Exclusive: How Float’s lucrative but risky FX trades led to ₦5 billion in losses
When Jesse Ghansah cofounded Float in 2020, his definition of the problem his startup would solve was clear: closing the $300 billion liquidity gap for Africa’s small and medium businesses. But three years later, the company has dug itself into a hole with at least $6 million in unpaid deposits to startups. While the company’s original business model focuses on providing credit services to businesses, its recent losses stem from an unrelated venture. Float attempted to profit from Nigeria’s currency exchange arbitrage by completing trades on behalf of businesses looking to buy or trade the US dollar with the local currency, three people with knowledge of the situation told TechCabal. The company, which raised $17 million last year in a round backed by Tiger Global, sourced foreign currencies through third-party brokers who traded on the speculative currency black market and USDT, the cryptocurrency stablecoin pegged to the dollar. While Float profited from currency trading in Nigeria for the better part of the last 12 months, its fortunes turned after it became a victim of fraud in the unregulated and speculative market it attempted to profit from, the sources claimed. Two sources said that at least four startups have an estimated $6 million stuck with Float due to those trading losses. Jesse Ghansah, the cofounder of Float With co-founder Jesse Ghansah scrambling to remedy the situation, startups who used Float face a significant risk of never getting their money back. The companies involved declined to comment on the record for this story, while one startup spoke about an ongoing police investigation to resolve the issue. TechCabal made persistent efforts to contact Float’s cofounders, and while Jesse Ghansah agreed to a meeting, he did not take calls or reply to messages. An ill-fated deal In May, Float entered into a trading agreement with a firm looking to buy as much as $2.5 million of the greenback. Float agreed to make the trade using a fixed exchange rate of ₦748 to $1, according to internal documents seen by TechCabal. Float received the naira equivalent of the total sum, promising to remit the agreed dollar amount to the client’s designated bank account within two days. Float, however, was defrauded by its exchange merchant when it attempted to buy the $2.5 million worth of USDT. Sources said it successfully bought only $1.5 million of the digital currency and lost $1 million. In the unregulated currency speculation market, trust is fickle. And for large transactions, the wait time to complete a transaction could take a few hours, currency traders told TechCabal. During this window, there’s a high chance of getting conned. “No matter how many times you trade, every time you transfer naira, the wait time until the merchant releases the USDT to you is filled with anxiety,” said one trader who asked to be anonymous to allow them to speak freely. “This is a largely unregulated space; nothing will happen if the merchant doesn’t release the USDT after collecting naira.” The $1 million fraud put a hole in Float’s balance sheet, people familiar with its finances told TechCabal. Yet the company continued trading, agreeing to source US dollars for more clients. It suffered further complications in June when efforts by the newly elected Nigerian government to stabilize the exchange rate caused a 63% devaluation within a few days. Currency volatility persisted, causing the naira to slide to ₦950 to the US dollar on the black market. Float, with its promise to provide dollar liquidity to businesses within a few days at a fixed rate, became a victim of the volatility. Fast-rising rates meant it could not settle previous trades at the agreed value, people close to the company told TechCabal. Executives at two startups who requested anonymity declined to confirm how much money their transactions involved. Another executive at a startup who also requested anonymity confirmed that it held $3 million in deposits with Float. “The goal is to work with Float and get all of our money back,” he said. He added that despite the situation, his company’s operations are unaffected; “It’s important to state this hasn’t impacted our operations; we’re solid in terms of runway.” Other sources told this publication that Float is working on bridge financing and will present payment plans to its clients as it tries to salvage the situation; they also shared that Float’s investors are in the process of a forensic audit of the company’s finances. TechCabal contacted Tiger Global Management, one of Float’s investors, to understand whether it was aware of the situation but did not receive a response at the time of this report. Another investor who asked not to be mentioned confirmed that a forensic audit is in the works and that “the situation is being handled.” How lucrative but risky currency trading deals backfired Nigeria’s complex FX regulations and lack of liquidity mean that individuals and companies needing US Dollars must often get creative. On Airtel Nigeria’s earnings call in 2022, for instance, the company admitted that it repatriated cash from Nigeria but didn’t disclose how it moved the money. “It is not the Central Bank rate,” said Segun Ogunsanya, the company’s CEO. “We have used many instruments and options for upstreaming the money. Unfortunately, we cannot give you the exact average rate or any specific answer.” Needing the greenback is a common problem for Nigerian companies. Startups that receive funding in dollars may be reluctant to dip into their USD reserves to pay international clients, creating a business opportunity. Float helped source FX for these transactions by taking Naira from clients and buying USDT from traders and merchants–popular Nigerian financial services companies sometimes broker these transactions. The USDT is then converted into USD and transmitted to the designated account. Since anyone can buy USDT from merchants on platforms like Binance, sources familiar with Float’s business say the company offered two unique selling propositions: it reduced the exposure of startups to the markets, escaping regulatory attention from a hawkish Central Bank. It also provided clients
