- December 11 2023
ChipperCash lays off employees again
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Chipper Cash, the African fintech startup backed by FTX and Silicon Valley Bank, has laid off 15 people across various departments. This is its fourth round of layoffs in the past year. Read about it here. Speaking about layoffs, our Insights team is doing some research on the impact of layoffs in the African tech ecosystem. If you are a founder, please take a minute to fill out this form. In today’s edition Tether freezes 41 wallets Twelve Kenyan edtech startups get $ 1.2 million funding Meta launches image generator TC Insights: Africa’s cybersecurity crisis The World Wide Web3 Opportunities Cryptocurrency Tether freezes 41 wallets Image source: Zikoko Memes On Saturday, stablecoin issuer Tether announced the implementation of a voluntary wallet-freezing policy. Tether has frozen 41 wallets controlled by individuals the United States has sanctioned since December 1, per TheNewsCrypto. These individuals were suspected of engaging in cryptocurrency transactions related to illicit activities, despite no directive from government authorities. This marks a reversal from the company’s previous stance, where it refrained from freezing addresses unless explicitly instructed by authorities. But why the change? In the US, regulators have been cracking down on crypto businesses, citing concerns that the technology facilitates fraud, scams, and the financing of illicit activities. In its blog post, Tether says that this new policy is a proactive measure that will foster closer collaboration with regulators and law enforcement agencies. What kind of illicit activities? From 2019 onward, shady characters and individuals with ill intentions have managed to wash around $7 billion in cryptocurrency using Tornado Cash, a technology that allows users to anonymously transfer cryptocurrency on the blockchain. Notably, one of the wallets frozen by Tether is linked to the $625 million Ronin Bridge attack, attributed by the US Treasury Department to the North Korean hacking group, Lazarus Group. To curb cryptocurrency transactions associated activities such as terrorist financing and illicit fentanyl trafficking, the US Department of the Treasury has adopted the use of a Specially Designated Nationals (SDN) List. This list comprises individuals and companies owned or controlled by sanctioned nations. The 41 wallets frozen by Tether are included in this SDN list. 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. AI Meta launches image generator Image source: Zikoko Memes Remember we told you that Meta was allowing users to generate images in group chats with the “/imagine” prompt? Well, last week, the company released the website version of its AI image generator named “Imagine with Meta AI”, trained on a staggering 1.1 billion photos posted by users of Facebook and Instagram. It enables users generate images using text promptS, just like Open AI’s Dall-E, and it is free to use. The generator is fuelled by Meta’s Emu, the image foundation model, and anyone with a Facebook or Instagram account can use it. Hold up, they used users’ photos? Yees! A whopping 1.1 billion pics pulled from the public archives of Meta’s platforms. To those concerned about privacy, Meta insists they’ve excluded private posts and messages and sifted out any private info from the data used for training. But who really owns the images created with the generator? Meta doesn’t snag the copyright, but they do claim a buffet of rights: a “non-exclusive, royalty-free, transferable, sub-licensable, worldwide licence” to do a whole host of things with these AI-spun images. Yet this adds another layer to the ongoing battle between artists and content creators who feel their work is being gobbled up without permission. Meta recently admitted that artists on its platforms can’t opt out of having their creations slurped up for AI training data. Introducing Discount Codes Accept online payments on your Zoho Commerce store with Paystack. Get started here → Funding Twelve Kenyan edtech startups get $ 1.2 million funding Image source: Zikoko Memes Twelve Kenyan edtech startups have secured KSh183.5 million ($ 1.2 million) through the Edtech Fellowship Programme by MasterCard Foundation and iHub. Each of the firms will take home $100,000 (KSh15.4 million) to scale up their enterprises over the next three years. The 12 edtech startups were a part of a six-month acceleration programme organised by Mastercard Foundation and iHub. Per The Star, the programme which was first announced in February this year offered them support around products, talents, and distribution. Which startups were involved? The 12 startups include FunKE Science, LoHo Learning, Angaza Elimu, Snapplify, Arifu, Easy Elimu, Elewa, Kidato, Ntemata, Silabu, Smart Brains Kenya, and Virtual Essence. MasterCard Foundation expects the startups and their services to reach at least two million learners by 2026. Before now, MasterCard Foundation has rolled out two such programmes to support the scaling of educational services in South Africa through edtech accelerator Injini, and Nigeria through Co-Creation Hub. How do Nigerians save and spend? Did you know that 64% of Nigerians save a portion of their monthly income? Read PiggyVest’s first-ever savings report to see more about how Nigerians save and spend here. TC Insights Africa’s cybersecurity crisis Africa’s growing digital economy depends on digital tools like bank apps, e-commerce apps, and streaming platforms. However, this shift from physical to virtual comes with significant risks, including a rise in cybercrime. In 2022, internet users in Africa grew by 8.4%, reaching 570 million, yet cyber attacks have also increased. According to the African Union, cybercrime has been on the rise in Africa, particularly in financial fraud and identity theft. A recent report by Checkpoint revealed that organisations worldwide experienced an average of 1,983 weekly cyberattacks in the first quarter of 2023. Image source: TechCabal Insights Africa now grapples with a worsening cybersecurity crisis, with approximately 90% of African businesses operating without cybersecurity protocols in place, making them vulnerable to cyber threats, such as hacking, phishing, and malware attacks. Interpol’s new Africa Cybersecurity Assessment Report further revealed an increase
