- December 13 2023
Flutterwave names new executives a month after CFO’s departure
Flutterwave, Africa’s fintech giant, has hired several high-profile executives to help lead its risk and compliance efforts one month after the abrupt exit of its CFO. Flutterwave, the African fintech giant widely believed to be considering an Initial Public Offering (IPO) on the NASDAQ, has named five new executives across its risk, compliance, and expansion departments one month after Oneal Bhambani, its former CFO, abruptly left the company. Today, Flutterwave shared the profiles of its new executives. Amaresh Mohan, Chief Risk Officer, joins from GoTo Group, one of Indonesia’s largest startups. Amresh also had leadership positions at Stripe and Paypal. Stephen Cheng, who has held C-level positions at American Express and First Data, is the EVP for global expansion and payment partnerships, a role he has had since July. Amanda Ortega, an experienced regulator in Wyoming, will lead Flutterwave’s regulatory standards and compliance in North America as Head of Compliance for the United States. Flutterwave recently acquired money transfer licences for 13 states in the United States. Steven Huynh has also joined as VP of global expansion and payment partnerships, while Chris Davis joins as VP of risk and compliance operations. Adewale Ayantoye joins as VP of risk management. These new executives could help transmit confidence to the public market and further fuel speculation that Flutterwave remains serious about its IPO plans. In August, Olugbenga Agboola, Flutterwave’s CEO, shared that the company was moving ahead with its IPO plans on the NASDAQ but declined to give a timeline. While that provided fuel for the speculative fire, the exit of Bhambani, the company’s CFO and two other finance executives, in October, may have called those plans into question. Today’s announcement of new hires may provide much-needed confidence as Flutterwave recovers from legal troubles in Kenya and allegations of workplace bullying that called its reputation into question. In February and March 2023, TechCabal reported that Flutterwave lost a little over N3 billion in three security incidents. While Flutterwave denied all three incidents, it obtained court orders to freeze several Nigerian bank accounts within the same period. In 2022, Flutterwave was sued by the Asset Recovery Agency (ARA), over money laundering and compliance concerns. Last month, the case was formally withdrawn, opening the door for Flutterwave to apply for a Kenyan payments and remittance licence. Last month, Flutterwave acquired an international transfer license in Malawi; the startup also expanded into India recently, and it received an Egyptian payment service license in June.
Read More- December 13 2023
In conversation with Yacine El-Mahdi Oualid, Algeria’s minister of knowledge economy, startups, and micro-enterprises
Algeria, the North African country that sits at the crossroads of Africa, Europe, and the Middle East, wants to become one of the biggest players in Africa’s tech ecosystem. And its government is backing this big ambition. Through its ministry of knowledge economy, startups, and micro-enterprises, Algeria isn’t only hosting arguably the biggest government-backed startup event on the continent—the African Startup Conference—, but also implementing a strategic playbook to drive its local tech ecosystem and foster collaboration across Africa. In a chat with Tomiwa Aladekomo, CEO of Big Cabal Media, on the sidelines of the three-day conference, Yacine El-Mahdi Oualid, Algeria’s minister of knowledge economy, startups, and micro-enterprises, disclosed that the country has a goal to build a strong and interconnected startup ecosystem across Africa. That explains why government delegations from several African countries—notably Nigeria, South Africa, Egypt, and Tunisia—were in attendance at the event, the minister shared. “I believe that if we want to succeed, we have to work together. Some issues can best be addressed on a continental level and everyone should make enough efforts,” he said. Oualid shared that the growth of Algeria’s tech ecosystem is largely driven by government support, citing the creation of a dedicated ministry for startups which has worked on putting in place legal frameworks to support startups. The Algerian government has also given incentives for startups including tax exemptions—startups in Algeria are exempted from tax for the first five years after their formation. There is also the Algerian Startup Fund, which the minister describes as “one of the largest state-backed funds ever created in Africa.” While acknowledging that some foreign capital has flowed into the Algerian tech ecosystem, the minister noted that the government’s goal is for Algerian startups to be able to raise money locally. The thinking is anchored on the belief that there is a huge potential for funding investments in the African market and government intervention is needed to unlock it. “The African startup ecosystem hasn’t reached its full potential. There are still lots of things to do at the policymaking level and the incentives government can offer startups. We have to move from a resource-based economy to a knowledge-based economy. We can do this by investing more in startups, innovation, and research and development,” the minister shared. Click here to watch the full interview.
