- 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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- December 7 2023
TechCabal Daily – Twiga Foods in $3m cloud services dispute with Incentro
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Nigeria’s regulators are set to close the year with a bang that will send shockwaves across the country’s payment ecosystem. The Nigerian Inter-Bank Settlement System (NIBSS), which facilitates instant electronic payment, has directed banks, mobile money operators, and all payment service providers to stop letting users deposit money into fintech platforms that are only licensed for transfers and not to hold deposits. This may affect popular companies like CrowdForce and Nomba. Read all about it here. In today’s edition Court drama over Twiga Foods’ debt Kenya finally gets YouTube Music and YouTube Premium MTN COO to step down Tappi secures $1.5 million funding The World Wide Web3 Job openings E-commerce Twiga Foods and Incentro dispute over $3 million cloud services contract Kenyan e-commerce platform, Twiga Foods and Incentro, a Google Cloud reseller, are entangled in a legal battle over a $3 million cloud services contract. The Kenyan court in Nairobi has given both parties five months to resolve the dispute arising from unpaid invoices and a bonus delay totalling $450,000, as claimed by Incentro. However, Twiga claims the owed amount is only $94,000. What dispute? The conflict emerged as Twiga transitioned from high growth to profitability, leading to payment delays on its three-year cloud services contract with Incentro. The $3 million contract at the heart of the dispute committed Twiga to using Google Cloud Services over three years through Incentro. In October, Incentro reportedly sought $261,878 in owed bills from Twiga, a claim now exceeding $450,000. This includes a $92,000 bonus from Google, withheld due to Twiga’s delayed work sign-off. The contract’s intricacies involve Incentro’s obligation to pay Google Cloud’s Africa distributor, DigiCloud, the $3 million balance unless Twiga and Google Cloud cancel the contract. Who do we believe? Twiga, still using Google services but not through Incentro, is in talks with Google Ireland Limited. Twiga CEO, Peter Njongo, stated that the company has paid a 50% deposit of the amount it believes is owes, yet Incentro claims non-receipt of the transfer. The court, after an initial missed deadline for invoice reconciliation last week, is set to hear the case on March 13, 2024. Zoom out: Amidst this, Twiga Foods announced last week that it raised “significant capital” from existing investors, to settle its debts with 100 vendors. 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. Media YouTube launches YouTube Music and YouTube Premium in Kenya Music lovers in Kenya can now enjoy ad-free music and background play with the launch of YouTube Music and YouTube Premium in the country. The services, which offer a premium music and video experience, are now available for subscription in Kenya, joining Ghana, Egypt, Nigeria, South Africa, Senegal, and Algeria where YouTube Music and YouTube Premium are available. Pricing and plans: In Kenya, YouTube Music (Individual) is priced at KES 419, while the YouTube Music Family plan costs KES 669. For an all-inclusive package, the YouTube Premium Bundle is your go-to at KES 499, while the Premium Family plan is available at KES 949. YouTube Premium is all of YouTube and YouTube Music without interruptions. This means that Premium subscribers can now enjoy uninterrupted video playback without ads, continue listening to audio content even when the app is minimised, and download videos for offline viewing. They will also have access to a premium version of YouTube Music, allowing them to listen to music offline and without ads on the standalone YouTube Music app. Is it truly ad-free, tho? There have been rants about how YouTube has been unfriendly to its users by filling the platform with too many ads, pushing them to use ad blockers. The platform is now filled with pre-roll and mid-roll ads, making it hard to watch anything without interruptions. Per The Verge, the platform “launched a global effort” in October to encourage users to allow ads or try YouTube Premium. But the video-sharing platform is reportedly not letting people pay for YouTube Premium either. Sidebar: This announcement comes shortly after another subscription service,Netflix, ended its free plan in Kenya, which aimed to convert its free plan users into paying customers. YouTube Music faces competition from key players like Spotify and Boomplay, both of which are already established in Kenya. Spotify entered the Kenyan market in February 2021, while Boomplay marked its entry into East Africa by establishing a Kenyan office in August 2016. 