Read More- December 11 2023
Exclusive: Chipper Cash cuts 15 jobs in fourth round of layoffs
Chipper Cash, the Africa-focused fintech unicorn, has laid off 15 people across various departments in its fourth round of layoffs over the last year, a source familiar with the company’s operations told TechCabal. The latest job cuts come six months after the company axed nearly a dozen roles including its Chief Operating Officer, Alicia Levine. Most of the employees affected are from the company’s US team. Chipper Cash confirmed the new layoffs in a statement to TechCabal, claiming its business was “doing very well” despite the headwinds reported over the last few months. “We constantly look to ensure we have as much efficiency as possible within our global organization, and only a small number of roles were impacted by the minor restructuring.” a spokesperson for Chipper Cash said in an email to TechCabal. “No roles in Africa were affected—this year we have expanded teams on the continent. Our business is doing very well and will be profitable in a few months.” Beyond the layoffs, Chipper Cash also cut the salaries of its remaining US and UK employees, said two sources connected to the company. Chipper did not respond to TechCabal’s questions about the salary cuts. Chipper Cash was founded in 2018 by Ham Serunjogi, originally from Uganda, and Ghanaian Maijid Moujaled. The duo set out to digitize remittance payments into Africa. The company operates a cross-border payments service that allows Africans to send and receive money from eight countries, including Nigeria, Africa’s biggest economy by population and GDP, South Africa, the UK and the US. Chipper Cash styled itself as a zero-fee payment platform, allowing users to make peer-to-peer transactions without charging a commission upfront. The company made revenue from the exchange rate arbitrage involved in international fund transfers. In addition to global fund transfers, the service helps merchants accept payments online. Chipper Cash also offers other products that allow everyday consumers to trade cryptocurrency, pay bills, buy airtime and shop online directly from a digital wallet or a virtual debit card powered by Visa, the American card company. According to information on the startup’s website, users in Nigeria and Uganda can also buy and sell fractional stocks in publicly traded companies listed on American stock exchanges. Since it launched, Chipper Cash has raised over $300 million in venture funding across multiple rounds that originally valued it at $2.2 billion in late 2021. Some of its prominent investors include fintech investor Ribbit Capital; Bezos Expeditions, the venture fund of Amazon founder Jeff Bezos; Silicon Valley Bank; and FTX, the failed crypto exchange. Buoyed by the pandemic, digital payments accelerated in Africa, fueling Chipper Cash’s growth in the region. By 2021, the company’s revenue had grown four times to $75 million, compared to $18 million in the previous year, according to Forbes. Company insiders say its annual revenue topped $100 million by the end of 2022. Chipper Cash claimed it had over 4 million users at its peak in 2021. Now, the company boasts over 5 million downloads on the Apple and Google app stores after splashy marketing campaigns, including a partnership with Grammy-award-winning musician Burna Boy, which industry insiders say could be worth as much as $1 million. Backed by hundreds of millions of dollars, Chipper Cash had adopted a “growth-at-all-cost” mindset to justify its unicorn valuation in a challenging macroeconomic environment like Africa. The startup hired aggressively in the UK and US, where it opened an office in San Francisco. It recruited 250 new employees between 2021 and 2022, doubling its workforce to 450. But Chipper Cash’s growth spree began to cool as higher interest rates in the US to tackle inflation put pressure on companies and sparked fears of a possible recession. Venture funding dried up, and startups, including Chipper Cash, faced urgency to conserve costs. The fintech company has also seen renewed competition from rivals, including Flutterwave, Eversend and LemFi, promising to simplify domestic and international money transfers. In late 2022, Chipper Cash cut around 180 jobs, representing 40% of its workforce. By February 2023, at least six of its senior leadership team members had left the company, including its chief operating officer, chief information officer, chief revenue officer, global head of marketing and its chief compliance officer. “The last two years were a period of rapid growth and scaling for us as a business and, to reflect this, our global headcount grew by around 250 people,” said Chipper Cash CEO Ham Serunjogi in February after the second round of job cuts. “However, given the macroeconomic climate, we are narrowing our current focus to core markets and products.” The startup qlwo ditched plans to expand to new markets in Europe and the Middle East. And with that organizational pivot, Serunjogi explained, “The reality is that we, unfortunately, need a smaller team at Chipper.” Chipper Cash has faced additional financial pressure after two of its prominent investors, FTX and Silicon Valley Bank, collapsed between Nov. 2022 and Mar. 2023. While the startup has reassured that its business is safe, a look into FTX’s financial statement showed it had marked down Chipper Cash’s valuation from $2 billion to $1.25 billion. Other reports claim the startup had slashed the value of its employee stock options by as much as 70%. Chipper Cash has also reportedly raised $25 million in convertible debt from an undisclosed investor that would convert at a $450 million valuation in the event of an acquisition or a new fundraise. The company is looking to conserve cash and extend its runway in a difficult fundraising environment.
