Fixit45 raises $1.9 million to expand into East Africa
Fixit45 expansion drive into East Africa has caused the startup to raise $1.9 million to provide quality automotive spare parts, vehicle repairs and maintenance services across the continent Fixit45, a Nigerian startup that provides automotive spare parts, vehicle repairs and maintenance services has secured $1.9 million pre-seed funding. The funding is a mix of equity and working capital. FixIt45 will use the investment to scale its business in Nigeria and expand into East Africa, particularly, Kenya and Uganda. The round was backed by Launch Africa Ventures, a VC investment firm, and featured participation from distinguished investors such as Soumobroto Ganguly and Dave Delucia, along with a diverse group of angel investors. Speaking on the fund round, Co-founder & COO of Fixit45, Pankaj Bohhra, said the funding represents a pivotal moment for Fixit45. “With this capital infusion, we are well-positioned to advance towards our expansion objectives,” Bohhra said. Have you got your tickets to TechCabal’s Moonshot Conference?Click here to do so now! Per data from the National Bureau of Statistics (NBS), Nigeria, with an estimated population of 200 million, boasts over 12 million registered vehicles, of which almost 90% are imported, representing a motorization rate of just 0.06 vehicles per person. Faced with the high costs of purchasing new or imported vehicles abroad, vehicle owners are poised to upgrade and repair their existing vehicles to enhance their mobility assets and trade-in value. FixIt45 plays in this market by providing high-quality repair and maintenance services. FixIt45 and its competitor Mecho Autotech were founded in the same year in 2021. However, FixIt45 says it has an impressive network of 300+ operational workshops spread across nine Nigerian cities, including Lagos, Abuja, Port Harcourt, and Jos, serving nearly 4,000 clients. It also leverages on a collaboration with 1,200 spare part dealers to tap into the African automotive industry predicted to reach $42.06 billion in 2027. The automotive startup is also intensifying efforts in spare parts distribution via its online-to-offline platform, xparts.africa. Co-Managing Partners at Launch Africa Ventures, Janade du Plessis and Zachariah George, said the Fixit45 team and seamless experience were the key factors in the decisions to back them. “We are impressed by their unwavering commitment to excellence, compliance, and accountability. We have every confidence that the company is well-prepared to achieve its ambitious goals,” they said. Have you got your tickets to TechCabal’s Moonshot Conference?Click here to do so now!
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👨🏿🚀 TechCabal Daily-PayDay in talks to sell after $3million raise
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday! It has been a really good year for Ebanx. Just one year after its debut in South Africa, Nigeria, and Kenya, the payment company has expanded to more African countries; Ivory Coast, Morocco, Senegal, Tanzania, Egypt, Ghana, Uganda, and Zambia. It also recently made its debut in the Asian market by launching in India. In today’s edition PayDay in talks to sell after $3million raise Chipper cash wants to verify users with AI Openserve confirms Sat-3 cable repair Google’s AI Bard gets new features The World Wide Web3 Event: Moonshot Conference Opportuinities Fintech PayDay in talks to sell after $3million raise Image source: TechCabal Nigerian fintech PayDay, after securing a $3 million seed funding round six months ago, is now in talks to be sold. What’s the gist? Per a member of PayDay’s management, the company was open to acquisition before its seed funding round which was led by Moniepoint. In March, a report speculated about Moniepoint acquiring PayDay, with a journalist privately predicting a three-month deal. According to an insider close to the situation, Moniepoint had expressed their intention to acquire PayDay contingent upon specific conditions or criteria that needed to be satisfied before proceeding with the acquisition. However, the deal remained in limbo, with sources suggesting that Moniepoint’s board was not enthusiastic about the acquisition. It’s possible that PayDay did not meet the required conditions for the deal to progress as initially anticipated. Despite Moniepoint pulling out of the deal, talks to sell the company are still ongoing. Nonetheless, negative publicity may also be hindering the company’s sale. A wave of bad press: In August, PayDay suspended customer accounts to recover funds lost to fraud. Per a source, the company did not disclose the losses until a prominent blog accused them of mishandling customer funds. Furthermore, some Nigerian employees claim their salaries were slashed in July—three months after the $3 million raise, while the CEO, Favour Ori, maintained a $15,000 monthly salary. These salary reductions coincided with the departure of key employees, including co-founder and COO Ogechi Obike. Zoom out: As the company continues discussions about a potential sale, sources disclose that Ori has reduced his involvement in the company and has been working full-time at GitHub, implying that PayDay was a side hustle. 