- December 5 2023
Exclusive: Payday to be acquired by BitMama after $3m funding round in February
Payday, the once-high-flying fintech backed by Moniepoint, is in talks to be acquired by BitMama, a Nigerian crypto exchange startup, three months after TechCabal exclusively reported that it was speaking to potential buyers. BitMama, led by CEO Ruth Iselema, has reportedly offered PayDay investors $10 million worth of equity in the crypto company at a $30 million valuation. “Favour reached out to me because we’re building products beyond crypto; one of those products is Changera, and it made sense to me,” said Iselema. While Bitmama started as a crypto exchange, it now focuses on global services, including remittance, Iselema shared. Payday is now in talks with Bitmama For the potential acquirer, it will mean they don’t have to start Changera, Bitmama’s relatively new remittance service, from scratch. They’ll also not need to create a new software stack or spend on acquiring new users. “The deal is a work in progress,” maintained Favour Ori, the CEO and founder of Payday. “If the deal goes through, the result will be a strong team with much more efficiency.” Bitmama will take on Payday’s customer deposits and liabilities if the deal goes through, said one person close to the deal. Bitmama and Payday declined to comment on the deal, claiming that acquisition talks were far from done. Publicity highs and lows When Favour Ori started Payday, he gained positive publicity on Twitter with optimism for his version of the company’s future. The company also became a payment partner for Starlink, the Elon Musk-owned internet service provider. Ori’s brash style alsop attracted praise, with one founder admiring Ori’s style of “slapping down overly demanding customers.” Yet Payday had real problems. A wave of complaints claiming customer accounts had been blocked with no information was not disputed by the company, and discontent among employees soon revealed that Ori was earning a salary of $15,000 monthly before slashing it to control the company’s burn rate.
Read More- December 4 2023
More capital needs to flow into northern Nigeria: An interview with Abubakar Nur Khalil, CEO of Recursive Capital
Since teaching himself to code in 2018, Abubakar Nur Khalil’s tech journey has evolved into him being one of the most prominent voices in the bitcoin space in Africa. Khalil is a bitcoin developer and CEO of Recursive Capital, an early-stage, Africa-focused, bitcoin VC fund launched in 2020. In December 2021, Recursive Capital, which started as a Web3 VC, rebranded to a bitcoin-only VC, citing “oversaturation” of the Web3 space. The company has invested in bitcoin startups, Fedi and Synota. Khalil is passionate about bitcoin and its potential to offer unique solutions to pressing issues in Africa, and his work at Recursive Capital is at the core of that. He also resides in Kaduna, a state in northern Nigeria, where the tech scene is still quite emergent, compared to that of other states in the country like Lagos. TechCabal had a chat with Khalil on a Saturday afternoon about the work that he does with Recursive Capital and his thoughts on how the northern tech ecosystem can overcome its challenges and grow beyond the stage it is now. What have you been up to at Recursive Capital? Abubakar Nur Khalil: A lot of our work this year has been refocusing on the bitcoin thesis. In general, it focuses on Africa, which is kind of the main priority for us, in terms of target geography. We’re looking at it specifically for two reasons: one, I believe it is going to be the development capital for bitcoin companies and development in general, and secondly, bitcoin provides unique solutions to the problems we face in Africa. The combination of those two things will culminate in having the most bleeding-edge bitcoin companies coming out of Africa. This is what our main operating thesis is, which is different from what we started with. At that time, it was mainly Web3, but my version of Web3 was bitcoin with privacy protocols. One of our priorities has been constant engagement with the general bitcoin ecosystem, both locally and globally. Every year we have a set of early-stage companies that we constantly engage with. We work with them to build them into investable companies. So, this year, we have been formalising that process. What are your plans for 2024? AK: Moving forward to 2024, the main priority will be even more formalisation of this process. A priority for 2024 is a lot more investments from our end. If you notice, this year, we had practically no investments and kind of paused to focus on other things. We’re also working to do a lot more research reports like ecosystem insights, etc. What are some thoughts about where the Nigerian tech ecosystem is at large? AK: One thing I noticed is that there’s a mismatch between priorities when it comes to a lot of founders in Africa. A lot of founders feel like the goal is for them to raise, as opposed to actually delivering on the project or whatever they’re building. I find it funny because, at the end of the day, venture capital is not always the best method for people to raise capital to grow their businesses. A lot of early-stage companies don’t necessarily need VC funding. They have small, nimble, most likely focused teams, which is a huge advantage. What happens at the end of the day is that when VC is introduced, they feel the need to start hiring. When a VC gives you capital, which essentially is a loan, you have to make good on that loan, whether that’s through growth or delivery of the product itself, to be cash flow positive and make a profit. As soon as you accept that capital, you’re driven to seek growth, and the cliche is to start hiring, which is what we tend to see across the globe. The problem with hiring is that you start to diverge in terms of your focus because you’re not bringing on people who have the same familiarity or who understand exactly where the goal should be. If you track the “progress” from the point where these companies accepted capital, you’ll see that nothing much has been done. In fact, they’ve probably convoluted the project to the point where it’s unrecognisable. Another major thing that shocked me about the ecosystem here was the valuations. My thinking was that California’s GDP is Africa’s GDP, so you know, we’re not necessarily going to be having crazy valuations. But, to my surprise, there seems to be a YC effect, which is a space term where a lot of companies just get into YC and come out feeling entitled, even when they have no MVP. How is Recursive Capital working to