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- December 11 2023
Next Wave: Estonia is invested in exporting its tech to Kenya
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 10 December, 2023 It is already lobbying for a digital ID contract with the Kenyan government. Its startups will also be more visible in Africa over this decade. The Estonian tech ecosystem was not built in one day. According to the East European nation’s ambassador-at-large for Africa, Daniel Schaer, Estonia, which achieved independence in 1991 from the Soviet Union, was just like any country across the globe that has freed itself from colonisers. It was poor but had big ambitions, and based on who you ask, it has managed to achieve them. Part of its development agenda was to modernise its government and the overall public sector. Despite its small size, Estonia is one of the world’s most technologically advanced nations, thanks to the Estonian Government’s 1990s initiatives to transform it into a digital society, known as “e-Estonia”. Within this movement, 99% of public services, 96% of tax declarations, and 99.6% of banking transactions are made digitally. Policymakers have taken bold steps to digitise the country, recognising internet access as a fundamental human right and offering “e-residency” for virtual business setups. Estonia also has some of the fastest public Wi-Fi, and digital processes, including virtual signatures, are integral to daily life. Now, fast forward to three decades later, the country has managed to make a name for itself in the tech space and has been exporting its tech and startups to developing economies such as in Kenya and the rest of Africa. The Kenyan case is particularly interesting because Estonia is popular in the country. One of its biggest startups, Bolt, which offers ride-hailing services in major towns and cities in the country, has been around for a long time and continues to make investments that should, hopefully, be rewarding to locals and partners in the long run. Bolt has also been complemented by other startups from its turf, including Admiral, Spacedrip, CoNurse App, and Mondo, following the launch of an Estonian-backed tech hub in Nairobi that seeks to spur investments in agritech, IT, cleantech and wastewater management, among other sectors. The hub also looks forward to improving dialogue between Kenyan businesses and business opportunities in Europe. “These Estonian companies are experts in developing seamless digital public services that have the potential to drive economic growth and improve the standard of living for the population,” Schaer had said during the launch of the hub. Latitude59 landed in Kenyan for its 2023 edition The cooperation between Kenya and Estonia was echoed following the staging of the Latitude59 event in Nairobi. The startup and tech event, which was launched back in 2011 in Estonia, brought together tens, probably hundreds, of players, including key members of the startup ecosystem in Kenya and neighbouring countries. “Since the first event back in 2011, we have experienced an explosion of energy and massive growth in the global digital startup space, with Africa being no exception,” Liisi Org, CEO of Latitude59 said, at the Latitude59 event in Nairobi. Partner Content: 2023 has been a wild ride for everyone. If you’re a founder, please share your thoughts on the outlook of tech in Africa. Click here to start. <!–Banner Ad Article continues after this ad The Kaduna State Digital Public Infrastructure Playbook takes a deep exploratory dive into the process on how sub-national governments can build DPI at a state level. Download here Banner ad ends –> Estonia and digitising Kenya’s ID systems However, it was during the event that it became clear that Estonia wants to take part in digitising Kenya’s ID system in what is now called Maisha Namba. The programme, which has since been suspended by the courts on data integrity concerns, succeeds the discontinued KES 10 billion Huduma Namba, which had been started by the previous government. Estonia was also one of the partners that had developed systems for Huduma. The Estonian Centre for International Development Cooperation (ESTDEV) initiated a €300,000 public procurement tender on November 16, 2023. The goal is to assist the Kenyan government in enhancing its IT systems and implementing e-citizen services (including the digital ID), like those in Estonia. The project, led by Andres Ääremaa, head of digital development at ESTDEV, is an international collaboration funded by ESTDEV, the EU, and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), Germany’s main development agency. “So, we’re in negotiations with the Ministry of ICT to see which areas they would like us to focus on. I mean, it’s just that it is our specialty from Estonia, and what we’re really good at,” Schaer said. If the negotiations are successful, then Estonia’s companies will also take part in making the e-ID interoperable because it will be used across multiple agencies in Kenya. The interoperability part also means that Estonian tech companies will be working alongside other Kenyan ministries, including that of foreign affairs. Article continues after this ad Unlock opportunities for growth. Apply for the develoPPP Ventures Program to receive €1,000 in matching funds, and technical assistance to propel your business forward. Apply before December 31st, 2023. Send all inquiries to support@theventurespark.com. Apply here Estonia in Namibia—and Africa Estonia’s presence in Africa is known thanks to Bolt, which has a presence in South Africa, Nigeria, Ghana, and Uganda, to name a few. There are also plans in the pipeline to bring more Estonian tech startups to Africa, but Kenya and Namibia are two African countries on which Estonia appears to be focusing. Namibia saw a collaboration between Estonian IT company Cybernetica and the Namibian government, which led to the implementation of the e-government interoperability system called Nam-X. As said, these partnerships will likely expand, thanks to Estonia’s Africa 2020–2030 strategy, which aims
