- December 19 2023
Starlink goes live in Eswatini months after receiving license
The country becomes the 8th in Africa to have access to the service. Starlink, Elon Musk’s satellite internet service provider, officially launched in Eswatini yesterday, December 18. The company initially applied for a license to operate in March 2023 and after ticking off regulatory and technical boxes, received the license in June. Starlink uses a low earth orbit to deliver broadband internet to urban and remote areas which is capable of supporting streaming, online gaming, and video calls. “Starlink is now live in Eswatini, marking the 8th country and 10 overall markets in Africa where service is available,” the company posted on X, formerly known as Twitter. Starlink’s most common “Residential” package will cost R1,070 (~$ 58) per month. Hardware and shipping will cost customers another R12,450 (~ $670) for the Standard rectangular antenna. According to DataReportal, ESwatini has over 710,000 internet users out of a population of just over 1.2 million inhabitants. However, Starlink might be more of a premium service as the country grapples with high poverty rates. According to the World Bank, over 55% of the country’s population lives on less than $3.65 a day. The other African countries Starlink has a presence in are Mozambique, Rwanda, Mauritius, Sierra Leone, Zambia, and Nigeria. In Zimbabwe and Botswana, the regulators have announced that it is vetting the company’s application for an operating license. Despite making strides in the southern Africa region, Starlink is still facing regulatory pushback in what could be its largest and most lucrative market, South Africa. Its importation and usage have been banned as, according to the country’s competition regulations, Starlink’s South Africa subsidiary must allocate 30% ownership to historically disadvantaged groups, a provision the company seems to be pushing back against.
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- December 19 2023
Clickbait cash grab: Fake online deals haunt Batswana as online scam claims victims
An online scam which claims to sell various items, including cell phones, food and unclaimed baggage for P40 (~$3), has claimed several victims in Botswana. An online scam offering expensive items for sale at a hard-to-believe discounted price of 40 Pula is gaining popularity in Botswana, racking up victims in the hundreds. The scam targets people through sponsored ads on Facebook and Instagram, offering them deals on products from recognisable brands like Game Stores, Cell City, Botswana Post and Chicken Licken. The scam uses fake pages of some of Botswana’s most famous brands to dupe consumers. (image source: Facebook) Instead of getting the advertised deal, anyone who clicks on the link would be charged a recurring $40. In one instance, a Chicken Licken meal, which retails for P279 (~$21), was advertised for P40. In another, a Facebook-sponsored post advertised unclaimed post office parcels for P40, while another advertised an iPhone 15 Pro for P40. To seem even more legit, on the comments under the fake Facebook pages mirroring the legitimate brands, there are “testimonials” of previous winners of the products. Fake “testimonials” are used to further convince victims of the legitimacy of the scam. (Image source: Facebook) “What startled me was that the transaction was completed without prompting me to validate payment as I usually do for online payments,” one victim of the scam, who asked not to be named, told TechCabal. “When I did a web search, I learned that once such a payment goes through, it would be a recurring payment, so I immediately canceled my card through the app.” A seemingly well-coordinated scam An investigation by TechCabal revealed that when anyone clicks on the link displayed on the sponsored ad, it leads to a website where the user is asked to answer some questions related to the product. The links on the sponsored ads vary according to the product. For example, the link for the fake Cell City website shows as “sountermeasures.click” while for the fake Botswana Post website, it shows as “janparcei.com.” After completing the questions about the product, the website directs to a payment portal whose URL is “greenboxpaymentcenter.com.” After clicking on the link, victims are duped into providing their banking details. A further inspection of Greenboxpaymentcenter’s domain name shows it was registered on December 1, 2023. After filling in the form on the portal with information, including credit card details and submitting the form, the victim’s card is charged $40 instead of the advertised P40. According to a payment transaction SMS notice of one of the victims seen by TechCabal, the charging entity is listed as “vgsfvr.com,” which claims to be operated by Host-It Limited, an ecommerce merchant located in the United Kingdom. However, the domain shows that it is owned by an unnamed person or entity registered in Panama. According to previous Reddit complaints, the same domain and several of its variations have also been associated with online scams in the past. Instead of being charged the advertised P40 for the product, victims are instead charged the equivalent of $40 by an entity named “Vgsfvr.com” (Image source: Facebook) According to vgsfvr.com’s terms and conditions, full access to its so-called “services” costs $39.99, the same amount charged to victims of the “P40 scam”. Vgsfvr’s service is explained obscurely as subscriptions to a “messaging” service. It appears that the scam’s modus operandi is tricking victims into buying a subscription to vgsfvr.com disguised as the P40 products. The website also states that “all memberships will automatically renew monthly for your convenience until canceled”, corroborating the recurring charge stated by victims. P40 scam taking advantage of naivety According to Richard Harriman, a consumer protection advocate, to avoid falling victim to such scams, people be more skeptical. Harriman is the founder of a 201,000-member awareness Facebook group called Consumer Watchdog Botswana. “It makes no sense to buy a phone which costs upwards of P20,000 for only P40,” Harriman told TechCabal. “ These scammers use people’s desperation and naivety so the best countermeasure is to not believe offers which seem way too good to be true.” Some of the brands being fronted for the scam have come out to caution customers not to fall victim. “Kindly note that there are pages on Facebook and Instagram that are using our logo and name to scam people. Cell City is not affiliated to these pages in any way,” Cell City warned customers. Some of the brands whose likeness is being used by the scammers have come out to warn consumers. Despite several victims having reported the ads, some of them are still running on Facebook and Instagram. None of the victims TechCabal spoke to had reported the scams to law enforcement officials. TechCabal also reached out to First National Bank regarding how its protecting its customers against such scams but had not received responses by publication. Over this year, online scams spread through social media have become prevalent in Botswana. In May, a scam purported to invest victims’ funds in products of Ecoplexus, a real US company, costed victims tens of millions of pulas.
Read More- December 19 2023
Marketforce CEO says Pezesha’s approach to resolving debt situation is questionable
Tesh Mbaabu, CEO of Marketforce, a Kenyan business-to-business e-commerce that raised $40m in series A funding in 2022, has questioned the approach that Pezesha, a Kenyan startup that offers business loans-as-a-service is taking to resolve a debt crisis. Pezesha asked a Kenyan court to liquidate Marketforce’s assets over an unpaid debt. “We have been proactively holding debt restructuring discussions with our creditors through constructive dialogue,” said Tesh Mbaabu, Marketforce’s founder and CEO. “Regrettably, Pezesha chose to prematurely file court proceedings. That said, we remain open and confident about resolving this matter amicably and out of court,” he said. Mbaabu declined to comment on how much his firm owes Pezesha. In the petition filed in September, Pezesha says Marketforce owes it a substantial amount but did not provide details on how the debt was incurred or how much it is seeking to recover from Marketforce. Pezesha did not respond to enquiries at the time of this report. In April 2021, Marketforce and Pezesha entered a partnership where Pezesha would offer affordable inventory and wholesale distribution financing to Marketforce merchants. Marketforce, which had up until then raised a total of $500,000 ($150,000 from Y Combinator and $350,000 in seed round), would go on to announce that it had closed $2 million in pre-series A financing. While Pezesha did not say in its suit that it was pursuing debt obligations resulting from the 2021 inventory financing arrangement with Marketforce, Mbaabu, Marketforce’s founder and CEO, suggested this. “Pezesha is not really a vendor… they are a debt provider,” he told TechCabal. According to Mbaabu, Pezesha has enjoyed above-market-rate returns since their partnership started two years ago. “We have also serviced over half of the debt and intend to fully service the same in due course. I believe any creditor who is in tune with the macroeconomic climate would be more patient with their client, especially after such a long trading partnership. Therefore, I don’t really understand Pezesha’s intention with the filing and how it benefits any party.” he added. Marketforce and Pezesha share a common investor in Greenhouse Capital, a Lagos-based venture capital firm. On LinkedIn, Greenhouse Capital partner Surabhi Nimkar sits on the board of Pezesha, and according to Pitchbook, Nimkar is also listed on the board of Marketforce. TechCabal could not independently verify if this is still the case. Exclusive: Twiga CEO closed a $35 million convertible bond deal before 6-month sabbatical Funding woes Founded in 2018 by Tesh Mbaabu and Mesongo Sibuti, Marketforce is one of the B2B e-commerce startups that raised millions of dollars from venture capital investors to digitise the informal corner shops where most African consumers shop daily. The argument was that digitally augmenting or even replacing the wholesale layer would result in cost savings for informal retail traders. For Marketforce, that thesis led to the launch of RejaReja, a marketplace where informal traders could source goods directly from manufacturers or distributors and pay for orders