help people engage with bitcoin more sustainably? AK: The work has evolved quite a lot, and the first thing I should clarify is that this is a global effort. The thing that’s unique with the bitcoin space is that any sort of development or advancements people come up with that benefit bitcoin itself trickles down into every single participant around the globe. So, if folks that are building out in the Netherlands, for example, build a small library that could help do XYZ on bitcoin, someone in Zimbabwe, or Tanzania could leverage that and build on top of that. The good thing with this space is there are competitive benefits to every participant. A lot of it tends to be both bootstrapping and finding ways to adapt to the local environment you’re in, because again, obviously, not all spaces in the bitcoin space, in general, are equal. You have people in the developing markets, people in more mature markets and things like that, so this is to avoid a mismatch with regard to priorities or approaches, especially when it comes to education. There are a lot of things we have to move around and refocus on, depending on where we are. The majority of our work has been taking a step back, examining from all global trends exactly what the opportunities are in
Read More- December 4 2023
Central Bank’s new KYC rules may not curb fraud despite optimism
Effective April 2024, Nigerian financial institutions will be mandated to implement stricter Know Your Customer (KYC) measures, requiring all customers to provide their Bank Verification Number or a national identification number (NIN) for account or wallet opening. The rule change, made by Nigeria’s Central Bank, comes after several high-profile fraud incidents raised concerns about existing Know Your Customer (KYC) processes, but industry experts believe that it will not solve what is now described as a “fraud pandemic”. “The accounts used to perpetuate fraud have always had BVN and NIN,” said Adedeji Olowe, a financial industry veteran and founder of Lendsqr. Instead, he framed the problem as a “lack of rules and regulations to stop fraud”. Nevertheless, Olowe said the rules are welcome and wonders “why it hadn’t been done since”. Like many banking industry experts, Olowe believes neobanks will be most affected by the new rules. “I am wondering why this move hasn’t been done since; it is a very good move,” Olowe said. “These might affect the neobanks that are very untidy, but it is something they need to do.” While deposit money banks offer Tier-1 accounts—bank accounts that usually require no identification—neobanks like OPay and Palmpay may have popularised these easy-to-open accounts using the narrative of aiding financial inclusion. It has allowed them to onboard customers with little friction or without a need for national identity cards, which only 30% of Nigerians have. Yet, industry experts have criticised these lax KYC measures. In October, TechCabal reported that Fidelity Bank, a Nigerian commercial bank that holds ₦3.1 trillion ($3.9 billion) in consumer deposits, blocked several neobanks over concerns that neobank wallets and accounts are an easy way to move monies that had been fraudulently obtained. Another major bank held similar internal discussions, TechCabal reported at the time. The new directive is part of efforts to promote financial system stability and strengthen the Know Your Customer procedures in all financial institutions, said Nigeria’s Central Bank.
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- December 4 2023
Next Wave: Telecoms is the building block for tech innovation in Africa
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 3 December, 2023 Experts believe that Nigeria’s telecommunications and tech sector are working at cross purposes. A romance between the sectors could result in a win-win for both sides. Telecoms is said to be the foundation for the fourth industrial revolution, and a future in the fifth—as the worlds of AI, the Internet of Things (IoT), and big data begin to take centre stage. Research into the use of semiconductors and the integration of voice, audio, video, or data into one single network has today made the industry more viable to scale. As a result, more technology suppliers and service providers are establishing several ventures to contribute to the growing sector while enabling adequate competition to drive down prices of video, voice and data. In Nigeria, telecoms has contributed significantly to the Gross Domestic Product (GDP) of the country. Source: NBS Last year, the executive vice chairman of the Nigerian Communications Commission (NCC), Umar Danbatta, said telecoms contributed over $70 billion to Nigeria’s GDP. “The resultant effect of this is that, today, we now have over 210 million active telephone lines, representing 110% teledensity; and over 150 million internet subscribers as well as 45% broadband penetration which has enabled over 80 million broadband subscriptions,” he said in an address at the 2022 Africa Tech Alliance Forum. To date, telecoms is still one of the top contributors to Nigeria’s GDP, according to the National Bureau of Statistics’ third quarter 2023 report. The sector has the ability to drive financial inclusion of the country more than 60% if citizens’ phone numbers can be well integrated with banking and payment channels, thereby offering financial services for all. Article continues after this ad The Kaduna State Digital Public Infrastructure Playbook takes a deep exploratory dive into the process on how sub-national governments can build DPI at a state level. Download here Worry for the future of the telecoms sector Many analysts who spoke with me for this edition of Next Wave believe that the telecoms sector risks being abandoned under the current Bola Ahmed Tinubu administration. They believe that a tech-inclined minister of communications, innovation and digital economy, in the person of Bosun Tijani, may pay more attention to startups over legacy tech companies, like telcos. An expert who confided in me told me that a minister who understands the importance of telecoms and tech would be more successful in deepening Nigeria’s communication sector as a whole. “The last minister, Isa Pantami, was more concerned about the National Identification Number (NIN) and telcos. This current one is interested in tech startups,” the source, a famed journalist, told me. Pantami is recognised for his reforms in creating a digital identity for most Nigerians, which was initially criticised because of the cumbersome process involved. Many Nigerians had to queue for hours on end just to link their