyone connected to 54gene of the company’s closure. Three people familiar with the company’s shutdown process told TechCabal that 54gene is looking for buyers to take over its assets, including the company’s biobank—a collection of biological samples that could be especially useful for research. While company sources believe these assets are valuable, it is unclear how far along they are with the sale process. However, legal issues will complicate the company’s closure amid claims that several creditors remain unpaid. Teresia Bost, the company’s former legal counsel and one-time interim CEO, sued 54gene for “discriminatory behaviour and creating a hostile work environment.” Bost was named CEO after the dramatic exit of Dr. Abasi Ene-Obong in October 2022. While there are several versions of his resignation, his departure came on the heels of fundraising as 54gene returned to investors for more financing despite earning significant revenue from its Covid-19 testing facilities and raising $25 million a year earlier. Dr Abasi declined to answer questions regarding his exit but told TechCabal via email, “I would like to begin by stating that my resignation as CEO of 54gene was a difficult and emotional decision for me.” Despite initial excitement at Teresia Bost’s appointment in 2021, things changed quickly. “Teresia is a well-rounded executive with a depth of experience in the global pharmaceutical and biotech industry,” 54gene said in a statement at the time of her appointment. But Bost left the position five months later. According to Law360, a legal trade publication, Bost alleges that Tobi Oke, one of the company’s investors, “would scream at her on video and phone meetings, degrading and humiliating her, and falsely criticized both her work product and legal work.” Tobi Oke declined to comment. She is suing five company associates at a New Jersey court in the U.S. Chiarello, who took over from Bost, is also a defendant in the suit. “When companies fail, no matter how altruistic their purpose, disagreements arise,” Chiarello told TechCabal. “It’s my hope that when the dust settles, the idea behind 54gene continues in some way for the health benefit of Nigerians, all Africans, and people globally.” ‘Questionable spending by former executives’ In her complaint, Bost said her salary was slashed from $330,000 to $175,999, which she alleged violates “her written agreement and represents a breach of contract because she was still performing all her duties.” She also claimed she was told the company could be insolvent by September 2022 because of questionable spending by the company’s former executives. Several sources with extensive knowledge of the genome medical research industry and 54gene’s business model admitted that genomics is capital-intensive. “Sequencing equipment for genomics is expensive, and there are other costs like storing data in the cloud. The costs add up quickly,” said one of the people. Two sources with first-hand knowledge of 54Gene’s business said that it still owes money to companies that supplied some of its medical equipment. “Neither I nor Syndicate Bio can comment on any speculation surrounding the monies owed to 54gene vendors,” Dr Abasi told TechCabal via email. In 2021, 54gene branched into diagnostics and set up Seven River Labs because of its success with COVID testing. Two sources said the company brought in at least $20 million in revenue from covid testing. “The kind of spending they did to launch Seven River Labs was unreal,” one person with knowledge of the business said. “They spent money without considering the dynamics of the diagnostics space.” According to a 2021 report by Technext, “7RiverLabs sample collection centres are already open in Lagos, Abuja, Kano and Port Harcourt. These collection centres boast over 100 employees.” Another report said Seven River Labs poached stars from global companies and invested in expensive equipment. “Despite all of the investment in diagnostics, the expected returns did not materialize.” By mid-2022, the company ran out of money, slashed salaries and instituted layoffs; plans to raise new external funding initially collapsed. While there are varying versions of events, it is clear that the company struggled to stay on track with its mission and that internal friction could not be resolved. Nevertheless, industry followers believe 54Gene’s failure will have consequences. “When one of the biggest flagship companies that have raised the most money in a sector has its value collapse overnight, global investors will hesitate about funding the sector,” said one health tech founder who asked to remain anonymous so they could speak freely. “That’s the reality. One of the flagship companies in our sectors went under rapidly and unceremoniously.”
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New crucial updates for SASSA SRD payment dates
The SRD (Social Relief of Distress) payments for September 2023 began recently. In this article, we will provide you with all the essential information you need to know about these payments, including the processing dates, how to check your SASSA SRD payment status, and when you can expect the funds to hit your bank account. SASSA SRD payment processing dates September 2023 For applicants who have been approved for the month of September 2023, the payment processing window which opened on the 22nd of September 2023, will be closed on the 29th of September 2023. This means that during this period, the government will initiate the transfer of funds to eligible recipients and after that you may need to wait for the October cycle to get paid if you don’t get it this month. So you are advised to check your payment status as soon as possible. Checking your SASSA SRD payment status It’s crucial to stay informed about the status of your SRD payment. To do this, applicants are strongly encouraged to visit the SRD website during the payment processing week. By logging into your account on the website, you can find out the exact date when your payment is scheduled to reflect in your bank account. This feature ensures that you have real-time information about your payment status, giving you peace of mind during these challenging times. Payment arrival time Once the payment has been processed, clients should expect the funds to appear in their bank accounts within approximately 2-3 working days. It’s important to note that this processing time is standard and may vary slightly depending on your bank’s policies and procedures. Therefore, it’s advisable to keep an eye on your account and be patient if you don’t see the funds immediately. Summary The September 2023 COVID-19 SRD payments are to be processed between the 22nd and 29th of September. Staying informed about your payment status is as simple as visiting the SRD website during this period. Remember that it may take a couple of working days for the funds to show up in your bank account after processing.