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 → Telecom MTN COO to step down MTN’s current COO; Jens Schulte-Bockum There is a new boss in town! Jens Schulte-Bockum, MTN’s chief operating officer, will step down at the end of his tenure in March 2024. Schulte-Bockum became COO of MTN in 2017. During his tenure, Schulte-Bockum worked on the group’s digital services platform, the Ayoba super app, and the API marketplace capability Chenosis. Schulte-Bockum who was formerly at the helm of Vodafone Germany will take up a non-executive director position on the boards of MTN South Africa, MTN Nigeria, and Bayobab. Who is the new COO? Schulte-Bockum will be replaced by Selorm Adadevoh, the current CEO of MTN Ghana. Adadevoh previously held key positions in Digicel Group—CEO, COO, and global director for mobile financial services—Millicom, and Tigo in Ghana. Lights out: The key leadership appointment marks a new era for MTN. Headquartered in South Africa, the telco was considering closing shop in three African markets—Liberia, Guinea-Bissau, and Guinea-Conakry—last month. MTN noted that these countries made paltry contributions in revenue—1.6%—to the telco giant. The telecom only holds a small portion of the market share in each of these nations. 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
Read More- December 6 2023
Nigerian regulator clamps down on unlicensed deposit-taking fintechs as fraud concerns mount
The Nigeria Inter-Bank Settlement System (NIBSS) has raised concerns over unlicensed financial services companies posing as deposit-taking institutions, in a sign that the industry is looking to step up regulatory enforcement following outcry over fraud and lapses in customer verification processes by payment providers. In a memo to banks, fintechs and other payment providers, the Nigeria Inter-Bank Settlement System (NIBSS) warned that companies holding switching, payments processing, and superagent licenses are non-deposit-taking institutions and should not be listed as beneficiary institutions when customers attempt to make bank transfers. Superagents, payment solution service providers (PSSPs) and switches are three crucial players providing payment infrastructure and offline distribution that have accelerated financial inclusion over the last decade. The PSSP license category authorises companies such as Paystack, Flutterwave and eTranzact, to operate digital gateways for card payments and money transfers by everyday consumers and enterprise customers. “Listing [these] institutions… as beneficiary institutions on your NIP funds transfer channels contravene the CBN Guidelines on Electronic Payments,” said Ngover Ihyembe-Nwankwo, executive director of business development at NIBSS, wrote in the memo sent Dec. 5. NIBSS — which operates Nigeria’s ubiquitous instant payments system used by all financial services providers — ordered commercial banks, mobile money operators and microfinance institutions to disable outward fund transfers into wallets operated by these firms. A switching license allows fintechs, such as Remita, HabariPay, TeamApt (also called Moniepoint) and Interswitch, to quickly settle transactions without relying on the real-time infrastructure provided by NIBSS. And the superagent license, used by Y Combinator-backed Nomba and Interswitch Financial Inclusion Services Limited (also called Quickteller Paypoint), has been a pivotal category driving financial inclusion, authorising companies to build a network of retail agents armed with a point-of-sales device to provide payments services across the country. By regulation, superagent companies rely on banks to secure POS devices and digital wallets for consumers. According to the Central Bank of Nigeria (CBN), there are nearly 50 superagent companies in Nigeria, at least 75 PSSP license holders and a little over a dozen switching companies. However, over the last few years, as fintechs expand, many of these companies now offer deposit-taking services. Excluding commercial banks, payments service banks and microfinance institutions, there are less than two dozen financial institutions, namely mobile money operators, licensed to accept and hold consumer deposits directly, according to the CBN. But on consumer payments apps, including bank apps, the list is much larger and includes dozens of unlicensed deposit-taking companies, such as superagents and switches. “Switches, PSSPs and [superagents] may process outward transfers [from wallets] as inflows to Banks but are not to receive inflows as their licenses do not permit them to hold customers’ funds,” NIBSS wrote in the memo The latest order could purge several fintechs away from consumer payments apps as banks and fintechs tighten scrutiny over illicit fund transfers and concerns over weak verification processes by other companies. In October, TechCabal reported that Fidelity Bank, a major commercial bank, had temporarily restricted consumer fund transfers to neobanks, such as Moniepoint, Kuda, OPay, and PalmPay. While the bank declined to comment on the issue, industry insiders cited rising fraud and customer verification as precursors for the action. Financial services companies are also proposing other initiatives to strengthen security and anti-fraud measures in the industry.