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. AI Chipper Cash wants to verify users with AI Image source: Tenor In its latest move, the African cross-border payment company has launched Chipper ID, an AI-powered suite of verification services. The feature is aimed at solving Africa’s industry-wide customer onboarding and compliance issues. A 5-in-1 suite: The suite consists of five core product areas: facial verification, document verification, Liveness, an AI system that detects authentic users, a screening bot for comprehensive compliance and a back office portal hub. ICYMI: Chipper Cash is among the few African companies to reach unicorn status.Since its launch in 2018, the company has raised a combined $300 million while recording $100 million in revenue with five million registered users. While Chipper Cash might have experienced great highs, the startup has been in the news lately for its valuation cuts and layoffs. Chipper Cash has had multiple rounds of layoffs since December last year, with its latest round of layoffs in August affecting the COO. In the same month, the company cut its valuation by 70%. Zoom out: Chipper Cash’s new feature offers a new inroad into shielding African businesses from fraud arising from inauthentic users. The feature would also help reduce the KYC gap on the continent Internet Openserve confirms Sat-3 cable repair Image source: Zikoko Memes Openserve, South Africa’s Telkom subsidiary has confirmed that the broken SAT-3 subsea cable has been fully repaired. ICYMI Last month the subsea cable broke off the coast off the Democratic Republic of Congo due to two separate rock falls in the Congo Canyon submarine. The SAT-3 cable breakage was one of three major west coast undersea internet cables that were severed in the past month. The West Africa Cable System (WACS) and SAT-3 undersea cables snapped simultaneously. As a result of the cable breakage, South Africans experienced reduced internet speeds. With all three cables being repaired, South Africans will now enjoy normal internet connectivity. Zoom out: The recent cable breakages show the need to rethink internet connectivity on the continent away from the traditional subsea cable. While subsea cables have been the backbone of internet connectivity for decades, recent disruptions highlight the importance of exploring alternatives. AI Google releases new features for its AI chatbot Bard Image source: Imgflip On Tuesday, Google revealed new updates for its Bard chatbot. What are the updates? Google has updated its AI chatbot, Bard, with the ability to access and use Google’s full suite of tools, communicate in multiple languages, and perform fact-checking. These updates are the biggest to Bard since it was widely released to the public six months ago. Bard can now also draw on information from Google’s other services, such as YouTube, Maps, Flights, and Hotels. Furthermore, Google has also taken steps to address some of the concerns that have been raised about AI chatbots, such as their tendency to generate inaccurate information known as “hallucinations”. Bard now has a “double-check” button that allows users to evaluate the accuracy of its responses, and the company has said that it is constantly working to reduce hallucinations. Lastly, Bard now supports conversation sharing, enabling one user to share a chat with another, who can then expand on the conversation. Zoom out: Overall, the new updates to Bard make it a more powerful and versatile AI chatbot. It remains to be seen how widely adopted Bard will become, but it is clear that Google is investing heavily in this technology.
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Postbank confirms full SASSA SRD grant payments amid fraud attempts
It’s some great news for SRD SASSA beneficiaries using Postbank. In a recent statement posted on the official SASSA SRD handle on X (formerly known as Twitter), Postbank has officially confirmed that all outstanding SASSA grant payments to affected recipients, stemming from the system incident on the 5th and 6th of September, have been successfully disbursed. The complex task of rectifying these payments has been accomplished, ensuring that SASSA SRD Gold Card beneficiaries who were awaiting their grant can now access them seamlessly, be it through ATMs or participating retailers. For those social grant beneficiaries with further inquiries regarding their payments, Postbank extends its support channels: Phone Call: 0800 53 54 55 Email: Reach out via PBbalancingSaswitch@Postbank.co.za WhatsApp: Message at 073 806 1631 Fraud detection by the Postbank system by some SRD SASSA grant beneficiaries The bank also in the statement noted that some individuals have attempted to manipulate the system by seeking double payments, despite having already received their due funds. Postbank wants to make it abundantly clear that such fraudulent actions will not succeed due to the robustness and high-end encryption of their systems. However, they highlight that such actions not only hinder genuine beneficiaries but also contribute to the misconception that a significant number of SASSA beneficiaries remain unpaid. Postbank condemns this behaviour and vows to report it to law enforcement agencies, emphasising its commitment to ensuring that deserving beneficiaries receive the assistance they require. Final thoughts Postbank’s diligent efforts to rectify the SASSA grant payment issue demonstrate their unwavering commitment to serving the needs of South Africa’s most vulnerable citizens. With all outstanding payments now disbursed and safeguards in place against fraudulent activities, beneficiaries can rest assured that the system is working in their favour. Meanwhile beneficiaries of the SASSA SRD grant can use any bank to receive their grant. If you want to learn how to change your banking details, read this article here.
