- November 8 2023
Nigerian startups win big at Global Startup Awards Africa
The Global Startup Awards Africa named the 16 category winners at the GSA Africa Summit in Addis Ababa, Ethiopia. Nigerian startups were the biggest winners, winning four categories out of 16. Four Nigerian startups were recognised at the Global Startup Awards Africa, Addis Ababa, gaining a chance to compete internationally to gain further recognition and funding. Awabah, a financial services startup serving Nigeria’s informal sector, was named ‘Best Newcomer,’ while tech training and consulting firm Dataleum emerged as ‘Best Edtech.’ The two other winners from Nigeria are the virtual hospital platform Zuri Health (Future Shaper Award) and Emergency Response Africa, a healthcare technology company that provides medical care to victims at the emergency scene (Best HealthTech). The GSA Africa awards began in 2021, with over 15,000 African innovators nominated from 54 countries, with the support of 300 jury members, ambassadors, and hundreds of innovation hubs across the continent. This year’s edition was held in collaboration with the Global Innovation Initiative Group (GIIG), the Ethiopian Ministry of Labour and Skills (MOLS), and the Ethiopian Ministry of Innovation and Technology (MInT) with the support of the Entrepreneurship Development Institute (EDI) Ethiopia. A total of 16 winners across different categories of the startup ecosystem were announced by the organisers. GSA Africa claims to be the largest independent startup ecosystem competition on the continent. The African winners will participate in the global round, where they will compete on an international stage at the Global Startup Awards and gain further recognition and support. In March 2023, two African startups were named global winners at last season’s grand finale in Copenhagen. Competing against more than 120 companies from 115 countries, Ethiopian greentech startup Kubik was recognised as ‘Startup of the Year,’ while the Ugandan fintech startup Emata was proclaimed ‘Best Newcomer.’ Other winners of this year’s GSA Africa awards include Egyptian women’s safety and anti-harassment app Hiryo (Startup of the Year), Kenya’s BasiGo (Best Mobility and Logistics), Ethiopian biotech company Coffee Resurrect (Best Greentech), Ghana’s Developers in Vogue (Diversity Role Model of the Year), and Egyptian e-commerce website Freeziana.com (Founder of the Year). Egyptian business designer and innovation consultant Hani W. Naguib was named Ecosystem Hero, while Mauritius’ first syndicated angel investment group, Mo Angels, was the VC of the Year. South African Web3 investment platform Momint won Best Web 3.0 Startup, and the Tunisian agritech startup that helps monitor dairy farming production MooMe, won Best Agritech Startup. Uganda’s Tech Buzz Hub was named Best Co-working Space), Egypt’s first university-based startup accelerator, the American University in Cairo Venture Lab won Best Accelerator/Incubator Programme and Zofi Cash, a Ugandan startup that is revolutionising how salaried individuals access their wages was named Best Commerce Tech.
Read More- November 8 2023
Africa’s geothermal expansion gathers steam
With Kenya and Ethiopia in the lead, increased investment in the geothermal sector will double Africa’s geothermal capacity by 2050 and see the continent exceed the total installed capacity in Europe, according to a recent report. This story was contributed to TechCabal by Bonface Orucho via bird story agency. The latest report from Norwegian energy research firm Rystad Energy sheds light on the prospects of geothermal energy to play a crucial role in meeting Africa’s increasing energy demands in the coming decades. “This growth will take the continent from being the sixth largest geothermal power generator in 2023 to the third largest in 2030,” Daniel Holmedal, a senior supply chain analyst at Rystad Energy, said of the region’s current geothermal trajectory. “Developments that we project to come online given economics and demand really highlight the rapid buildout.” The forecast anticipates that investments in Africa’s geothermal sector will soar to at least US$35 billion between 2024 and 2050, driven by the surging energy demand in East Africa. Kenya and Ethiopia are poised to spearhead this growth, contributing nearly 90% of the total capacity. Their abundant geothermal resources and Ethiopia’s need to diversify its power sector, which is 88% hydro-based, will be the driving factors behind the expansion of geothermal installations in this sector, according to the report. <script src=”https://bird.africanofilter.org/hits/counter.js” id=”bird-counter” data-counter=”https://bird.africanofilter.org/hits/story?id=1418&slug=africa-s-geothermal-expansion-gathers-steam” type=”text/javascript” async=”async”></script> Power supply in both countries is expected to increase sixfold from 2023 to 2050, surging from 34 terawatt-hours (TWh) to 222 TWh. Rystad Energy projects that the geothermal capacity in Kenya and Ethiopia will soar well beyond 10 GW by 2050, with the potential to reach as high as 12 GW. Given its