Read More
How Moniepoint wants to win the retail banking market
Moniepoint, one of Nigeria’s biggest business banks, wants to replicate its success in agency banking in retail banking by leveraging its distribution strategy. On August 17, 2023, TechCabal exclusively reported that Moniepoint, the Nigerian fintech, has expanded into retail banking. The 8-year-old startup, which provides banking services to small and medium-sized businesses across Nigeria, is hoping to reach new customers by expanding its services into the personal banking segment. At a recent media parley in Lagos, the acting managing director, Moniepoint Microfinance Bank (MFB), Babatunde Olofin disclosed that the holding company, Moniepoint Inc. now processes payment transactions worth $12 billion with an average of 400 million transactions monthly. It is an interesting number when you consider that Moniepoint said it processed 1.7 billion transactions worth over $100 billion in 2022. According to Olofin, Moniepoint, formerly called TeamApt, has an “elastic infrastructure” that allows it to process huge volumes of transactions. Moniepoint’s latest bet on retail banking means it will compete in a field crowded by large banks and well-funded fintechs including upstarts Opay and Palmpay and the likes of Kuda, Fairmoney and Carbon who have built a significant presence in the personal banking space. OPay, for instance, claims to have 35 million registered users, while Palmpay says it has over 25 million users. Moniepoint is positioning itself ahead of further boom in electronic transactions. Industry data shows Nigerian digital payments is having its best year with an average monthly volume topping 818 million for the first five months of 2023. TechCabal Insights projects real-time payments could reach 9.7 billion transactions by the end of the year, almost double the figure from 2022. For Moniepoint, distribution is everything Moniepoint wants to replicate its success in agency banking in the consumer banking vertical. It is betting that its distribution strategy, with a network of offline agents, will attract customers into its fold. “In every corner of the nation, we have our representatives known as agents,” Olofin said. “Even in areas where we don’t have a physical bank presence, we are there. We call our agents ‘man bank’ because you can actually do everything you can do in a banking hall with our agents.” With over 1.6 million onboarded businesses and over 10,000 agents across the country, the fintech hopes to leverage its solid agent network to target retail customers. Moniepoint projects it will onboard at least 4.8 million retail customers over the next three months. It is basically betting that it can pull three new retail banking users from each of its business customers., To onboard people without smartphones, Moniepoint’s agents will help them open a personal account, and issue them cards that can be used to carry out transactions, Olofin shared. “With our spread of agent network, it is easy for them [customers] to approach the agents and carry out transactions without necessarily looking for a physical structure,” he said. Gamification for financial inclusion Moniepoint’s personal banking service represents an interesting foray for the Engineering-first company. To stand out in the competitive market, the company is relying on gamification. Thousands of users could win N2,000 weekly and a grand prize of N10 million when they complete certain tasks and milestones, said Ope Adeyemi, the company’s senior vice president of channels and sales tools. “Consumers are rewarded with coins on our personal banking app after they carry out transactions, and these coins allow them to take part in exciting weekly games such as Shuffle, Spin the Wheel, he said.” Moniepoint is betting that gamification will not only enhance user experience but also encourage customers to use the app and its accompanying debit card for transactions over cash. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read More“We are bridging Nigeria’s digital finance gap”- Moniepoint’s CEO
By Tosin Eniolorunda, Group CEO, Moniepoint Inc. Picture a restaurant in Ikeja, Lagos State, where a customer needs to make a payment after a meal. To make this interaction successful, two critical parts of the digital financial experience need to happen. On one side of this are businesses, like, in this case, the restaurant. Businesses serve as an important locus, collecting payments from millions of customers. By empowering businesses to collect payments and manage their finances digitally, great transformation is possible. But on the other side are the customers who need to pay these businesses, like the person who just finished their meal at this restaurant and wants to clear the bill. While these businesses can receive digital payments, the experience on the customer’s side isn’t very seamless. As a team, I’m proud of how Moniepoint has helped lead this evolution through our reliable