Read More- December 13 2023
Scramble in SA crypto market ahead of licencing round
This article was contributed to TechCabal by Conrad Onyango via bird story agency. South Africa is witnessing an expansion in cryptocurrency offerings as the country gets closer to issuing its first operational licences to financial service providers. Payment firms and fintech companies are driving the move, with commercial banks expected to follow suit. One of the latest offerings enables users to purchase goods and services using cryptocurrency, while another allows them to withdraw digital currency as cash from automated teller machines. Stitch, a South African payments infrastructure company, has launched a new payment method called “Pay with Crypto,” which allows customers to use cryptocurrency directly when purchasing goods and services in South African rand. Customers using ‘Pay with Crypto’ have the choice to make a deposit or check out using cryptocurrency. “Cryptocurrency adoption in South Africa has been one of the highest in the world. There’s a massive audience that would prefer to use their crypto to make payments,” said Stitch president Junaid Dadan. “We’re excited to offer Stitch clients an opportunity to reach and serve this audience, without the need to take on direct volatility risk, thanks to our ‘Pay with Crypto’ method,” Dadan added, Another fintech company based in South Africa, Paycorp, has launched an app called CryptoExpress that enables users to withdraw their cryptocurrency as cash in South African rands, at over 3,000 ATMs across the country. The app is seamlessly integrated with multiple cryptocurrency wallets, and withdrawals can be made at Cash Express ATMs operated by Paycorp subsidiary and ATM Solutions. According to a statement released by Paycorp, to withdraw cash, users need to convert their cryptocurrency from any crypto wallet through the app, authorise the transaction in their crypto wallet, and receive a withdrawal voucher PIN generated by CryptoExpress. “Paycorp remains committed to advancing financial inclusion in South Africa. The introduction of the CryptoExpress app, facilitating cardless withdrawals from crypto wallets at Cash Express ATMs, coupled with our Smart ATM rollout, which combines drop safe and ATM functions, underscores this unwavering commitment,” said Paycorp Group CEO Steven Kark. Payout in local currency is available for Bitcoin, Ethereum, USD Coin, and Tether. In early December, the Financial Sector Conduct Authority (FSCA) of South Africa announced that it had completed assessments of 36 firms out of the 74 that had been under consideration. These 36 firms are to be presented at the Licensing Executive Committee meeting. Another 22 applications will be presented on February 13, while the remaining 14 will have to wait until March 12. As of November 30, 2023, the FSCA had received a total of 128 applications for crypto asset service provider licenses. As part of new regulations, South Africa will require crypto companies with foreign headquarters to have a local office. “For the 10% of entities that have an off-shore head office, consideration will need to be given to the requirements relating to having a local branch. This is important because it, amongst other things, creates a physical presence that would allow the FSCA to have appropriate oversight over and ensure accountability of the institution conducting activities in South Africa,” the regulator said in a recently launched Crypto Assets Market Study. According to the FSCA, only a small proportion of Crypto Asset FSPs operating in South Africa have their head offices in foreign countries. The Crypto Assets Market Study drawn from 47 Crypto financial service providers showed that more than half of the Crypto Asset FSPs have built their businesses around retail customers, with crypto exchanges (49%) being the most common business. The highest monthly transaction value on the South African cryptocurrency market was recorded in November 2022, when it peaked at over 8 billion rand ($427 million). Foreign-based cryptocurrency firms are also expanding their services in Africa, starting with countries with the highest cryptocurrency adoption rates, combined with progressive regulation. Dubai-based investment platform, The Open Platform (TOP) in November announced the global rollout of Wallet, a third-party Telegram bot allowing users to buy and sell crypto. The rollout targets South Africa and Kenya in 2023 with plans to launch in Nigeria in the first quarter of 2024, to capitalize on a huge Telegram user base and high crypto adoption numbers in these markets. Kenya is also on the path to regulating cryptocurrency transactions after recently introducing a bill defining crypto assets as securities and imposing capital gains tax on them. The Capital Markets (Amendment) Bill of 2023, amending the country’s tax code to impose taxes on cryptocurrency assets stored on crypto exchanges and digital wallets, made it through a Kenyan parliamentary committee in early December. Kenyans will pay capital gains tax on increased cryptocurrency market value when they sell or use it in a transaction. The bill also proposes deducting a 20% excise duty on all commissions and fees charged on transactions.
