👨🏿🚀 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.
Read MoreOne year after resigning as 54Gene CEO, Abasi Ene-Obong is back in the arena
Abasi Ene-Obong, former co-founder and CEO of 54gene has launched a new startup—Syndicate Bio. On Monday, Abasi Ene-Obong, former CEO of Nigerian health and biotech startup 54gene, announced the launch of his new venture, Syndicate Bio. Per his LinkedIn post, Syndicate Bio will drive genomics and precision medicine initiatives across the world’s most diverse regions, starting from Africa. “After a few months in stealth mode, I am happy to say that we have started Syndicate Bio to empower inclusive advancements in global genomics science.” Jumi Popoola and Estelle Dogbo will serve as the chief scientific officer and chief operating officer of Syndicate Bio. According to Ene-Obong, Syndicate Bio uses collaboration with governments, pharma companies, academia, and other stakeholders to drive local precision medicine impact while creating powerful datasets that can be used for drug discovery and development.“In the coming months, we will be sharing some of the great strides made in furtherance of our vision and mission,” the post concluded. Ene-Obong founded 54gene in 2019 to address the shortage of African genetic material in pharmaceutical research. He stepped down in October 2022 following a challenging year for the company. The company saw its valuation slashed by over $100 million and eventually laid off 30% of its workforce. While the reason for his resignation was not disclosed, one publication insinuated that it was one of the conditions for investors to provide additional funding to the company.
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Kenya’s ICT agency suspends CEO Ezra Chiloba over alleged corrupt practices
Ezra Chiloba served half of his four-year tenure before his suspension over alleged corrupt practices. Ezra Chiloba, the director-general or CEO of Kenya’s ICT watchdog, the Communications Authority (CA), has been suspended. The CA alleges that Chiloba engaged in corrupt practices that attempted to defraud the agency of KES 25 million ($170,000). Part of the agency’s audit reads, “As the accounting officer there was gross misconduct of the process to acquire a mortgage for himself as is demonstrated by disbursement of the loan of KES 25,000,000 to Kitale Hilmost Limited. A company search with the Business Registration Bureau revealed that the seller entity is owned entirely, as the sole shareholder and the sole director, by Ezra Chiloba Simiyu, the director general who is also the buyer in this case. This is reasonably construed to be demonstrative of an intent to defraud the Authority.” Read more: Kenya’s ICT regulator suggests revamping existing laws amid WorldCoin controversy The CA’s audit report highlights potential disciplinary action against Chiloba for gross misconduct, including negligence of duty, failure to conduct due diligence on transactions, and overall misconduct in his office. Per an audit, these issues involved approving his mortgage, overvaluing properties, and clearing staff without reviewing mortgages, resulting in significant financial risks for the CA. “Disciplinary action on account of gross misconduct is contemplated as the audit indicates that the Director General has fundamentally breached his obligations arising under the contract of service,” the CA said in a statement. Read more: ICT regulator in Kenya fails to enforce guidelines for phone brands Chiloba was appointed as CA’s CEO two years ago and was previously the CEO of the Independent Electoral and Boundaries Commission (IEBC). Following the development, Christopher Wambua has assumed the acting director-general role, starting today until further notice. Chiloba succeeded Mercy Wanjau, who served the same role in an interim position after the exit of the late Francis Wangusi. Chiloba has served half of his four-year tenure. It is not clear if he will return to the helm of affairs at the CA or if his suspension will be made permanent. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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The people who call the shots at Piggytech
In six years, customers withdrew ₦1.1 trillion from Piggytech, a Nigerian fintech app. Here are the executives who powered the company’s growth. Piggytech, the parent company of Piggyvest, Pocket, and Patronize, has grown from a savings platform in 2016 to a diversified financial services company with multiple licences today with over 170 staff. Powering this remarkable growth has been the same set of cofounders and executives who were students together at Covenant University. Founded in 2016 by Somto Ifezue (CEO), Odunayo Eweniyi (COO), and Joshua Chibueze (CMO), the company operates a hierarchical structure where the co-founders and the founding team—Nonso Eagle (chief creative officer), Terry Kanu (chief partnerships), Ibukun Akinola (head of customer finance), and Ayo Akinola, who now works on the Pocket product—report directly to Ifezue. All seven were part of the founding team at PushCV, a recruitment company founded two years before Piggytech. That the team has remained together for so long is rare in Nigeria’s fintech space, where churn is quite common and cofounders often leave companies. “We