technology solutions. We’ve been able to work with over a million businesses across Africa to power their dreams and we are still on this path. It’s not uncommon to find disputes between businesses and their customers, primarily because the current personal banking experience doesn’t give users as much control and reliability as they need. With businesses being a touchpoint for these customers, our initial approach was to give them the full support they needed. More than 33 million unique cards are used on our terminals each month—over half of all banked Nigerians. This shows how firmly embedded digital payments are in our day-to-day lives and how much change is possible through the businesses we initially focused on. But to truly improve the experience across the board, we need to extend our reliability to customers too. We’ve built a solid and reliable infrastructure for businesses. What if we powered their customers too? That is why we launched our personal banking product as part of our expanding suite of services. People are often promised high-quality personal finance, only to be let down by unreliable service and poor results, and they deserve better. We are offering consumers the same service relied upon by many businesses they’re familiar with. Too often, idealistic promises are made to users to revolutionise consumer finance. We bring a simple offer: a banking app and card that works. With our expertise in building banking infrastructure and experience providing banking services to businesses, we’ve introduced new solutions to personal banking. Dispute resolution can now be more easily managed and monitored, putting control in the hands of the consumers who use these services, as it should have been. This, in collaboration with the millions of businesses that use our terminals and banking solutions, guarantees unmatched reliability for users everywhere. We will build this up over time with new capabilities so consumers can make the most of our industry-leading service. We have been part of this country’s digital transformation since our founding in 2015. I have witnessed firsthand how society has changed for the better through financial technology, and I’m determined to make the most of the opportunities. As digital payments become more central to the financial experience in Nigeria, fintechs form the basis on which immense change is possible, and so much more can be explored. If people can pay digitally, commerce can thrive, and the ripple effect will be felt throughout the economy to the benefit of everyone. By stepping up to provide financial solutions for individuals, we strive to be the gateway to people’s financial happiness. Together, we can help consumers and businesses across Nigeria power their dreams as part of a brighter and more prosperous future.
Read More
Edo State moves to paperless civil service to simplify work processes
As part of its move to become Nigeria’s first fully e-governed state, Edo has made a full transition to a paperless mode of communication in its civil service. Edo State has officially transitioned to a paperless mode of communication in its civil service—the first Nigerian state to do so. According to a government circular seen by TechCabal, the state governor, Godwin Obaseki directed his office to reject physical files from any ministry, department, or government agency. This development is Edo’s latest move in pursuit of its goal to become Nigeria’s first fully e-governed state before September 1st, 2023. Last month, the Edo state government held a one-week digital transformation training for over 3,000 workers. It also launched a digital policy project. Edo is betting that its automation of work processes will reduce backlog and free up government resources. A former media aide to the state government told TechCabal, “About six million documents have been archived digitally and the goal is for state operations, including interface with the public, to be initiated and completed online.” With the transition to a paperless approach, communication in the Edo State civil service is expected to become faster, reducing administrative burden, and enabling quicker decision-making and response times. However successful implementation requires investing in digital infrastructure, ensuring data security, and more importantly, providing training for employees to adapt to new technologies. In 2021, the state government began the digital registration of all workers across the 18 local government areas of the state. Digitising public service remains an important step in improving the delivery of all government services. It not only increases the effectiveness of the government business but also sets up a framework for e-governance. According to a McKinsey report, digitization has the potential to unlock over $3.5 trillion of economic value for the government and public sector. While Edo appears to be leading the charge, the federal government has long committed to going paperless. In January 2022, the then minister of communications and digital economy, Isa Pantanmi disclosed that the federal government spent a total of N152 billion on digitisation in 2021. In August, immediate past President Muhammadu Buhari and five governors endorsed a framework for the harmonisation of the digital economy and e-governance initiatives at federal and state levels. This July, Nigeria’s Head of Civil Service, Folasade Yemi-Esan said all ministries, departments, and agencies will be fully digitised by 2025. It’s worth watching if the other 35 states will take a page from Edo’s playbook and digitise their civil service. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read MoreTingo Group waves aside Hindenburg allegations as it announces ~$1 billion in H12023 revenue