Read More- December 8 2023
Airbus to launch drone hub for high-altitude satellites in Kenya
This article was contributed to TechCabal by Bonface Orucho via bird story agency. European aircraft manufacturer Airbus, through its high-altitude satellite building subsidiary, AALTO HAPS Ltd., plans to set up its first communication hub for its high-altitude drones (Zephyr) in Kenya’s Laikipia County. A news report by Bloomberg indicates it will roll out operations in the country “at the beginning of next year and begin serving customers in the third quarter.” Tom Guilfoy, vice president for AALTO PORT operations, explains therein that Kenya is being considered for the port because of “the weather, the wide open spaces, the uncongested airspace, the stable government, the economic environment, and the well-educated, young, tech-savvy population.” Besides the promise of creating close to 1,000 job opportunities, the hub will also encourage local internet adoption. This high-speed internet technology could revolutionise accessibility and internet speeds as conventionally known. Notably, Airbus will work with telecommunications service providers in the country to facilitate accessibility rather than directly selling to customers. Also, the Bloomberg report explains that the officials have already met with Safaricom Plc and Telkom Kenya Ltd. and that it targets being an internet provider for 3% of the country, especially those in remote areas. Airbus is, however, awaiting approvals from the country’s aviation, meteorological, and communications authorities before full rollout and subsequent commissioning. Earlier communication from Airbus on its website shows it will formally roll out commercial operations for the drones in 2024. Zephyr is a fixed-wing High Altitude Platform Station (HAPS) UAV boasting a stratospheric range of about 20 kilometres above Earth, making it the lowest Earth-orbit satellite network, considering existing offerings such as Elon Musk’s SpaceX, which operates some 550 kilometres above the Earth. Details on AALTO’s website explain the technology’s extensive game-changing high speeds and connectivity ranges, such as the “coverage of 7,500 square kilometres, which is the equivalent of up to 250 towers on the ground.” The Zephyr drones can spend as many as 200 days in flight and up to 64 days and nights in the Stratosphere. With these unique capabilities, they could replace mobile phone towers. The developers also explain on the website that HAPS will operate on a direct-to-device (D2D) model boasting a latency of less than ten milliseconds and 5G non-terrestrial internet connectivity, making it an ideal option in Africa. AALTO HAPS plans to build between 50 and 75 of these drones annually. World Bank data shows more than 50% of people in Africa had no broadband internet access in 2022. Airbus joins a growing list of global internet tech companies setting their sights on the Stratosphere to revolutionize high-speed internet uptake. The race to provide fast and reliable internet services to remote areas has intensified in Africa. The announcement of Amazon’s Project Kuiper, the rollout of Starlink’s satellite internet offering in Africa, and Safaricom’s agreement with AST SpaceMobile, which offers space-based internet connections on regular mobile devices, are some of the latest developments signalling a surge in activity in this emerging technology. Amazon is partnering with Vodafone to extend Project Kuiper’s broadband to global communities with limited access and is considering additional services for businesses, including backup connectivity and support for isolated infrastructure. In October, Rwanda’s government teamed up with Japanese investor SoftBank Corp. for a test transmission of a video stream to Japan over HAPS 5G using an unmanned aerial vehicle positioned in the Stratosphere. The successful test involved delivering 5G connectivity on a solar-powered HAPS UAV prototype situated in the Stratosphere at a maximum altitude of 16.9 km for approximately 73 minutes. Also, SpaceX’s Starlink continues to ramp up reach and distribution in Africa, with the latest additions being in Benin, increasing its offering to seven countries on the continent. It recently partnered with online retailer Jumia to drive its satellite internet offering across the continent, starting with Kenya and Nigeria. Even in critical markets, such as South Africa, where market access for major companies such as Starlink is limited due to legal hurdles, emerging players promise to leverage high-altitude technology to offer high-speed internet from space. According to My Broadband, OneWeb, a French satellite operator and Eutelsat subsidiary, “is set to introduce its low-earth orbit (LEO) broadband service in South Africa, its first market on the continent.” All these developments could fast-track the uptake of mobile internet and increase internet speeds in Africa. Already, existing data shows Africans are hungry for higher mobile internet speeds. The GSMA’s State of Mobile Internet Connectivity 2023 report shows that more than half of global 4G network expansions last year occurred in Africa, increasing from 58% in 2021 to 65% (excluding North Africa).