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Exclusive: Nigerian fintech PayDay is looking to sell the company six months after $3m raise
Months after raising $3 million, the Nigerian fintech PayDay is in talks and hopes to conclude a sale of the company soon. Six months after raising $3 million in a seed round led by Moniepoint, the Nigerian fintech startup Payday is actively speaking to buyers. Favour Ori, the startup’s CEO, confirmed that PayDay is entertaining conversations with potential acquirers. “Active conversations are being had with people who reached out and expressed interest in buying,” Favour told TechCabal. In March, one publication reported that Moniepoint was in discussions to buy Payday; a journalist at that publication said privately that the deal would be closed in three months. “Favour himself leaked the news,” One source close to the situation said. “Moniepoint had issued a letter of intent to acquire Payday, contingent upon specific performance benchmarks being met. It was a matter anticipated in the near future.” But by May, there was no update about the deal. A highly placed member of PayDay’s management said the company was open to being acquired before its seed round. Despite this openness to being bought, the Moniepoint deal did not go through, with one source claiming that Moniepoint’s board was not keen on the deal. One source at a VC with equity in Moniepoint claimed that they first heard about the potential acquisition of PayDay in the media. Despite Moniepoint pulling out of the deal, TechCabal confirmed that talks to sell the company are ongoing. A wave of bad press may have complicated attempts to sell the company. In August, PayDay acknowledged that it suspended access to customer accounts after it noticed some customers had lost funds to fraudulent activities. While an employee familiar with the matter refused to disclose how much was lost, they admitted that PayDay temporarily disabled access to several accounts to recover funds stolen by people who exploited a loophole in Payday’s infrastructure that enabled currency arbitrage. “The company didn’t publicly acknowledge that it had restricted accounts until a prominent blog accused the company of misappropriating customer funds,” a source told TechCabal. As the company pushed back on bad press, it also had to deal with internal issues. A contentious salary adjustment at PayDay Current and former employees said PayDay slashed salaries of some Nigerian staff in July—three months after the $3 million raise. “They told us that it was because the company wanted to be domiciled in Nigeria and was obligated to pay its resident employees in Naira,” a current employee said. While employees expected the Naira equivalent of their salaries to align with their dollar salaries, the actual amounts fell short, amounting to 30-50% reductions. The company said the cut was necessary to adjust the wages of employees in Nigeria to the regular pay for such roles in the country. A highly placed source claimed that less than 10 of the company’s 60 staff were affected and that PayDay planned to assign stock options to the employees as further compensation. PayDay employees told Techcabal that the stock options that were promised had not materialised. The displeasure of employees was complicated by the fact that Favour, who shuttled between Rwanda and the U.S maintained his monthly salary of $15,000. “I went months without a salary before we raised it,” Favour said. “After we did, I earned $15,000, but that has been slashed to reduce the burn rate.” Those salary reductions coincided with the exit of several employees, including co-founder and Chief Operating Officer (COO) Ogechi Obike. Obike’s exit note cited a misalignment of goals as the reason for her departure. Three current and former employees described meetings in which Obike and Favour argued. “During meetings, he provoked arguments, particularly when she proposed alternative approaches different from his own,” said a company insider. The same source claimed Obike was omitted from conference calls involving service providers, investors, and other stakeholders. A source at PayDay’s management denied these claims and said that Favour often had praise for Obike, and she left by mutual agreement. Favour Ori’s shiny object syndrome Sources say that many of Favour’s decisions often came out of the blues. “There were instances when we would wake up to discover upcoming features through Twitter, and even the product team had no prior knowledge of these developments,” one person said. “At times, he would suddenly take control of the company’s social media account to respond to customer complaints.” An employee insisted that Favour’s behaviour was typical of founders in the early stages and not necessarily odd or worrisome. Several people said that Favour had a pattern of hiring top talent from renowned startups, primarily through social media. Once he had recruited them, he rarely allowed them to implement their own ideas instead of compelling them to conform to his directives, effectively stifling their ability to apply their expertise. A member of PayDay’s management who asked not to be named pushed back on some of these claims; ”The team is dealing with a lot, and everyone is stressed, the source said. “I don’t know that anyone