As it declared sales of $977 million in the first half of 2023, Tingo Group said it relied on an investigation by its outside counsel “and further investigative work of its own,” to declare itself innocent of allegations leveled by Hindenburg Research almost 3 months ago. On Wednesday, Tingo Group released a press statement claiming it had been found innocent after an investigation by an unnamed independent counsel. Tingo Group said, “At the direction of the Company’s independent directors, independent counsel investigated certain Hindenburg allegations and provided the independent directors with an interim report summarizing evidence it had reviewed, along with items requiring further investigation.” The company’s press statement says a separate outside counsel carried out an investigation that followed up the report of the unnamed independent counsel. Without explaining what the independent counsel discovered or recommended, Tingo Group said it relied on the second investigation by its outside counsel “and further investigative work of its own” to declare itself innocent of all the Hindenburg allegations. The embattled company had previously named prestigious law firm White & Case as its independent counsel after a report by short seller, Hindenburg Research accused Tingo’s operations and SEC filings as an elaborate con. White & Case reportedly ended its relationship with Tingo Group in July. TechCabal reached out to several White & Case partners in New York, London, Hong Kong and the UAE, but we have yet to receive a response. With Tingo, the more you look… In Tingo’s Wednesday press release, Tingo explained some of the allegations made by Hindenburg research; the financial statement errors (Hindenburg had accused Tingo of filing financial statements that were unbalanced, missed some figures and missing inventory) that run into hundreds of millions were merely “typographical errors.” A partnership with Stanbic Bank that was exposed to not exist had merely failed due to fallout over a 2021 press release and was subsequently replaced by a partnership agreement with Visa. Tingo now says it is building a “super app” based on that partnership. A mobile virtual network partnership with Airtel that was exposed by WeeTracker to not exist is now provided by an undisclosed third party and covers all four mobile network operators in Nigeria. In addition, Tingo earns commissions from airtime and internet data sales. The NWASSA platform which is now inaccessible after reports that it did not work is now a USSD platform that is pre-loaded on the Tingo Mobile phones that are then leased to the cooperatives and their farmers. Tingo Group did not disclose the USSD code to access the platform. The earlier USSD code available on the NWASSA website did not work. Here’s the full rebuttal from Tingo. Tingo’s most recent SEC filings show a drop in the company’s cash balance from around $780 million in March 2023 to just over $53 million in June. This is despite reporting revenues of $1.828 billion in the year’s first six months. According to Tingo SEC filings, $977 of that $1.8 billion was generated between April and June of 2023. Tingo explains the drop in cash balances as due to vendor payments and advances. These payments include A $434.2 million payment to a mobile phone supplier to purchase 6 million phones (type not specified) for new members of All Farmers Association of Nigeria (AFAN). Advances to AFAN for agricultural produce to be exported by Tingo Foods and a settlement of outstanding balances. It did not disclose when these outstanding invoices were incurred. Self-funding food stocks before receiving payments for same. This is essentially, Tingo buying the food it claims to export ahead of receiving customer payments. And a $174 million tax payment to the Nigerian government for Tingo Mobile for 2022. Last year, the company reported a little over $21 million in revenue and $3 million in gross profit in the same period. In the first two quarters of 2023, that $3 million in gross profits has jumped to more than $732 million. Tingo says the more than 8000% growth in revenue was the result of the acquisition of Tingo Mobile and Tingo Foods and the commencement of food exports by a new company Tingo DMCC in May. After several postponements, the embattled company held an earnings call for its second quarter results yesterday morning (Eastern Time) where it claimed profits (before tax) of $420 million in the first half of the year. Tingo’s President Chris Cleverly, also announced that the company would begin quarterly dividend payouts—if it was allowed access to forex by the Nigerian government. On its part, Hindenburg Research released another report saying Tingo did not answer any of the questions it had asked the company in its initial report. The short-seller has accused Tingo Group of contradicting prior SEC filings in its latest press release where it absolved itself from blame. Hindenburg says at least one of the vendor payments which Tingo claimed was the cause of the drastic drop in cash balances, was to a company that was only registered in July in Niger Republic, Nigeria’s northern neighbour. Here’s the full rejoinder by Hindenburg. After a brief spike following the release of Tingo Group’s press release announcing the completion of investigations and the earnings call held yesterday, the company’s shares resumed their downward trend, closing at $1.29 almost 8% down from the previous day’s close.