Read More- December 8 2023
This investor is balancing impact investing and getting returns on her investments
In the course of her work helping venture capital firms across the world gain access to deal flows from Africa, Surayyah Ahmad realised that these local ecosystems lacked structure, affecting the quality of said deal flows. This pushed her to return to Nigeria from London in 2022 to do the work of fostering collaboration and building funding pipelines within the local ecosystem, especially in northern Nigeria, through her accelerator, TechTankLabs (TTLabs). According to Ahmad, her focus on the northern tech ecosystem is simply strategic. Nigeria’s population is expected to match that of the United States by 2050, becoming the third-largest country in the world, and a large number of that population will come from the northern part of the country. “This is a ready market for anything,” she shared. “We want to make sure that we start to harness the potential now, not in the next 20 years.” In November, Ahmad, alongside Sanusi Ismail, the founder of Kaduna’s first tech innovation hub, CoLab, announced the launch of Aduna Capital, a $20 million fund targeted at discovering and nurturing early-stage tech founders across Africa, with a focus on regions like northern Nigeria. One of the main challenges of the northern tech ecosystem is a lack of access to funding as there are not enough VCs in the region, according to this report. On the other hand, investors from other regions are typically wary of investing outside the Lagos tech bubble. This puts entrepreneurs building in the north in a tight position, with many resorting to dev shops and prioritising being contractors for the government over pushing to scale their startups. “There are a lot of businesses in Abuja, but they get carried away with contracting and doing dev shops,” Ahmad shared. “Dev shops were the highest category of companies in our survey, which makes sense that people are developing software for the government.” However, Ahmad believes this trend is slowly changing as the ecosystem is increasingly seeing more people who recognise the need to have scalable products that are not government-dependent. She believes that it’s important to invest in them. According to Ahmad, the right time to invest in some of those outliers is right now because a couple of success stories will result in a multiplier effect for the ecosystem. “We’re already starting to see success stories with Sudo Africa, which raised $3.7 million; and Flexi Saf, which is bootstrapped to over a million dollars in revenue,” Ahmad said over a call. “These kinds of successes send a message to others, or even employees that work there, that they can build and scale their products. The cycle continues and this is how we’ll start to see a more vibrant ecosystem.” Ahmad is also hopeful that this growth will be facilitated by the presence of Nigeria’s new minister of communications, innovation and digital economy, Bosun Tijani. Tijani recently launched the 3MTT programme to train three million tech talents, simultaneously giving smaller tech companies the chance to apply to facilitate trainees. “Having one of our own who understands the pain of the ecosystem is great, and I can see that he’s already opening things up with the 3MTT programme, giving smaller companies the chance to apply as trainers,” said Ahmad. “This is automatically going to catalyse the ecosystem both in Abuja and nationwide, simply because some of these companies will have that initial market that they need to gain some traction and to be able to raise for the funding.” Beyond funding, another key challenge of the northern tech ecosystem is a lack of cohesion. This means that it is often difficult for entrepreneurs to connect with other stakeholders to gain knowledge or access to opportunities and resources. Currently, there are only about 40 key ecosystem entities, including accelerators, VCs and incubators operating from the region. This is something that Ahmad struggled with in her early days in the ecosystem. She shared that a lot of growth and funding opportunities were only discovered later in her journey. She told TechCabal: “As a young founder, I wish I knew the kind of support available to me out there as a founder—all the accelerators or incubators or programmes. It is very sad, but it’s also the reason why we’re making sure that founders within the ecosystem here can access support, even if not from us, but from other incubators and accelerators available within the space.” In the next five years, Ahmad is looking to grow TTLabs to become a major pipeline for deal flows from the region and connect underserved founders around the country to VCs in Africa. Their fund, Aduna Capital, is targeting a 5–10x investor return, striking a balance between impactful investments and lucrative returns for investors.
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- December 8 2023
TechCabal Daily – Kippa transfers agency banking product KippaPay to Bloc