Read More- December 6 2023
Global wealth and VC funding
Economic markets and government policies affect global wealth distribution. Major world powers like the US, China, and Japan are heavily involved in making some of the key policies that affect the law of demand and supply and, extensively, global wealth distribution. One such entity is the United States’ central bank, the US Federal Reserve. The US Federal Reserve’s monetary policy decisions, such as interest rate adjustments and quantitative easing measures, can stimulate or slow economic activity, affecting liquidity and investment availability for startups. VC funding provides capital to early-stage startups with high-growth potential, influenced by this global economic liquidity. To understand this, let’s consider global wealth as a big jar of coins, and that jar represents all the money in the world. When the US Fed decides to make it easier for people to get money, it is like adding more coins to the jar because lower inflation frees up more money for investment and VC funds. On the other hand, when the US Fed decides to make it harder for people to get money, it’s like taking money out of the big jar; this means less money is freed up for limited partners (LPs) and investors to invest with. The Federal Reserve’s monetary policy can influence venture capital (VC) funding by making it easier or harder for VCs to invest in startups. How this affects LPs In essence, the US Fed’s monetary policies act as a significant driver of global wealth and, consequently, VC funding. Policies like these determine the rate at which limited partners provide capital for VC firms to fund businesses. For instance, when the borrowing cost is high, the interest rate tends to be high. LPs may decide to pursue other forms of investment that guarantee them low expenditure and better returns. Here, government bonds, commodities or stocks make a lot of sense for them. But in low interest economies, investing in bonds isn’t too clever, as yield is low. Instead, they grasp on straws and invest in companies that VCs analyse to succeed, and hand them capital. They can make a lot more money from equities and business stakes. In a nutshell, global economic health plays a role in VC funding. VC funding boom in the 21st century Between 2020 and 2021, VC funding experienced unprecedented growth due to the Fed’s expansionary monetary policies, resulting in increased valuations and startup activity. In 2021, funding peaked at $345.4 billion, breaking the previous record set by 2020. Some key activities that shaped these strong performances were: US Fed’s expansionary monetary policy at the time. In stark comparison to 2023, the US Fed fund rate was drastically reduced between February to April 2020, from 1.58% to 0.05%—stimulating the economy and landscape for VC funding. Remote work and the SaaS boom produced more founders and startups. VC firms had amassed considerable capital in the years leading to 2020. This ample supply of cash enabled VCs to actively pursue and invest in promising startups. An estimated 20% of funded companies were successful after raising in 2020. This gave VC firms more confidence to pursue deals in technology, fintech, and health-tech startups. Blockchain’s stock skyrocketed during and after COVID. Investors wanted a piece of that pie. The drive for early adoption of technologies backed to be the next big thing increased investment activity. The performance of the stock market, particularly in the technology sector, reached record highs during this period. This success fuelled investor confidence in the potential of early-stage startups, further incentivising VC funding activity. VC funding challenges overtime One major challenge for VC funding, however, has been the decline in global liquidity and increasing risk aversion among investors. This has made it more difficult for VC firms to raise capital from investors, which has in turn reduced the amount of money available to invest in startups. Despite these challenges, there are still opportunities for startups to attract VC funding. Let’s take a look at the trend last year. The AI boom The artificial technology (AI) industry in tech is experiencing a boom now, thanks to key players like Google, Microsoft, and recently, OpenAI. Generative AI was obviously the clear breakthrough trend for VC funding in 2022. That trend continued in 2023. VCs continue to place bets on artificial intelligence leading the future of technology. In October 2023, out of 100 companies that raised, 22% were Gen AI startups. Sectors that traditionally led raising rounds like IT, business and financial services, and healthcare all fell behind by 35% in 