Read More
PointsBud wants to help you order food in five minutes using AI
PointsBud is creating an AI-enabled system to help people buy food within minutes without human interaction. “He doesn’t look like a tech bro,” my colleague, Ngozi Chukwu, says as ‘Deji Atoyebi, PointsBud founder, sits with us for an informal product demo at our office in Lagos. Ngozi, and anyone curious to ask what we were doing, was excited about ‘Deji’s product once he explained it. I was, too. As conversations around AI, its functionality, and unemployment fears continue to rise, ‘Deji is one of the people building artificial intelligence (AI)-enabled products that solve critical problems. In his case, he explains that his product provides embedded finance servicing in the hospitality industry. “We just launched yesterday [August 23, 2023] at a restaurant in Lagos,” he tells me as we explore the features of the PointsBud, an AI-assisted messaging system that allows people to order products and services from different providers at breakneck speed through WhatsApp. ‘Deji Atoyebi (L) demonstrating how the PointsBud platform works to Muhammed Akinyemi (R). Photo Credit: Blossom Sabo It took less than five minutes to order food and pay for the order from Circa Lagos, the first restaurant to get on PointsBud. We mentioned the meal we wanted, and the AI responded within seconds, confirming the order’s availability and how much it cost before processing the order and moving to payments. At the moment, the bot is exclusive to each restaurant. “For example, the bot I showed you,” ‘Deji emphasises, “was acting as Circa Lagos’ bot. It’s built on their menu. When we onboard enough restaurants, we will have a general PoinstBud bot where people can find restaurants and other services.” But that’s not all. “It’ll learn customer interests and recommend similar products in the future,” ‘Deji says, smiling coyly through the demo. Despite a slow internet connection, our order was faster than typical human response time. But a human still has to operate the admin panel to confirm and reject orders, so that customers know the restaurant has gotten their order. In the past, the process was a human taking the order, confirming from the kitchen, and finally sorting out payments. Now, the human only does kitchen confirmation. Everything else is automated. The admin panel of the PointsBud platform shows customer orders being confirmed by an admin. The ex-Flutterwave engineer (for four years) promises that his team is building an integrated system that’ll be an infrastructure for businesses to have customer data and insights; so that hospitality businesses can target customers with offers, upsell and cross-sell to them faster and better than ever. “The reason why it’s called PointsBud is to provide a way for businesses to reward their customers. With all this data, it becomes possible to know what the customer likes.” This means you can order food, book flights and hotels without interacting directly with a human at any level of the journey. PointBuds didn’t start as an AI-enabled system. “Initially, we started with QR codes… if you scan the QR codes, it takes you to their [a restaurant’s] menu,” but getting to onboard restaurants was difficult. On one hand, restaurant owners were difficult to find and persuade on LinkedIn. On the other hand, workers made it difficult to see their managers at the restaurant. This could be because of fears that their jobs might be at risk. When TechCabal asked Victor Daniel, a content creator specialising in food content, how he felt about the integrated AI system, he said, “I think it’ll make the experience better in the sense that it can be faster and more efficient. And since AI improves the efficiency of everything, then yeah, I want AI.” One of the PointBud’s features is that “you can even check and track your rider through WhatsApp.” What this efficiency means, however, is that there’s at least one person whose services are no longer needed in the customer servicing queue. Victor doesn’t seem bothered by this as long as he gets his meal faster: “that’s the way the world works. Every innovation that has ever benefited humankind including myself had to come at the expense of someone’s job. We have to deal with this. In future, it’ll probably be my turn,” he tells Tech Cabal. However, Ama Udofa, who works in the foodtech industry, thinks “anyone who wants to replace the human touch is in for a rude shock. In the restaurant industry which is more hands on than say fintech or SAAS type industries, diners are demanding more human involvement. See how QR code menus ruined table-side ordering, for example.” Nonetheless, he supports some automation: “I’m all for partial automation. AI working hand in glove with humans.” While the argument on the human experience hovers, the PointsBud founder explains that they “plan to charge a monthly subscription for the usage of some of the features, payment for marketing automation and delivery tracking.” It’s only day one at PointsBud. One can only imagine how high and in what direction they might fly in the coming months. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read More
Months before Starlink’s Zimbabwe launch, government warns against its ‘unlicensed’ use