NINs to their subscriber identification modules (SIM). Apart from the clamour from Nigerians who thought the NIN-SIM exercise was needless, leader of the terrorist group Boko Haram, Abubakar Shekau, threatened the ex-minister for the move. But the linking of NINs to SIMs has today turned out to serve as an infrastructure in verifying the identity of Nigerians. Tijani, in October 2023, revealed a blueprint that will enable Nigeria to thrive in the digital age through digital technology and innovation. The blueprint stands on five pillars which are: knowledge; policy; infrastructure, innovation, entrepreneurship and capital (IEC); and trade. Knowledge will be concerned with the growth of talent, research and digital literacy while policy will help to encourage investment, research and intellectual property. Infrastructure will focus on broadband penetration, the development of communication satellites, and spectrum management. Innovation, entrepreneurship and capital will concern itself with the growth and sustainability of startups, while trade will be bullish on positioning Nigeria as a top technology centre to the world. Despite these glowing moves, Tijani has ignored the telecom industry’s recent struggles. For instance, 9Mobile, the fourth-largest operator in the market, has continued to shrink in market size since 2014, when the company had 20.2 million mobile subscribers. Currently, it has lost over 7 million subscribers between 2014 and 2023 and is slowly losing its status as the network of choice. The latest NBS telecoms data shows that 9Mobile had the lowest share of internet subscribers in Q1 2023. 9Mobile had 4.2 million internet subscribers while MTN had the largest share with 67 million. Recently, news spread that 9Mobile may be up for acquisition. If that eventually comes to fruition, it shrinks the sector further. MTN Nigeria and Airtel Africa have also not had it better. Both telcos have suffered declining profits, related to macroeconomic challenges. Yet, the minister is yet to speak on these matters. In May 2023, active broadband subscriptions dropped from 96,169,176 to 86,993,472 in August 2023, while broadband penetration also dropped to 45.57% in August 2023 from 48.28% in May 2023, heightening worries by the Association of Licensed Telecoms Operators of Nigeria (ALTON) on the growth of the sector. Still, the minister is yet to resolve right-of-way fees that operators face—a move that can deepen broadband infrastructure. So far, only seven states in Nigeria are implementing reduced right-of-way fees. There is a need for Tijani to pay attention to some of these issues and urgently hold meetings with the rest of the 29 states if he is ever going to achieve his infrastructure blueprint of 95,000 kilometres of fibre optic cables in the country. Article continues after this ad Unlock opportunities for growth. Apply for the develoPPP Ventures Program to receive €1,000 in matching funds, and technical assistance to propel your business forward. Apply before December 31st,
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- December 4 2023
Naspers thinks Amazon will lose in South Africa
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning MultiChoice is leaving its users spoilt for choice with a new streaming app GOtv Stream, which launched in Kenya yesterday. The app will allow users to download or watch movies, sports shows and shows live on phones, tablets, and web platforms. This launch comes hot on the heels of its recently reported triumph over Netflix. Weeks ago, we reported that MultiChoice’s other product ShowMax surpassed Netflix as the market leader. The year is coming to an end, but it looks like Multichoice is only getting started. In today’s edition Naspers thinks Amazon will lose in South Africa Cell C remains insolvent AstraZeneca to use AI to maintain 6 million Trees in Kenya TC Insights: Can Africans save now, buy later? The World Wide Web3 Job openings E-commerce Naspers thinks Amazon will lose in South Africa Image source: TechCabal Naspers, owner of South African e-commerce platform Takealot, has broken its silence on the company’s brooding competition with e-commerce giant Amazon…and it sounds assured of victory. Amazon has been in talks with South Africa’s regulators concerning its plans to launch in the country in 2024. It has begun fighting for Takealot’s market share by slashing the money it charges sellers on its platforms from R400 ($21.44) per month to only R1 ($0.054) per month. Despite this aggressive move by Amazon, the Takealot owner says that it is “untroubled” by the competition. What cards does Takealot have up its sleeve? Anyone would be scared when a large global company like Amazon enters a country. Amazon is already throwing around a lot of money to gain both consumers and sellers to its side, but per Sunday Times, Naspers is prepared to make necessary investments in Takealot to maintain its position as the market leader. Naspers South Africa CEO Phuthi Mahanyele-Dabengwa thinks that winning over a market requires more than just deep pockets—it takes understanding the locals’ needs. Per MyBroadband, Mahanyele-Dabengwa said that Amazon has previously failed in certain markets because of the lack of local knowledge of businesses that are there. Naspers is betting on Takealot’s experience of doing business in the country to give them a competitive advantage. The true winners: In this e-commerce face-off, the ultimate victor might just be the South African consumer. In pricing battles, both Takealot and Amazon will vie for their loyalty and wallets. It’s a win-win for shoppers and sellers alike. 