abundant geothermal resources, robust local expertise, and growing interest from international players, it is foreseeable that Kenya’s share of this total will surpass 8 GW in the projected period. Recent developments in both countries affirm the report’s projections, emphasizing the substantial potential for these nations and the wider region to integrate geothermal energy into their energy mix. With close to 1000 MW already installed, Kenya ranks as the 8th largest geothermal power producer globally and has more geothermal power capacity under construction than any other country, globally. With an ambitious plan to double the current capacity by 2030, the Kenyan government is actively working to establish solid frameworks to support and fast-track the achievement of these targets. In the latest development, legislators in Kenya directed the national utility, Kenya Power, to terminate a deal with Africa Geothermal International due to “continued delays in starting exploration of geothermal power on an allocated block.” This termination will leave KenGen free to directly explore additional blocks in Olkaria, where 34 wells, including 26 production wells and 8 injection wells, with a tipped generation capacity of more than 1100 MW, are yet to be exploited, as reported by the country’s Business Daily. Exploration and development activity is underway, too, at other geothermal sites in Kenya. In August, the Baringo-Silali Geothermal Project successfully drilled a new well, the Paka Well 8-A, adding 20 MW of electricity to the national grid. More such explorations and rollouts can be expected, especially now that Kenya has secured a US$48 million (45 million euros) loan from Germany for the development and upgrade of geothermal wells in the country. There is also a noticeable surge in geothermal activity in Ethiopia, which has the potential to generate at least 10 GW of energy from geothermal sources. In September, the Ethiopian Electric Power (EEP) Geothermal Sector Development Project Directorate announced the successful completion of production tests for six geothermal wells for the 35 MW phase 1 of the Aluto Langano project. The project plans to generate 70 MW in two phases. Earlier that same month, Canada-based 4th Resource signed a memorandum of understanding with Ethiopia Investment Holdings (EIH), the strategic investment arm of the Government of Ethiopia, for the development of the Hermokale geothermal project. These are among the 24 sites that the Ethiopian Geological Survey discovered in 2018 as potential geothermal drilling sites. Interest in harnessing geothermal energy resources is also growing in African countries situated along the same East African Rift System currently being tapped by Ethiopia and Kenya. These countries include Tanzania, Burundi, Rwanda, Uganda, Kenya, Ethiopia, Djibouti, and Eritrea. In Tanzania, 50 sites have been earmarked as potential locations to generate geothermal electricity. Kenya’s electricity generating company, KenGen, is leveraging its expertise and technical know-how to explore drilling opportunities in Tanzania and Malawi. According to The East African, KenGen already operates drilling sites in Ethiopia and Djibouti. Kiiza Hussein, a creative consultant at UNDP, underscores the significance of international collaboration and knowledge sharing in accelerating exploration and rollouts. “African nations can leverage partnerships with countries, organizations, and institutions that have expertise in renewable energy to accelerate their own development,” he explains. “African countries can also allocate resources to research initiatives that focus on adapting and optimizing technologies to their specific climatic and geographic conditions,” he adds. According to the United Nations Environment Program and the Infrastructure Consortium, the geothermal potential capacity for eastern Africa exceeds 20 GW, highlighting the considerable opportunities that lie ahead in the region for geothermal energy. bird story agency Useful link: https://www.rystadenergy.com/news/africa-overtake-europe-geothermal-capacity
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- November 8 2023
TechCabal Daily – MTN might exit three African markets
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning We’d like to make an addendum to yesterday’s edition of TC Daily. The initial version we sent out was headlined “Novastar Ventures closes $40 million Fund”. We have now corrected it to reflect that Novastar Ventures received an $80 million commitment from SBI Holdings. The funds will also be spread across future funds. You can read the update here. In today’s edition MTN might leave Liberia, Guinea-Bissau and Guinea-Conakry Bolt Kenya denies acquisition of Little Cab MTN SA pays $103 million to ICASA WeWork Global files for bankruptcy The World Wide Web3 Opportunities Telecom MTN might exit three African markets Image source: News24 African telecoms MTN is considering exiting three African markets. During its quarterly update call, CEO Ralph Mupita told journalists that the telecoms is engaged in discussions about the potential “orderly exit” of its operations in Liberia, Guinea-Bissau and Guinea-Conakry. While the telecom has yet to reveal why it’s leaving these African markets, its financial reports show that it’s facing numerous challenges across the West and Central Africa region. Mupita pointed to signs of inflation and currency devaluation across several markets. Small markets, small shares: Per Bloomberg, these three countries also aren’t heavy hitters for the telecoms, contributing a scant 1.6% to MTN’s revenue in 2022. Across these countries, the telecom controls a secondary chunk of the market share, about 30% in Guinea-Bissau and Guinea-Conakry, beaten out by Orange Mobile which controls over 60% of the market share in both countries. In Liberia, Lonestar MTN is the second-largest telecom in the country, with Orange Liberia controlling over 50% of the Liberian telecoms market. It’s also not the first time the telecom has hinted at exiting these countries. In May 2023, it was reportedly in talks with Axian Group Limited to sell its assets in these countries. Exiting Afghanistan: The telecom is also nearing a close for its exit from the Middle East. In 2020, MTN announced its plan to exit the Middle East, focusing on Africa to simplify its structure and reduce risk exposure. This decision was driven by increased complexity due to US sanctions on Iran and growing troubles in Afghanistan. Later, MTN sold its Yemen business and stopped operations in Syria and Afghanistan. In August 2022, the company received a $35 million offer for its Afghanistan business and recently confirmed the sale to M1 New Ventures. The group, yesterday, announced that its Afghanistan exit will be complete within two months. 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. Mobility Bolt denies acquisition of Little Cab GIF source: Tenor Bolt Kenya, the global ride-hailing company’s subsidiary in Kenya, has denied talks of an acquisition of Little Cab, a Kenyan competitor. This comes after a claim by the Kenyan publication Business Daily that both parties were in talks. Per Business Daily, acquisition talks between Bolt and Little Cab broke down after the National Transport Authority of Kenya (NTSA) renewed Bolt’s annual operating licence. However,Bolt told TechCabal in an email that it had no appetite for acquisition, and had not been in talks with Little Cab for such acquisitions. ICYMI: Bolt’s licence renewal was halted due to multiple assault complaints from customers and riders who wanted the removal of illegal booking fees. The ride-hailing platform then dropped the controversial “illegal” booking fee and opened a local office in Nairobi to resolve driver complaints. While Bolt struggled to get its licence back, Little Cab’s CEO, Kamal Budhabhatti, had mailed Bolt for a possible collaboration in the shape of a merger and acquisition to help solve its licensing woes. However, Budhabhatti made a retreat after Bolt got its licence renewed. Zoom out: A potential acquisition of Little Cab—which is present in Kenya, Uganda, Tanzania, Ethiopia, and Ghana—makes sense for Bolt; it would increase its market share of the ride-hailing company. Little Cab says it is profitable and plans to sell 25% of its stake to private investors. Join the Paystack private beta Paystack has launched a private beta to offer payment tools to businesses in Côte d’Ivoire, Egypt, and Rwanda. Learn more about Paystack’s entry into 3 new markets → Telecom MTN SA pays $103 million to ICASA Image source: Zikoko Memes MTN is paying its debs everywhere it goes. Financial results of the telecom’s South African arm, for Q3 2023, show that the telecom paid R1.9 billion ($103 million) to the Independent Communications Authority of South Africa (ICASA) for an outstanding payment for the low-band 800MHz spectrum it acquired in the 2022 ICASA auction. Dig in: In March 2022, ICASA received bids from telecommunication agencies in South Africa—MTN, Cell C, Liquid Intelligent Technologies, Rain Networks, Telkom and Vodacom —for the auction of its high-demand radio frequency spectrum or International Mobile Telecommunications spectrum. MTN purchased 100MHz in the spectrum auction for R5.2 billion ($281 million) and paid about R3.3 billion ($179 million) to the regulator. This spectrum allowed telecommunications companies to provide better coverage and faster speeds to their customers. MTN was not the only company on the regulator’s debt list, per local media. The ICASA gave other telecom companies up until the end of last month to clear up the R5.8 billion ($312 million) debts. Lights out: Aside from the debt repayment to the ICASA, MTN South Africa’s third-quarter financials showed few positives. Its gross earnings increased from 36.2% in Q1 2023 to 37.2% in Q3. Companies WeWork inc files for bankruptcy, WeWork SA denies affiliation GIF source: Tenor Global workspace provider WeWork Inc. has filed for bankruptcy. Per the Financial Times, the process will allow the company to convert $3 billion of existing debt commitments into equity in the reorganised company. Additionally, the bankruptcy process will allow the company to terminate pre-existing leases with little financial penalty. This comes three months after the company initially warned, in August 2023, that it could