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Starlink is still illegal in Ghana! Yesterday, the country’s National Communications Authority released a circular cautioning anyone reselling the satellite internet device or related services to stop. It is not just in Ghana. Last Tuesday, South Africa’s telecommunications industry regulator, the Independent Communications Authority of South Africa (ICASA), also made a similar announcement, discouraging the use or provision of Starlink’s services in the country as it is unlicensed. In today’s edition Kippa transfers agency banking product KippaPay to Bloc Fuse Network launches $10 Million grant for web3 fintech WIC Capital raises $1 million for West African businesswomen Meta testing over 20 new AI features for FB, IG, and WhatsApp Funding tracker The World Wide Web3 Events Fintech Kippapay transferred to Bloc Kennedy Ekezie-Joseph, founder and CEO at Kippa Kippa, a Nigeria fintech, has transferred the operation of its agency banking product, KippaPay, to Bloc. Why? Kippa shuttered the operations of KippaPay in October after the naira devaluation meant that the fintech couldn’t keep up with buying point-of-sale (POS) terminals which its banking agents used. The fintech would not have been able to recover those expenses without increasing the fees it charged its agents. KippaPay has now been incorporated into GPay, Bloc’s payment subsidiary. Taking full control: Bloc confirmed via email today that KippaPay’s Android terminal and mobile app are now fully operational again. Additionally, it provided guidance on how to resume using the agency banking platform. However, service is yet to be fully restored to the Linux terminals which processes payments from POS. Merchants have also been told to return their POS devices to Kippa. According to a source close to the situation, those who don’t return the POS devices will not be onboarded as GPay users. Lights out: Bloc’s takeover of Kippapay is an unusual move. Kennedy Ekezie, a Kippa cofounder, claims that Kippa is still the owner of the product. 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 Fuse Network launches $10 Million grant programme Mark Smargon, founder and CEO of Fuse.io Fuse Network, a blockchain payments provider, has launched a $10 million grant programme dedicated to supporting startups and businesses interested in Web3 payments globally. With a particular focus on emerging markets like Africa, Fuse Network wants to bridge the gap between the growing interest in Web3 and the lack of resources and infrastructure needed for businesses to adopt these innovative solutions. Crypto adoption thrives in Africa: Countries such as Kenya, Nigeria, South Africa, and Tanzania rank among the top 20 in the Global Crypto Adoption Index, with a transaction volume comprising retail-sized transfers at 7%, surpassing the global average of 5.5%. The grant programme is now open for applications and seeks to support businesses that are building and utilising Web3 payment technologies. Zoom out: Fuse Network actively supports projects in decentralised finance (DeFi), non-fungible tokens (NFTs), and the gaming sector. Additionally, the network provides a blockchain payments API platform—Fuse Charge—granting businesses and developers access to advanced payment capabilities. Introducing Discount Codes Boost sales with percent-based, fixed rate, and free shipping discounts when you sell with Paystack Storefronts and Product Links. Get started here → Funding WIC Capital raises $1 million to empower women entrepreneurs in West Africa Evelyne Dioh Simpa, managing director of WIC Capital WIC Capital, a Senegalese investment fund has secured a $1 million loan from FSDAi Nyala Facility, a UK investor focused on sub-Saharan Africa. With a commitment to supporting women-owned businesses, this loan will fuel WIC Capital’s mission to provide financing, create innovative products and provide targeted mentoring and training to women entrepreneurs in Senegal and Côte d’Ivoire. Understanding the issues: In Senegal, a mere 3.5% of businesswomen have access to credit from traditional financial institutions. This lack of funding hinders growth and limits their ability to contribute to the local economy. In April 2022, WIC Capital secured a $1.6million investment fund for female entrepreneurs based in Francophone Africa, including Senegal and Côte d’Ivoire. Although the amount to be invested in these individual businesses is still unknown, the $1 million loan will aid WIC Capital in significantly expanding its reach and impact. Bluechip Data and AI Summit Join us at the #BluechipDataandAISummit: Building an Effective Data and AI Solution. Shape the future of your business and industry with data-driven intelligence, innovative solutions and sustainable growth. Secure your seat today. Social media Meta adds new AI features for social media Image source: Meta Meta wants you to have the coolest experience on social media. Through Meta AI, the company’s AI bot capable of answering questions and generating images, Meta has added features to allow for more fun for its users. Reimagined features? Users in group chats can now recreate AI images using prompts through the “reimagine” feature. To use reimagine in group chats, users need to first create images using the “/imagine” prompt on Meta AI. After creating the images, friends or foes in the group could add spice to it when they press and hold the image and then suggest another text prompt. Meta AI will automatically generate a new image afterwards. That’s not all: Meta is also rolling out Reels in Meta AI Chats, where the AI chatbot can share video responses in the form of reels to a user query. Say you’re planning a trip to Tokyo with friends in your group chat, you can ask Meta AI to recommend the best places to visit and share Reels of Tokyo’s top sites to help you decide which attractions are must-sees. How to use the new features? To start enjoying all the fun, start a new message and select “Create an AI chat” on WhatsApp, Facebook or Instagram. You can also access any of the features by typing “@MetaAI” in a group chat, followed by what you want help with, e.g “@MetaAI/reimagine a tsetse
Read More- December 7 2023
Nigerian fintechs rush to reassure users as misinformation spreads over regulatory clampdown
