How agritech startups are contributing to SA’s agriculture sector
Despite little VC capital, South Africa’s agritech sector is pushing ahead. TechCabal caught up with a few to get more info on their contributions to SA’s breadbasket sector. According to Wandile Sihlobo, an agriculture economist and author, technology has played a significant role in making South Africa’s agricultural sector the most advanced on the continent. “South Africa has been able to make great strides in biological and mechanical engineering technologies, which has seen the country’s agriculture sector’s output more than doubled since 1994,” Sihlobo told TechCabal. The importance of technology in the sector is reiterated by Amanda Chembezi, a member of the board of directors of the Center for Coordination of Agricultural Research and Development for Southern Africa (CARDESA). CARDESA seeks to coordinate and harmonise the implementation of agricultural research and development in the 16 member states, including South Africa. “When we talk about food security in Southern Africa, technology is at the forefront of enabling us to increase our food sufficiency and our production levels as well the effectiveness by which we produce food,” Chembezi told TechCabal. Despite the clear importance of technology to the agriculture sector, the sector is struggling to incorporate new technologies along its value chain. Numerous agritech startups in South Africa are building unique solutions to accelerate the adoption of such technologies to boost the sector. These solutions aim to address the challenges, both in the production and distribution parts of the value chain, facing the country’s breadbasket sector. Agritech startups boosting agriculture production One of those startups is Tsehla Holdings, a startup specialising in hydroponic farming. Hydroponic farming refers to growing plants using a water-based nutrient solution rather than soil. Tsehla claims to help farmers use about 90% less water than conventional farming methods, a sell factor statistic in a country where water is classified as a scarce resource. “Technologies like hydroponics help tackle adverse and unpredictable weather patterns which can lead to droughts. With such technologies, we can control our production, thus ensuring that whatever happens with the weather, at least the production of food continues to go on,” Roseline Mapuranga, founder of Tsehla, told TechCabal. Mapuranga shared that the main challenge she faced was access to funding, as hydroponics is cash-intensive. She secured an investment from the Africa Trust Group which she used to refine the company’s go-to-market strategy. After that, she landed a supplier contract with one of South Africa’s leading retail chain stores. Tsehla is also an alumnus of the Grindstone X program, one of the country’s leading accelerators. Another startup using newer technologies to boost production in South Africa’s agriculture sector is AgriLogiq. The startup, founded by Joel van der Schyff, enables farmers to optimise crop yield through a fully automated greenhouse management system. The system includes a cloud-based IP-intensive software platform to allow wireless and intelligent poly greenhouse automation. “One of our key products is a ventilation system that gets you to 70% of the efficiency of a traditional closed greenhouse at 50% of the capex cost and 20% reduction of running costs. That helps to bring water and chemical usage, leading to a massive impact on a farmer’s bottom line,” van der Schyff told TechCabal. Founded in 2021, van der Schyff shares that AgriLogiq has deployed its proprietary system in over 25 farms across the country, tripling its turnover within its first year of operations and is on track to do so again in the current financial year. The company also resells its system to other greenhouse manufacturers in the country. Van der Schyff states that education on deploying technologies in agriculture has been a pressing challenge. To address that, Agrilogiq is creating an open-sourced education space within its infrastructure to teach people about efficient farming. “I think there is certainly an opportunity [to use technology to drive efficiency] because farmers are also innovative in the sense of trying new things and trying to do more with less. But it does come down to finding those farmers and equipping them with the requisite education,” he concluded. Addressing the distribution bottlenecks Beyond produce, distribution is another area where there is room to improve efficiency in South Africa. Challenges like the country’s rolling blackouts, known as load shedding, have sometimes led farmers across the country to fail to get their produce to the market. For consumers, the cost of these distribution bottlenecks is passed onto the shelf prices, making food more expensive. One startup trying to address some of these distribution problems is AgriKool, founded by Zamokhuhle Thwala. The startup claims to “solve the challenges of food affordability” by building an ecosystem that reconnects farmers and buyers so that both parties get fair prices and a reliable marketplace. AgriKool’s product offering is a two-sided online marketplace where producers list their available produce even before harvest. Buyers use the platform to look for produce they would like to buy. Once the two entities settle on an order, AgriKool engages a third-party logistics supplier to complete the delivery. The startup also facilitates payments to farmers from buyers to reduce the time it usually takes for invoices to be settled on the buyer side. According to Thwala, the issue of high food prices in South Africa is more of a logistics than a production problem so reducing friction and fragmentation between producers and sellers, contributes to the reduction of shelf prices of agricultural products. “We realised that the best way to make food affordable is to make sure that there’s streamlined logistics so that fresh produce travels the shortest route to market,” Thwala told TechCabal. AgriKool’s reports revenues “close to three million rands” from operations based only in Pietermaritzburg in the Kwazulu-Natal province. A few months ago, the startup also announced a distribution deal with Shoprite, South Africa’s largest retailer. According to Thwala, despite the traction, fundraising has been challenging because don’t see the fact that the business is geographically located in one province as compelling enough to write cheques for it. “[At the moment], it doesn’t make sense for us