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- November 7 2023
Flutterwave CFO, two finance executives resign months after company touted IPO plans
Flutterwave’s Chief Financial Officer (CFO) Oneal Bhambani has resigned just 18 months after joining the fintech startup, raising questions about the company’s plans to list on the stock market. Oneal Bhambani has left Flutterwave after just 18 months “Last week, I made the difficult decision to end my tenure at the company,” he shared in a LinkedIn post on Tuesday. “Thank you to Flutterwave for a seat on its journey to scale payments across Africa… I wish everyone at Flutterwave the best, and I will be rooting for you.” “Oneal Bhambani has decided to pursue new opportunities,” said Flutterwave in an email to TechCabal. “Israel Koledowo, Head of Finance for Africa, will lead the finance department on an interim basis as we embark on a global search for a new CFO.” Bhambani joined Flutterwave in May 2022 as Africa’s most valuable startup contended with allegations of financial improprieties and employee bullying. He arrived at the payments company from American Express, where he was CFO of the US fintech’s small business lending arm, formerly called Kabbage, now American Express Business Blueprint. With two decades of experience working in finance, his arrival was expected to steady the ship, and he helped the company navigate fraud allegations in Kenya, East Africa’s largest economy, where Flutterwave didn’t have a license. Bhambani joined Flutterwave alongside two other finance executives from Kabbage with experience in corporate audits and treasury work. Those executives, Rebecca Mendel and Oscar Lan. have also left the company. According to their LinkedIn pages, they both exited the company in October. After Kenyan prosecutors withdrew their charges of financial impropriety against the company, Flutterwave has since returned to high growth territory and touted its plans to list on the stock market although it has declined to give a timeline for an IPO. The company launched a new currency swap product for the Nigerian market and released its redesigned international payments app called Send App. Flutterwave is also doubling down on consumer payments in addition to its primary business segment, which has fueled its growth for years. Bhambani’s exit represents the most high-profile exit from Flutterwave since 2018, when its co-founder and then CEO, Iyin Aboyeji, left the company. The CFO’s departure, however, raises major questions about the fintech, which is backed by Tiger Global and valued at $3 billion, and its IPO plans. *Editor’s note: This article has been updated with a statement from Flutterwave
Read More- November 7 2023
Kenya’s $20 billion crypto market takes first step to regulation
The crypto market in Kenya is huge and is already being taxed under the provisions of the Finance Act, 2023. Kenya’s parliament has asked the Blockchain Association of Kenya (BAK) to prepare the first draft of what might become the Virtual Asset Service Provider’s Bill, commonly known as the Crypto Bill. The decision followed BAK’s second appearance before the National Assembly Committee on Finance and National Planning on October 31. BAK’s first engagement with the committee was in August 2023 when it opposed the Digital Asset Tax (DAT) provision in Kenya’s Finance Act, 2023. BAK’s draft preparation coincides with notable cryptocurrency transactions in Kenya, reaching nearly $20 billion (KES 3 trillion) between July 2021 and June 2022. Kenya’s engagement with crypto assets is also high, coming in third position in Africa for crypto site traffic and 21st in global crypto adoption. The meeting between BAK and the National Assembly Committee sought to enable BAK to partner with the national government in shaping cryptocurrency and digital asset regulation policies. BAK, alongside Binance, Yellow Card, Kotani Pay, and the Law Society of Kenya (LSK), presented key elements for a robust regulatory framework, including a clear licencing framework, tax framework, consumer protection framework, anti-money laundering (AML) and counter-terrorism financing measures, and a regulatory sandbox. In response, the parliamentary committee directed BAK to draft and submit a bill governing digital assets within two months. This development acknowledges a knowledge gap that has historically hindered their ability to address this asset class. It also marks a unique instance of a parliamentary committee instructing an association to draft a bill for adoption. BAK’s directive to draft Kenya’s digital asset regulatory framework, including tax integration and revenue guidelines, mirrors efforts in South Africa (Financial Sector Conduct Authority), Nigeria (Finance Act 2023, SEC Regulations on Digital Assets), and Mauritius (Virtual Asset and Initial Token Offering Services Act 2021), which lead in Africa’s crypto market values at $25 billion, $19 billion, and $3 billion, respectively.