digitally. RejaReja users could also accept payments for utility bills and access loans to finance their businesses. Lately, the thesis around retail digitalisation has run into the hard realities of increasing retail prices due to inflation and a sudden unwillingness by venture investors to subsidize high growth costs. In August 2023, Marketforce announced that it was looking to raise up to $1 million from Wefunder, the US-based crowdfunding platform. Per TechCrunch, Marketforce has raised $42.5 million since its launch, with the latest round being a $40 million series A round led by V8 Capital Partners, a London and Lagos-based venture capital firm. But that round did not close at that amount despite a public announcement, two people with knowledge of the matter told TechCabal. The lead investor, V8 Capital Partners backed out of the transaction, TechCabal learned. TechCabal did not receive a response from V8 Capital at the time of publication. Mbaabu, Marketforce’s founder, is now involved in a new startup called Chpter, which has raised $125,000, according to the company’s LinkedIn page. An investor with knowledge of the matter said Marketforce is preparing to acquire a stake in Chpter through its Delaware holding company. Mbaabu is expected to keep his role at Marketforce. According to this investor, a liquidation proceeding against the Kenyan version of Marketforce would not affect the deal as the Kenyan company owns very few assets in the country.
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- December 19 2023
TechCabal Daily – Twiga raises $35 million
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Remember the startup that was named an exceptionally obvious scam? Yes, Tingo Group. Well, America’s Securities and Exchange Commission (SEC) has announced that it will bring charges against the CEO, Dozy Mmobuosi, for fabricating financial statements, insider trading, lying to auditors, failing to disclose the sale of millions of common shares, and more. If you are a founder, please take this survey to tell us what you are looking forward to next year. In today’s edition Twiga CEO closed $35 million deal before sabbatical SEC files charges against Tingo CEO Safaricom loses more market shares FTX plans to end bankruptcy TikTok removed 1.4 million videos by Nigerians The World Wide Web3 Opportunities E-commerce Twiga closes $35million convertible bond Peter Njonjo, CEO Twiga Foods Three weeks ago, Twiga, a Kenyan startup that connects farmers to food vendors, closed a funding round to settle its debts and pay suppliers. However, the size and nature of the funding was not previously reviewed. New reports by TechCabal show that the startup received a $35 million convertible bond—debt that pays interest but can also be converted into equity. Twiga raised the funds from Creadev and Juven, two private equity investors who had previously invested in Twiga. ICYMI: Twiga, previously cash-strapped, was sued by cloud service vendor Incentro, which asked a court to declare it bankrupt and force Twiga to repay its debts. The dispute is still being discussed privately between the two firms. A CEO exit? While Twiga might have secured enough money to bring it out of the water, a new eruption is happening at the company. The company’s CEO, Peter Njonjo, announced his decision on Thursday to take a six-month sabbatical, raising fears that investors were trying to remove him.While some believe that Njonjo might be in the good books of the board, others say this could be Njonjo’s path to an exit. The development comes as a new twist to the startup’s recent struggles. It laid off 30% of its employees and changed its business model, relying on independent sales contractors instead of its in-house sales department. 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. Fintech SEC charges Tingo CEO with fraud Dozy Mmobuosi, CEO of Tingo Group The Securities and Exchange Commission (SEC) is serving up a legal feast for Dozy Mmobuosi, the CEO of Tingo Group. The American financial watchdog has filed charges against Dozy Mmobuosi, and three affiliated entities of which he is the CEO—Tingo Group Inc, Agri-Fintech Holdings Inc, and Tingo International Holdings Inc. What are the charges? The charges encompass a range of offences, including insider trading, providing false information to auditors, failure to disclose the sale of millions of common shares, and violations of internal controls. Here’s what you need to know: Tingo Group gained public attention when Hindenburg Group, an American short seller, published an explosive report in June 2023, branding Tingo Group as an “exceptionally obvious scam with completely fabricated financials,” alleging that Tingo falsified reports about partnerships, projects, and expansions. Tingo denied the allegations, but the company’s share price crashed by 55% following the report. In November, the SEC launched a formal investigation into Tingo Group, leading to the suspension of trading in the self-proclaimed agri-fintech company’s shares. It has now charged the company with fraud. Zoom out: One notable misrepresentation involves Tingo Group reporting $461.7 million in cash and cash equivalents for the fiscal year 2022, while its actual bank accounts held less than $50. Checkout