Read More“You can invest in Africa” and other common mistakes in how the world sees our continent
Africa, with some of the world’s fastest-growing economies and a rapidly expanding population, has the potential to become a global leader in telecommunications. But enabling this requires overcoming certain shortfalls. First, there is a need to shift fundamental misconceptions about the continent. The belief that Africa is a unified market must be corrected. It is not. The sheer size of the continent is massive, with the ability to accommodate China, Europe, the continental United States, and a significant portion of India within its borders. This expansiveness is not just geographical, but cultural, too. It is home to more than 1.2 billion people—not far shy of China’s populace that speaks more than 2,000 languages. By comparison, Europe houses a little over 200 languages and dialects. The truth here is simple: Africa is a region, not a market. We must understand that Africa is not a homogeneous entity but a diverse continent consisting of 54 markets, each with distinct political dynamics and economic climates. Africa is a region of diverse nations. As such, the argument stands firmly that we cannot logically “invest in Africa” because it is not one country with a single currency, government and regulatory framework, social system or business ecosystem. From a business point of view, companies do not operate “across Africa”—they instead have the opportunity to win a share in specific national markets. Without a doubt, over-generalisation cannot win in the region as operating in our context requires a tailored approach for each specific national market, and trying to extrapolate trends for consumer app adoption generically will only produce an inaccurate and dangerous conflation of no value. There’s wisdom in the opportunity of complexity The technology, media, and telecommunications (TMT) industry serves as a prime example of the intricate dynamics that make it challenging to adopt a one-size-fits-all approach to doing business in the region. As providers of connectivity and essential services, telcos play a significant role in building trust among consumers as they enable them to connect with others anywhere in the world and make and receive payments. Looking at the sector, even from a basic perspective, we realise the depth of variations and nuances in market dynamics as there are extensive and innovative ecosystems. In East Africa alone, consider some of the giants in digital payments and mobile money solutions: Safaricom’s M-Pesa in Kenya, MTN Network’s Mobile Money in Rwanda and Uganda, and Airtel Money in various countries. Within renewable energy and green technology spaces, there are companies such as M-KOPA Solar, BBOXX, and Powerhive which offer affordable and clean renewable energy solutions using solar power and battery storage, leveraging the Internet of Things (IoT) and cloud technology for monitoring and management. Artificial intelligence (AI) is also leaping ahead with the likes of Twiga Foods, Shield, and Flare utilising AI and machine learning algorithms to optimise supply chain logistics, combat financial fraud, and optimise emergency response systems. In terms of mobile technology, East Africa has witnessed remarkable mobile penetration, with this technology becoming the primary means of communication and internet access. Mobile money services and mobile applications are now widely adopted, with efforts being made to expand broadband coverage by deploying 4G and 5G networks. Network infrastructure is also progressive with significant investments made in submarine and national fibre optic cables, improving international connectivity and broadband coverage—this is just a glance at the full picture of the advances taking place. There’s no x-factor in entrepreneurship Another common misconception is the belief that all African startups can be categorised as “X for Africa”. In reality, the startup ecosystem of the region has evolved in three waves. Initially, these businesses emulated ecommerce models like Amazon, followed by drawing inspiration from Asian counterparts. A third wave emerged with them adapting to the realities and requirements of local environments. This showcases the distinct entrepreneurial spirit and solutions that originate from within the African ecosystem. Assuming that global values apply to startups on the continent is another fallacy. In reality, valuations in African countries differ significantly, challenging the preconceived notions of Western investors. African deals are now valued at all-time highs, reflecting investors’ growing confidence and willingness to support these fast-growing businesses. Importantly, this discrepancy necessitates a more detailed appraisal method, considering the factors at play in each market. To achieve more, the right grasp of the continent is needed globally. Africa cannot be treated uniformly, and acknowledging and understanding the complexities of this is crucial to enabling a powerhouse of inclusive impact across the region. This article was contributed to TechCabal by Bernard van der Walt and Roy Kinoti Nkandau. Van der Walt is head of audit in Cape Town and leads the TMT sector for BDO South Africa. He is also a member of the managing committee in Cape Town. He has extensive experience in the media and technology sector, from start-ups to listed entities. Nkandau serves as the director of audit & assurance at BDO Rwanda. He has more than a decade of professional experience under his belt working across a plethora of industries ranging from NGOs, manufacturing, tourism, service, trading, energy, and health.