Read More- November 7 2023
How to build a launch pad for Africa’s innovation, the Moonshot way
Speaking at Moonshot by TechCabal, CEO of Big Cabal Media, Tomiwa Aladekomo explained the thinking behind the event and why it’s critical to bring together the important players in Africa’s tech ecosystem. Here’s a question: How do you build a global launch pad for innovation in Africa? The answer is bringing together all the relevant stakeholders in Africa’s tech ecosystem, said Tomiwa Aladekomo, CEO of Big Cabal Media, in his opening address at the maiden edition of Moonshot by TechCabal conference in October. The two-day event played host to over 2,000 founders, business leaders, innovators, venture capitalists, and regulators from around the world. Conversations at the event centered on five content tracks: the future of commerce, Big Tech and enterprise, emerging tech, startup festival, and the creative economy. “We believe that there is value in bringing together some of the brightest thinkers and brightest regulators together to share ideas that can drive the ecosystem forward,” Aladekomo said in his speech By definition, a “moonshot” refers to a lofty goal. Relating to the African context, Aladekomo explained that the word represents a monumental effort to build radical or innovative solutions to huge problems in the continent. This, according to him, is the central idea of the conference. “It isn’t just networking,” he said. “It is the opportunity to talk to people who are passionate about solving problems.” In the last decade, Africa’s tech ecosystem has witnessed incredible growth evidenced by the rise of unicorn startups, billions of dollars in venture funding flowing into the ecosystem, and milestone deals like BioNtech’s $682 million acquisition of Tunisian AI startup Instadeep earlier this year. But, despite these wins, Africa still faces real challenges including a rapidly growing population that is undereducated and under-resourced, and more disturbingly, a brain drain wave that has seen young people leave the continent in droves in search of opportunities on foreign soil. For Aladekomo, there is still huge optimism about how important technology has become for the future of the continent. Africa is witnessing a steady increase in the adoption and use of technology, with innovative startups and established tech companies driving growth in various sectors. “We see technology as a critical tool in solving Africa’s problems. It isn’t the only one, but it is the most potent,” he said. While Moonshot by TechCabal serves as an avenue to share innovation and the endless possibilities of technology, it is also an opportunity to showcase Lagos as one of the important centres of technology in Africa. The Yaba district of Lagos is often credited as the foundation of the Nigerian tech ecosystem. Today, Lagos is home to a number of successful tech startups on the continent as well as an attractive tech hub. Nigeria’s minister of communications and digital economy, Bosun Tijani—who also spoke at the event—played a critical part in that evolution through Co-Creation Hub, Nigeria’s pioneering open-living lab and pre-incubation space. Click here to watch the full video of Tomiwa Aladekomo’s speech.
Read More- November 7 2023
A snapshot of Sabi at Moonshot by TechCabal
At TechCabal’s flagship conference, Moonshot, Anu Adedoyin Adasolum, co-founder and CEO of Sabi, a Nigerian B2B platform, spoke to Big Cabal Media CEO Tomiwa Aladekomo about how Sabi works. “Sabi [in Nigerian speak] means to know what to do,” Anu Adedoyin Adasolum, CEO of Nigerian B2B platform Sabi, explained to the teeming audience at the Moonshot by TechCabal conference. The three-year-old startup has been helping African businesses solve the problems of Africa’s fragmented commerce sector. “We make money by helping people make money,” Adasolum said. In Nigeria, and many African countries, commerce is challenging due to inadequate infrastructure, and access-related problems. This slows the growth of businesses. Sabi, through its online tools and in-person services, fills the gaps in the fractured supply and demand chain for small and large enterprises on the continent. For example, if a farmer has a lot of groundnut produce, Sabi can connect her to different off-takers so that she doesn’t have to be worried about demand. Through its online tools or in-person services, Sabi helps businesses find demand, access credit or working capital, and manage inventory and supply, from sourcing goods to safely transporting them to off-takers. Currently, Sabi’s biggest customer base is in agriculture, but Sabi extends its services to small, medium, and large businesses in sectors like fast-moving consumer goods (FMCG), electronics and pharmaceuticals. Smaller merchants can access credit, order products, and manage inventory and sales through Sabi’s app. Big producers of commodities in the agriculture, minerals, or chemicals sector can use any of Sabi’s initiatives such as Technology Rails for African Commodities Exchange (TRACE) to close commercial agreements, facilitate exports, imports and more. Larger-sized businesses, who are typically wholesalers or distributors, would typically work with Sabi through any of its relationship managers. De-risking the process Sabi works with about 200,000 businesses and has to manage risks so it conducts customer assessments. “We have a very large network, so it is very unlikely that we do not know you or anyone that you work with,” Adasolum told Aladekomo. “We will use that information from our network to understand your history and determine if you are reliable or not.” Once Sabi confirms the reliability of a client, it leverages its network and partnerships to meet the business’s needs. For example, if a client needs capital to fulfill a ₦200 million ($255,901) purchase order from a reputable buyer, and they have 100 farmers supplying the products, Sabi can connect you with a finance partner. “We vouch for your credibility and ensure the transaction’s legitimacy,” Adasolum said. “We also manage the logistics, from paying the farmers to overseeing the product’s transport and delivery to the buyer.” Adasolum also revealed that Sabi is currently exploring how artificial intelligence (AI) can streamline its processes. While some AI applications might align with the data products that Sabi offers at an enterprise level, the team is gradually developing ideas for how AI can be integrated into the business. Adasolum anticipates that, in the coming year, parts of Sabi’s tech stack will be replaced by AI solutions as they continue to innovate. If you would like to watch the full conversation with Sabi’s CEO, head over to our YouTube channel!