2022. This could potentially point towards the future of investment tilting towards AI technology. Thankfully, the place of innovation will never be overlooked by investors. Startups innovating in these sectors like finance, healthcare, and education are still getting funded. But the new trend is with companies that are using artificial intelligence for industry solutions in finance, healthcare, and education. Global wealth prediction Credit Suisse predicted global wealth of emerging economies to grow by 6.5% over the next five years. During this same time, Statista has also forecasted inflation to reduce to 5.79% as early as 2024 and 3.83% by 2028. This would allow economies to operate open markets. With this, the US Fed is expected to lower borrowing costs soon and turn the lever for more expansive monetary policies. This will in turn recreate all the occurrences that happened in the 2020–2021 VC funding boom. Here’s what the prediction might look like: Fed will reduce the federal fund rates—although we may not get as low as the central bank’s 2% rate just yet. SaaS startups are still moon-shooting in 2023—we’re still seeing the trends in healthtech, fin-tech solutions, blockchain, artificial intelligence, and more. With more companies documenting their APIs, the barrier to SaaS startup founding is getting lower, and this means more innovation from founders in a few years. Low inflation will open up more funding from LPs that VC firms can use to invest in companies. Specialised VC funds in cleantech, for example, quickly shaping the VC landscape. How to
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- December 6 2023
Entering Tech #51: Why you should try focused hours
Get more work done without losing sleep. 06 || December || 2023 View in Browser Brought to you by #Issue 51 Why you should try focused hours Share this newsletter Greetings, ET readers If you’re looking for short explainers on tech roles, we’ve got you. Binge watch the one-minute Entering Tech shorts on YouTube, and hear tech bros describe their jobs. Listen to professionals from Flutterwave, Dojah, Interswitch and Found talk about their work, and see if you’d like to follow suit. Watch the series here. Faith Omoniyi & Timi Odueso. Tech trivia Here is this week’s trivia. Answer is at the bottom of this newsletter. How many hours, on average, does a person spend at work during their lifetime? (It’s not as much as you think it is!) Simplify with Zido Streamline your global supply chain from procurement to distribution with Zido. Start here. Long and hard hours In today’s tech world, working long hours is often equated to productivity. Tweets like this from tech influencers, for example, say that working overnight or long hours gets things done. While this might be a great approach to getting a lot of work done quickly, research has shown that employees who work more than 60 hours per week are more likely to experience burnout, which leads to decreased productivity, increased absenteeism, and health problems. You might say no pain, no gain, but there might be better ways to get more work done without losing sleep. Hey, it’s not rocket science. It is simply focused hours What are focused hours? Focused hours are two or more hours dedicated to deep, uninterrupted work. It’s also called “Focused time”. It’s the time people tackle their most demanding work with undivided attention. People who practice focused hours don’t bother about the constant beep of Slack notifications…or hot Twitter goss. Focused hours aim to eliminate all distractions so you can do your best work and get it done faster. Focused hours afford you a smarter approach to attaining your goals. Who doesn’t like smart work? Image source: Zikoko Memes A study by the University of Texas at Austin found that employees who could focus on their work were more creative and came up with new ideas more often. Every startup needs fresh ideas to thrive, and focus time could bring fresh ideas that could give your startup a leap, which means more pay and bonuses. Some other studies have shown that employees who engage in focused work can boost their productivity by up to 20%, meaning that tasks that would take the whole workday to complete can now be completed with 2 hours to spare. One study, conducted by the University of California, Los Angeles, found that employees who had dedicated blocks of focused time were able to complete tasks 50% faster than those who were constantly interrupted. Read Piggvest’s Grown Ups for free Experience a journey of friendship, financial twists, and the hilarious chaos that comes with being a Grown-Up in Nigeria. Read Grown Ups for free. Techies talk about focused time Now