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New news on SASSA relocation of specific offices
The South African Social Security Agency (SASSA) plays a crucial role in the distribution of social grants and support services to eligible citizens. In an effort to better serve its beneficiaries and streamline its operations, the SASSA Gauteng Regional (Provincial) and Johannesburg District Offices have undertaken the relocation of their offices to a new physical address. SASSA office relocation details Effective October 1, 2023, the SASSA Gauteng Regional and Johannesburg District Offices will be relocated to the following address: Second Floor 222 Smit Street, Braamfontein This move is aimed at providing a more accessible and efficient location for beneficiaries and stakeholders in the Gauteng region. Checking SRD SASSA Status Online Also, as payments are currently ongoing for approved beneficiaries of the grant program, concerned parties are urged to check their SRD (Social Relief of Distress) status online. Here are the steps to do so: 1. Access the SASSA website: Visit the official SASSA website at https://srd.sassa.gov.za/sc19/status 2. Provide required information: You will be prompted to enter specific information such as your ID number or application reference number. 3. Submit and check: After entering the necessary information, click “Submit”. 4. View status: The website will display the current status of your SRD application, whether it is approved, pending, or declined. 5. Additional assistance: If you encounter any issues or need further assistance, don’t hesitate to reach out to SASSA’s customer support channels. Summary The relocation of the South African Social Security Agency Gauteng Regional and Johannesburg District Offices to the Second Floor, 222 Smit Street, Braamfontein, effective from October 1, 2023, is a strategic move to improve service delivery in the Gauteng region. Additionally, the availability of online tools to check SRD status underscores SASSA’s dedication to providing accessible and efficient services to its beneficiaries. You may also need to learn how to change your SASSA banking details. Read this article specially prepared for you.
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Logistics startup Sendy appoints Peter Kahi of PKF Consulting as administrator
Sendy is now under administration to save its business. If this doesn’t work, the company may be forced to liquidate its assets. Yesterday, TechCabal exclusively reported that logistics firm Sendy was going into administration; at that time, it was unclear which company had been appointed as the administrator. But a document seen by this publication has shown that Peter Kahi of PKF Consulting (K) Limited is the administrator. Peter Kahi also served as administrator of the now-defunct Nakumatt supermarket in 2018 and Britania Foods Limited in 2021. “Notice is hereby given that Peter Kahi of PKF Consulting (K) Limited, Kalamu House, Grevillea Grove. Westlands and P 0 Box 14077-00800 Nairobi was appointed as the Administrator of Sendy Group of Companies,” read the notice. “Sendy Kenya Freight Limited (Under Administration) company number PVT-Q7UDVX5. Sendy Limited (Under Administration) company number CPR/2014/140428, Sendy Store Limited (Under Administration) company number PVT-PlUQRL9 and Sendy Kenya Marketplace Limited (Under Administration) company number PVT-MKUJX57 on 20 September 2023,” read the notice. Sendy is now under administration despite its efforts to stay find a buyer and after burning through $22 million in funding. The company faced significant setbacks, such as a 20% reduction in its workforce in 2022 and the discontinuation of its operations in Nigeria. During its most challenging period, Sendy’s monthly burn rate hit $1 million. Sendy had been actively exploring buyout options with potential companies like Sabi and Wasoko. However, an insider familiar with the negotiations revealed that these companies decided against acquiring Sendy, citing concerns about assuming the company’s existing liabilities. The administrator (PKF) has assumed control over the management of Sendy’s affairs, businesses, and properties. As a result, Sendy’s directors no longer have the authority to oversee these matters. Per the notice, any party holding a claim against Sendy must submit their claim in writing, along with the necessary supporting documents and proof of debt form, to the administrator by 19 October 2023 for review. This means that the administrator is acting as a representative of Sendy and is not personally liable for any contacts made in this capacity. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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👨🏿🚀TechCabal Daily – Risevest rises up to the Cha-llenge