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Next Wave: Thinking about Jumia and the future of e-commerce
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published September 3 2023 In 2012, Jumia, Africa’s first ecommerce giant, revolutionised shopping by offering the service online, alongside shipping. Since then, they have grown as a market leader over the African continent. They have also gone on to list their shares on the stock exchange, in 2019. The listing went well; their stock prices surged 75% on its first day of trading. This made the company a unicorn with an over $3 billion valuation. But four years after that IPO, everything has crashed. Its stock now trades at somewhere around $4, losing nearly 70% of its value since its listing date. Last weekend, at an event somewhere in Marina, Lagos, I was chatting with some artificial intelligence enthusiasts when one of us in the group, a founder, pitched the idea of selling fashion accessories online—mostly clothing and shoes with same-day delivery options. He wanted us to give feedback on his idea. Two interesting people were in that group, following the founder’s pitch. They were Nicolas Eyssallenne, an energy, AI and logistics expert; and another guy I’ll simply call Mark, who is an ideator for startups and self-described lover of Jumia products. Mark asked to stay anon for this piece. Jumia was at an all-time high of $57.55 per share in 2021. Today’s it closer to $4 | Chart by Mobolaji Adebayo, TC Insights As the founder shared his fashion accessories ecommerce idea with our little group, everyone waited for the hook: How are you going to make money off this? For anyone who has seen Jumia’s latest second-quarter financials, the problem the ecommerce giant is facing is dwindling revenue and more losses. In Q2 2023, its revenue was down 15.4%, with a drop in all of its major earning indices—commissions, fulfilment, market and advertising, and value-added services (VAS). It also lost one million customers as gross merchandise value dropped by 25.4%. In a 2022 report by the firm to the United States Securities and Exchange Commission, the ecommerce giant reveals that the firm has not been profitable in the long run. As of December 31, 2022, the firm states that it had accumulated losses of $2 billion, a bleeding that’s been consistent since 2020, the year of the pandemic. In the pitch conversation I listened to at that event in Marina, the consistent question Eyssallenne kept asking was how much the founder was going to charge as commissions, and whether he would be able to make good with his promise of same-day deliveries. Partner Content: Liquidity as a service: Surviving a cash crunch with OneLiquidity’s solution In rethinking a solution to the ecommerce situation Jumia is facing, Mark was of the opinion that the ecommerce company was suffering from low margins and a high cost of operations. He painted a scenario where a USB charger costs ₦8,000, is shipped from China and stored in a warehouse in Nigeria. “How much money do you think the seller makes off that, and how much money do you think Jumia makes off that? What is the delivery cost?” he asked me. The crux of Mark’s argument is that if a product which is not manufactured by you is sold on a platform, how much does the seller charge to be able to make a profit? How much does the ecommerce platform charge? How much do they make in delivering that same item to you? This situation can easily mean that Jumia sellers are not earning much from what they sell on the platform. Partner Message Unlock new opportunities for your business with Vesicash! With our secure, all-in-one and cost effective payment insfrastructure, you can seamlessly expand into emerging markets. Reach out to our dedicated team at info@vesicash.com Click here to learn more Elsewhere, Amazon, Alibaba and the Indonesian ecommerce markets demonstrate use cases outside of the continent. Indonesia’s growth has been attributed to strong economic development, internet access and penetration, and mobile phone ownership. All these are not available in many parts of Africa. Already, many countries on the continent battle extreme poverty, political instability, not enough smartphones, poor