that you know the benefits of focused hours, you might be considering trying out focused time. Here’s how young professionals are doing it: Ifihan Oluseye, a software developer, says that prioritising tasks, setting boundaries, and single-tasking have helped her maintain a focused work culture. She says that having dedicated workspaces and noise-cancelling headphones has helped her remain focused during work hours. Ifihan also uses time-tracking apps to gauge her level of focused work hours occasionally. For Israel Adetunji, another developer, putting his phone on focused mode—or DND for Android users—helps avoid distractions. “When I am in my focused mode, I do not get any notifications which allow me to focus.” Ifihan Olusheye “I plan my most intense task towards the morning,” Kelechi Njoku, deputy newsroom editor at TechCabal—and my boss—tells me. For people like Kelechi and myself who work in short bursts of energy, identifying the work that requires the most intense amount of energy and prioritising it makes all the difference. “While I am not against working late into the night and having midnight sprints, the goal is to have a flexible schedule so that after you have worked through the night, your day is freed for other things like resting. “If I want a slower Monday, perhaps I do some of my work on the weekend”, says Kelechi. “The point is not to work, work, but to have time to rest and do other stuff. Kelechi Njoku Kelechi strongly believes that a focused work culture should be promoted at workplaces. “Employers should insist that once work has closed, employees should stop working,” he said. Israel agrees with Kelechi. “Founders need to understand that if they want their employees to be effective, they don’t want them to burn out, so you don’t want them working excessively,” he said. Basecamp, a project management software company, has a policy of allowing employees to work from home on Fridays, but they must use that time to work on deep work projects that require uninterrupted focus. Buffer, a social media management platform, has a policy of giving employees two hours of uninterrupted time per day to work on their most important projects. While this policy is not a new concept for startups in other countries, perhaps it’s time for HR to yield to Kelechi’s advice and implement focused work hours in your startup…or in your day-to-day work life. Ultimately, the sole purpose of adopting focused work time is to ensure a fair work-life balance. Working all of the time is not a fair way to live life. I know it might be impossible to rule out the culture of overwork in the tech ecosystem due to its high competitiveness and because many tech workers are passionate about their work and are willing to put in long hours to achieve their goals. However, my [unsolicited] advice is for you to try out focused time. Do let me know your thoughts about focused work time—faith.omoniyi@bigcabal.com. Ask
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- December 6 2023
The people who call the shots at Eden Life
Eden Life, a home service company, has a goal to become profitable within 12 months. Here is the composition of its leadership team. Eden Life was founded in 2019 as a home service company providing laundry, cleaning and chef-made meal services to Nigeria’s middle to high-income earners. Ex-Andela employees Nadayar Enegesi, Prosper Otemuyiwa, and Silm Momoh started the company and have since raised $2 million in total investments. According to its LinkedIn, Eden Life has over 50 employees, some of whom joined after it announced plans to expand operations to Kenya. A significant exit from the team is its former growth lead, Fu’ad Lawal, who worked with the team from 2020 until November 2022, during a time when employees reportedly took pay cuts to deal with unfavourable economic conditions. As a response to a bad economic situation heralded by multiple inflations and soaring prices of foodstuff in Nigeria, Eden Life unbundled some of its services and started a fast-food delivery service. In October 2023, Eden Life said it could become profitable in 12 months, a bold move in an uncertain market. As the company continues to work towards its sustainability, here are the people at the helm of affairs at Eden Life. CEO & Founder – Nayadar Enengesi. CFO & Co-founder – Prosper Otemuyiwa. Product lead & Co-founder – Silm Momoh. HR Lead – Diseye Amy Naasin. Chief Marketing Officer – Adedeji Adeleye. Director of Operations – Sofiri Daminabo. Ajoke Yusuf – Customer Sales and Success Lead. Food Production Lead – Firi Adoki. Jomi Oguntuase – Chief of Staff. Brand and Content Lead – Olumide Yomi-Omolayo. Operations Lead – Adebukola Alao.