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- December 13 2023
TechCabal Daily – Google loses antitrust trial
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Nigeria will start building assembly plants for electric vehicles in the near future. The country’s president, Bola Ahmed Tinubu, announced this when he inaugurated 50 four-seater electric taxis in the city of Maiduguri. In today’s edition Google loses antitrust battle Egypt considers digital currency Google greenlights crypto ads South Africa eyes nuclear power South African crypto platforms merge with Austrian rival The World Wide Web3 Job openings Big Tech Google loses antitrust battle Google has lost its antitrust trial against Epic, maker of the video game Fortnite. This ruling could change how Google manages its app store, Play Store. What happened? In 2020, Epic Games accused Google of using its position as the dominant app store on Android to engage in anti-competitive practices. Google forced app developers to use Google’s payment system and charged them a 30% commission on in-app purchases. Epic argued that this stifled competition and harmed consumers by limiting their choices and raising prices. Google defended itself, arguing that it needed to do so to maintain a secure and high-quality platform for users. What did the jury decide? After hours of deliberation, the jury concluded that Google violated antitrust laws and engaged in anticompetitive conduct that harmed the video game maker. This is a major blow to Google and could force it to change its business practices in the Play Store. Zoom out: While the court will decide the remedies needed to address Google’s conduct next year, this antitrust battle is not a first. Epic Games also filed a similar lawsuit against Apple’s App Store in 2020, alleging similar anti-competitive practices. However, in that case, the judge ultimately ruled in favour of Apple, finding that the company did not violate antitrust laws. The long-term impact of the jury’s decision on the mobile app market remains to be seen. 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. Cryptocurrency Egypt considers digital currency Central Bank of Egypt’s headquarters. Image source: Reuters Egypt wants to roll with the big boys. The East African country is considering issuing a digital Egyptian pound that will allow residents to settle payments with their mobile phones. The Central Bank of Egypt is partnering with the International Monetary Fund (IMF) to make this a reality. But why? The Egyptian digital pound, intended to be a digital equivalent of the traditional paper currency, offers a stable alternative to volatile cryptocurrencies like bitcoin. Also, using the digital pound could minimise the use of cash and facilitate faster electronic and cross-border payments. The introduction of the digital pound also aligns with Egypt’s goal of improving financial inclusion. Egypt joins other African countries that have adopted digital versions of their currencies or are considering its adoption. Nigeria launched its e-naira in 2021, while Ghana launched its e-cedi last year. Others, like South Africa and Senegal, are piloting their own Central Bank Digital Currencies (CBDCs), while Kenya is testing a commercial digital currency through KCB M-Pesa. Zoom out: While the Egyptian government has yet to issue digital currency guidelines, it remains to be seen if the digital pound will be fully utilised in the country as Nigeria’s e-naira failed to take off after implementation. According to Bloomberg, less than 0.5% of Nigerians are using the digital currency. Reports also suggest a slower-than-expected adoption rate of the e-cedi. Introducing Virtual Accounts, with Paystack-Titan Reliably accept 99% of your bank transfer payments in under 8 seconds with Paystack-Titan. Learn more → Cryptocurrency Google to allow crypto ads after five-year ban Google is allowing a cautious re-entry into the crypto advertising landscape. Starting in January 2024, the tech giant is lifting its ban on advertising for US-based cryptocurrency coin trusts, five years after it banned all crypto-related ads on its platform amid growing scam concerns. Further details regarding the rules and extent of this allowance will be disclosed in January 2024. What is a crypto coin trust? It is a form of crypto investment that allows investors to trade shares in trusts holding digital currency. Conditions to advertise: Google’s policy states that all advertisers must adhere to local laws for the regions or countries their ads target to ensure users have the necessary information to make informed financial decisions and protect them from harmful practices. Google also permits advertising for educational content on crypto, and for businesses that accept virtual currencies or sell mining hardware, provided they comply with existing Google Ads regulations. NFT-based games advertising in-game purchases are allowed, but limited to in-game exchanges. However, direct marketing promoting buying, holding, or swapping cryptocurrency remains prohibited. Zoom out: Google’s decision to reverse its crypto-related advertisement ban in January 2024 can be perceived by many as a strategic move to capitalise on the growing crypto market and boost advertising revenue, being that the crypto market has seen a notable 35% increase in total market capitalisation from October to November 2023. 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. Electricity South Africa to build nuclear power South Africa’s Minister of Electricity, Dr Kgosientsho Ramokgopa South Africa is working on a long-term fix to address its crippling nationwide blackouts. The country’s electricity minister, Kgosientsho Ramokgopa, has announced a procurement process for an additional 2,500 megawatts (MW) of nuclear power to alleviate the severe electricity crisis that has hampered South Africa’s economy. The first of the new nuclear units is anticipated to be operational by 2032 or 2033. South Africa’s energy crisis: This year, Eskom reported a severe electricity crisis which is largely attributed to frequent breakdowns in Eskom’s ageing coal-fired plants. According to the South African Reserve Bank (SARB), persistent power cuts cost South Africa an estimated $47 million daily, impacting businesses