the Paystack Terminal experience Paystack Terminal helps you accept in-person payments. We released updates that help you easily access receipts, customise reports, and shorten the length of receipts. Learn more about Paystack Terminal → Telecom Safaricom share drops in Kenya Safaricom CEO Peter Ndegwa Safaricom is losing steam. According to data from Kenya’s communications authority, Safaricom suffered a decline in market share across its mobile and broadband services for the third quarter of this year. The telecom lost 0.4% of its market share, reducing its position as market leader to about 44.1 million subscribers. Two quarters, two drops: This is Safaricom’s second loss of its market share position in two quarters. The report notes that Safaricom’s broadband subscriptions decreased by 0.9% to 61.9%. Airtel, however, has taken a slice of Safaricom’s market share, recording growth in both mobile and broadband subscribers. Airtel gained about 800,000 customers, bumping its market share to 28.2%. Safaricom, however, gained only 200,00 customers in the quarter. The report also notes that Telekom Kenya suffered a reduction in its market share from 3.8% to 3.1% with 2.1 million subscribers, signalling a heightened appetite from Airtel. Another side of the coin: While Safaricom might have dropped a portion of its market share, it maintains a dominant position in the mobile money market with a 97% share. Airtel Money trails behind with a 2.9% share, while Telkom’s T-Kash manages a paltry 0.1% market share. 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. Cryptocurrency FTX plans to exit bankruptcy To bring closure to its bankruptcy case, FTX Trading Ltd has revealed a proposal to repay billions of dollars to customers and creditors. The crypto exchange proposes to liquidate most of its remaining crypto holdings and convert them into cash which will then be distributed to creditors and customers, according to a yet-to-be-determined formula. The proposal is slated for a vote by creditors next year. Following the creditor vote, the plan will be subject to final approval by US Bankruptcy Judge John Dorsey. The backstory: In November 2022, FTX filed for bankruptcy after users pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. This
Read More- December 18 2023
Breaking: SEC charges Tingo Group CEO Dozy Mmobuosi with “massive fraud”
America’s Securities and Exchange Commission (SEC) will bring charges against Dozy Mmobuosi, the CEO of Tingo Group, for fabricating financial statements and other documents of three of Tingo Group and its subsidiaries, Tingo Mobile and Tingo Foods PLC. Dozy Mmobuosi and all three of Tingo’s subsidiaries are listed as defendants in the case with charges ranging from insider trading, lying to auditors, and failing to disclose the sale of millions of common shares for which he was the ultimate beneficial owner and internal controls violations. The announcement of the charges comes one month after the SEC formally launched an investigation into Tingo Group. The agency also suspended trading in the shares of the self-described agritech company. Part of the SEC’s filing said, “Mmobuosi made and caused the entities to make material misrepresentations about their business operations and financial success in press releases, periodic SEC filings.” One significant misrepresentation, for instance, is that while Tingo Group reported having cash and cash equivalent of $461.7 million for the fiscal year 2023, its bank accounts held less than $50 in total. The SEC also said Mmobuosi “fraudulently obtained hundreds of millions in money or property through these schemes, and that Mmobuosi has siphoned off funds for his personal benefit, including purchases of luxury cars and travel on private jets, as well as an unsuccessful attempt to acquire an English Football Club Premier League team, among other things.” Tingo Group was the subject of an explosive report published by Hindenburg Group, the famous American short seller. The research firm called Tingo Group an “exceptionally obvious scam with completely fabricated financials” in June 2023. *This is a developing story
Read More- December 18 2023
Hacking SA’s tech gender gap
This article was contributed to TechCabal by Charles Mathews It is a Saturday morning in Cape Town, and in a room, many girls and a few boys are baking code. The big challenge? To create an e-commerce store with a scannable barcode, front end, and the attendant API. The tension is palpable because there are cash prizes up for grabs, and these young people come from contexts marked by unemployment and poverty. The event was organised by BabesGotBytes, a South African advocacy group that promotes equitable access to quality education and technology as inherent rights, rather than exclusive privileges. Since 2018, this initiative started by founders Amanda Gxagxa and Phindiwe Nqanqaru has been preparing girls and women to enter the workforce. “Amanda Gxagxa and I started BabesGotBytes when we were students, and we noticed that there was a huge gender gap in the technology industry,” says Nqanqaru, in an interview after the Hackathon early in December 2023. “When we went out to technology businesses and industry meet-ups, we saw how few women there are in the industry. We wanted