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. Climate AstraZeneca to use AI to maintain 6 million trees in Kenya Biopharmaceutical company AstraZeneca wants to plant up to six million trees across Kenya, and it’s going to use artificial intelligence to monitor them. The reforestation project will cover more than 3,500 hectares of land. This follows the country’s recent announcement of a new nationwide holiday for tree planting. ICYMI: As part of a plan to plant 15 million trees in 10 years, Kenya assigned 13 November as a public holiday for its residents. The East African country hopes that this will reverse the climate change which has been resulting in disasters like flooding. The tree planting will be monitored through an internet app, the Jaza Miti app, which has reportedly seen over two million registrations. What will the AI technology do? It will monitor tree health, long-term survival and carbon sequestration. However, technology is not enough. Per ITNewsAfrica, over 5,000 local farmers and local community members will be engaged in AstraZeneca’s project. Aside from Kenya, AstraZeneca has also planted millions of trees in Ghana and Rwanda since the project began in 2021. The project has engaged 1,200 farmers across 23 communities. In Rwanda, 6,000 farming households are signed up for the project to grow a range of indigenous and fruit tree species. Telecom Cell C remains insolvent Image source: Daily Maverick South African mobile operator Cell C is still grappling with insolvency, with liabilities towering almost three times higher than its assets. The latest report tells us that Cell C still has more debts than assets with a gap of R9.294 billion ($499.9 million). Side bar: The full-year 2022 results come after the largest shareholder in Cell C, international telecom Blue Label, concluded a series of agreements with Cell C and its financial stakeholders to restructure and refinance the mobile operator. The agreements led to the settlement of debts at a discounted rate of 20 cents to the rand, aiming to ease Cell C’s hefty debt load. After this move, Cell C’s immediate debts dropped from R17.691 billion ($950.87 million) to R10.732 billion ($576.83 million). However, non-current liabilities increased by R1.1 billion ($58.9 million) due to an increase in contract liabilities and other payables. The company is still optimistic: Cell C is staying positive Despite losing many subscribers over the last two years (going from 17.2 million to 8.2 million). Per MyBroadband, its revenue for the year up to September 2023 is holding strong at R10.09 billion ($542 million), just a bit less than the R10.14 billion ($454 million) in 2022. Plus, the company is banking on a fresh start with a new management team, showing that it’s ready for the road ahead in the competitive mobile market. Pay With Transfer support on the Paystack API We made it possible for merchants to white label a Pay with Transfer option on their custom checkout experience. Learn more → TC Insights Can Africans save now, buy later? Fintech is one of the vibrant sectors in Africa’s rising tech ecosystem. The sector received $1.45 billion in funding for 2022, a 39.3% increase from the previous year, 2021, and has seen massive acquisitions. According to an EY report, consumer lending accounts for 23% of fintech businesses, surpassing consumer payments which accounts for 17%. Consumer lending manifests across the continent through the buy now, pay later model (BNPL), giving customers instant access to
Read More- December 1 2023
How Namibia’s ecosystem can boost its venture capital attractiveness
Besides one startup, Namibia’s startup ecosystem is not widely known. Can addressing its challenges unleash its opportunities? In the last few years, numerous innovative startups have sprung up in Namibia. There are LEFA and Intercity both of which drove mobility in the southern African nation as well as Tutors Hub which pioneered edtech. And there is PayToday and PayPulse, which introduced digital payments to Namibia as well as Macquire Medical which pioneered telemedicine in the country. However, these and many more startups in the country, despite their innovations, have not been able to position the country’s ecosystem as a destination for investment. Startups in Namibia still struggle with raising venture capital, an important component of building scalable and impactful technology companies. From conversations with various ecosystem stakeholders, numerous ecosystem challenges contribute to this shortfall. According to data by Statista, in 2022, only three Namibian startups raised venture funding, totalling $15.21 million. The majority of this funding—$15 million to be precise—went to logistics startup JABU. JABU Logistics, which has raised over $18 million, according to Crunchbase and is present in three countries, is an outlier in Namibia. Founded in 2020 by David Akinin, the startup enables shops and bars to place orders digitally to stock up their shops. It currently operates in Zambia and South Africa and was part of Y Combinator’s Summer 2021 batch. In May 2022, it raised $15 million in funding, led by Tiger Global. “There is enough adoption of technology in the country to achieve scale. Namibia is definitely a small country, [but] it has a lot of opportunities,” said Kevin Hassan Abadi, partner and director of products at JABU. Challenges facing Namibia’s quest to be a VC destination Namibia has a small and sparsely distributed population of 2.5 million people and extreme economic inequality only surpassed by South Africa. It also grapples with multidimensional poverty, a small financial sector, and an almost non-existent local venture capital industry. Even StartUp Namibia, which was set up by the German development agency GIZ to support the country’s fledgling ecosystem, shut its doors earlier this year. An amalgamation of these factors contributes to a landscape which makes building a venture scalable company challenging. However, according to some investment professionals in the country, the issue is not a lack of capital in the country but, rather, a disconnect between the requirements of capital providers and the needs of startups. Jesaya Hano Oshike is a seasoned investment professional with over 10 years’ experience in the field. He is co-founder of Windhoek-based Basecamp Business Incubator and was also one of the founding members of the Namibia Business Angel Network. “Even though there is dry powder in the market, investors argue that startups are not investable because they are way too risky in the early stages,” Oshike told TechCabal. “But the reason startups are not investable is because no one is willing to give them funds for them to actually build out their businesses.” To address this chicken-and-egg conundrum, Oshike believes that business development via entities like the Basecamp Business Incubator is vital in accelerating the process of business model validation and investment readiness for startups. This point is further reinforced by Meike Neitz, co-founder of the business development community “It Takes A Village”. “There is a lack of support in the form of a business-friendly environment for startups to mature beyond their first two years of existence,” Neitz told TechCabal. “A lot of effort to that end at the moment is spearheaded by individuals as well as private enterprises, which is nowhere near enough. ”Although there have been government initiatives such as the Namibia Investment Promotion Board in that regard, Netz believes there is still a lot of work to do. “Big institutions like banks are willing to