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- December 12 2023
TechCabal Daily: Lagos’ LagRide under fire
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Google has released 2023’s Year in Search—it’s like Spotify Wrapped—but for web search. The report shows trending topics, and what’s keeping people across the world clicking on the Google browser. Plus, we’re cooking up our report on recent tech layoffs. If you are a founder, please share your insights in just a minute through our form! In today’s edition LagRide’s asset financing model under criticism Nigeria says illegal loan apps can’t be banned Bolt riders to take selfies before a ride request Africa’s first cook-stove carbon credit futures The World Wide Web3 Opportunities Mobility LagRide asset model faces scrutiny Image source: TechCabal LagRide needs to reexamine its playbook. The Lagos state-owned ride-hailing company has faced renewed criticism from the Amalgamated Union of App-Based Transporters of Nigeria (AUATON) over the viability of the asset financing model. According to the union, LagRide’s partners take advantage of the model to demand unrealistic returns from the drivers. Zoom in: LagRide’s original model is a lease-to-own model that allows drivers to make a downpayment of ₦750,000 ($948) and make a ₦8900 ($11.25) daily instalment for a four-year period to own the vehicle. However, drivers who cannot make the initial down payment resort to a partner arrangement in which said partner pays the down payment, and the driver is then tasked with paying the partner and repaying the daily ₦8900 instalments. This takes a toll on the drivers’ profits. A new model? LagRide is reexamining this model because some of these partners hold on to the vehicles after making down payments for them and do not lease them out to drivers. This means losses for LagRide who secured the cars on loans from Polaris Bank. One Idris Shonuga who owns IOS Holdings, one of LagRide’s major partners who hires drivers and provides them with cars to drive for LagRide, had 21 cars in his custody unused for six months. Shonuga blamed the fuel scarcity as part of the reasons why drivers abandoned their vehicles with him. Lights out: This is not the first time that the asset financing model has been put for debate in the Nigerian mobility sector. Moove drivers, in February, protested against the model’s steep repayments. 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. Fiintech Nigeria says illegal loan apps cannot be banned Image source: Zikoko Memes Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) says illegal digital money lenders (DMLs) are slithering through regulatory cracks. The commission revealed that illegal DMLs, also known as loan apps, bypass regulations by transferring their transactions to Payment Solution Service Providers (PSSP) wallets when their bank accounts are frozen, making it difficult for the FCCPC to curb their activities despite its efforts. What activities? In October, Fidelity Bank blocked transfers for two weeks to neobanks like Opay, Kuda, and Moniepoint due to rising fraud and customer verification concerns. Also, Nigerian fintechs have lost over ₦5 billion ($6.3 million) to hackers in the first eight months of this year as cases of hacks and frauds increase within the ecosystem. ICYMI: The Nigeria Inter-Bank Settlement System (NIBSS) recently directed banks to stop enabling payments into financial entities that are not authorised to receive deposits. This is one of the regulator’s moves against companies facilitating potentially illicit financial activities. This follows the Central Bank of Nigeria’s (CBN) recent instruction to financial institutions asking them to implement stricter Know Your Customer (KYC) measures. Zoom out: The FCCPC has also dismissed recent posts on social media platform X, alleging that its officials are allowing the illegal loan apps to continue to operate because they were taking bribes from them. Introducing Discount Codes Accept online payments on your Zoho Commerce store with Paystack. Get started here → Mobility Bolt introduces new safety measures in South Africa Image source: Zikoko Meme Say cheese! In South Africa, ride-hailing service provider, Bolt, rolled out a new safety measure that requires riders to take a selfie to verify their ID before accessing the service. The company says that it is to improve the safety of a secure environment for both riders and drivers. Rising safety concerns in South Africa: This initiative comes as a proactive response to the tragic incidents involving Bolt drivers in South Africa. In October this year, three teenage boys stabbed a Bolt driver to