to do something about this. We wanted to get more girls to become a part of the industry.” “In the communities that we come from most people think that technology is only for men, and we wanted to challenge and change this perception. Nowadays, everything is about technology and most jobs will be generated by the tech industry, so we didn’t want the girls to be left behind. This is how and why we started,” Nqanqaru says. The Global Gender Gap Report 2023 authored by the World Economic Forum reveals that only three African countries rank in the study’s top 20 this year. They are Namibia, which pleasingly now has closed 80% of its national gender gap; Rwanda, which is also doing well in this regard; and South Africa, which has dropped in the rankings since 2010 when it was in 10th place. “Progress towards the achievement of gender equality in South Africa has been very slow,” writes gender activist, Nozi Mjoli. “Millions of women continue to be the most disadvantaged members of society in South Africa due to poverty and lack of skills.” Nqanqaru’s origin story reveals the agency that access to technology affords girls and women. “Coding has revealed my superpowers,” she says. “At first, I didn’t know anything about technology or computers. I wanted to build a career that was solid but didn’t know what to do.” Born in a small Eastern Cape town called Elliot, the coder matriculated from high school without any options for tertiary education. But everything changed when a friend asked her to come along to a coding programme. This sparked an interest that changed the course of Nqanqaru’s life trajectory. “I was a lost soul, but when I started coding, I flexed my muscles and realised my superpowers. That’s when I realised I wanted to pass this experience on because I wanted to impact other people’s lives. I got so many mentors who believed in me when I didn’t believe in myself. This is why I wanted to do the same for other girls who don’t believe in themselves,” the coder-cum-mentor says. “What is exciting to see is that this first cohort is now in university or working in the technology sector,” Nqanqaru says. “2023 was our most productive year because we managed to get five girls into jobs in technology. We have gotten 14 of our BabesGotBytes girls into the Samsung and UWC Future Innovation Lab & App Factory Programme. So, we are not just teaching. What is important is that we get girls internships and help them to study further so we develop a good pipeline of engineers for this country and Africa.” Research proves this to be true. The South African SME Tech Index 2023 reveals that the female-owned companies in the study had higher business growth compared to male-owned companies, indicating a competitiveness and ability to navigate challenges. Charles Lee Mathews is a former journalist and serial entrepreneur who now works at Thinkroom, Thinkubate and Grindstone Accelerator. Thinkroom, a female-led consulting firm that grows SMEs, founders and entrepreneurial ecosystems, sponsored the prizes for the BabesGotBytes hackathon.
Read More- December 18 2023
Exclusive: Twiga CEO closed a $35 million convertible bond deal before 6-month sabbatical
Peter Njonjo, the CEO of Twiga, a Kenyan startup that connects farmers to food vendors, announced his decision to take a six-month sabbatical from the company on Thursday, sparking fears that the company’s investors were pushing him out. Njonjo’s break comes just two weeks after Twiga successfully raised new funding to pay suppliers it owed. TechCabal previously reported that one of the owed suppliers, Incentro, a cloud service vendor, had asked a court to begin liquidation proceedings to force Twiga to pay its debts. Private conversations are still ongoing between both firms to resolve the dispute. Cash-strapped, Twiga raised $35 million in convertible bonds—debt that pays interest but can also be converted into equity—from Creadev and Juven, two private equity investors who had previously invested in Twiga, one person with direct knowledge of the deal told TechCabal. The size and nature of the funding has not been previously disclosed. Twiga did not respond to TechCabal’s request for comments at the time of this report. Creadev, one of the two private equity firms that provided the latest round of capital to Twiga, is a subsidiary of Mulliez Family Association (AFM), the investment holding company that controls the fortunes of a French family-owned consumer goods conglomerate. Creadev typically invests between $500,000 to $10 million, with the potential to cut even bigger cheques when it doubles down on portfolio companies. Juven, the second backer and a Goldman Sachs spinoff, follows a similar investment strategy. The evergreen fund invests between $10 million and $30 million. Creadev and Juven also did not respond to TechCababal’s request for comments. Heading to an exit? In private conversations, investors and long-time players in Kenya’s technology ecosystem speculated that the timing of Njonjo’s sabbatical, one week after new funding, may suggest that he is being graciously shown the exit by investors. But two sources close to the matter insisted that Njonjo has a “great relationship with Creadev” and that the investment outfit is still “very supportive of the