infrastructure and internet facilities. What many readers may not recognise is that both Amazon and Alibaba were long established before Jumia. While longevity may not translate to profitability, it can if the founder is bullish on learning while burning money. Amazon’s history of being an ecommerce giant started with it being a bookstore, providing books and publishing services. An underreported story is how Amazon suffered losses in 2014 as the firm set aside profitability and focused furiously on growth, spending all its money on the success stories we see today: Amazon Prime and Amazon Web Services (AWS). Four years later, all of that investment began to slowly pay off. Amazon’s foray into the grocery delivery business via the acquisition of Whole Foods did great numbers on its revenue in 2018. Added to that was revenue from AWS and Amazon Prime membership subscriptions. In Q1 2018, AWS’s revenue rose 49% to $5.44 billion from what was recorded a year before. Same for revenue from subscription services, which went up 60% to $3.1 billion. In September 2018, Amazon became the second US public company to cross the $1 trillion valuation threshold after Apple. Similarly, its investment in faster shipping drove its revenues to $87 billion in Q9 2019 from $72.4 billion the year before. As at 2021, Amazon has generated $24.8 billion in operating profits, with AWS contributing a significant percentage—74% ($18.5 billion)—to that success. AWS’s growth cannot be ignored as the biggest contributor to its net income. So, maybe what Jumia needs is more money to burn and more time to develop other verticals creatively like the Amazon use case. However, time and money are what Jumia doesn’t have—especially with a liquidity position of $166.3 million, as at June 2023, and a quarterly cash utilisation of $38 million in the quarter. At that burn rate, Jumia could run out
Read MoreExclusive: mPharma lays off 150 employees due to tightening macroenomic conditions
mPharma is parting ways with some of its workforce as it doubles down on its Mutti product. mPharma, the Ghanaian startup that manages prescription drug inventory for pharmacies and their suppliers, has laid off some members of its workforce. “We took the difficult decision to right-size the team,” said Gregory Rockson, the company’s CEO; “[the layoffs are] in light of the current macroeconomic conditions driven by the devaluation of the Naira.” About 150 employees—40 in Nigeria—were affected by the layoffs, and severance packages were provided to the affected employees.”We allowed affected employees to keep their health insurance, and we extended the period for them to exercise their stock options from 90 days to 3 years,” Rockson said. mPharma has raised $90 million, including a $35 million series D last year. In September 2022, the startup bought a majority stake in HealthPlus, a leading pharmacy chain in Nigeria, for an undisclosed amount. A year before, it also bought a 55% stake in Uganda’s Vine Pharmacy— the second country in East Africa after buying Halton’s Pharmacy in Kenya for $5 million in 2019. The startup operates in nine African countries: Ghana, Nigeria, Kenya, Zambia, Malawi, Rwanda, Uganda, Gabon and Ethiopia. mPharma will now be focusing primarily on its main healthcare business, Mutti. Mutti is mPharma’s online pharmacy and according to their impact report, they are looking to have a Mutti pharmacy in every community on the continent. According to Rockson, “This decision will allow us to continue to serve the over 200,000 patients who rely on our Mutti services for their healthcare needs each month.” mPharma, which was launched in 2013, started as a way to provide prescription drug inventory for pharmacies and their suppliers, manage retail pharmacy operations and to provide market intelligence to hospitals, pharmacies and patients. In 2021, they added telehealth services because of the high demand for telemedicine after the COVID-19 pandemic. They also helped the Ghanaian government procure vaccines for in 2020. Since then, mPharma has rolled out several projects and services, including a $3 million molecular diagnostic fund to facilitate investments in private hospitals in Ghana and Nigeria.