Read More- December 6 2023
Exclusive: tappi raises $1.5 million pre-seed to digitize African SMEs
This startup allows small business owners to place ads using airtime; it has raised $1.5 million pre-seed to pursue its next growth phase in Nigeria and Kenya. tappi, an end-to-end digital commerce SaaS solution tailored for small and medium-sized businesses, has raised $1.5 million in a pre-seed round. tappi simplifies the process of creating and managing an online business profile, enabling SMEs to showcase their products and services, engage with customers, and accept payments. Mercy Corps Ventures and Chui Ventures led the fund round, with participation from Digital Currency Group, SOSV, Resilience17, growX ventures, Orbit Startups and Reflect Ventures, with participation from angel investors and advisors from global tech companies, including Google, Salesforce, Zendesk. tappi will use the new funding to double down on its current markets and focus on talent acquisition and overall brand building. SMEs are the lifeblood of the African economy, contributing about 50% to the continent’s GDP and employing over 80% of the workforce. However, these businesses are rife with numerous challenges, which may include digitising their businesses to leverage profits in the digital age. Founded in 2022 by Kenfield Griffith (CEO) and Louis Majanja, tappi helps to digitise these small businesses by creating an online business profile or websites for them. Once a business owner creates a profile on the tappi app and supplies their business information, tappi creates a website which is SEO-optimised and indexed on Google. “Our goal is to help businesses achieve visibility,” Griffith told TechCabal. According to Griffith, the websites are usually available in 2 minutes. Per numbers seen by TechCabal, tappi has indexed 5,000 business pages on Google over the last few months. Via these sites, tappi helps businesses collect reviews from their customers. tappi also partners with mobile network operators—currently, it only partners with MTN—to ensure that small business owners can purchase ads using airtime. Oftentimes, small businesses encounter bottlenecks when trying to pay for ads with their credit cards. However, tappi offers users a specialised data bundle consisting of an ad credit for placing ads, a data bundle, and a voice bundle. tappi offers an AI feature that businesses can use to generate business ad descriptions. According to Griffith, tappi’s AI feature is used to provide what the businesses don’t have the resources to do. “We have found that most of these businesses do not have the resources to craft their ad copies well, hence low-performing ads,” he said. “So the tool permits them to input details about their business and get ad copy,” he said. tappi is not yet profitable but Griffith asserts that the startup is on the path to profitability and is looking to explore partnerships for its next phase of growth. The startup makes money from customers’ subscriptions ranging from $2 to $100. Griffith says the startup has seen a huge flow of subscribers between the $2–$19 threshold and has seen a 19% MoM growth in business ads and business data bundle subscriptions. Speaking on the round, Griffith said, “We are grateful to be supported by great investors who share our vision and the mission to address the untapped potential within Africa’s informal SME markets, particularly in overlooked service industries such as food services, fashion, and agriculture, and health and beauty. We are eager to empower SMEs across Africa by providing them with a trusted identity online to find customers.”
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- December 6 2023
TechCabal Daily – Y Combinator-backed fintech shuts down
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Yesterday, we told you about how Kenyan online marketplace Sky.Garden is bouncing back through a $1.63 million acquisition deal with Lipa Later. But, we know we left you on the edge about the nitty-gritty details of the deal. No teasing here—we just wanted to get all the details right! Our Kenyan reporter, Kenn Abuya wrote all about it here. In today’s edition Nigerian fintech Pivo shuts down Jumia Nigeria’s CEO steps down Lidya shutters European business Bitmama to acquire Moniepoint-backed fintech Kenya halts roll-out of digital IDs The World Wide Web3 Opportunities Fintech Pivo, a Nigerian supply chain fintech, shuts down Co-founders of Pivo; Nkiru Amadi-Emina and Ijeoma Jacquelyn Akwiwu Pivo, a Nigerian fintech startup that raised more than $2.6 million from Y Combinator and over 17 other investors, has closed shop. Despite its promising start, the company had to cease its operations one year after raising a $2 million seed round in November 2022, earmarked for extending operations into East Africa and introducing payment-focused products. Why? The CEO, Nkiru Amadi-Emina, did not deny the shutdown but refused to disclose specific details, stating that she would “be happy to do so at a later date”. Co-founded by Nkiru Amadi-Emina and Ijeoma Akwiwu in July 2021, Pivo offered banking services to small supply chain businesses in Nigeria’s supply chain sector. With two fintech verticals—Pivo Capital, a lending product, and Pivo Business, a business banking product—the company claimed to have disbursed over $3 million in loans and processed more than $4 million through Pivo Business. Zoom out: Pivo’s closure adds to the growing list of African startups that have shutdown in 2023. Startups like Lazerpay, 54gene and Hytch shutdown in April, September and February respectively, due to the economic downturn and a rising funding gap. 