are friends and have been through it all together. It’s like having your own accountability group. We know our strengths and weaknesses and have been able to complement each other,” Chibueze told TechCabal on how the founding team has been able to stay together. The stability also flows to middle management, where the company prefers to promote internally rather than bring in new hires. According to a source at the company, Piggytech rarely breaks this tradition and the few instances that it was broken were when a new department was created. Exclusive: How Piggyvest paid out ₦1.1 trillion in six years “When we started to expand into what we are today, it was very clear that we should promote the people from the beginning, and they have over the years improved themselves. The people who are in top positions today are mostly people who understand the core values and DNA of the company,” Chibueze said. High-profile leadership changes include the recent hire of Sayo BiluBaje from Stanbic IBTC Stockbrokers as Senior Compliance Officer in 2022, Daniel Orubo from Zikoko as Head of Content and Content Strategy in 2021 (the department covers social media, brand design, and marketing), the rehiring of Karen Onigbide as Senior Product Manager (Onigbide had previously worked at PushCV and Piggyvest as product manager and product specialist) in 2021, and the promotion of Ojimaojo Udale-Ameh to Head of Engineering, who has been with the company since 2019. The engineering team reports to Ifezue, the company’s first engineering lead. The legal, business development and operations teams report to Eweniyi, while the entire marketing, content and customer success teams report to Chibueze, who leads the largest team. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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“Ice-cream births” are saving women’s lives in Nigeria
This article was contributed to TechCabal by Dorcas Bello via the bird story agency. Determined to prevent loss of life through childbirth in a country with one of the highest rates of maternal death in the world, this paediatrician went online to help pregnant women. The result? “Ice cream births”. “If we have science that can tell you precisely what your blood pressure is, or how much fuel you have in your tank, or exactly what your pulse is, why do we not have something that’ll tell you exactly how much blood a woman has lost in childbirth?” asked maternal health specialist, Dr Idara Umoette, indignantly. She was speaking from the rooms in which she runs her practice – and a fast-growing online support group for women preparing to give birth. Umoette recently gained online notoriety for her digital pre-natal courses and their results – what women in her WhatsApp and Telegram groups have begun calling “ice-cream births”, referring to natural births that go well. Which is why I found myself in her rooms. Somehow, the online term “ice cream births” had passed me by. Not surprising, perhaps, given the incongruous, even outrageous nature of such a term. But when a friend told me I “had” to take a course when I was pregnant, I took note. And when the opportunity arose to find out more, for a story, I jumped at it. Nearly 20% of all global maternal deaths occur in Nigeria. Between 2005 and 2015, some 600,000 women lost their lives during or as a result of childbirth. A lot of that has to do with the low level of doctors in the country. The Nigerian Medical Association states that there are only 40,000 doctors for an estimated population of 196 million. The latest data from the World Health Organization (WHO) reveals that Nigeria’s physician-to-patient ratio is four doctors per 10,000 patients, and patients often wait hours to be seen. That wait can be too long for women suffering from internal bleeding after childbirth. Which is where Umoette and her “ice cream births” comes in. When the medical doctor of 17 years experienced her own internal bleeding for a year – thanks to a tumour that was removed – she came to understand, very personally and for the first time, the thin line between life and death. “The fragility of life really hit home,” she said. The experience resonated sharply with what she had been seeing around her on a regular basis as a General Practitioner and public maternal health specialist – women dying during childbirth. As a doctor and as a woman, she said, she couldn’t bear the fact that women continued to lose their lives, often due to blood loss. She realised she had to act. Her first initiative was an audio-visual tool to help measure blood levels (specifically, PCV, or, Packed Cell Volume in the blood). A colour-coded, digital tool was designed to be easy to use and after presenting the idea to the Niger Delta Development Commission, she was given the nod to conduct a pilot in nine states. The tool has since been distributed to pregnant women through partners such as the Medical Women’s Association of Nigeria and the Office of the First Lady, in Benue State. But Umoette quickly realised that this wasn’t enough. She could, she felt, help decrease mortality rates and improve the chances of successful childbirth by educating more women. So, in August 2020 she started giving online prenatal advice. She called her service BirthSafe. To get