sponsor startup-related events but they are not willing to be more active in availing funds,” she added. “Also, I believe that corporates should be more willing to adopt the solutions of startups. That would go a long way in helping them get traction and validating themselves to investors.” According to Fillemon Nangolo, founder of Tololi Market, a B2B logistics startup which enables retailers to procure produce from farmers, the reputation of digital solutions also contributes to stunting the growth of startups, which in turn shuns investors away. During the COVID-19 lockdowns, e-commerce and logistics startups boomed in the country. However, amongst the legitimate businesses, there were also bad actors who scammed consumers. As reported in TransUnion, some faux e-commerce websites scammed consumers into buying fake or non-existent products. Others scammed consumers into downloading phishing software. “Namibia doesn’t have the biggest population, so as soon as one person gets scammed online, word of mouth spreads very quickly and suddenly 100 people do not want to use online platforms because of that [person’s] experience,” Nangolo told TechCabal. Nangolo’s Tololi Market is currently in the market to raise seed capital of $720,000 to scale its operations, and recently pitched to CcHub Namibia. Another challenge reiterated by founders that TechCabal spoke to is a need for more technical talent in the country. With only two public tertiary education institutions, startups in the country are not exactly spoilt for choice when it comes to sourcing talent. Additionally, Namibia’s stringent immigration laws make it difficult for startups to source talent from abroad. “Namibia makes almost the biggest investment in education on the continent as a percentage of GDP, but if you look at the ICT graduates specifically, we produce the lowest number of graduates,” Anicia Peters, CEO of the National Commission on Research, Science and Technology, told TechCabal. “So there is a shortage of skills to advance the country’s digitalisation ambitions.” Peters chaired the task force set up by Namibia’s president Hage Gottfried Geingob in 2022 to investigate impediments to the country’s Fourth Industrial Revolution ambitions. To address the skills shortage challenge, Peters and her team recommended [pdf] that the country invest more into upskilling graduates to match modern requirements, doubling down on homegrown research and development efforts, and establishing a national
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- December 1 2023
How uLesson became an online university from an “extra lesson” company
uLesson, Nigeria’s leading ed-tech, recently announced it had become a group with an online open university under it, the first in Nigeria. Here’s how they moved from K-12 to tertiary education. At 10:20 a.m. on October 28, 2023, Professor Tayo Arulogun, Miva open university’s vice chancellor, mounted the stage at The Podium event centre in Lagos, Nigeria, and kicked off the university’s first matriculation ceremony. With 532 students in Lagos and Abuja, Miva was making history as Nigeria’s first fully accredited online open university. Miva’s launch will contribute to solving the capacity problem in Nigeria’s tertiary education system. In 2014, for instance, almost 1.2 million candidates who sat for college-entry exams into Nigerian tertiary institutions didn’t gain admission. Nigeria’s 170 universities can only hold 1.8 million students, and there are not enough places for even those who pass college entry exams. “The traditional method of brick and mortar cannot address the demands of 50 to 60 million Nigerians trying to get into tertiary institutions at the same time,” said Sim Shagaya, the founder of uLesson Group, Miva’s parent company. “We have to be able to use the internet somehow.” Shagaya shared those thoughts in a 2014 interview when he was still CEO of Konga, Jumia’s e-commerce rival. He had a thesis for online education but would dedicate the next four years to building Konga before selling the company in 2018. With time on his hands, Shagaya launched uLesson, an edtech company targeting the k-12 category, in 2019. “I decided to revisit this education opportunity, which I had been thinking about for a while,” he told TechCabal in a virtual interview. L-R: Prof. Tayo Arulogun, VC of Miva University; Mr Sim Shagaya, founder and chancellor of Miva University; Iheanyi Akwitti, Miva University registrar. Photo credit: TechCabal/Muhammed Akinyemi Unlike most businesses, uLesson refined its business model away from Nigeria’s economic capital, Lagos, and major cities like Port Harcourt or Abuja. uLesson started building in Jos, a city not bothered by traffic congestion while taking advantage of a lockdown that forced staff to work from one building. Within four years, uLesson would grow to birth Miva University in one of the fastest business expansions in the edtech space. Here is how uLesson did it. uLesson’s Day 1 in Jos uLesson’s focus on K-12 education was new and important. As K-12 education was changing globally with technology-assisted learning, ed-techs like uLesson helped Nigeria attempt to catch up. uLesson’s approach involved three phases: pre-recorded content, live content, and personalised services. uLesson’s time in Jos (early 2019 to late 2020) was spent building the pre-recorded content library, which eventually became their best-selling product when they went to market in 2020. At inception, the learning content was accessible to students through USB dongles and an Android app which students could access without the internet. The live content had educators teach students in real time, and the personalised services allowed teachers to help students directly and also give them homework Having all the staff in one place, and building a massive library of educational content, meant that, for a long time, uLesson couldn’t pursue revenue. “We were trying to teach academic principles in a way that’s fun and engaging through rich animation and interaction between live humans and animation, and to test efficacy while we’re doing that,” Shagaya said. “It was very tough. It took a year and a half before we could even reasonably go to market.” uLesson’s residential and official quarters in a Jos neighbourhood. Photo credit: uLesson group uLesson planned to go to market in February 2020 in Nigeria, Ghana, Sierra Leone, and Gambia. To achieve that, they went into overdrive. First raise, COVID-19, and expansion challenges Late in 2019, Shagaya was on the phone with an old friend, Omobola Johnson, a one-time ICT Minister in Nigeria