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Eid Mubarak Spotify has a new Jam. Yesterday, it released a new feature—Jam—that allows users create listening sessions together and add songs to queues. It’s social media, but for music. With Jam, you now can share your questionable taste in music with your friends, and get feedback in real-time! In today’s edition Risevest acquires Chaka inDrive faces ban in Botswana Sendy goes into administration Kenya sanctions digital lender The World Wide Web3 Opportunities Acquisitions Risevest acquires Chaka Image Source: TechCabal Yesterday, after months of bargaining, Nigerian trading startup Risevest announced its acquisition of digital trading startup Chaka for an undisclosed sum. Chaka was founded in 2019 with the mission of helping Nigerians buy shares of publicly traded companies in Nigeria and the United States for as little as $2. Since then, it’s faced a couple of challenges including a ban from Nigeria’s Securities and Exchange Commission (SEC) in 2020. By 2021, however, it became the first trading startup to receive a digital sub-broker licence. Mutual benefits: Talks of acquisition began early in 2023 when a mutual investor in the two startups suggested the deal to Risevest co-founder Eke Urum. Informal talks began in March, and the deal was finalised in September. Urum and Chaka founder Tosin Osinbodu said they got along quickly and shared a similar vision for the future of fintech in Africa. The investors on both sides were also supportive of the deal. What’s changing? Both companies will continue to operate as separate products, but will collaborate on product development and marketing. The acquisition will give Risevest access to Chaka’s digital sub-broker licence, which will allow it to offer its users more investment products and services. The deal is expected to benefit both companies and their users. Risevest will be able to expand its product offerings and reach a wider audience, while Chaka will be able to leverage Risevest’s expertise in wealth management and financial education. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Mobility inDrive faces ban in Botswana Image source: Mmegi inDrive has found itself in a holdup. The company, yesterday, responded to calls for its ban in Botswana. A ban? Yup, local public transport operators want the e-hailing service banned. Earlier in the week, the Botswana Kombi and Taxi Association urged the Department of Road Transport and Safety (DRTS) to ban inDrive, citing concerns about the platform’s lack of necessary licences. This prompted the DRTS to launch an investigation into the matter. What licence? While traditional kombis and taxis in Botswana pay operating fees to the DRTS, inDrive has largely sidestepped these fees since most of its drivers use their private cars. This distinction places inDrive outside the regulatory purview of the DRTS, which primarily governs public transport. The taxi association argues that inDrive operators should be subject to the same regulations as taxis and kombis, which pay operating fees to the DRTS. What’s inDrive doing about this? Per Vincent Lilane, inDrive’s business development representative for Southern Africa, while inDrive has yet to officially receive the complaint from the DRTS, the company is actively collaborating with pertinent stakeholders to resolve the issues raised. The taxi association has also filed a complaint with the Botswana Police Service, seeking charges against inDrive drivers for alleged piracy, which refers to operating public transport services without proper licensing from the DRTS. inDrive has said it is actively collaborating with authorities, including the Botswana Police Service, to ensure clarity regarding their operations. Events Get early-bird tickets for the Moonshot Conference! Tickets are still selling out fast for the gathering of the most audacious players in Africa’s tech ecosystem. You and your friends can get an exclusive discount to secure your seats if you haven’t yet. Get your tickets today. Logistics Sendy goes into administration GIF Source: Zikoko Memes Kenyan logistics startup Sendy has entered into administration after talks for an acquisition fell to the ground. Administration?? By going into administration, Sendy—which is currently facing financial difficulty—is seeking protection from its creditors while it sorts out its future. What this means is that an independent person or firm will take control of the startup, investigate its finances, and make recommendations for a resolution. Sendy was considering a firesale in August after the company was reportedly burning $1 million per month. A $1 million burn rate? Rising fuel prices and Kenya’s election contributed to Sendy’s rise in operating costs. Many manufacturers who use Sendy’s service scaled down their production in the run-up to Kenya’s election, leading to reduced order volumes for the company. Continuous fuel hikes also meant that Sendy was making deliveries at a loss. Sendy’s road to administration: Sendy’s sad tale began after COVID pandemic. The sectors with Sendy’s clients—manufacturing and retail industries—were grossly affected by the travel and lockdown restrictions which affected Sendy’s revenue. The company began cutting costs and adjusting its business model to extend its runway. Sendy prioritised end-to-end fulfilment and stopped operations in Nigeria. On its Kenyan side, it laid off about 20% of its staff and announced plans for a pivot to connect online buyers with logistics providers. Zoom out: TechCabal reported in August that Wasoko and Sabi were likely buyers of Sendy, but acquisition talks broke down when both companies were unwilling to take on Sendy’s liabilities. The administration affords Sendy a chance to put its house in order and potentially find a new buyer in the process. Get a working card from Moniepoint FSDH Merchant Bank has partnered with the IFC (of the World Bank) and WEAV Capital for a female accelerator and investment readiness programme for female founders. Selected startups will partake in a world-class Investment Readiness Programme designed to support high-potential female-led tech companies to raise capital. The programme will end with a Pitch Day and a $10,000 non-equity
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New CBN governor faces an uphill task in tackling inflation