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. E-commerce Jumia Nigeria’s CEO steps down Jumia Nigeria’s new CEO Sunil Natraj Sunil Natraj will replace Massimiliano Spalazzi as CEO of Jumia Nigeria. Massimiliano Spalazzi, the current CEO of e-commerce giant Jumia Nigeria, will be stepping down in December 2023 after working with Jumia Group for 11 years. Spalazzi, one of Jumia’s pioneer employees, will be replaced by Sunil Natraj. Natraj, who previously headed Jumia Ghana’s business arm, will start in his new role in January 2024. Natraj’s appointment comes at a time when Jumia suffered a decline in growth from its single biggest market—Nigeria—after the country’s unstable currency exchange system affected Jumia and other businesses. Jumia recently turned its focus to rural markets in Nigeria to ensure profitability. Another view: Natraj’s appointments mirror the current reshuffling process to get Jumia on track towards profitability. The e-commerce board appointed Francis Durfay as the company’s CEO in February. Dufay was announced as the acting CEO after the exit of Jeremy Hodara and Sacha Poginonnec as co-CEOs. Since Francis Dufay took the helm at Jumia, he has implemented painful cuts across the company, including laying off 900 (20%) employees. Also, 60% of Jumia’s top management team who work from the UAE were mandated to work from the continent to save costs. Dufay also earns less than previous CEOs. Lights out: Over the years, Jumia has consistently splurged on marketing and advertising costs as it positions itself in the African market. However, the company reduced its advertising spend by 40% early this year to ensure profitability. The company is looking to expand into more Nigerian cities in the coming months as it focuses on rural markets to ensure profitability. Fintech Lidya shuts down European business, shifts focus to Nigerian market Co-founders of Lidya; Tunde Kehinde and Ercin Eksin Lidya, a small and medium enterprise (SME) lending company, has decided to exit its European lending operations in Poland and the Czech Republic. The seven-year-old company aims to redirect its efforts towards growing its new credit assessment and loan recovery offering for the Nigerian market. Why? Lidya decided to leave the European market three years after it expanded its small business lending services to Eastern Europe. The company is now channelling its focus on Lydia Collect, a loan recovery tool initially developed last year, for its in-house SME lending operations. Tunde Kehinde, Lidya’s co-founder and CEO, expressed confidence in Nigeria’s tech-savvy lending ecosystem, calling it the “ideal launchpad” for Lidya’s solutions that support data-driven decision-making. Lidya Collect, built upon Nigeria’s Global Standing Instruction (GSI) technology, will serve as a robust last-resort system, enabling connected lenders to directly debit accounts of loan defaulters in other banks. The company collaborated with the Nigerian Inter-Bank Settlement System (NIBSS) to integrate Lidya Collect with the existing GSI infrastructure. A new product: Additionally, Lidya unveiled Lidya Bridge, a credit assessment offering introduced in October 2023. Lidya Bridge will analyse 300 data points from borrowers’ bank statements, streamlining the process of evaluating new loan customers. The big picture: Lidya will focus on selling Collect and Bridge to micro-finance institutions and other financial service providers, with over 50 lenders and microfinance banks already signed up for the service. Since its inception in 2016, Lidya has raised a total of $16.5 million in funding, with its latest being $8.3 million in Pre-Series B funding. 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 → Acquisition Bitmama in advanced talks to acquire Payday in $1 million equity deal Nigerian fintech Payday, after securing a $3 million seed funding round in February, is now in talks to be acquired by Bitmamaa Nigerian crypto exchange startup. This news comes three months after Payday reportedly began exploring acquisition opportunities. What’s the price? Bitmama is offering Payday investors $1 million worth of equity in the crypto company at a $30 million valuation. This acquisition would be mutually beneficial, as Payday would gain access to
Read More- December 5 2023
Court drama over Twiga Foods’ lingering cloud service debt