death and burnt his body in Limpopo. Also, in June this year, Bolt and Uber drivers were banned from dropping off or picking up passengers inside malls in Soweto for three months, following violent activities which saw some Bolt and Uber vehicles burnt by taxi drivers who accused the operators of stealing their customers in the malls. It’s happening in other places, too: In Kenya, the National Transport Safety Authority (NTSA) initially rejected Bolt’s licence renewal request for reasons including safety concerns. Bolt drivers in Kenya have been associated with instances of assault and sexual harassment. In September, a Bolt driver reportedly cut the hand of a female passenger over an argument regarding the trip fare. The NTSA later granted the renewal after Bolt met stringent demands, which included outlining plans to improve driver relations and address challenges faced by drivers and riders in their day-to-day operations. Although the selfie safety system is not yet available in Kenya, the ride-hailing company has set up driver engagement hubs for drivers to voice out their concerns. Zoom out: Uber, another ride-hailing service has a similar feature. The company launched a facial recognition system that uses users’ selfies to identify drivers in 2017. 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. Climate Africa’s first cook-stove carbon credit futures Image source: Burn BURN, a Kenyan cook-stove maker, has
Read More- December 11 2023
In Algeria, African leaders mull startup visas to boost innovation
Technology ministers across Africa are looking to introduce startup visas to support innovation and startup growth while simultaneously addressing the brain drain wave on the continent. Technology ministers from Algeria, South Africa, Tunisia, Botswana, and Nigeria shared details of the startup visa after a panel session at the second edition of the African Startup Conference held in Algiers, the Algerian capital, from December 5 to December 7, 2023. The startup visa will “facilitate the free movement of startups on the continent” and “help to boost the mobility of young entrepreneurs on the continent,” the declaration read. This could also be viewed as another step in achieving “a borderless Africa” with free movement of people and trade. Canada, the UK, and the Netherlands have introduced similar startup visa schemes to attract tech talents, innovators, and investors. Another important takeaway from the ministers’ declaration is a unanimous agreement to begin negotiations for an African Charter on brain drain. It aims to tackle the issue head-on and empower African nations to retain their brightest minds. According to the African Youth Survey 2022, 52% of young Africans will likely consider emigrating in the next few years, citing economic hardship and seemingly better opportunities in North America and Europe. The ministers’ workaround to this issue is creating new policies and completing mergers to develop local talent. The ministers also declared that a Pan-African Startup Strategy will be developed to bolster startup growth further. This strategy will focus on creating an environment conducive to entrepreneurship, offering support programs, and fostering regional collaboration. The ministers also called for the creation of an African Founders Fund. This dedicated fund will provide crucial financial resources to promising startups across the continent, accelerating their growth and boosting Africa’s tech landscape. There have been similar efforts by African leaders to fund startups. Nigeria launched a $672 million fund under the Investment in Digital and Creative Enterprises (iDICE) in March.
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- December 11 2023
LagRide’s asset financing model under criticism after recent moves upsets partners
Ibile Holdings will investigate partners who subjected drivers to poor working conditions after recovering cars from the partners. LagRide, the Lagos state-backed ride-hailing platform, has recovered 21 cars from one of its partners, one Idris Shonuga, as part of efforts to reform its asset financing model with drivers on its platform. The asset financing model means that LagRide vehicles remain the company’s property until the driver completes payment for it. Drivers have to pay ₦8,900 daily for four years to claim vehicle ownership. Explaining the need for the reforms, an executive director of Ibile Holdings, LagRide’s parent company, Oyekanmi Elegushi, told TechCabal that Shonuga held 21 cars in his custody unused for six months. This resulted in losses for Ibile Holdings who secured the cars via a loan facility with Polaris Bank. “The cars we seized were from IOS Holdings [a company owned by Idris Shonuga],” Elegushi said. “The cars were seized because they were meant to make money but were not making money. That means you don’t need it. Each of the cars was expected to remit ₦8,900 daily to LagRide but did not.” Elegushi said Shonuga held on to three extra cars and refused to let go of them, an act that was criminally motivated. “We have submitted the case to [the police station at] Alagbon,” he added. Fred, a Lagride driver, breezes through the third mainland bridge in Lagos as he trails another Lagride vehicle | Image source: Techcabal / Caleb Nnamani Shonuga admitted to owning IOS Holdings, a company that recruits drivers and gives them vehicles to drive for LagRide. “They [LagRide] said categorically they do not want partners after