Read MoreAnchor closes $2.4 million to scale banking-as-a-service for African businesses
Since its public debut one year ago, Anchor has processed more than $550 million. YC-backed embedded finance fintech, Anchor, has raised $2.4 million in a seed round led by Goat Capital with participation from FoundersX, Rebel Fund, Pioneer Fund, Y Combinator, Byld Ventures and Future Africa among others. Anchor’s partnership with regulated financial institutions enables fintechs and SMEs to create and embed financial services in their core products. Using Anchor’s APIs, fintechs and even regular businesses can generate bank accounts, issue cards, make and receive payments seamlessly, and offer savings and investment products without needing to acquire expensive licences. Anchor was publicly launched in August 2022 on the back of a $1 million pre-seed round and its selection for the summer cohort of Y Combinator. The company says it has now hit over $550 million in annualized total transaction volume (TTV), with revenue growing 30% month-on-month. “We’ve been fortunate to have been able to just grow the platform very quickly, which we believe confirms that there was actually a problem to be solved. And there is a there’s a need, and we just want to double down with this new funding,” Segun Adeyemi, CEO and co-founder of Anchor told TechCabal. In a press statement shared with TechCabal, Anchor says it recently the company signed a partnership with the fintech arm of Africa’s largest telecom in Nigeria, MTN MoMo PSB which it hopes will dwarf its previous growth numbers. Anchor charges users for accessing the platform, but also takes a cut of every billable transaction, according to Adeyemi. It counts SeamlessHR, LifeBank, Penne, Zit and 56 other companies as customers and is hoping to grow its customer base beyond fintechs to also target other businesses. Embedded finance is the latest current in the world of financial technology companies that broadly follows the spirit of fintech-enabling reforms like Open Banking, to allow non-financial providers to offer payment, savings, insurance and other financial services to their consumers, users, or businesses. Fintech Focus: Why is embedded finance becoming popular By adding financial services to their core product offerings, companies can enable their customers to access financial services as part of a user journey their customers are already familiar with. As more parts of African businesses become digital, fintechs are in a race to capture the growing market segment of newly digitising business sectors. Anchor thinks there is a $7 billion opportunity locally for the taking. Globally that market is expected to surpass $622 billion in a decade. This current of embedded finance is interesting because it represents a switch from the previous two decades of consumer fintech to fintech that enables financial services for other sectors. Justin Kan, Partner at Goat Capital, says, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader which is something we look out for in our portfolio companies.
Read MoreAltSchool Africa introduces new schools in creative and business industries
AltSchool Africa has expanded its faculty and hopes to leverage the growing interest in Africa’s creative economy. Nigerian ed-tech startup AltSchool Africa has expanded its facilities to include creative economy and business schools. AltSchool Africa, which traditionally offered tech-related courses, has now included content creation, sales, and music business (using Afrobeats) to its existing nine courses. The edtech startup claims it had a 40% completion rate in its first year. According to a statement shared with TechCabal, the new programs are designed to provide a comprehensive and experiential upskilling platform for aspiring learners looking to forge careers in other growing sectors. AltSchool Africa is hoping to leverage the growing interest in Africa’s creative economy that has created a new wave of nonconformist career paths such as music management, content creation, and influencer marketing. Speaking on the launch of the new schools and call for applications, co-founder and CEO of AltSchool Africa, Adewale Yusuf, said, “We are excited to announce the addition of these two new faculties, with qualified experts leading the courses. These industries were specifically chosen for their rapid growth, and we want to help people quickly enhance their careers in these fields.” Co-founded by Yusuf, Akintunde Sultan, and Opeyemi Awoyemi in 2021, AltSchool Africa has successfully enrolled more than 20,000 learners. The programmes offered have no educational requirements and can be completed in as little as six weeks with course fees starting from $100. Per the statement, Nigerian artist Falzthebahdguy (Folarin Falana) and content creator and actor Mr. Macaroni (Adebowale Adedayo) will be joining the creative economy school as facilitators, while media personality Do2dtun (Oladotun Ojuolape Kayode) was recently named as the school’s Creator Relations Director. Other facilitators joining AltSchool Africa’s business faculty include Nigerian film director and cinematographer Nora Awolowo, multi-award-winning music journalist Joey Akan, and content creator Aproko Doctor (Chinonso Egemba). Dr. Ademola Akinrinola, Director of Curriculum and Learning Experience Design at AltSchool Africa added, “The AltSchool curriculum is designed to cater to learners of all levels, from beginners to experts, who possess a natural curiosity and a drive to solve problems.” AltSchool prides itself on creating internship opportunities for its graduates. But this won’t apply to the new schools, according to Yusuf. “When learners enroll in any of the 6-week courses, they will learn directly from industry experts and leaders who will supervise their capstone projects and provide comprehensive feedback at the end of the course,” he told TechCabal.