Four months—that’s how long Kenya’s most funded e-commerce platform has to settle a liquidation claim over unpaid invoices in a $3 million cloud services contract dispute. A Kenyan court sitting in Nairobi has given Twiga Foods, Kenya’s most funded e-commerce platform, and Incentro, a Google Cloud reseller, five months to resolve their dispute over how much Twiga owes Incentro. Incentro claims Twiga owes it $450,000 in unpaid bills and a delayed bonus from Google. But Twiga claims it only owes $94,000. According to Incentro, Twiga fell behind on monthly payments on a three-year contract for cloud services as the e-commerce firm shifted from high growth to try to become profitable. After both parties missed an earlier court deadline to reconcile their invoices last week, the court will now hear the case on March 13, 2024. The $3 million contract at the heart of the dispute committed Twiga to using Google Cloud Services over three years through Incentro, a Google Cloud reseller. In October, TechCabal reported that Incentro was demanding up to $261,878.75 from Twiga in owed bills. Incentro says its claim has now gone up to more than $450,000. The amount includes $209,000 in bonuses which Incentro says it was supposed to receive from Google for additional services that are part of perks Google offers to large customers. Google did not pay this bonus because Twiga failed to sign off on the work on time. In a 158-page affidavit filed at the Milimani courts last week, Incetro alleged, among other things, that Twiga paid more than 559,000 Kenyan shillings (roughly $3,900 at the time) in value-added-tax based on unpaid invoices which totalled more than $239,000. But Twiga denies owing Incentro this much. The tech startup, which still uses Google (but not through Incentro), says it is in talks with Google Ireland Limited, the primary provider of Google Cloud Services. “There is an amount Twiga believe we owe and there is an amount Incentro believe Twiga owe,” Twiga CEO Peter Njongo told TechCabal via text. “As a sign of good faith, Twiga has paid a deposit of 50% of the amount we believe we owe.” Incentro said it did not receive the transfer but got a letter the evening before the court case saying Twiga had paid $47,000. According to Incentro, the payment notice showed the transfer was made to an NCBA account which it had closed.” Companies in countries where Google’s invoice billing is not available use Google Cloud through resellers in order to better control spending on cloud services instead of being billed directly. They still pay the same as if they enabled direct billing via a debit card, but also get additional services and more support. Incentro says the contract it entered into with Twiga means it has to pay Google Cloud’s Africa distributor DigiCloud the balance of the $3 million if the contract is not cancelled by Twiga and Google Cloud. “We are mindful that should we not hear from Google Digicloud that [sic] will have no option…but to demand full repayment of the outstanding total commit value,” part of a letter dated October 12, 2023, from Digicloud CEO Gregory MacLennan, read. The letter which was filed as an attachment to an affidavit pointed out that Digicloud will only release Incentro from the payment obligation if Google cancels the agreement; otherwise, Digicloud would pass on any default penalties to Incentro “in order for Incentro to pass on the same quantum release (and/or associated penalties) to Twiga”. Recall that last week, Twiga Foods announced that it had raised “significant capital” from existing investors, including Creadev and Juven. This new capital was supposed to be used to pay 100 vendors Twiga is indebted to. Twiga has previously raised more than $150 million from 25 investors since it was founded in 2013 making it one of the most VC-backed tech companies in Kenya.
Read More- December 5 2023
BasiGo gets $5 million loan to ramp up e-bus assembly in Kenya
BasiGo raised nearly $11 million in 2022. It has since expanded to Rwanda. BasiGo, an electric bus company with operations in Kenya and Rwanda has announced $5 million in debt funding from the British International Investment (BII), the UK’s development finance institution and impact investor. The $5 million is borrowed money, and unlike equity funding, where companies give away ownership in exchange for capital, debt funding involves borrowing money that needs to be repaid. This means that BasiGo will repay BII the sum on agreed-upon terms. The funds will be used to scale electric bus assembly in Kenya as the company races to deliver 100 buses in the country. So far, BasiGo has 19 buses on Nairobi streets, which are run by multiple matatu (privately-owned mini-buses used for public transport) companies. Jonathan Green, co-founder, and chief financial officer of BasiGo, said: “Because electric buses in Kenya are powered by the country’s abundance of renewable energy, electrification of public transport in Kenya holds transformative potential.” BasiGo offers its buses to matatu companies based on its pay-as-you-drive model. Customers have an option to buy an electric bus without a battery for a lower upfront cost. However, they can opt for a pay-as-you-drive subscription, which covers the battery lease. This subscription also provides perks like free charging at BasiGo’s stations and maintenance. The K6 electric bus costs $35,600 initially, and the subscription is $0.14 per kilometre. In 2022, BasiGo raised nearly $11 million. After three months of launching in Kenya, it secured $4.3 million in seed funding, with Novastar Ventures leading the round. This funding was supported by various investors, including Moxxie Ventures, Nimble Partners, Spring Ventures, Climate Capital, and Third Derivative, with $930,000 raised in a pre-seed round in late 2021. Then, in November 2022, BasiGo raised $6.6 million in equity funding, with Novastar, Mobility54, and Trucks.vc jointly leading the way. In November 2023, BasiGo received a $1.5 million grant from the United States Agency for International Development (USAID) to support its recently launched pilot initiative in Kigali, Rwanda.
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