Nigerian financial services companies are racing to reassure users after a memo from the Nigeria Inter-Bank Settlement System (NIBSS) asked banks and mobile money operators to delist unlicenced fintechs from directly accepting consumer deposits. The memo affects companies that own superagents, payment solution service providers (PSSPs) or switching licenses. By regulation, financial services with only these licenses cannot directly accept consumer deposits, particularly through bank transfers. According to the Central Bank of Nigeria, over 100 entities currently hold these licenses in Nigeria. Over the last few years, some of these companies have expanded to offer more financial services directly to consumers. They avoided regulatory enforcement by securing relevant licenses such as mobile money or microfinance banking licences, which allow them to accept deposits. Nigerian fintechs such as OPay, PalmPay and PiggyVest’s Pocket App each operate with a mobile money license; while Moniepoint owns a microfinance bank, a switching and a superagent licenses, allowing it to operate a digital banking platform and a network of offline agents to provide cash-in and cash-out services across the country. Other companies have partnered with banks to offer deposit services building on top of an open-banking architecture that has led to the rise of virtual accounts and the “pay with bank” feature for accepting consumer payments. This year, Paystack announced its partnership with Titan Trust Bank, a licensed commercial bank, to offer virtual accounts and terminals allowing merchants to accept payments with bank transfers for multi-person businesses. Nevertheless, some companies with superagent, payment solution service providers (PSSPs) or switching licenses have styled themselves as deposit-taking institutions without an accompanying license or relevant bank partnership. The memo from NIBSS directly targets such companies, and it could lead to a purge of these services from the list of approved institutions when consumers make fund transfers. New directives and misinformation The memo from NIBSS has triggered misinformation in Nigeria’s public space. One list circulating on social media caused a stir after it claimed that several approved mobile money services and payment companies would be affected by the NIBSS order. “The recent NIBSS circular has zero impact on our services because we are not deposit-taking like a bank,” Flutterwave, a licensed payments service provider, explained in a tweet posted on Thursday. “We wanted to reassure you that the recent NIBSS circular does not impact Paystack-Titan or any other Paystack services,” Paystack wrote on X, formerly Twitter. “We developed Paystack-Titan in partnership with Titan Trust Bank in a way that allows the service to operate compliantly, and it passed review from NIBSS,” the company added. “Moniepoint MFB is a CBN-licensed Microfinance Bank, Moniepoint, which also holds a switching license, said. “As such, we are a deposit-taking financial institution.” “Your funds are safe and secure,” Opay told customers on Thursday. “OPay is a Mobile Money Operator (MMO) licensed by the CBN and insured by the NDIC… the focus [of the NIBSS memo] is on Payment Service Solution Providers, Switches and Super Agents.” Other Nigerian fintech companies, such as PalmPay and Nomba, the Y Combinator-backed startup providing financial services to small businesses, have also informed customers that the NIBSS memo has no impact on their services. PalmPay is licensed as a mobile money operator, allowing it to hold deposits. Nomba says it works with only licensed partners to facilitate consumer transactions. The purge of unapproved deposit-taking institutions could happen over the next few days or weeks. However, it is unclear if NIBSS or the CBN will proceed with additional enforcement action.
Read More- December 7 2023
Exclusive: Kippa transfers agency banking product KippaPay to Bloc
Kippa, the Nigerian fintech backed by investors like Saison Capital and Horizone, has transferred the operations of KippaPay, an agency banking product it shut down in October, to Bloc, a Nigerian fintech preparing to launch banking services. KippaPay will now be integrated into GPay, a payment subsidiary Bloc owns. “[You can think of it as a handshake agreement as [Kippa] still owns the product,” Kennedy Ekezie, the cofounder of Kippa, told TechCabal during a phone call. He also shared that despite Bloc taking over the product, Kippa Pay still belongs to Kippa. “The deal with Bloc was closed weeks ago,” Kennedy Ekezie, the cofounder of Kippa, told TechCabal on a phone call. “After speaking with several other companies, we chose to go with Bloc because they showed the most ability to provide immediate support for our merchants.” Kippa shut down KippaPay after June’s Naira devaluation dramatically increased the cost of buying the POS terminals its banking agents use. In an intensely competitive market, those costs would have been impossible to recoup without raising the commission it charged its agents. Bloc emailed existing users today, confirming that full service has been restored on KippaPay’s mobile app and Android terminal. It also shared instructions on resuming transactions on the agency banking platform. Per the same email, service has not been fully restored to Linux terminals, which facilitate payment through the handheld POS device. A source close to Kippa told TechCabal that merchants had been directed to return their POS devices to Kippa. “Those who have not will be onboarded as GPay users,” they said. TechCabal reached out to Bloc for comments but did not receive a response at the time of this report.