Starlink users and resellers in Zimbabwe have been warned that unless they secure requisite licenses, they are breaking the law by using and providing the service. Zimbabwe’s communications regulator, the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), has issued a warning against the unlicensed use of Starlink. To use the service in Zimbabwe, Starlink will have to apply for a direct license with POTRAZ. It appears that Starlink, whose website states that it plans to launch in Zimbabwe in Q3 2023, has not yet secured the requisite license. Alternatively, the regulator states that Starlink could also partner with a registered public network in the country to distribute the service or require its users to apply for private network licenses. The authority cited increasing cases of “ entities masquerading as licensed satellite service providers” distributing customer premises equipment for the provision of satellite-based internet services as the cause for concern. Starlink has become popular in the southern African nation, with social media users sharing pictures of the service’s router mounted on their premises. Even the country’s national broadcaster, the Zimbabwe Broadcast Corporation, has been seen using the service. State-broadcaster Zimbabwe Broadcasting Corporation has been spotted seemingly utilising Starlink before it officially launches in the country. (Image source:X) It further added that local resellers, even after securing a local license, were only allowed to distribute satellite-based internet services if their virtual network operator (VNO) agreements with the service provider, in this case, Starlink, were approved. “Being found in possession or operating telecommunication equipment/system without a valid license, certificate or authorisation from POTRAZ is a statutory offence punishable by law,” Dr G.K Machengete, director general of POTRAZ, said in a statement. Zimbabwe joins South Africa in enacting much stricter regulations with regard to the usage of Starlink. A fortnight ago, the country’s telecommunication regulator banned the importation, distribution and usage of Starlink services, pending the Elon Musk-owned entity satisfying licensing requirements to launch the service.
Read More
The Blockchain Association of Kenya goes to court to block taxes on crypto
A law seeking to tax crypto exchanges is met with opposition from Kenya’s Blockchain Association. The Blockchain Association of Kenya (BAK) wants to block the implementation of the Digital Asset Tax (DAT) introduced a few months ago as part of the Finance Act 2023. The case will be mentioned on September 28. The new tax, which will take effect from September 1, is part of the many taxes introduced in the Finance Act 2023, with some focused on expanding the tax net in the digital space. The tax provisions outlined in the already-signed act seek to create extra income of up to $2 billion for the Kenyan government. The BAK explained the rationale for its petition challenging the law’s legality: “We are deeply committed to advocating and lobbying for a conducive environment for innovation while ensuring legal clarity. Our petition addresses concerns about the DAT’s impact on our industry and the broader economy.” According to the legal and policy director at BAK, Allan Kakai, DAT has been introduced as income tax, yet it is imposed on the gross value of the asset instead of gains and profits. “This means that people in a loss-making position will still pay the tax. It’s is unfair and inequitable to impose a tax on losses,” he told TechCabal. The Finance Act introduced DAT for earnings from digital asset transfers. A digital asset is defined as intangible value, including crypto and digitally-represented tokens exchangeable electronically. Non-resident platform owners for asset exchange must register under a simplified tax scheme, like Digital Services Tax. Under this law, platform owners would deduct 3% of the asset’s value as DAT. Non-resident owners must remit this tax within 24 hours, along with the required details. The 24-hour remittance requirement could be burdensome for some, and taxing turnover rather than gains might discourage digital asset trading. The Blockchain Association of Kenya argues that the law may hinder the growth of services associated with blockchain and crypto by crippling innovation. “The core focus of the petition is to thoroughly examine the legal and constitutional dimensions surrounding the imposition of this tax on digital assets,” the association said in a statement posted on X. The Finance Act 2023 has since started taxing online content creators. It had previously enforced a 15% withholding tax on earnings from digital content monetisation. Kenya’s parliament later reduced this to 1.5%. Starting from July 1, whenever a content creator is paid for their work, the client must withhold 1.5% of the payment and send it to tax authorities. This change intends to expand taxation to cover digital content enterprises, acknowledging their substantial growth in recent times. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read More
👨🏿🚀TechCabal Daily – Anonymous Sudan hacks Twitter