started, Umoette dug deep into her early training experiences. As a junior doctor in a paediatric posting at the University of Uyo Teaching Hospital in Akwa Ibom State in southern Nigeria, Umoette had dedicated herself to the well-being of neonatal babies, safeguarding them from risks in the weeks and months following childbirth. To do this, she set up an initiative to ensure no child was left behind in receiving medication – by educating mothers. “I would always support initiatives that encouraged mothers to prioritise the availability of necessary medications for their babies. Throughout my time there, I never encountered a single instance where a baby’s life was lost,” she recalled. Through her Instagram posts, Umoette now offered a similarly thorough program, teaching pregnant women how to prevent problems during pregnancy and during childbirth. In October 2022, she organised the first webinar on Zoom for her WhatsApp community. The service has since grown to provide virtual consulting sessions via digital platforms such as Zoom, Telegram, YouTube and Instagram, with group meetings on WhatsApp. She has a team of professionals who help and who have also signed partnerships with service providers in the maternity sector to increase offerings to women. The antenatal classes focus on three key “protocols”; a PVC Protocol focusing on nutrition – to ensure sufficient iron and other elements in the blood to maintain the correct PCV levels and to help with dilation during the birth; an NIL Protocol (meaning no complications) focusing on exercise to improve blood circulation and agility; and a Birth Recovery Protocol, focusing on how to recognise symptoms requiring immediate first aid, or professional medical assistance in the postpartum period, for both caesarean and natural births. “This runs for 42 days from the time a woman gives birth, any number of things can occur that could result in either injury or loss of life to the woman. The two most common in our environment are hypertensive events and excess bleeding,” Umoette explained. By establishing dedicated, digital antenatal care support groups on social media, Umoette was able to start improving the pregnancy experiences of women. “When the doctor told me I was 3cm dilated, I already knew what he meant and the next step to take. Being a member of the BirthSafe group had equipped me with adequate knowledge and I knew I would have a safe delivery. With that knowledge, I began the drills just as instructed by our Doctor Idara. It was almost like I
Read MoreExclusive: Sendchamp’s founders and investors get cash and equity in six-figure Whogohost deal
The acquisition of the messaging platform Sendchamp has been verified as a “mid-six-figure” acqui-hire. This deal kicks off the self-reinvention of the 16-year-old acquirer, Whogohost. According to people with direct knowledge of the deal, Whogohost’s acquisition of the customer messaging platform Sendchamp was a “mid-six-figure” USD deal. TechCabal understands that the deal was a mix of cash and equity, but most of Sendchamp’s early investors—from whom it raised an estimated $400,000—chose to convert their equity holdings in Sendchamp to Whogohost shares. “Whogohost is ultimately copying [GoDaddy’s] playbook,” said Opeyemi Awoyemi, Whogohost’s CEO. The American internet domain registrar and web hosting company has evolved into a partner for growing businesses. Between 2012 and 2022, GoDaddy bought 24 companies that cater to small and medium-sized enterprises (SMEs). Whogohost is still in the early stages of its strategy, with Sendchamp being only its third acquisition after buying The Expert Host and iHost Africa in 2016. The addition of Sendchamp will help Whogohost broaden the range of services it offers to a client base that includes Guaranty Trust Bank, Seamfix, and Cool FM. One day after acquiring Sendchamp, Whogohost began offering access to Bodsquare, Sendchamp’s customer messaging application, to its 100,000 customers at a discount. Additionally, SendChamp’s co-founders, Goodness Kayode and Damilola Olotu, have been named Chief Product Officer and Chief Technology Officer, respectively, at Whogohost, alongside an unspecified number of engineers. Charles Dairo, who has built several applications for businesses told TechCabal, “The acquisition of the Sendchamp team is a very notable aspect of the deal, as their technical expertise is key to Whogohost becoming the GoDaddy of Africa.” The perfect selling opportunity for Sendchamp According to Goodness Kayode, Sendchamp’s cofounder, the company had turned down previous acquisition offers and only sold to Whogohost because it liked the opportunity to grow on the back of a company with a deeper pocket and a similar customer base. “We had raised additional funding in 2022, bringing all our raised funds to $400,000,” said Goodness. “We also serve about 6,000 clients, many of whom are corporate clients like SureBet, and Zenith Bank, who bring in monthly dollar revenue in five figures many times.” Despite these milestones, Sendchamp was not immune to the broader macroeconomic environment, downsizing its 15-person team earlier in the year. The acquisition seems like the perfect situation for both companies, and Whogohost believes it will kickstart an evolution in depth and breadth.