left because they were dissatisfied.” The impulsiveness of the company’s founder was sometimes costly. Some customers lost money while trying to create virtual cards, while others could not access their accounts. “All of this happened because Favour abruptly switched from our previous Mastercard provider to a new one, with minimal to no prior vetting. As soon as the switch happened, we were inundated with a wave of customer complaints,” said an employee to TechCabal. The company claims that it has refunded all the affected customers. Lately, Favour has reduced his involvement in the company. “He is no longer as active as he once was on the company’s Slack channel, except for a few occasions when he drops messages in the engineering channel,” a source told TechCabal. A source also disclosed that while he is occupied with attempts to sell the company, Favour has worked full-time at GitHub. “Early in the year, during a team hangout, Favour showed us his Github work ID when introducing himself, implying that Payday
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Adetutu Laditan on how creators can better drive growth on YouTube
There’s few people who absolutely love what they do and where they work, and Adetutu Laditan is one of them. The PR and advertising professional is in her ninth year working at Google, where she currently is a senior product manager for YouTube. Laditan describes herself as an artist at heart, which fits her role perfectly because she gets to interact with YouTube creators and design a platform that millions of creators use. Before YouTube, Laditan worked in media strategy and sales, which she believes were integral in getting her to better understand the role she’s in now. The core functions of her role now are supporting the creator ecosystem—which she refers to as the engine of the platform—and ensuring that more users keep enjoying the platform. For this edition of Centre Stage, I had a conversation with Laditan just after she had completed a run organised by her company. We discussed the different opportunities available to creators on YouTube and how they can better use the platform. Video content is just as valuable as written content AL: I love content and I love videos. I personally believe that I learn better from watching videos than from reading books or articles. For almost every book I want to read, there’s someone on YouTube who has done a summary I can watch and assimilate in thirty minutes. The power of video excites me, which is probably why I enjoy working with all the people who create this content I enjoy so much. I’m also focused on getting more users to enjoy the value of content that creators put out on our platform. This means that we’re constantly working to lower barriers to access like data costs by working with telcos to provide more affordable data for viewers. Challenges that African creators face when using video apps like YouTube AL: We live in a time where African creators can build a global audience and get their content to different parts of the world. We at YouTube are working on our algorithm to facilitate this but creators also have a large role to play. One challenge that they typically have is not being able to properly define their unique selling point(USP). What makes me stand out? The market is saturated and it’s easy to get drowned out, which is why it’s important to recognise why people will stick to your content for the long term. After discovering your USP, you need to find how to constantly reinvent yourself. This process requires you to look at the ecosystem first and ask yourself what you aspire to be. It could be anyone—local or international. After this, you want to find a creative approach that you own while also finding ways to innovate. The second thing is the skill set. The power of the mobile phone has enabled more people to become creators. However, there’s an aspect that entails acquiring the right skill set to ensure that you shoot your videos well. Your videos need to be shot from good angles, and the sound needs to be clear. It’s also important to optimise to be found and ensure that the algorithm works in your favour. This means using the right tags and keywords. Collaboration is key for creators looking to grow and monetise A lot of YouTube creators struggle with knowing how to monetise, and the first thing they need to learn is knowing how to collaborate. If you’re at a point as a creator where you’re not making as much money, or your content isn’t doing so well, there are multiple things you can do. You can collaborate with another creator who has a great following because what tends to happen is that their community could be part of your community which can increase your own following. Collaboration is key for creators because you have a potential audience everywhere. You should actively reach out to work with other brands and creators, always. There are several ways you can make money from content. One way is direct monetisation, like YouTube offers. You can also make money from brands, product placements etc. You can begin to create your own merchandise. There is all of that opportunity. This is sometimes a challenge for creators because it can be hard to understand the business of content. Before going on that journey, think of your strategy, phase it out