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy Friday! Whatsapp has finally rolled out a feature that we have all been waiting for. You can now add another number, and have two accounts running on the same app, just the same way you can on Twitter and Instagram. So, using WhatsApp business account for your second active number will be a thing of the past. Well, maybe not right away, as the feature is currently limited to a few beta users. It is slowly rolling out and will be available for the public later. In today’s edition Anonymous Sudan hacks X Tingo group responds to Hindenburg Research allegations Uber launches electric motorbikes in Kenya India wants to expand its Unified Payments Interface to Africa Funding Tracker The World Wide Web3 Event: The Web3Bridge Conference Lagos Job Openings Cybercrime Anonymous Sudan hacks X Image source: Zikoko Memes Anonymous Sudan has struck again. The hacktivist group is claiming responsibility for taking X (formerly Twitter) offline in more than a dozen countries on Tuesday morning. The hackers said that they hacked X to pressure Elon Musk into launching Starlink in Sudan. Thousands of users affected: Per BBC, X was down for over two hours, and according to Downdetector, a website that monitors service outages, users from the US and the UK filed nearly 20,000 reports of outages, though the actual number of affected individuals is likely much greater. In a chat with the BBC, a member of the hacktivist group, Hofa, said that the purpose of the Distributed Denial of Service (DDoS) attack was to bring attention to the ongoing civil war in Sudan. The war, which began in April, was due to a power struggle between the two main factions of the ruling military regime. This has led to the internet in Sudan being disrupted several times. Currently, internet access is limited and unreliable due to the ongoing conflict in the country. If Starlink is launched in Sudan, it will mean that people can access the internet even if the government blocks internet access. Hacktivism over the months: The group has been involved in a series ofdistributed denial of service (DDoS) attacks. Back in June, the hacktivist group targeted Microsoft in a DDoS attack, claiming that the attack was retaliation for US policy regarding Sudan’s military conflict. In July, the group also attacked digital services in Kenya, including the country’s eCitizen portal, used by the public to access more than 5,000 government services. They claimed that the attack was because the country “released statements doubting the sovereignty of [the Sudanese] government.” In August, the group carried out attacks on Nigerian companies, targeting digital infrastructure such as that of the National Information Technology Development Agency (NITDA), in response to the ECOWAS threat of military action against Niger. Zoom out: X has not publicly acknowledged the disruption caused, and Musk has not responded to questions to launch his satellite internet service in Sudan. 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. Fintech Tingo group responds to Hindenburg Research allegations This week, investigators of Tingo Group, an agri-fintech company denied allegations made against the company by Hindenburg Research. Image source: Zikoko Memes What allegations? In June this year, Hindenburg Research, a US-based investment research firm focusing on short-selling, accused Tingo Group of being an “exceptionally obvious scam with completely fabricated financials.” The report made several allegations about the company, including that its financial statements were inaccurate, its relationships with its partners and customers were illegitimate, and its mobile licence was invalid. Tingo publicly denied all the claims and said the allegations were a deliberate attempt to damage its reputation, and also appointed an International law firm, White & Case LLP, to conduct an independent review and report to its independent directors concerning the allegations. What are the results? In a new press release shared on Tingo’s website, the company states that Tingo’s financial statements and MD&A were accurate and all required disclosures were made. The investigators reportedly found that Tingo’s relationships with its partners and customers are legitimate. Per the findings, investigators also say that Tingo has a valid mobile licence in Nigeria and does not require a licence in Ghana. The report states that it has paid its taxes in Nigeria, that its partnership with Visa is legitimate, that its NWASSA platform is legitimate and has generated revenue, and that the company’s agricultural export business is legitimate and has generated revenue. Finally, the report notes, that its independent auditors are qualified and have a good reputation, and that the Company’s bank statements are accurate. Mobility Uber launches electric motorbikes in Kenya Image source: Techcabal Uber has new bikes in Kenya The ride hailing company has launched One Electric, its e-mobility product in Kenya. The launch is part of Uber’s move to transition into the use of electric vehicles. The launch of One Electric is Uber’s third product announcement in Kenya this year. It follows the rollout of an audio recording feature for safety and the integration of M-PESA into its payment system. Uber doesn’t own any of the electric motorbikes, Greenwheels Africa—an e-mobility company focused on electrifying motorbikes— oversees the fleet ownership, maintenance and charging. According to Imran Manji, Uber’s head of East Africa,Greenwheels currently operates only a few charging stations in Kenya, but plans to increase them to ten before the end of the year. The electric bikes which have an 80-kilometre range when fully charged will be leased to riders for Uber services. Instead of recharging their bikes, riders exchange depleted batteries for new ones at Greenwheels Africa’s stations. According to Manji, cyclists will be charged based on battery usage, “If a rider wants to swap a battery that is at 40%, they will only pay for 60% of charge at the station,” he