bringing them on board,” Elegushi said, in response to the allegations against him. “IOS is helping [LagRide] to get good drivers. We always get drivers in line with what the government said the scheme is created for.” Offering an explanation for the idle cars discovered in his possession, Shonuga told TechCabal that fuel scarcity was part of the factors that made some drivers abandon the cars with him. Ride-hailing drivers, under the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), have criticised the asset financing model of LagRide. According to them, LagRide’s partners take advantage of the model to accumulate cars and demand unrealistic returns from the drivers. “We have told LagRide that the [asset financing] scheme is a killer,” the general secretary of AUATON, Ibrahim Ayoade, told TechCabal in an interview. “In totality, it is a failure of the government, especially the Lagos government, who promised drivers employment. We critiqued this model, but they used our members against one another.” The state of affairs at LagRide has reawoken the debate of the viability of the asset financing model in the Nigerian mobility sector. Earlier this year, Moove drivers protested against the model due to the steep repayments. Ayoade is of the opinion that the Lagos state government cannot impose cars on e-hailing drivers: the model the mobility service operates does not allow drivers to register their own cars on the platform like they can with other ride-hailers like Uber and Bolt. They can only use LagRide-branded cars on the platform. “If the government wants to do an empowerment scheme, it can give drivers grants to buy cars. You cannot impose cars on drivers!” Ayoade said when he spoke to TechCabal. He also believes that LagRide should be an empowerment platform that gives drivers cars instead of them paying for it for a period of four years under the asset financing model. Ayoade however vowed to work in the best interest of vulnerable drivers under their union that were caught up in this issue.
Read More- December 11 2023
Algeria wants to drive tech investments, but it must first open up
Bracing 10-degree weather, 3,000 investors, innovators, and regulators gathered at CIC Algiers, Africa’s biggest international conference center, for the second edition of the African Startup Conference. The three-day event, which kicked off on December 5, was put together by the Algerian Ministry of Knowledge, Economy, startups, and Micro-enterprises. The conference marks the North African nation’s growing ambition to become a key player in Africa’s tech ecosystem. Algeria has a lot to sell itself on. It sits at the crossroads of Africa, Europe, and the Middle East, offering access to a vast market and investment potential. Also, 30% of its population is young, and its literacy rate is high, giving it the basic ingredients to grow its tech ecosystem, ranked 114th globally by Startup Blink. As it dreams of becoming a tech hub, it must open up what has historically been a closed country; hosting key stakeholders from other parts of Africa is the beginning of changing the perception. A significant highlight of the African Startup Conference was a Ministerial Summit, which featured ministers of technology and their representatives from South Africa, Tunisia, Botswana, and Nigeria to discuss driving innovation on the continent. The outcome of that deliberation is a plan to launch negotiations for an African Charter on Brain Drain and a Pan-African startup strategy. The ministers are also looking at introducing startup visas. One thing is clear: Algeria wants to be the tech confluence of the continent. “We are going to do everything to achieve this ambitious objective of making our ecosystem the place for African startups [to build],” Yacine El-Mahdi Oualid, the country’s minister of knowledge, economy, startups, and micro-enterprises, said during the closing ceremony. The government is backing this plan to spur technological progress. The state-backed Algeria Startup Fund manages $411 million in state funding. Dispatch from Algeria While this is a good start, some believe that there is a need for more private capital in the country’s tech ecosystem. One Abu Dhabi-based investor of Algerian descent described Algeria Venture as “the only game in town.” His characterisation is not entirely accurate. Some external venture funding has flowed into Algeria’s tech ecosystem. Yassir, the YC-backed ride-hailing and food delivery startup, closed 2022 with a $150 million Series B funding. But Algeria is still some way off compared to the continent’s Big Four. Catching up to the continent’s biggest players will take time, and Algeria insists it’s ready to do the work. Already, the country is considering taking next year’s edition of the Startup Conference on the road, and it is taking a pan-African approach to its thinking. A startup visa and an agreement to share innovative thinking and approaches will potentially be the actionable steps for this year’s conference. But there’s still work to be done. Algeria will need to rethink its restrictions on foreign investments and introduce friendly and open policies to show that it is serious about a push into technology.
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- 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
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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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