into different steps that you need to take and then put a holistic plan to address employee growth. Startups can do more on YouTube AL: When people think about YouTube content, they often think it’s for an individual and all companies can do is pay for ads. We need to demystify what content is. Every startup should have a storytelling approach. You have to think of ways to educate and entertain your core audience in various ways. Think of your YouTube channel as your TV channel because that is essentially what it is. As a startup, you can share stories of your entrepreneurial journey. Tell the world how you started and how you’re doing. Give your CEO an opportunity to inspire others. Talk about some of the trends you’re seeing in the market. This is an opportunity to own your narrative and develop quality content which enhances your position in the market. Now, people know what you do, and who you are and they understand why you do what you do. Content helps you drive not just engagement, but connection. Another thing is that this is a cost-efficient approach. If you successfully build your YouTube channel, you are reducing the costs of marketing because you own the channel. Marketing is not cheap, and with marketing forms like TV and billboards, you cannot measure conversions to optimise in real-time. We need more women in content creation AL: I’m passionate about how we can get more female voices to create content. Right now a lot of women shy away from creating content in certain areas because they don’t want to be seen or
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Ivorian startup, Anka, raises $5 million pre-Series A round
Anka, an Ivorian e-commerce startup with the majority of its vendors in Nigeria and Kenya, has raised $5 million in equity and debt as an extension round. Anka, an Ivorian startup that operates three e-commerce products, has raised a pre-Series A extension round worth $5 million, after raising a $6.2 million pre-Series A round last year. This brings the total amount raised by Anka to $13.5 million. The round was led by the International Finance Corporation (IFC), with participation from Proparco and Bpifrance, an investment bank. Founded by Luc B. Perussault Diallo, Moulaye Taboure, and Kadry Diallo, the startup, previously known as Afrikrea (a marketplace for African clothes and art), rebranded into Anka and added a payment (Anka Pay) and shipping product (Anka Shipping) to the marketplace by partnering with DHL and Visa. According to Kadry Diallo, the co-founder and COO, the startup has grown from recording over 700,000 monthly visits and $35 million in transactions last year to recording over 1 million visits and $50 million now. This has helped the startup grow its gross revenue from €200,000 to €3.6 million in the same period. “We have grown in terms of community buyers and sellers since last year. The more our community grows, the more processes have to be efficient. That’s why we raised an extension to strengthen our processes and build teams too,” he said. The startup will use the funding to grow its sales, technical, and product teams as it looks to grow its vendor count from 20,000 to 100,000 by 2030. E-commerce platforms are helping African fashion makers access global markets This funding will further cement Anka’s position as the most funded startup in Cote d’Ivoire and continue the wave of increased investment in francophone Africa. “Abidjan is not only a hidden gem for African startups but for the African economy in general. We have a strong economy and great infrastructure that isn’t talked about much,” Moulaye Taboure, the co-founder and CEO at Anka, told TechCabal last year. Abidjan is a hidden gem—but for how long? Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Zimbabwe confirms Starlink has applied for operating licence
After initially warning the public against the usage of Starlink, citing the fact that it is unlicensed, the Zimbabwean government has confirmed it is reviewing the satellite internet provider’s licence application. Zimbabwe’s minister of information, publicity, and broadcasting services, Jenfan Muswere, has confirmed that the country’s communications regulator has received an application for an operating licence from Starlink. Muswere added that the application is currently being reviewed by the Postal & Telecommunications Regulatory Authority of Zimbabwe (POTRAZ). About a fortnight ago, POTRAZ issued a warning against the unlicensed use of Starlink after cases of reselling had become rampant in the country. “What I remember is that they submitted their application for licencing and POTRAZ was still going through that application… Of course, we want to see it approved,” Muswere told journalists on Monday. Furthermore, according to Muswere, the reason Zimbabwe would be looking to approve Starlink is that fibre-optic connections across the country are proving to be a challenge as a means to connect the whole country to the internet. According to its website, Starlink plans to launch in the country in Q4 2023. “It’s not possible to have fibre-optic cables across the country. It’s a reality that we need satellite technology for communication purposes. What we want as the government is a situation where every citizen from Binga to Chiredzi is also connected. That’s what the government wants, to leave no one behind,” Muswere added. In January 2023, Vodacom-owned Dark Fibre Africa announced plans to use Zimbabwe’s major rail network to lay 2,000km of fibre across the country. Thus far, the project has laid down 1,180km of fibre stretching from Beitbridge to Victoria Falls in its first phase, forcing the country to explore other options for internet connectivity. According to insights by DataReportal, there were 5.74 million internet users in Zimbabwe as of January 2023, translating to an internet penetration of 35%. The country aims to have an internet penetration of over 75% by 2025. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Artificial intelligence: An indispensable tool for African startups