and now a partner at startup investment firm, TLCom. He mentioned uLesson to her and she was excited to invest in uLesson, as its overall objective matched what TLCom was looking to invest in. Johnson and her partner, Ido Sum, travelled from London to Abuja, from where they took a four-hour road trip to Jos, to see the uLesson team, discuss growth plans, and figure out how TLCom could support the company. In November 2019, uLesson announced its $3.1 million seed round led by TLCom. Johnson was not just a friend of Shagaya’s; she was now on uLesson’s board of directors with Sum. In 2020, months after uLesson brought all its staff to its Jos hub where they all lived and worked, and after it had raised capital, the COVID-19 lockdown started. Abdulafeez “Penzu” Ojetola, who was the pioneering illustrator at uLesson said of those days that: “Work needed to keep going, the library needed to be completed, [so] we didn’t stop work at all. We had two different lockdown shelters. One was the [residential] mansion and the other was the office complex. We had people who were cooking for us. Work was going on. We were not commuting, we lived in the same place. We got our salaries. We got our allowances. We needed to work overtime because we weren’t going anywhere.” Two other former employees who did not want to be quoted shared similar sentiments about work not stopping and everyone in Jos working round the clock. Ojetola said he “worked from 6 a.m. till 10 p.m. for weeks on end. There wasn’t much to be done because of the lockdown so we worked double time. The workload of six months was done in three months.” In 2020, uLesson went to market as planned. “The first product was very basic and was Android only. We covered only senior secondary school sciences,” Shagaya told TechCabal. While they had initially hoped to benefit from growing internet usage, Shagaya said the market let them know convincingly that “for us to provide a compelling academic experience, there had to be a physical component because of the internet issues that continued to challenge us.” As uLesson made more USB dongles,
Read More- December 1 2023
Electricity access in Africa exceeds previous estimates
This article was contributed to TechCabal by Seth Onyango via bird story agency. Emerging data is shedding new light on the electricity landscape in Africa, indicating the oft-cited statistics of those without power might be considerably lower than recent figures indicated. Fresh analysis suggests that more and more homes and businesses are being powered by off-grid solutions, a factor that was not accounted for in past estimates. The World Energy Outlook 2023 notes a significant uptick in the number of homes and businesses turning to solar power to meet their energy needs. “This reversion was partially offset by robust growth in solar home system sales, which provide electricity to households not connected to electric grids. Sales of these systems surged past pre-pandemic levels last year, with strong growth in West and East Africa,” the outlook states in part. “Thanks to increased solar home systems sales, Nigeria saw its population without access continue to drop during the crisis.” In a recent analysis, the news platform Semafor suggested that “one of the reasons that number seems to have been unchanged for some while now is that a lot of work is being done to expand access and increasingly by non-traditional grid buildouts.” Traditional approaches to measuring electricity access have predominantly focused on the expansion of national power grids, overlooking the rise of domestic solar energy and pay-as-you-go (PAYG) solutions whose numbers are hard to capture. The sun is fast being recognised as the one universal resource for all Africans. Solar home systems sales soared to record levels in 2022, with most imported from China. These systems accounted for half of the increase in electricity access in Africa in the same year. The significance of solar power is further emphasised by its provision of electricity to over 8% of households in sub-Saharan Africa that have access. According to the Africa Solar Industry Association’s (AFSIA) Africa Solar Outlook 2023 report, the commercial and industrial segment registered a year-on-year growth of 61.5% in the previous year. In terms of major installations, some 949 MW of additional solar energy was installed across the continent in 2022, a 14% year-on-year increment from the 833 MW added to the grid in 2021. With 284 MW, Angola had the most installations in 2022. The top five include Angola, South Africa (111.8 MW), Egypt (80 MW), Ghana (71.3 MW), and Mozambique (41.9 MW). The report states, “Africa is now home to more than 10 GW of identified solar projects.” However, estimates from state-run utility Eskom indicate that South Africa alone added more than 1,000 megawatts (MW) of private solar capacity in just two months in 2023, according to news platform Semafor. The increase in solar installations to June was more than what was added in the preceding six months, highlighting not just South Africa’s but the continent’s solar power potential. The installations came on the back of increased power outages across the national grid. “What you’re seeing in these numbers is households and the private sector taking matters into their own hands,” Wikus Kruger, director of the Power Futures Lab at the University of Cape Town told Semafor. “It’s being driven not by government policy per se, but by desperation.” Chinese customs data reveals significant solar panel imports into South Africa, totalling over 5GW (or US$1.1 billion) since January 2022, with 3.7GW in 2023 alone While solar installation capacity in Africa has historically been driven by a few “hot spots” such as South Africa, Morocco, and Egypt, more countries are now adopting solar initiatives. This trend towards decentralised, non-grid solutions like solar home systems and PAYG models is revolutionising electricity access in Africa. These methods are not only proven to be more adaptable to the diverse and often remote landscapes of the continent but also offer a more cost-effective and rapid deployment compared to traditional grid extensions. The PAYG model, in particular, is making solar energy financially accessible to more households by allowing users to pay for their energy consumption in small, manageable instalments. Kenyan PAYG operator M-KOPA recently launched in Soweto as the company expands across Africa. Countries like Côte d’Ivoire, Kenya, Ghana, and Senegal are nearing their targets for universal access, showcasing the potential of these innovative approaches.