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Scaling a startup in an unstable economy
This article was contributed to TechCabal by Norebase, a startup that helps entrepreneurs to start businesses and expand into other markets in a transparent, fast, and efficient way. In recent years, Africa has faced significant economic instability due to a confluence of challenges. High inflation, currency volatility, supply chain disruptions, and insecurity have made the business environment difficult to navigate. The unstable economic conditions agitate the core challenges faced by startups seeking to scale. Compared to last year, the first half of 2023 saw a 54% dip in VC funding for Nigerian tech companies. Without adaptive strategies, these growing businesses risk being derailed or discouraged altogether by the unpredictability. This article will explore how startups in Africa can formulate adaptive solutions to the problems of scaling within unstable economies by drawing from real-world examples and expert recommendations. The goal is to provide a roadmap for startups seeking to successfully expand their reach and deepen their solutions despite economic volatility. 1. Use adaptive marketing and growth hacks a. Demand generation over lead generation Focus marketing efforts on generating real demand and sales from existing customers and interested prospects rather than just acquiring new leads that may not convert due to economic pressures. Marketing tactics such as email drip campaigns, community building, and webinars are low-cost ways of educating, nurturing, and retaining customers in a marketing funnel. For instance, if you were building a conversion funnel for a SaaS solution, a monthly webinar can act as a growth lever that demonstrates your understanding of the subject matter while giving you a chance to get real-time insights from your prospects. Each webinar can end with a call-to-action that drives customers into a curated community (on WhatsApp, Telegram, or Slack) where you nurture them with interesting and witty content that addresses their pain points. Finally, you can use an email drip campaign to retain customers and cross-sell products—65% of a company’s revenue comes from existing customers, highlighting the importance of cross-selling in retaining and growing business from current clients. b. Cost-effective digital experiments Leverage low-cost content marketing and SEO. Using AI, anyone can build a comprehensive SEO campaign that drives qualified traffic to a source. Motivate existing users to invite others by incentivizing referrals, and building social proof via social media challenges that leverage user-generated content. Leverage automations to respond nimbly to unfolding economic and customer behavior signals with customised, dynamic journeys at scale. In simpler terms, use relevant APIs and AIs. 2. Hedge against economic uncertainties a. Hedge against economic uncertainties Keep a portion of assets in stable foreign currencies to protect against currency devaluation. Saving funds in a US corporate bank account is an important contingency measure that will protect you from the unpredictable effects of the floating naira. b. Incorporate in relatively stable economies Target countries with steady GDP growth, low inflation, stable currencies, developed financial systems, consistent regulations, and minimal political unrest. Prioritise markets like the US, UK, Canada, Kenya, Rwanda and South Africa. By all means, avoid incorporating in very volatile markets. 3. Cut down on costs a. Review all expenses and look for areas to reduce spending Renegotiate contracts and rates with vendors and suppliers. Reduce office space if remote work is feasible. Freeze hiring for non-critical roles. Delay new projects and capital expenditures. b. Automate as much as possible Look for opportunities to automate manual processes using software and tools. This could include HR tasks, customer service, bookkeeping, social media marketing, etc. Automation increases efficiency and reduces labour costs. But provide training to employees to work alongside these new technologies. c. Retain staff Avoid layoffs if possible, as hiring and training new employees later is costly. Consider temporarily reducing hours or pay rather than terminating jobs. Support employees by clearly communicating about the business challenges. Keep staff motivated with development opportunities and recognition. Losing key staff now means losing invaluable expertise and company knowledge. Conclusion Scaling a startup in a volatile market is not as simple as this article has rendered it. However, if you’re like me and failure is not an option, then you should adopt the lean startup mindset. In no time, you will find yourself piercing through the noise and growing against all economic and financial odds. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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What we know about Naspers interim CEO, Ervin Tu