Noel K. Tshiani founded Congo Business Network in October 2018 with a vision to build and connect the startup ecosystem in the Democratic Republic of Congo. Under his leadership, the organisation has led delegations of startups and government officials to major business events in the United States, Ethiopia, Egypt, South Africa, and France, aiming to secure investments and learn from renowned international entrepreneurs. Since the release of ChatGPT last November and Google Bard this March, there has been no escaping the buzz around artificial intelligence and its transformative potential. But what exactly is AI? At its core, AI is a branch of computer science that aims to create machines that can mimic human intelligence. This means not only thinking like humans, but also learning, reasoning, and self-correcting. From chatbots to predictive analytics, AI technologies are reshaping the way businesses operate globally, and African startups are no exception. Beyond the hype, here are five ways AI is essential for African startups, and how it is shaping their future: 1. Boost productivity and efficiency AI can automate many repetitive and time-consuming tasks, freeing workers to focus on more creative and strategic work. By automating repetitive tasks and streamlining processes, AI can help African businesses to significantly improve their productivity and efficiency. 2. Improve decision-making AI can help businesses to make better decisions by analysing large amounts of data and identifying patterns that would be difficult or impossible for humans to see. AI can help African startups to make more informed decisions about their products, services, and operations by providing them with insights into customer behaviour, market trends, and other important factors. 3. Create new products and services AI can be used to develop new products and services tailored to the needs of African consumers and businesses. For example, AI-based medical diagnostics can help improve healthcare in Africa, and AI-based agricultural solutions can help farmers to increase crop yields. 4. Access new markets AI can help African startups to reach new markets and customers around the world. For example, AI-powered translation tools can help African businesses to market their products and services to international customers in Europe, America, and Asia. 5. Fuel job creation As AI continues to evolve, it is projected to help create millions of new jobs in the near future. By harnessing and deploying AI-powered solutions, African startups can be at the forefront of this employment surge and position themselves as key job creators, especially in French-speaking Africa. Top AI technologies for startups Different AI technologies offer immense benefits to startups. Among the most sought-after AI solutions for African businesses are: 1. Machine learning Machine learning is a type of AI that allows computers to learn without being explicitly programmed. Machine learning can be used to train AI systems to perform a variety of tasks, such as recognising objects, predicting customer behaviour, and making decisions. 2. Natural language processing NLP is a type of AI that enables computers to understand and generate human language. NLP can be used to build AI systems that can communicate with humans in a natural way, such as chatbots and virtual assistants. 3. Computer vision Computer vision is a type of AI that allows computers to recognize and understand objects and scenes in images and videos. Computer vision can be used to develop AI systems that can perform tasks such as image classification, object recognition, and scene segmentation. AI in action across various sectors AI’s adaptability is one of its core strengths. Whether in agriculture, e-commerce, fintech, or healthcare, education, insurance, African startups can use AI to address continent-specific challenges, such as using AI for precision agriculture, irrigation optimization, or crop disease prediction. Conclusion AI is not just the latest buzzword in the tech world; it is central to the future of African startups. As the continent faces enormous challenges and opportunities, AI is emerging as a tool for competitive advantage, promising not only growth but innovation tailored to Africa’s unique environment. It is critical for African startups to lead this AI revolution, mastering its tools and techniques to create a tech-centric, prosperous future. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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👨🏿🚀 TechCabal Daily — What makes a CEO resign after ten years?