Read More- November 7 2023
Exclusive: Bolt Kenya denies acquisition bid by Little Cab
Bolt Kenya, one of the most popular ride-hailing apps in the East African country, has denied having buyout discussions with Little Cab, a Kenyan competitor, after a report by Kenyan publication Business Daily, claimed both companies were in talks. The publication said that Bolt and Little Cab’s talks only ended after the National Transport Authority of Kenya (NTSA) renewed Bolt’s annual operating licence. “Bolt has not engaged in any discussions regarding a potential buyout, as we are not available for acquisition,” Bolt Kenya told TechCabal in an email. “We appreciate the interest expressed by one of our competitors in our company; however, we remain steadfast in our commitment to operate within the market under the Bolt brand.” Little Cab’s CEO, Kamal Budhabhatti, who heads the app’s parent company Craft Silicon, said they had sent Bolt a letter proposing a “possible collaboration.” “Bolt had gotten some challenge in getting the licence from the Kenyan transport authority,” he said. “Such mergers and acquisitions have happened in other parts of the world like Southeast Asia between Uber and Grab.” Kamal further clarified that the letter aimed to open the door for discussions. Little Cab stopped collaboration attempts after Bolt got its licence. In the last couple of weeks, Bolt’s licence renewal exercise was halted by NTSA following multiple assault complaints from customers and riders. The NTSA asked the company to provide a plan to address the concerns. The ride-hailing platform then dropped the controversial and “illegal” booking fee and said it had opened a local office in Nairobi to address driver partner grievances. Little Cab, which operates in Kenya, Uganda, Tanzania, Ethiopia, and Ghana, says it bootstrapped itself to profitability and has a valuation of about $80 million. It plans to expand to two other African markets in 2024. In August 2022, Little Cab revealed plans to sell 25% of its stake to private investors in a move aimed at boosting its valuation to $100 million. The sale has since been dropped because, per the CEO, Little is profitable. Its current valuation is between $200-250 million. On the other hand, in early 2022, Bolt raised $711 million in a new round of funding led by Sequoia Capital and Fidelity. This investment valued the company at about $8.4 billion, up from $4.8 billion five months earlier.
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- November 7 2023
Exclusive: IROKOtv’s user numbers show Africa’s oldest streamer is behind competition
IROKOtv, the first-ever dedicated streaming service for Nigerian films, had one of its best months in January 2022, according to internal documents seen by TechCabal. It started 2022 with 192,174 active users, but by the end of the year, those numbers fell to 46,000, a 76% decline. IROKOtv’s subscriber numbers have continued downhill since then, a person with direct knowledge of its numbers shared with TechCabal. They blamed a slowdown in shipping new content and IROKOtv’s malfunctioning app for the slump. Two sources also said the company’s decision to halt paid advertising, which gulped a large chunk of its $300,000 monthly expense in 2021, and the layoff of its marketing team have hurt the business. ”We shifted from subscriber growth as a metric,” IROKOtv told TechCabal in a statement while declining to comment on its user numbers. The company also said it entered a content deal with FilmOne Entertainment that spans 2024. Crucial app upgrades are behind schedule In September, the absence of IROKOtv in app stores sparked rumours that the company was shutting down. Its CEO, Jason Njoku, dismissed those claims. He told TechCabal that IROKOtv was migrating its software stack to a new platform designed to serve a primarily international audience. The platform upgrade will include specific configurations for locations with faster internet and smart television devices, including Roku adapters. Njoku, who shares the struggles of building a streaming business on his blog, argues that the sector’s peculiar challenges have kept several platforms small. Digital TV Research, which studies the streaming and pay-TV industry, estimated that the African streaming market had 3.75 million subscribers in 2020, with IROKOtv accounting for 8.6% of the market or 322,500 users. The company was predicted to reach just under 600,000 subscribers by 2025. However, data seen by TechCabal shows that IROKOtv, at under 200,000 subscribers in January 2022, is significantly far from the mark. Its shrinking customer base in recent months and average revenue per user of under $10 coincide with increasing competition in the African streaming market. Betting on an international market IROKOtv is now staking its future on a large international subscriber base, particularly the African diaspora in the US, Canada, the UK, and continental Europe. This ambition is not new. In 2020, during the pandemic, Njoku