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Paving the way for affordable cross-border payments in Africa
Image source: Openway Group According to the African Development Bank (AfDB), cross-border banking has emerged as a critical feature within Africa’s financial landscape. It not only facilitates transactions across regions for individuals but also plays a pivotal role in expanding markets and nurturing innovation for businesses. In Africa, Small and Medium Enterprises (SMEs) sell to and depend on imports from suppliers in other countries to meet their local production, sales or reexport goals. Sub-Saharan Africa also, saw diaspora remittances grow by an estimated 5.2% ( $53 billion) in 2022, compared with $24.3 billion in 2018. This significant trade flow between African countries and between Africa’s top trading partners globally present promising opportunities for business payment facilitation. However, for African businesses, navigating the cross-border payment landscape has proven to be a costly and complex endeavor. For instance, in 2017, Nigeria’s central bank opened a special facility to provide up to $20,000 per quarter for small and medium businesses who struggled to access the forex they needed to finance imports. Similarly, last year, small-scale importers in Kenya were hit hard by a scarcity of forex that forced banks to impose $1500 to $2000 daily limits. Currency exchange expenses, inadequate payment infrastructure, compliance costs, and limited access to financial services are major barriers to seamless payment operations for African businesses. Also, high transaction costs continue to impede progress, rendering cross-border payments expensive and inefficient. The volatility of exchange rates makes it difficult for businesses to plan ahead and hedge against inflation and this causes losses for many businesses who are reliant on cross broder transactions. More than anything else, it is now important for businesses to pay attention to getting revenue from outside their local environment as a way to gain foreign currency to facilitate foreign transactions for their businesses “Navigating cross-border payments requires a nuanced understanding of the African user base,” said Lucia Okafor, senior manager of payments & financial services strategy at Deloitte during a recent edition of TechCabal Live that gathered industry leaders to discuss the intricacies of cross-border payments in Africa and shed light on the challenges, opportunities, and future trend. The event was delivered in partnership with AZA Finance. She also advised the need for companies to reevaluate the sourcing strategy and pay attention to getting local sources for their supplies. Elizabeth Rossiello, CEO and founder of B2B fintech company, AZA Finance also emphasized the need for cross-border payment platforms that intimately understand the nuances of the African market. Her insight underscored the complexities and costliness arising from the involvement of multiple intermediaries, bank charges, and the intricacies of currency conversions, which collectively create hurdles for African businesses engaged in cross-border transactions. International trade expert Dare Fadeji believes that policies targeted at addressing the regulatory fragmentation on the continent are critical in reducing fluctuating exchange rates and streamlining international trade. This will facilitate innovations that seek to eliminate intermediaries and expedite transaction speeds for a smoother cross-border payment landscape. The private sector plays an indispensable role in shaping effective cross-border payment solutions according to Nana Yaw Owusu Banahene, regional head of Africa partnerships at AZA Finance. He advocated for governments to empower the private sector to spearhead these initiatives, thereby driving progress in the cross-border payment landscape. Drawing from her expertise, Okafor believes that ultimately, collaboration is important in driving financial inclusion in Africa and widening access to cross-border payment services. While high transaction costs and regulatory complexities remain hurdles, the future of cross-border payments is one of tremendous growth and opportunity. As the continent’s payments ecosystem evolves, cross-border payments continue to hold the key to economic growth and innovation across Africa. This edition of TechCabal Live, ‘How can businesses reduce the cost of making payments across African borders’ was brought to you by TechCabal in partnership with AZA Finance.