business.” Startups attempting to digitise the fragmented informal market for fast-moving consumer goods and packaged foods have been hard hit. Twiga laid off 30% of its staff and changed its commercial model, shutting down its in-house sales department in favour of independent sales contractors. “Our investors are fully supportive of this transformation,” Njonjo had told TechCabal in August. Despite Njonjo’s optimism, a prominent seed stage investor who did not want to be named so they could speak freely took a harder view. “I’m 90% certain Peter was fired. This is how VCs are viewing it,” the investor said. “VCs in Africa are having a bad week” because of the recent news and internal conversations about Twiga and other struggling B2B e-commerce startups, the investor added. Across Africa, rising inflation and currency devaluation have brought economies to the brink and squeezed consumer spending. Even with Twiga’s impressive funding, the business has struggled in 2023, citing an increasingly challenging business climate. One former Twiga vendor questioned the monthly burn rate of the firm, which has raised more than $150 million in equity and debt since 2017. Twiga operates an asset-light model, so it did not own the trucks or warehouses that housed its operations, one former vendor told TechCabal. More than half of the amount Twiga has raised (about $80 million) was raised in the last three years after the departure of co-founder and former CEO Grant Brooke, who left in part due to differences in the direction investors wanted to take the company, a person close to talks at the time told TechCabal. Peter Njonjo cofounded Twiga with Grant Brooke in 2014 to source fresh produce directly from farmers and deliver it to Kenya’s urban retailers. The B2B company is backed by investors like Genevieve Capital, Creadev, Juven AHL Venture Partners, and Omidyar Networks.
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- December 18 2023
Next Wave: Tides, tsunamis and a slow-motion return to hard things
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 17 December, 2023 2023 is ending on a humble note for the fintech boom, climate-tech’s wobbly first steps and a back-to-the-drawing-board for e-commerce in Africa. Everywhere you turn, doing the hard things first is back on the menu. The hard thing about building a $180 billion internet economy in Africa by 2025, as Google and the International Finance Corporation predict, is making an economy that can run without looking at DFI-backed venture capital for handouts. To meet this admittedly difficult $180 billion goal, the attention of the technology sector in Africa needs to finally leave the residue hype of 2019 to 2022 behind in 2023, and continuously solve the series of hard problems that are peculiar to Africa. 2025 is 13 months away. Google and the IFC predicted Africa’s internet economy would be worth $180 billion by that year. I am not referring to the obvious hard things like bringing millions into the financial system or providing energy to them. Those are the end goals. I am referring instead to the core problems that make things like energy or financial inclusion hard. Fintech startups for example, find themselves needing to deal with the unruly cyber fraud menace that has cost untold billions in customer and investor losses. It’s not a game many are winning. In fact it has crippled fintech giants, including the Y Combinator-backed Zambian unicorn, Union54. The ecommerce sector in Africa is a venture capital darling that has ebbed and flowed through different models since 2012. Regardless of the model, the sector still has a lot to prove about its profit-making capacity, especially now that the venture capital tide is draining away. Clean energy and climate-tech is a rising star, but modular piecemeal solutions are unsustainable in the long term and do not move the needle on the continent’s energy poverty. In fact the climate tech space is under threat of being swept away by the emerging (and more profitable) nature-based carbon credit industry. Investors are not left out of doing the hard things. Marketing yourself as an investor and giving speeches is well and good, but returning capital with outsize gain to their limited partners is even better—and harder. Everywhere you turn, doing the hard things first is back on the menu. African entrepreneurs tackle hard problems, no doubt. Delivering accessible healthcare is difficult. Bringing excluded millions into the financial system is difficult. And helping people shop online is not the easiest dream to live for. But sometimes, and especially in the last capital deluge, a lot of problem fighting has been focused on the wrong end of the hard thing. Chris Maclay, programme director for the Jobtech Alliance, first introduced me to the monkey vs pedestal framework that guides how X, one of Alphabet’s most ambitious innovation labs, operates. So I went off and read a bit about it. Astro Teller, Captain of Moonshots at X, describes the monkeys versus pedestal problem as having to decide between training a circus monkey on how to perform its routine and focusing on building the pedestal on which it would stand to perform magic tricks at a circus. Building a pedestal, or the performance stage where a monkey will perform a magic trick at a circus, is analogous to doing the easy portion of a task. But training a monkey to do the actual magic tricks is the most difficult part. It is obviously easy to build pedestals. It is also what most people will default to, because building pedestals is an easy way to show progress. For the entrepreneur, employee, investor or policymaker reading, think of things like joining a new accelerator program, raising new funding, discovering the next best idea, writing banging tweets complete with stunning charts, or even passing a new startup bill. These are the easy parts of building a thriving healthy and non-venture capital dependent technology ecosystem. <!