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- December 1 2023
TechCabal Daily – Putin’ in the time
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy new month And happy birthday, in arrears, to ChatGPT! On November 30, 2022, the AI service was released and it amassed over 100 million active users within just three months—the fastest growth rate ever recorded for a consumer app. Since ChatGPT came into our lives, several companies from Google and Amazon to Microsoft have released their own AI chatbots/services that make everyone’s jobs, assignments, and businesses easier! In today’s edition Putin’s daughter to offer digital training to Africans Musk claims Neuralink hasn’t killed any chimps Nigerians don’t care about black Friday South Africa releases crypto licence updates Funding tracker The World Wide Web3 Job openings Governance Putin’s daughter offers digital expertise to Africa Katerina Tikhonova, general director of Russia’s NIDF Delegates from 36 African countries have been invited to Moscow next month to pitch digital services to Russian investors and IT specialists. The project is supported by the Innopraktika Centre, which is affiliated with the National Intellectual Development Foundation where Russia’s President Vladimir Putin’s younger daughter, Katerina Tikhonova, is the general director. What is the project about? Delegates from Africa first convened on July 28, at the Second Russia–Africa Economic and Humanitarian Forum, to discuss the project stylised as “e-Governance Knowledge Sharing Programme”. The programme aims to promote the exchange of knowledge and experience in the field of e-governance between Russia and African countries. The programme will provide training, including lectures, seminars, workshops, and other learning activities led by Russian and African experts. The training will cover the theoretical aspects of e-governance, regulations, and technological solutions, with a focus on practical case studies. The programme will also include excursions and visits to partner companies’ offices. Andrey Maslov, deputy executive director for Innopraktika, said the project was pivotal due to a significant demand for digitisation of public services, and high growth rates in African countries. A wider angle: The move is seen as Putin’s way of forming alliance with Africa to counter the impact of US and European sanctions over Russia’s war in Ukraine. By showcasing its proficiency in digital solutions across a wide spectrum—cybersecurity, public services, and electronic voting—Russia can potentially establish itself as a formidable contender in the ongoing geopolitical rivalry with China, the United States, and the European Union for influence in Africa. 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. Big tech Musk says monkey deaths aren’t related to Neuralik implants Elon Musk’s Neuralink is under scrutiny. The company is being accused of mistreating monkeys used in its experiments. What experiments? Neuralink is creating a brain-interface chip that can be implanted in the brain. According to the company, the chip will allow people with paralysis or other disabilities to control devices with their minds, and it will also be used to treat neurological disorders or improve human cognitive abilities. Speaking at a New York Times Dealbook conference, Musk reiterated previous statements from his social media platform, X, asserting that Neuralink had “never caused the death of a monkey”. He explained that the company chose terminally ill monkeys for experiments, to “minimise risk to healthy monkeys,” further highlighting that the monkeys live in what he described as a “monkey paradise,” located in Fremont, California. A different narrative: Musk’s statement comes as the company faces an investigation into its animal treatment practices. Veterinary records obtained by the Physicians Committee for Responsible Medicine (PCRM) from UC Davis, where Neuralink previously conducted its primate studies, found that twelve “previously healthy” monkeys had to be put down due to symptoms like bloody diarrhoea, paralysis, and brain swelling post-implant. In a letter to the US Securities and Exchange Commission (SEC), the PCRM alleged that Musk’s assurances about Neuralink’s safety misled investors. In August, Neuralink raised $280 million in a funding round led by Peter Thiel’s Founders Fund. According to a filing published by the SEC, the company increased its previous funding by $43 million, from $280 million to $323 million, in the same month. Zoom out: After receiving approval from the Food and Drug Administration (FDA) in May, Neuralink has announced the commencement of in-human trials for individuals with quadriplegia, with the study expected to span six years. Economy Black Friday fizzles out in Nigeria GIF source: Tenor Despite retailers offering discounts of up to 40%, stores across Nigeria are witnessing a noticeably low turnout for the 2023 Black Friday season. Black Friday, a day of big discounts, is not as popular as it once was due to high inflation and low purchasing power. Under President Bola Tinubu’s reforms, Nigerians have prioritised spending on essentials like food and housing, with most believing there is no difference between shopping during Black Friday and shopping days after the offer expires. Here’s why: 2023 started with a cash crunch in Q1 that strained finance and reduced household spending. As of October 2023, inflation had risen consistently, reaching an 18-year high of 27.33% and was predicted by KPMG to hit 30% in November. Food inflation soared to 31.5%, forcing several Nigerians to rely on social welfare programs to survive. The Central Bank of Nigeria (CBN) delayed holding rate meetings to address the escalating inflation, which further complicated the economic landscape. The decline in Black Friday enthusiasm has also reportedly made businesses forgo exclusive deals this year considering the low turnouts this season. Checkout the Paystack Changelog Paystack enabled single and bulk transfers to M-PESA Consumer Wallets for merchants in Kenya. See what Paystack has been up to in 2023 → Crypto South Africa releases crypto licence updates South Africa’s Financial Sector Conduct Authority (FSCA) has released new updates on the licence status for crypto asset service providers in the country. As of November 2023, the FSCA received 128 renewal applications. State of the licences: Only 36 of the 128 licence application assessments were complete; the regulatory body said it would present