Ervin Tu has been announced as the interim CEO of Naspers and Prosus following the resignation of Bob van Dijk, the chief executive of both entities. On Monday, September 18, Naspers, Africa’s largest company by market capitalisation, and its subsidiary Prosus, Europe’s largest consumer internet company, announced that CEO Bob van Dijk would leave the company. Van Dijk had been CEO of Naspers for ten years and CEO of subsidiary Prosus for four years. He will be succeeded by the group’s chief investment officer, Ervin Tu. Tu received an undergraduate degree in Bachelor of Arts in Economics from Dartmouth College in 1997 and an MBA from MIT Sloan School of Management in 2004. Following his MBA, he joined Goldman Sachs, and in 2014, he eventually became managing director in the technology banking group, focused on M&A deals. Tu joined SoftBank as a managing partner at the SoftBank Vision Fund in 2016. There, he was part of the team that led investments in Uber and Bytedance, among others, across technology sectors, including transportation, logistics, delivery, next-gen media, and sustainability. His time at SoftBank also saw him co-leading M&A and corporate finance for SoftBank Group International. In June 2021, Tu joined Naspers and Prosus as the group chief investment officer based in San Francisco, California. In the newly created position, Tu led investments across the Prosus and Naspers group, reporting to now-former CEO Bob van Dijk. In his role at Naspers/Prosus, Tu has most prominently overseen the group’s handling of its stake in Chinese technology company Tencent. Naspers initially bought its Tencent stake in 2001 and currently holds, through Prosus, a 26% stake in the company worth $112 billion. This stake is more than Naspers and Prosus’ entire market capitalisations. Since mid-2022, Prosus has been selling off its Tencent stake, then 29%, to finance an open-ended share buyback program intended to bridge the gap between its market value and the value of its assets. Tu has also overseen the share swap deal between Naspers and Prosus. In May 2021, Naspers announced a share swap deal with Prosus to reduce the discount between the asset value of the companies and their market capitalisation. The deal, successfully completed in August 2021, reduced Naspers’ stake in Prosus to 56.92% and gave Prosus an approximately 49% share in its parent company. In March, Tu also oversaw the termination of the Naspers Foundry, which was South Africa’s most prominent venture capital fund. The R1.4 billion fund (~$73 million), launched in October 2019, was an early investor in some of the country’s most prominent startups, including Sweepsouth, Planet42, and Naked Insurance. Only half of the fund had been invested in twelve startups when it was shut down. Regarding M&A deals at Naspers/Prosus, Tu led the team that completed the acquisition of the developer-knowledge-sharing platform Stack Overflow in June 2021. Other acquisitions deals in Tu’s time at the group include the online learning platform Goodhabitz also in June 2021, iFood and Delivery Hero in August 2022, Udemy in August 2021, and Skillsoft, a portfolio company of Prosus’s acquisition of Codeacademy in December 2021. Under Tu, Prosus also divested from the Russian social media platform VK in March 2022, writing off its 27% stake following the country’s invasion of Ukraine and selling a stake in fintech platform PayU to Rapyd for $610 million. As the new CEO of Naspers, Tu’s role will encompass continuing the group’s strategic goals, which remain unchanged despite the abrupt change in management. This will include bringing the company’s consolidated e-commerce portfolio to profitability while maintaining growth and leading capital allocation across the Group. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Next Wave: A modern retail wave is building up across Africa
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 17 September 2023 Smallscale modern retail in Africa will not completely replace open markets in Lagos, souks in Cairo, or storied markets like Karatina in central Kenya. But a subtle shift that can become a major marker of African retail is underway. Warning. Long read ahead. Please find a comfy seat, some coffee and relaxing music. It’s Sunday after all! The more I read the news, interact with people, and think through how urban food systems are organised, the more I realise how much Africa’s retail scene needs to defragment. Defragmentation means support for scale and efficiency. It also means that retail is then organised in a less chaotic manner. But it does not necessarily mean complete defragmentation à la the mall and retail industry structure of America. Japan has a high density of neighbourhood shops, but it also boasts one of Asia’s strongest modern retail markets, with everything from à la carte malls to specialty luxury shopping outlets. In many African countries, retail is beginning to take the same contours, but cheaper, of course. Consultancies, enthusiastic entrepreneurs, freshly minted marketing executives and the big