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning! In the Nigerian fintech landscape, where employee turnover is prevalent and co-founders frequently part ways with their companies, how has Nigerian fintech company Piggytech continued to maintain a close knit team of seven executives for years? Find out here. In today’s edition What makes a CEO resign after ten years? What are the specifics of the Sendchamp acquisition? The startups selected for Bill Gates foundation fund The World Wide Web3 Event: Moonshot Conference Opportuinities Talent What makes a CEO resign after ten years? Image source: TechCabal The What: Bob van Dijk, the CEO of Naspers and Prosus, has resigned after 10 years in charge; Naspers is the largest African company by market capitalisation. Through its subsidiary, Prosus, it holds an estimated 26% stake in Tencent worth $112 billion. Despite completing 23 deals, Prosus’ most important investment remains Tencent and its value has continued to increase over the years. In 2021, Van Dijk proposed a new structure to have the value of Prosus’ Tencent investment show on Naspers books. It created a complex structure where Prosus went on to own 49% of its parent company. Why did Van Dijk leave? Eventually, the lopsided structure of a subsidiary owning its parent had to change. As the ownership changed, it opened the door to Van Dijk’s exit and shares of both companies fell on the Johannesburg Stock Exchange. What’s next? While Van Dijk will remain as a consultant and help with the transition until the end of September 2024, Ervin Tu, the Chief Investment Officer of Naspers will become interim CEO. Here’s all you need to know about him. Per the WSJ, “The management change comes as the 108-year-old company pushes to make its e-commerce businesses and investments profitable, and works to narrow a persistent gap between the value of its shares and its stake in Tencent.” 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. Acquisition What are the specifics of the Sendchamp acquisition? Image source: TechCabal In a report TechCabal exclusively released last week, we revealed that WhoGoHost had completed a full acquisition of SendChamp. Now, TechCabal has exclusively reported that the acquisition was valued in the “mid-six-figure” range in USD and involved a combination of cash and equity. Notably, a significant portion of Sendchamp’s initial investors chose to convert their ownership stakes in Sendchamp into shares of WhoGoHost as part of this deal. SendChamp seemed to be doing okay: After raising $100,000 in an initial round, the startup secured additional funding in 2022, bringing the total to about $400,000. CEO Goodness Kayode noted that the company boasted approximately 6,000 clients, with a substantial portion being corporate clients generating significant monthly revenues in the five-figure range on multiple occasions. Despite a reduction in the size of its team earlier in the year, SendChamp appeared to be achieving impressive milestones. So why get acquired? While the acquisition of SendChamp serves as a strategic move for WhoGoHost, Goodness notes that it represents an opportunity for SendChamp to expand with the support of a financially stronger company and a shared customer base. Funding The startups selected for Bill Gates foundation fund Image source: TechCabal Investing in Innovation Africa (i3), a pan-African initiative funded by Gates Foundation, is providing equity-free funding to 29 African healthcare startups. Each of them will receive a $50,000 grant as well as connections to potential clients in industry, government, and donor agencies. What kind of startups? Both early-stage and growth-stage startups were accepted to the cohort, but only African-founded startups with African founders were considered. Startups in the cohort are building online pharmacies, telemedicine businesses, inventory management for pharmacies, clinics, and hospitals, product protection solutions, and supply chain data analytics. Zoom out: The amount invented in health startups in the first half of the year—$330 million—is up from what was invested same time last year—$225 million. This shows growing investor optimism in the health sector—good news for a clime where health has proven to be a capital intensive sector. Interesting thing about this selection is that women make up neary half of the selected health tech startups. Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $26,621 + 0.79% + 2.65% Ether $1,637 + 0.89% – 1.43% BNB $215 – 0.24% – 0.05% Cardano $0.2519 + 0.87% – 4.53% * Data as of 04:23 AM WAT, September 19, 2023. Events 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 ticket today. Opportuinities Calling all emerging conservation photographers and storytellers! Applications are open for the Ocean Storytelling Photography Grant 2023($2,000 prize). Four successful grantees will receive a fully-funded assignment to choose a conservation photo story on location (including day rate and travel), under direct mentorship from the Ocean Storytelling Grant team. Apply by October 13. Applications are open for the Aurora Tech Award 2024. The Award is an annual global prize for women founders of tech startups. Winners of the first prize get $30,000, the second prize gets $20,000 and the third prize gets $10,000. Apply by December 1. Applications are now open for the Hello Tomorrow Global Challenge 2023,which aims to offer deep tech and science-based entrepreneurs from around the world the chance to secure equity-free funding, exposure on a worldwide scale, and contacts with influential deep tech ecosystem actors. Apply by September 22 What else we are reading Drive fast and carry a fake wallet: How Pakistan’s gig workers stay safe There is no work to balance: how shrinking budgets, Covid and AI shook up life in consulting Written by – Faith Omoniyi & Mariam Muhammad Edited
Read MoreA MultiChoice acquisition is perfect for Canal+ but regulatory hurdles loom