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- November 30 2023
Nigerians don’t care about Black Friday
The Black Friday sales, where shoppers get discounts as high as 80% on goods, are no longer attractive to customers due to paltry discounts and inflationary hikes. Every November, on the first Friday after Thanksgiving celebrations in the United States, retail stores slash the prices of many of their goods to attract higher patronage from shoppers. This culture of heavily discounting the price of goods is what is today known as Black Friday, said to be the busiest shopping day of the year in the US. Black Friday sales usually extend throughout the weekend until Monday, known as Cyber Monday. Around the world, shoppers keep an eye out for mouth-watering Black Friday deals from their favourite retail brands and outlets. But this year in Lagos, Nigeria’s most populated and technologically advanced city, all of that Black Friday fever seems gone. Low turnout for Black Friday On Cyber Monday, at the Opebi branch of retail chain store Spar, less than 20 cars drove into the store’s premises to shop. On the shopping floor were banners that said Spar would run Black Friday deals up to 40% off until November 30. But the scant number of customers ambling down the aisles, in no rush to grab cheap items off the shelves, seemed either oblivious to this or simply didn’t care. At the Ikeja branch of ShopRite, another retail chain store, the situation was no different. At least four customers told TechCabal that the discounts on offer at the store were too low for them to bother. With the purchasing power of Nigerians wilting under rapidly rising inflation this past year, discounts on goods make little difference towards conserving people’s spend. “The purchasing power of Nigerians has been significantly eroded as a result of the surge in the price of pretty much everything. People are now forced to prioritise their spending and avoid what they do not need,” Samuel Oyekanmi, a financial analyst, told TechCabal. A shopping floor of one of the stores visited. Credit: Joseph Olaoluwa/TechCabal Nigerians had a rough start to 2023. The first quarter began with a cash crunch that overwhelmed the financial sector and further crushed household spending. As of October 2023, inflation has consecutively increased every month to an 18-year high of 27.33%. Food inflation also increased to 31.5%, forcing several Nigerians to opt for social welfare programmes to get by. The majority of spending was reserved only for necessities like food and housing under the latest reforms by Nigeria’s president Bola Tinubu. The Central Bank of Nigeria (CBN) paid lip service to the surging inflation, refusing to hold rate meetings to curb it, thereby complicating the situation. These policy reforms have lately impacted Nigerians’ shopping habits. Shoppers told TechCabal that there was no need to act in a frenzy over discounts that may not stretch beyond ₦5,000 ($6.30) less than the full price. “Black Friday is an illusion to us,” Frank Obogai, a middle-aged man shopping with his friend at ShopRite Ikeja, told TechCabal. “There is no difference between shopping today and shopping days after ShopRite’s offers [expire]. What is the difference between ₦5,000 ($6.30) or ₦2,000 ($2.52)?” Obong*, an online shopper, told me he got shoes and some food items on Jumia last year for his wedding, at discounted prices. This year, “things were tight,” he said. Black Friday sales were introduced to Nigeria in 2014 by the e-commerce platform, Jumia. Other e-commerce platforms followed later. However, adoption is low with the platforms’ customers. Adobe Analytics reported Black Friday generated $9.8 billion in US online sales, up from 7.5% the previous year. The CEO of a Nigerian e-commerce platform, who spoke to TechCabal under anonymity, said that inflationary pressures and poor purchasing power have affected the e-commerce sector in the country. “Things are collapsing for everybody. Also, the country has fundamental, structural and skill problems that won’t change overnight.” Declining trend of Black Friday searches in Nigeria on Google Trends. Credit: Google Trends No more Black Friday discounts An Instagram vendor who sells hair extensions and refused to be named said she is not thinking of doing any exclusive Black Friday deals. “I can always give a discount on my daily purchases, though,” she added. Although businesses in other parts of the world use Black Friday deals to maximise their profit over a weekend, Oyekanmi the financial analyst told TechCabal that buyers don’t believe that businesses in Nigeria are offering any of the discounts, as claimed. “Companies are in business to make a profit and would not sell lower than cost price,” Oyekanmi said. “The question asked by an average buyer would be, why would there be a 20%, 30% discount in this high inflationary environment?” *Name has been changed.
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