The Nigerian Senate has confirmed the nomination of Yemi Cardoso as the 11th governor of the country’s central bank. The new CBN governor is tasked with tackling record inflation and saving a battered currency. The Nigerian Senate on Tuesday confirmed Yemi Cardoso as the next governor of Nigeria’s Central Bank after an hours-long screening process. The accomplished banker succeeds Godwin Emefiele whose controversial policies called into question the CBN’s independence. Also confirmed were four deputy governors: Emem Nnana Usoro, Muhammad Sani Abdullahi Dattijo, Philip Ikeazor, and Bala M. Bello. While Cardoso’s political affiliations may be called into question, he is now tasked with tackling record inflation and saving a battered currency. Controlling inflation in a cash-strapped economy will be a major test for the new CBN governor. Since Emefiele’s reign, the Central Bank has struggled with controlling inflation which hit an 18-year high of 25.80% in August, driven by food prices. Cardoso is betting that evidence-based policies will make a difference. “We will revamp the infrastructure in the central bank with respect to data and to ensure that the data gathering capacity is significantly enhanced,” he told senators during the screening. Last week, the central bank postponed the Monetary Policy Committee (MPC) meeting to decide the nation’s interest rates—for the first time in eight years. Experts have predicted that the CBN will elect to raise interest rates from 18.75% to 20% in response to mounting inflation. Two months ago, the apex bank hiked interest rates by 25 basis points. Despite currency reforms by President Bola Tinubu notably the unification of the foreign exchange market, the naira fell to N1000 to a dollar on the parallel market on Tuesday. With a significant arbitrage in the FX market, the CBN governor already has work on his hands. The apex bank had failed to fulfill an earlier promise to clear the current FX backlog—estimated at $10 billion—in two weeks. The big question on the lips of many observers is how the new CBN governor hopes to tackle this. “We are aware there are unsettled obligations. Our immediate priority will be to verify the authenticity of the figure. And then of course, once we do that, we need to frankly find a way to take care of it,” Cardoso said in response to questions on how the new CBN leadership will address the FX backlog. He, however, didn’t provide additional details on the measures to be taken. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read MoreKenya fines three digital lenders $60,000 for abusing user data
Some digital lenders have resumed harassing borrowers on their platform, even in cases where laws protect them against personal data abuse. The Office of the Data Protection Commissioner (ODPC) has stepped in. The Office of the Data Protection Commissioner (ODPC) has fined three entities a total of KES 9.3 million ($63,500) in a move set to further enforce sanity in the online lending space in the country. Mulla Pride Ltd, which operates two online credit platforms, KeCredit and Faircash, has received a KES 2.9 million ($20,000) million penalty. According to the ODPC, the company used personal contact information from third parties to shame borrowers into paying their loans. “The Digital Credit Provider (DCP) was found culpable of using names and contact information of the complainants which were obtained from third parties, and subsequently used to send threatening messages and phone calls. This penalty will ensure that Digital lenders and financial institutions notify data subjects when collecting and processing their data, and the intention of processing the said data,” the ODPC said in a statement. The penalty is interesting because Mulla Pride Ltd. has not received a licence to operate as a digital credit provider. The two lenders – KeCredit and Faircash – do not appear in the approved list by the Central Bank of Kenya (CBK). Kenya has a list of registered 32 digital lenders, including Branch, Tala, and Zenka. Existing data law requires data to come directly from the individual, but digital lending apps also collect and process data from the borrower’s smartphone and other sources without consent. Consent, as defined by the law, must be clear and informed. Many consumers are unaware of this data collection method. The Data Protection Act, 2019 requires data processors to inform data subjects about processing activities. This includes informing them about their rights, data collection purposes, sharing with third parties, contact details of entities receiving the data, security measures, mandatory and voluntary data collection, and consequences of not providing certain data. However, it is apparent that Mulla Pride Ltd. did not adhere to this law, thus the fine. A few months ago, the ODPC was uncertain how to fine digital lenders that misuse personal data. By law, these companies can be fined up to KES 5 million ($33,800), which isn’t big enough a punishment for highly profitable lenders. However, data commissioner Immaculate Kassait hinted at possible future changes. Kenya’s unregulated online lending industry allowed loan apps to harass people for years. The absence of regulations may have prompted the Data Protection Act, 2019. Before the bill, online lenders could offer loans to locals at high-interest rates, targeting anyone with a mobile money account (M-PESA) and a smartphone. These lenders, however, started abusing the personal data they collected, resorting to shaming and predatory tactics against defaulting borrowers.
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