With Canal+ experiencing operational challenges in its French and European strongholds a MultiChoice acquisition could be perfect but complex for the French broadcaster’s global expansion ambitions. Canal+ Group’s parent company Vivendi is not shy about its interest in Multichoice. In its 2023 financial results, Vivendi states that its increasing its stake in Multichoice for international expansion. Growth potential in Africa and stiff competition from streaming platforms in France and Europe mean that acquiring Multichoice makes sense. However, complexities in South African mergers and acquisition regulatory requirements, including the fact that Canal+ would only be able to hold a maximum of 20% of voting rights, will make a deal complex. According to South African law, Canal+ Group will have to make a mandatory takeover offer when its shareholding reaches 35%. Canal+ Group’s shareholding in MultiChoice stands at 32.6%. If the transaction goes through despite the complexities, the resulting entity would be an African broadcasting giant which could change the continent’s broadcasting landscape. A sensible deal for Canal+ “[The company’s stakes in Asia’s Viu and Europe’s ViaPlay demonstrate] the company’s commitment to diversifying its portfolio and reaching a global audience,” said Sherilyn Kamga, a senior strategic finance analyst. “This diversification allows Canal+ to reduce its reliance on any single market and tap into potential growth opportunities in various regions around the world.” In Europe, Canal+ holds a 12% stake in video streaming service ViaPlay. The company has been making investments in Viu, a Hong Kong-based over-the-top video streaming provider. Canal+ paid $200 million for a 26% stake with an option to increase it to 51%. “Africa is an appealing market for Canal+ due to its existing presence in French-speaking countries like Ivory Coast, Cameroon, and Senegal,” added Kamga. “The acquisition of shares in MultiChoice further extends its reach across Africa, tapping into substantial growth potential driven by the rapidly growing middle class and increasing urbanisation in this region.” According to data by DigitalTV Research, pay-TV revenues on the African continent are projected to reach $6.46 billion by 2027, up from $4.78 billion in 2021. Africa, with its growth potential especially in the pay-TV industry which is Canal+’s bread and butter, would be a logical frontier for international expansion for Canal+. Furthermore, because of the similarities in the business models of MultiChoice and Canal+, there are likely synergies that can be harnessed through integration such as content sharing, technology integration, or marketing strategies. This could lead to cost savings, improved content offerings, and enhanced competitiveness in the market. Also, instead of Canal+ trying to compete with MultiChoice, especially in its anglophone African market segments, a consolidated group could potentially operate more efficiently and respond more quickly to market dynamics and consumer demands. This agility could be a competitive advantage for the entity in the rapidly evolving media landscape. According to Digital TV Research’s data, by 2027, MultiChoice’s DSTv is projected to have a 14.6% market share while Canal+ is expected to have 10.7% share. If the two services consolidate, the resulting entity will have a more than 25% market share, easily beating out second-placed StarTimes. Some hurdles expected ahead Although the transaction seems to be cleared for landing considering Canal+’s healthy financial position and the fact that MultiChoice’s share price has been taking a pummeling, regulatory challenges will be a nagging factor. “It would be unlikely that we would see a complete takeover. South African legislation limits the foreign ownership of South African broadcasters to 20%,” said Jimmy Moyaha, an independent financial markets analyst. “This means that the voting rights of Canal+ would always be limited to 20% of the company’s total voting power as per a provision in MultiChoice’s Memorandum of Incorporation.” According to Kamga, to get past that hurdle of having its voting rights limited, Canal+ could partner up with local players via a holding structure. “[Canal+] could form alliances with local partners who will hold a majority stake in the company. This way, it could exert indirect influence over the management of the company without exceeding the 20% voting rights limit,” said Kamga. Alternatively, some foreign investors use complex investment structures, such as trusts or holdings, to acquire a significant stake in a South African company while adhering to voting rights limits. This way, it could exert indirect influence over the management of the company without exceeding the 20% voting rights limit. Interesting times ahead Canal+ currently has 7 million subscribers in Africa, its second-largest market, easily dwarfed by MultiChoice’s 23.5 million. However, while MultiChoice’s revenues were R59 billion (~$3.1 billion) for the FY 2023 with a jittery share price, Canal+’s were 3 billion euros (~$3.2 billion) in just 6 months. MultiChoice’s growing subscriber base, marked by an 8% year-on-year increase in 2023, solidifies its appeal as an acquisition target. However, MultiChoice’s impressive performance should not be taken at face value. For example, although subscribers are on the increase, its average revenue per user (ARPU) has been on a downward trajectory. Taking into consideration these facts, according to Kamga, whether the transaction will boost shareholder value on the buy-side will depend on Canal+’s strategy. “By successfully implementing cost synergies, pursuing strategic expansion, and effectively enhancing its market position, Canal+ can significantly enhance shareholder value in the long run,” concluded Kamga. Canal+ Group’s France and European market challenges, combined with MultiChoice’s pan-African presence, robust topline financial performance and a struggling share price make the perfect concoction for an acquisition. However, regulatory headaches as well as MultiChoice’s own operational issues mean that to derive the most value for parent company Vivendi’s shareholders, Canal+ still have a lot of work ahead to even get the transaction off the ground let alone sustain it in the long run.
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