Read More
Exclusive: How Piggyvest paid out ₦1.1 trillion in six years
Piggyvest has paid out over ₦1.1 trillion ($1.42 billion) to its customers since its inception in 2016. Its co-founder and CMO, Josh Chibueze, talked to TechCabal about how they did it and the challenges they faced. Piggyvest, a Nigerian digital savings company, paid out over ₦400 billion ($519 million) in 2022, bringing the total amount of money it has paid out to customers since its inception in 2016 to ₦1.1 trillion ($1.42 billion). Josh Chibueze, a cofounder and chief marketing officer of Piggyvest, told TechCabal on a call that the disbursement represented only a fraction of the money saved with Piggyvest. “Our disbursement model means that this amount is money that people saved and requested. Only a few people withdraw their money. It represents the liquidity we had to return their money,” he said. He added that the startup is now moving into the “money management phase,” where the company will offer credit to Nigerians. The startup would leverage its three licenses; a fund manager license from the SEC, a mobile money license from the Central Bank of Nigeria, and a microfinance bank license to achieve this, Chibueze said. “Right now, we have a savings and investments arm, which is Piggyvest, and a spending arm, which is Pocket app. So once we’re able to understand savings and investment patterns and spending, then we can build reliable data to be able to give you credit.” A mobile money license would allow Piggytech (the parent company) to issue account numbers through Pocket app and control a customer’s entire transaction flow. Nigerians savings habit According to a report from the IMF, Nigeria ranks 11th in the sub-Saharan region for private savings. During the COVID pandemic, 42% of Nigerian households said their source of financing came from savings. However, for years, this saving culture was not incentivised, as Nigerian banks typically offered low interest rates of around 5%-7%. This led to Nigerians preferring to save their money in cash at home with piggybanks or opening bank accounts and not collecting cards to save money. To solve this, fintechs like Piggyvest and Cowryrise came onto the scene with a digital solution for saving money and higher interest rates. Their promise of higher rates made them appealing to Nigerians, quickly propelling these fintechs to prominence and creating a new business segment. Data from CEIC Data. Nigeria’s yearly gross saving rate in % (disposable income minus consumption). That business segment has since grown exponentially. Piggyvest, the market’s first entrant, now has 4.5 million customers, up from 53,000 in 2018, who trust their savings with the company rather than traditional banks. Chibueze said that the startup’s numbers can be attributed to a first-mover advantage, constant innovation, and fulfilling its business promise of instant access to funds on set withdrawal dates and interest. “It’s a simple rule in business, once you fulfil your business promise and you remain consistent, people will keep coming back and referring other people. We grew largely through word-of-mouth marketing. It was just in the last two years that we decided to do offline marketing. We only just incentivized referrals.” Piggyvest’s path to profitability According to Chibueze, Piggyvest became profitable “very early on” by being effective with capital and only relying on word of mouth and social media marketing to grow. He said that the startup only raised a $1.1 million seed round in 2018 to acquire its microfinance bank license and added that they were currently in fundraising mode. For a fintech that specialises in savings, security has to be a prominent feature, but several media reports have detailed how Piggyvest customers have fallen victim to fraud. Chibueze told TechCabal that the startup has “one of the most robust internal tools for detecting fraud” and that with recent product and app upgrades, fraud would be a thing of the past. “We have also invested in cybersecurity awareness for our customers. I don’t think we’re going to have any of those issues anymore,” he said. The co-founder also mentioned that operating in a low-trust environment like Nigeria and dealing with issues with third-party service providers and regulators were other problems that the startup faced. “We struggled with regulation because innovation was faster. We had to take time to explain to the regulators before we could get all of these licenses.” This year, the Nigerian economy has been hit with the triple whammy of cash scarcity in the first quarter, a petrol subsidy removal and the floating of the exchange rate in the second quarter. When asked how this has affected Piggyvest’s users and their saving patterns, Chibueze told TechCabal that he had noticed an increase in the income capacity of Nigerians. “What is happening right now is that people are having to spend out of their savings, which reinforces the need for platforms like ours to exist. [Another thing] people are doing right now is increasing their income capacity to be able to earn more so that they can afford the expenses they already make,” Chibueze said. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read More