shots of African retail have expected or prophesied the coming of modern retail to Africa’s consumption habits. The consequent impact of an Africa with more modern retail is not a new conversation. What is clear after every round of discussion on modern retail in Africa is that the continent remains a tough place to run retail businesses, declining incomes are a challenge, and, as a result, the open market remains the strongest competitor. It is true that the open market will remain a competitor for the foreseeable future. It is among other things, a cultural relic. It is also an economic mainstay that packs more economic punch than appearances suggest. But alongside the open market, African neighbourhoods are seeing the rise of modern retail channels. Branded multi-store retailers and single-store supermarkets are popping up all over towns, cities and villages. Most are just bigger versions of the regular convenience stores, and even the big malls are small compared to peers in developed countries. But I believe we are in the early stages of a modern retail boom, and the wave is slowly building up. The first stages of a wave Ripples on the Lifjord lake in in Øksnes, Norway. Photo by Blue Elf via Wikimedia Commons When a light breeze blows across a smooth lake or ocean expanse, it creates small ripples that are called capillary waves. These ripples are the first stage of wave generation. As the ripples get larger, the wind is better able to “grip” it in a self-sustaining cycle that creates even bigger waves. These waves can become stronger the longer they travel over the ocean. Then they become groundswells—the type of waves that ocean surfers love because they are even spaced and powerful enough to ride. That initial capillary wave action is where Africa’s modern retail is at in several countries. Excluding South Africa, this wave of modern retail across Africa looks just like how any other wave does, i.e. it is undulating, and not a smooth upswell across the continent. But it is definitely there and building up. Because Next Wave is a pan-African business and tech commentary and not a country-by-country level research paper, our discussion will remain at the continental macro-level. I will leave you, the reader, to do the country analysis. If however, a lot of readers indicate a strong demand for country-by-country examples, I might be persuaded to highlight a few countries in a subsequent essay. Partner Content: Africhange’s commitment to delivering seamless remittance experiences for Africans Loosely speaking the economics of retail is driven by aggregation. B2B, B2C, B2B2C ecommerce companies try to aggregate shoppers either directly or through retail points. FMCG manufacturers aggregate through distributors. And even savvy street corner shops try to aggregate the best and most recurring daily shoppers. The fewer the points that tie demand together into an efficient logistics chain, the better for manufacturers and sellers. Consumers however want convenience and worry about pricing. In our continent, with low purchasing power, low consumerism and high unemployment, a disjointed last-mile for consumer goods emerged to serve two needs. Get stuff to people in small packets, and create low-wage jobs. The result is aggregation upstream at the manufacturing level. And heavy fragmentation at the distribution level. Consumer goods makers, for example, can simply rely on large distribution operations in key locations. The distributors (digital or non-digital) move the goods downwards through whatever works—wholesalers, sales staff or road hawkers. This aggregation of chaos has somehow worked long enough that everyone has learned to respect the African traditional retail market. And with good reason. FMCG players see no need to do the work (and face the economic consequence) of organising a consolidated retail market, and hence supply chain. Distributors are too busy moving goods at tiny margins and small commissions, and the capital requirements to build modern retail consolidation do not square with the economic realities in many African countries. There is simply little incentive to create formal modern retail and risk disturbing the waters of consumer trade too much. But like I said, modern retail (with African characteristics) is happening anyway. It is not even across the continent. And it comes in different colours. Modern retail in Africa is local and neo urbanist Japan is one of the world’s largest retail markets with a strong large modern retailing sector with huge malls and millions of square feet of luxury shopping centers. But it is also host to exciting street markets and smaller modern retail outlets (both chain supermarkets and single store outlets). Japan’s konbini are small supermarkets that are open 24 hours every day of the week. They are a cultural and consumer staple in the Asian nation and play an important role in Japan’s retail market. In many areas, Japan and African countries are poles
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