announced that the company was “defocusing our Africa growth efforts” to focus on international markets with much higher average consumer spending. He explained that IROKOtv had lost over $30 million during its lifetime and has been “bleeding millions of dollars annually trying to build Internet TV in Africa.” “Thankfully, we have an international business to fall back upon,” Njoku said at the time, explaining that its international business represented 80% of the company’s revenue. However, a declining customer base could put additional pressure on the company’s resources. Company data from 2022 shows that IROKOtv’s international customer base is small. While the streaming platform averaged 95,647 monthly users in 2022, only 4,855 were international subscribers. A person with knowledge of IROKOtv’s business said the company came into 2023 intending to improve user retention, identifying technical issues as a critical reason for losing 76% of users. Yet, fixing these issues has not been straightforward, with the source citing financial, labour and operational constraints. The company used to own ROK, a movie studio and distribution company that produced over 500 movies and TV series for IROKOtv and ROK’s dedicated cable TV channels on pay-TV service DStv and SKY, a UK cable company. In 2019, IROKOtv sold ROK to Canal+ Group, a French media company ramping up expansion plans on the continent. The sale was a shock since Njoku had previously explained in 2018 that “content is king.” “No one really cares about IROKOtv,” he wrote in a 2018 blog post. “Yes, it’s a brand they have come to know and love… But what they are really interested in and fall in love with is the content. ROK on DStv demonstrated this fact, without a shadow of a doubt.” The sale of ROK cut IROKOtv from a direct vital source of content, making it dependent on Canal+ despite Njoku bemoaning the high cost of content acquisition. IROKOtv told TechCabal in a press statement that it asked ROK to pause supplying content earlier in the year. “It became increasingly important to control the flow of dollar-denominated content to our platforms as a cost-control mechanism,” the statement said. A former IROKOtv employee said over the last year, the company typically received several user complaints that new movies announced via email and push notifications were unavailable. The ex-employee said the team was unaware of this development at first and assumed it was caused by technical issues on the client’s end. “They would call us, and we would walk them through basic troubleshooting, telling them to try a better internet connection, reboot the app, all to no avail.” This continued until the team stumbled on information that ROK Studios, its former sister company and now content partner, had stopped supplying movies. A content distribution executive at Rok Studios confirmed that content distribution to IROKOtv was paused but declined to say when or why. “But we still have a working relationship with IROKOtv, “ she said, declining to offer additional details. This sort of communication gap across teams has also hampered other growth plans, another source said. “The app has needed fixing since the start of the year, but for months, the engineering team remained more occupied with Njoku’s other products—BettyBingo and Black Bet.” IROKOtv disputed this version of events, clarifying that it doesn’t have an “engineering team to be overstretched.” In the following months, IROKOtv slowed down and eventually halted its paid marketing campaigns, which primarily helped to acquire new international customers. The source claimed that the company spent over $4,000 on ads, which brought in over 4000 subscriptions in January. In February, the company spent about half of that, which brought in less than 1,500 subscriptions. “Eventually, the customer support team kept getting fewer leads for subscribers, and they learned that it
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- November 7 2023
TechCabal Daily – Novastar Ventures closes $40 million fund
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning It’s that time of the year when we ask you how we’ve been doing so far. What do you like about this newsletter, and what do you think we can do better? Please take out a couple of minutes to fill our survey. Let us know how we can improve. And if you’d rather say it to our faces, please schedule a 1:1 session with us here. We’d be happy to speak with you. In today’s edition Novastar Ventures closes $40 million fund MNT-Halan raises $130 million Elon Musk launches new AI Twitter is selling inactive usernames for $50,000 The World Wide Web3 Opportunities Funding Novastar Ventures closes $40 million fund GIF source: Zikoko Memes Novastar Ventures, an Africa-focused investment firm, has partnered with Japanese venture capital firm SBI Holdings to launch a $40 million African fund for Novastar’s upcoming funds. Launched in 2019, Novastar Ventures invests in early-stage startups in Africa. Its portfolio