–Subtitle Write subtitle here 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. On the other hand, figuring out how to keep a beautiful startup as a going concern when the VC money dries up is a hard thing. Turning the best idea into something that makes money is not easy. Building a payments company with zero cyber fraud is much more difficult than launching a new payments app. Carrying out proper due diligence as an investor is not as easy as speaking on a conference panel about the future of African tech. In every scenario, training monkeys to perform magic tricks before building pedestals is the hard part. <!–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 –> Take the case of the much-celebrated boom in mobile telecoms in Africa. The hard thing involved fighting and lobbying for deregulation and a fair licensing process. It meant building out a wide-enough network for mobile communications to have value right off the start on a tight budget. It meant creating the prepaid billing pricing strategy and collaborating with external partners like mobile phone suppliers and informal airtime retail agents to supply the devices and retail the airtime. Doing these hard parts allowed the early mobile network carrier networks to win in the face of adverse and entrenched state-owned landline opposition. That model holds true today. It is how the next stage for innovation that wins in Africa will be created. Not more capital—although more will certainly
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- December 18 2023
TechCabal Daily M-PESA goes plastic
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Lagos is one of the most popular tech ecosystems in Africa. However, there are tech ecosystems budding in other states in its home country Nigeria. Here are some of the interesting innovators in Abuja, the country’s capital. Also, If you are a founder, please take this survey to tell us what you are looking forward to next year. In today’s edition M-PESA to roll out plastic cards Zambia’s Starlink giveaway OPay’s KYC is enabling impersonation TC Insights: What should Africa prioritise? The World Wide Web3 Job openings Fintech M-PESA to roll out plastic cards Image source: Safaricom Hey Kenyans! No more fumbling with a bulky wallet at your favourite Kenyan shop. M-PESA, Kenya’s biggest mobile money platform is set to disrupt the country’s cash-loving retail sector with roll-out plastic cards. Until now, M-PESA only provided virtual cards called GlobalPay, but they could not be used at many local kiosks, market stalls, fancy boutiques, and physical shops as many sellers preferred hard cash. The GlobalPay virtual cards were limited to purchases from online platforms like Netflix, Amazon, and others. Sidebar: Virtual cards haven’t exactly had a stellar track record with reliability and fraud risks. Companies like card issuing startup Union54 learned that the hard way. Physical cards are much safer, however, but it also turns out that Kenyans aren’t exactly plastic pals either. Only 6.35% of Kenyan adults use a credit card, and debit cards sit at a lukewarm 22%. Can M-PESA make it work? If the numbers are anything to go by, it is M-PESA if anyone can make it work. The mobile money company holds 97% market share in Kenya in its really big hands. But can M-PESA overcome the trust issues left by virtual cards and convince Kenyans to join the plastic party? Only time will tell, but one thing’s for sure: the game is changing, and the future of Kenyan payments is about to get a whole lot swipier. This is great for everyone involved. If these plastic cards melt Kenyans’ distrust of cashless payment away, M-PESA’s chokehold of the East African country will get exponentially tighter. It is not only M-PESA that will grow. Visa, the card processing company that created M-PESA’s virtual card and its new physical card will also expand its footprint across the country and, consequently, Africa. 