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👨🏿🚀TechCabal Daily – Starlink is illegal in Zimbabwe
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Last week, we published an exclusive investigation revealing how a Ghanian fintech Float lost ₦5 billion ($6.4 million) of client deposits in risky FX trades. Read about Float’s jaw-dropping gambles here. In today’s edition Starlink is illegal in Zimbabwe Telkom Towers shut down. Again! The Blockchain Association of Kenya challenges the Digital Asset Tax Can Africans save now, buy later? The World Wide Web3 Event: The Moonshot Conference Job Openings Internet Starlink is illegal in Zimbabwe Image source: Zikoko Memes Selling or using Starlink in Zimbabwe is a crime. The satelite internet provider hasn’t officially launched in Zimbabwe yet, but that hasn’t stopped some enterprising folks from getting their hands on it. Moreover, because it is a satellite-based internet service, Starlink can be used anywhere. Even the country’s national broadcaster, the Zimbabwe Broadcast Corporation, has been seen using the service. However, on Thursday, the government warned that it is illegal to use or resell the service in the southern African country. What makes it illegal? Well, it turns out that Starlink is supposed to either get a direct license from the Postal and Telecommunications Regulatory Authority of Zimbabwe, buddy up with a registered public network in the country or make their users apply for private network licenses. But it hasn’t done any of that so owning or selling a Starlink kit could land you in some hot water. Zoom out: Starlink is illegal in South Africa too. Weeks ago, the country’s telecommunication regulator banned the importation, distribution and usage of Starlink services, pending the operators satisfying licensing requirements to launch the service. 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. Telecoms Telkom Towers shut down again Image source: Zikoko Memes Telkom towers were switched off again. Last week, the American Towers Corporation (ATC) shut it down because the telecom was defaulting on the site leasing fees. This led to service disruptions on the telco’s network. This is not the first time: In June, after receiving numerous complaints from customers regarding network outages, Telkom admitted that the issue was due to the shutdown of Telkom towers. This shutdown occurred because Telkom was unable to pay its debt to ATC, which was reported to be KES3.5 billion ($23.8 million). Why can’t Telkom pay? Per Techweez, the government of Kenya fully owns Telkom, and the debt is currently sinking the company. However, it has actively been on the hunt for an investor who can take on its KES7.2 billion ($49.4 million) debt. As a Plan B, they might just reach deep into the National Treasury’s pockets and bail out Telkom with public funds. Power your startup growth Join burgeoning entrepreneurs & innovators in Ghana, Nigeria, Senegal, South Africa, & Kenya to pitch your startup and unlock funding, mentorship, & growth opportunities at the 2023 MEST Africa Challenge. Apply today! . Crypto The Blockchain Association of Kenya challenges the Digital Asset Tax Image source: Zikoko Memes The Blockchain Association of Kenya (BAK) is blocking the new Digital Asset Tax (DAT). The new tax took effect on September 1, but the case will be mentioned in court on September 28. ICYMI: The Kenyan government introduced several new taxes in the Finance Act 2023, aiming to generate extra income of up to $2 billion for the country. Since July 1, the Finance Act 2023 has been imposing a 1.5% tax on the earnings of online content creators. As for crypto, the new law mandates owners of crypto exchanges to deduct 3% of the asset’s value as DAT. The red flags: BAK believes the tax is unfair because it’s categorized as income tax, yet it’s imposed on the gross value of the asset rather than on gains and profits. This means that even individuals in a loss-making position will still have to pay the tax. Beyond the issue of fairness, they are concerned that taxing turnover might deter digital asset trading and hinder progress in the sector. Unlock new opportunities for your business Unlock new opportunities for your business with Vesicash! Seamlessly expand into emerging markets using our secure, all-in-one and cost-effective payment infrastructure. Contact Vesicash via our website www.vesicash.com or reach out to our dedicated team at info@vesicash.com 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 account for 17%. Consumer lending manifests across the continent through the buy now, pay later model (BNPL), giving customers instant access to products after necessary credit checks have been in made. Despite the rapid adoption of the credit-driven BNPL on the continent, concerns exist about the sustainability of the model, as it could lead to overspending, high interest rates, and debt traps for consumers. According to data from BVA Group, African financial consumer markets have a savings-first culture. Informal savings groups, known as “susu” in West Africa and “stokvels” in South Africa are a popular way to save money to make purchases. As a result, some fintech startups on the continent are digitizing this model as an alternative to the BNPL to embed savings into the online retail experience for consumers. With the model’s success in India and other emerging markets, startups in Africa are doubling down by enabling users to save up for desired items in bits, get discounts and avoid debt. Image source: TC Insights While the SNBL sub-sector is nascent, it has the potential to grow, given the long history of installment savings schemes amongst Africans. In Kenya, more than 1 million people have used SNBL products to avoid