includes Nigerian fintech Moniepoint, electric mobility startup BasiGo, and healthtech mPharma. According to Steve Beck, co-founder and managing partner of Novastar, the venture firm has seen a 20x increase since its launch and has successfully secured over $200 million from global institutional patrons. With the investment, SBI Holdings aims to attract other Japanese investors to invest in Novastar’s funds, and in return, Novastar will offer SBI Holdings the opportunity to co-invest in startups and provide valuable market insights. Although SBI Holdings’ investment gives it a minority stake in Novastar, Novastar’s partners—Mavuno Capital, Jumia Partners, Sterling Bank and KPMG Africa—will retain control of the company’s core management. SBI Holdings will also have a non-executive seat on Novastar’s Management Board. Lights out: The Novastar and SBI Holdings partnership is a win-win for both sides. Novastar gets access to SBI’s capital and expertise, while SBI gets exposure to Africa’s fast-growing startup ecosystem. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Funding Egypt’s MNT-Halan raises $130 million debt funding Image source: MNT-Halan Egyptian fintech unicorn MNT-Halan has raised $130 million through a bond issuance this week. This brings its total raise this year to $530 million. In February, the company raised $400 million in equity and debt financing from Chimera Investments and other investors. At the time, MNT-Halan was also valued at $1 billion, giving it its unicorn status. It also announced plans to raise $600 million this year, and it looks like it’s achieving that goal with this recent raise. The fintech is also reportedly targeting another $150 million by year-end. More investors: Its more recent $130 million raise was led by investment bank CI Capital. Launched in 2018, MNT-Halan offers digital banking, payments, and e-commerce services to the unbanked. With more than 1.5 million quarterly active users across small and micro business lending, payments, consumer finance, and e-commerce. The fintech has served more than seven million customers in Egypt. “We are seeing very strong demand for off-balance sheet funding as we enter 2024. This is primarily a result of the high quality of our underwriting,” CEO Mounir Nakhla said, commenting on the recent raise. Zoom out: MNT-Halan has raised most of its funding this year through its loan portfolio, which is now worth $650 million and growing by 4–5% per month, according to Nakhla. Join the Paystack private beta Paystack has launched a private beta to offer payment tools to businesses in Côte d’Ivoire, Egypt, and Rwanda. Learn more about Paystack’s entry into 3 new markets → AI Elon Musk announces new “fun” AI bot GIF source: Tenor Move over ChatGPT, there’s a new bot in town. Yesterday, chief twit Elon Musk announced a new artificial intelligence service, Grok which is “intended to answer almost anything”. According to the X announcement, Grok is “is designed to answer questions with a bit of wit and has a rebellious streak, so please don’t use it if you hate humour!” It’ll mock you, just like Musk: To demonstrate how much of a hard guy Grok is, Musk, in a tweet, asked Grok to draw up the recipe for cocaine, and Grok responded, “Just a moment while I pull up the recipe for homemade cocaine. You know, because I’m totally going to help you with that.” Hold your funny bones though, Grok isn’t available for use just yet. Like many of Musk’s social plans, the bot is premature. It’s still in its early stages of growth, only has two months of training and will only be available to a select few. If you’re interested in testing out Grok, you can sign up for the waitlist here (caveat, only verified users on X can join the waitlist). Per Musk, Grok will become a feature exclusive to X Premium, allowing users to access the chatbot for a monthly fee of $16. This underscores Musk’s commitment to maximising X’s profitability by monetising every aspect. The big picture: AI services are the new NFTs, but ones that are actually useful. After ChatGPT’s launch in November 2022 saw a quick rise in users—about 100 million within two months to be exact—several other companies like Google and Microsoft have also launched their AIs. Now, an estimated 1.5 billion people across the world are using one AI chatbot or the other. And the AI space is only getting bigger. Yesterday, at its first developer conference, OpenAI announced plans for a custom GPT Builder feature. The ChatGPT parent company is creating a tool that will let users create and manage custom AI agents, and it will even pay the creators of these agents depending on how much their services are used. On the financial side, these chatbots are expensive to run. Research and consulting firm SemiAnalysis estimated that ChatGPT was costing OpenAI a remarkable $700,000 per day in computing costs alone. Social media Twitter is selling inactive handles for $50,000 GIF source: Zikoko
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