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- December 7 2023
Dispatch from Algeria
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Hey there! TechCabal travelled to Algeria to cover this year’s African Startup Conference. The conference has been running from December 5 to December 7. About 3,000 people are attending and the venue, CIC Algiers, is the biggest international conference centre in Africa. We are sending you this newsletter to give you all you need to know about Algeria’s tech ecosystem and the crucial conversations happening at the conference. Enjoy! Event Dispatch from Algeria African Startup Conference in Algeria Seventeen hours after we hopped on a flight from Lagos, we were finally at an immigration desk in Algiers. Despite the big names in town for the second edition of the African Startup Conference, the immigration officials seemed to be hearing about the conference for the first time. “You should visit Algeria again, but for tourism,” the official tells us as she waves us on. It’s one of the few times I hear anyone speak English at the airport. Arabic and Berber are Algeria’s official languages. Before now, if anyone had asked me about Algeria, I’d definitely have drawn a blank. Algeria is what that friend on Twitter who never shuts up about being an introvert thinks he is. This country has largely “kept to itself and deliberately avoided outside attention,” one investor born and raised in Algeria told me. Some of the people at the conference But it’s 2023, and not much can be achieved if a country insists on being an “omo get inside”. So Algeria is attempting to build a new persona as it attempts to diversify its economy and attract foreign investment. One way to meet that second goal is by growing its tech ecosystem, ranked 114th globally by Startup Blink. This year’s edition of the African Startup conference—the first edition was held in 2022—is a way to kickstart that growth. From December 5 to December 7, TechCabal will cover the conference and speak to African ministers of technology and innovation, investors, and some of the early builders in Algeria. Two conference officials told us there are about 3,000 people attending this event and the venue, CIC Algiers, is the biggest international conference centre in Africa. A key part of our Algeria visit is to give you all the actionable information about Algeria’s tech ecosystem, the stage it is in, where it plans to go, who its key figures are, and the crucial conversations happening this week. A stage at the African Startup Conference in Algeria The state of play in Algeria: The country’s high literacy rate (80%), population (44.9 million), per capita income of around $4,000, and proximity to Europe means there’s a lot of promise here. Also, the Algeria Startup Fund, which is managing $411 million in state funding and $17 million of its own, invests in pre-seed stage to Series A startups. It’s finding joy in the logistics sector and expects that new regulations will open up fintech and allow neobanks to give legacy banks a run for their money. Logistics is big business here, Mohammed Moussaiou, the business development manager of the Algeria startup fund tells me. Think last mile, exports, and moving goods across six African countries. Yassir, one of Algeria’s most recognisable startups that we covered last year is a ride-hailing and food delivery service that claims to have eight million users across seven countries. There is also Heetch, which one student described as the Algerian version of Uber. Cash is king: A new law that finally permits fintechs to handle payments was only passed in July, so cash is the main way to pay. Supermarkets and malls sometimes reject cards to avoid bank charges. Being so cash-reliant has its downsides, especially for a country with a youthful population (30% of total). That youthful population does a lot of freelancing, but receiving payments for their work can be difficult. Newer regulation is expected to also solve this problem. Freelancing is huge in Algeria among young people—who make up around 30% of the total population—mostly graphic designers, UI/UX designers, and technical support staff. And the government sure supports this: there are no taxes on freelancing. I would take up freelancing if I had my way. Tomiwa Aladekomo, the CEO of Big Cabal Media and Yacine El-Mahdi Oualid, the country’s minister of knowledge economy, startups and micro-enterprises Who to watch out for: Yacine El-Mahdi Oualid, the country’s minister of knowledge economy, startups and micro-enterprises, believes bringing African tech stakeholders together will play a critical role in opening up the country. A panel that featured ministers of technology and their representatives from South Africa, Tunisia, Botswana and Nigeria discussed how they’re thinking about driving innovation on the continent. There’s also a memorandum of understanding that’s going to be signed today by these ministers. We’ll bring you all the details at the signing! Oswald Guobadia, managing partner at DigitA, who spoke to us on the sidelines, believes the African Startup conference is critical to bridging the gap between regulation and innovation. Bonus: Why does it feel like African countries are making a push for tech investors every week I open the TechCabal website? I hear someone in the back ask. Fresh from our coverage of Uganda and Rwanda, my working theory is that more African countries are looking at the investments pouring into Africa’s “Big Four” and thinking to themselves, “We can achieve that too.” 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. Introducing Discount Codes Boost sales with percent-based, fixed rate, and free shipping discounts when you sell with Paystack Storefronts and Product Links. Get started here → Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $43,760 – 1.14% + 24.57% Ether $2,233 – 2.06% + 17.29% Holo $0.002036 + 14.88% + 29.05% Terra Classic $0.0002201 – 2.69% + 225.26% * Data as of
Read More- December 7 2023
Fuse announces $10 million grant programme for Web3 startups
Fuse Network has launched a grant programme aimed at enabling startups and businesses access Web3 payment systems. Fuse Network has announced a $10 million grant aimed at supporting businesses to access Web3 payment systems. The grant programme encompasses funding and infrastructure support. Eligible grantee businesses include businesses looking to build and use Web3 payment technologies. According to data by Chainalysis, sub-Saharan Africa has the smallest crypto economy of all regions, accounting for 2.3% of global transaction values between July 2022 and June 2023. In that period, the region received an estimated $117.1 billion in on-chain value. However, in terms of volume, countries like Kenya, Nigeria, South Africa, and Tanzania had some of the highest grassroots adoptions in the world and ranked in the top 20 Global Crypto Adoption Index. Figures show that transaction volume made up of retail-sized transfers in Africa is at 7%, against the global average of 5.5%. Although African blockchain startups raised $474 million in 2022 to build solutions for the increasing adoption of the technology—up 429% in a year—this is still a pittance relative to the rest of the world. Although the Fuse programme will be aimed at businesses across the world, according to CEO Mark Smargon, there will be a keen focus on enterprises in emerging markets like Africa. “In Africa, we already see very interesting businesses which have innovative Web3 use and business cases and need those solutions to reach customers better. We are excited that this program will facilitate this scaling,” Smargon told TechCabal. The programme is currently open for applications and interested businesses, and startups can sign up on the Fuse website. Founded in 2019, Fuse Network supports various projects in DeFi, NFTs, and gaming sectors. It also provides a blockchain payments API platform which enables businesses and developers to have access to advanced payment capabilities.
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