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. Internet Zambia’s Starlink giveaway Felix Chipota Mutati, Zambia’s minister of technology and science Tech billionaire Elon’s dream is coming true in Zambia, but at what cost? Two months after Starlink launched its satellite internet service in Zambia, the country’s government is handing out the internet device like party favours—one Starlink kit for each of its 150 constituencies. Why? Well, Zambia’s internet situation is really bad. Over 20 million people, most of whom are in rural areas, stare down a measly 21% internet penetration rate. The cost of maintaining Internet infrastructure in the country discourages Internet service providers. In several interviews, including this one with tech journalist Kara Swisher, Elon Musk, the owner of Starlink has said that the satellite internet service was designed for these kinds of underserved populations. The country’s decision to distribute free Starlinks will see his dream come true. But at what cost? The hardware costs ZMK 10,744 ($505) and the monthly subscription fee for Starlink is ZMK 771 ($36). In a Twitter post, the Zambian minister of technology and science said that it would bear the cost of both for a year. But considering that Zambia is the 16th poorest country in the world, a giant question mark hangs over the sustainability of the decision. About 64% of Zambians live on less than $2 per day. Will they be able to afford to pay for the service when the time comes? Here is another question: Is it even worth it at all? While the ministry says that Starlink can connect 300 devices per router, each router only handles 128, per the Starlink website. This means that, across all 150 constituencies, only 19,200 devices can get online at once. This is not exactly the internet revolution Zambia’s minister of Technology and science is painting it to be. Checkout the Paystack Terminal experience Paystack Terminal helps you accept in-person payments. We released updates that help you easily access receipts, customise reports, and shorten the length of receipts. Learn more about Paystack Terminal → Fintech OPay’s KYC is enabling impersonation Image source: TechCabal OPay, a Chinese-owned mobile money platform, is using elaborate marketing schemes and easy-peasy sign-ups to charm millions of people into creating accounts on its platforms—including those who have never had a bank account. But here’s the rub: in its eagerness to woo the unbanked, OPay might have opened its door wide for impersonation by removing strict requirements for identity verification. How bad is it? Fraudsters can create fake OPay accounts and start using them to move cash around in about 60 seconds. OPay uses a tiered verification process—ranging from tier 1 to 4—allowing users to access a larger suite of services once they submit a National Identification Number (NIN), a bank account number or a bank verification number (BVN). Users must also submit a real-time facial verification to confirm their identity. But its tier-1 account seems to have more holes than a basket. First, the system’s blind as a bat. It allowed a man to create female accounts even after going through OPay’s facial recognition system. In another test, OPay allowed a user to create a tier-1 account using basic personal information, name and birthday, about a celebrity to register. While OPay requires users to submit either a bank account or phone number for verification, the app did not proceed to verify the details. This tier-1 account allows users to deposit up to ₦300,000 ($378) in their
Read More- December 17 2023
M-PESA goes plastic: 50 million Kenyans will get debit cards following Visa partnership
This marks the second time in under two years that M-PESA and Visa have collaborated to expand global payments for their customers. M-PESA, the ubiquitous mobile money platform used by 51 million Kenyans, is taking a pivotal step into the world of plastic. In a partnership with Visa, the global digital payments giant M-PESA will debut physical debit cards, marking a bold expansion beyond its virtual GlobalPay offering and setting its sights on the cash-reliant retail sector. Until now, M-PESA only provided its customers with a virtual card called GlobalPay, powered by Visa. Those virtual cards were limited to online purchases and could not be used at Kenya’s cash-first retail stores. Physical cards signal a significant shift for M-PESA, which has revolutionized digital payments in Kenya but has not yet significantly penetrated the physical retail space. Credit and debit cards are unpopular in Kenya, and only 6.35% of Kenyans over 15 have credit cards, while debit card penetration stands at 22%. M-PESA, which has a 97% market share, still has use cases like subscription payments, which can only be solved comprehensively by cards. M-PESA deepens partnership with Visa Visa, meanwhile, gains a powerful partner in its quest to expand its footprint in Africa. M-PESA’s vast user base and deep integration into Kenyan life offer a unique platform for Visa to tap into the continent’s rapidly evolving digital payments landscape. Customers can use the new cards across the eight countries in which M-PESA operates. “FintTechs and financial institutions are equally set to leverage our card processing capabilities, empowering them to provide end-to-end mobile and card payment solutions,” M-PESA added in a statement on X. For instance, subscription payments like Netflix and Google One are better served by cards. And while its GlobalPay cards supported these payments, virtual cards are notoriously unreliable and susceptible to massive fraud risks. M-PESA’s physical debit card launch is a watershed moment for Kenya’s financial landscape. The race is on to see how effectively M-PESA can leverage its digital dominance to crack open the country’s cash-kinged retail market.
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