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M-PESA to introduce standing orders as Safaricom strengthens its mobile money product
Standing orders are common in banking services but are very rare in mobile money products such as M-PESA. Safaricom’s M-PESA is set to introduce standing orders in an announcement revealed by the telco’s CIO George Njuguna. This will effectively make it the first mobile money platform with this feature, although standing orders are quite common in traditional banking and neo-banking products. Through X (formerly Twitter), Njuguna said, “This is the first initiative, where you will have standing orders on a mobile platform – the first in the world, and not just the first in Africa. We will use it in other areas such as health because we understand this economy to increase accessibility and affordability.” READ MORE: As M-PESA plans to enter Ethiopia, it faces a stiff rivalry from Ethio Telecom’s Telebirr Standing orders in M-PESA will be a great way to automate recurring payments or transfers. With a standing order, you can set up a regular payment to be made from your mobile money account to another person, business, or service. This can be a convenient way to pay your bills, rent, or other recurring expenses on time and without hassle. Possible implementation avenues M-PESA has grown to feature tens of products and services, covering payments, savings, and access to credit. For bill payments, M-PESA runs products such as Lipa na M-PESA and Buy Goods. This is one channel where users will likely be able to set up standing orders to pay for utility bills, rent, and other expenses automatically from their M-PESA accounts, and on specific dates. M-PESA also runs a number of credit facilities, including M-Shwari, KCB M-PESA, and Fuliza (an overdraft facility). Therefore, this is one area where standing orders will be key to ensure that loan repayments are done on time. READ MORE: In a move to support SMEs, Safaricom’s M-PESA increases daily limit to $3,400 Standing orders have traditionally been instrumental for savings and investments. Safaricom has similar products, including the aforementioned KCB M-PESA and M-Shwari for savings, as well as Mali, its investment product. It would be interesting to see how standing orders will be integrated with these services, as they can help in transferring part of a customer’s balance into investment or savings regularly. Last year, Safaricom launched a virtual card in partnership with VISA. The card is solely used for online payments. Kenyan customers can, for instance, pay for Netflix via M-PESA through this channel – and this is another application where standing orders can go a long way in settling payments without manual intervention every other time. Safaricom has not revealed when standing orders will be accessible to users. Implementation details have also not been disclosed. In the fiscal year ending in March 2023, M-PESA recorded 8.8% growth in revenue, reaching KES 117.19 billion ($816 million). These figures, however, fell short of the results reported in the prior fiscal year. Safaricom attributed this decline to macroeconomic effects. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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Register for the X-Pitchathon 2023
African startups and MSMEs are always on the lookout for funding and opportunities that will help them scale on different levels. And thanks to several established businesses and corporations, the opportunities keep springing. The latest of the funding opportunities available to startups in Africa is the X-Pitchathon by X3M Ideas, an advertising agency headquartered in Nigeria, with branches in other African countries like South Africa, Zambia, Kenya, and Congo Brazzaville. The X-Pitchathon is an initiative by the Zambian branch of X3M Ideas to mark their fifth year in business. The X-Pitchathon aims to promote MSMEs in Zambia by fostering networks and providing scaling assistance. It’s a fantastic opportunity for budding innovators and small company owners to showcase their startups to industry leaders, gain fundamental skills, and possibly win prizes valued at over K1 million ($50,000) for their companies. Other prizes applicants stand the chance to win include a laptop equipped with Microsoft 365, MTN 5G router with three months’ data plan, and more. Terms to apply for the X-Pitchathon 2023 Do you have a start-up or business that you think is worth investing in? See the following terms to enter for the X-Pitchathon in Zambia. Only startups or early-stage businesses that have progressed beyond the ideation phase and are below 5 years old can apply. Applicant must be a Zambian citizen. Applicant must be18 years and above. How to register for the X-Pitchathon 2023 If you meet the above criteria, simply follow these steps to get started for it: Visit www.xpitchathon.com Submit a 60-second elevator pitch Provide your Zambian National ID Provide TPin certificate Provide your PACRA registration Provide a description and video of your prototype (if applicable) And that’s all. Please note that the deadline for submission of entries for the X-Pitchathon is September 29, 2023. Final thoughts In the vibrant entrepreneurial landscape of Zambia, this startup funding pitch competition stands as a beacon of opportunity, illuminating the path for budding Zambian startups and MSMEs to realise their dreams. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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