Safaricom, Craft Silicon tap into the buy-now-pay-later trend
Safaricom has expanded its credit services to include a Buy Now Pay Later (BNPL) product. Craft Silicon has also launched a similar product with different terms and target customers. In the past week, two new Buy Now Pay Later (BNPL) products have been launched in Kenya. The first, Faraja, is offered in partnership between telco Safaricom and financial services firm EDOMx. The second is SpotIt by Craft Silicon, the software development company behind Little Cab, an e-cab app. Both products have the same fundamental model but are functionally different because they are offered on different channels, have different partners, and take different approaches to interest rates. Craft Silicon’s SpotIt According to Craft Silicon’s CEO, Kamal Budhabhatti, SpotIt was called a Get Now Pay Later (GNPL) product to set it apart from the competition. SpotIt offers shoppers the opportunity to make credit-based purchases and then repay their loans installmentally. The credit limits are determined based on the customer’s credit score, which is assessed by the bank through which SpotIt is accessed. Customers who purchase products on credit through SpotIt can repay their loans over a period of six to twelve months. According to Budhabhatti, SpotIt’s interest rates are comparable to or slightly lower than those of traditional banks. SpotIt also allows customers to create virtual cards for international purchases and payments. Unlike other BNPL services, SpotIt is a mini app integrated into existing banking apps rather than a standalone service. A mini app is a small program that performs a specific function and can be integrated into a much larger app. This integration offers a key advantage, as potential customers are not required to download another app. This strategy is similar to that of Safaricom and Telkom with their M-PESA and T-Kash apps, which incorporate mini apps from various partners, including financial services like Hustler Fund, a loan product launched by the Kenya Kwanza government, accessible as a mini-app within the two apps. To use SpotIt, interested customers activate their accounts, select their desired merchant by inputting the merchant code on their app, and the merchant processes the items on a hub provided by SpotIt. Once the customer confirms the purchase on their app and accepts the terms and conditions, a unique code will be generated, finalising the loan booking, and confirming the sale completion to the merchant. SpotIt then transfers funds to the merchant for the sale. Budhabhatti informed TechCabal that SpotIt has onboarded approximately 30-40 merchants. Craft Silicon has also partnered with four banks, including NCBA, to integrate SpotIt as a mini app, and others like Equity Bank are expected to join soon. Speaking on the launch of the new product, Budhabhatti said, “We are proud to revolutionise BNPL in Africa and create a product that offers unparalleled value to our partners and customers alike.” He continued, “SpotIt represents a significant step towards financial inclusion and empowerment for individuals across the continent.” Safaricom’s Faraja Faraja has been in development for over a year and only went live a few days ago after approval from the Central Bank of Kenya (CBK). Like Safaricom’s other credit products, such as Fuliza, an overdraft offered in partnership with KCB and NCBA as partners, Faraja is a partnership between the telco and a financial services company named EDOMx. Unlike SpotIt, which applies interest and allows repayments over six to twelve months, Faraja takes a different approach. Here, customers can make purchases ranging from KES 20 ($0.14) to KES 100,000 ($703) without any interest fee and have a 30-day period to repay the loan. However, Faraja’s services are limited to Kenya, so customers cannot use it for international purchases. During the launch of Faraja, Peter Ndegwa, CEO of Safaricom expressed his optimism about the new product. “We continue to innovate M-PESA to empower business owners with different tools and solutions to run their businesses better and to faster grow their firms. Many businesses lose out on sales when a customer would like to make a purchase but lacks money at that point. We are glad to partner with EDOMx to offer Faraja empowering any business to grow their sales by enabling their customers to buy now and pay later,” he said. Revenue model Faraja earns revenue from commissions with its partner network, such as supermarket chains. These collaborations with merchants enable Faraja to earn revenue primarily by providing credit access, motivating customers to make purchases at the affiliated stores. SpotIt, accessed through banking apps, uses the same model and is also beneficial to banks, as they charge interest on the loans offered. The BNPL market in Kenya The BNPL market in Kenya has long been dominated by two companies: Aspira and Lipa Later. The market’s growth has been driven by the increasing adoption of digital payment solutions and the rise of ecommerce platforms in the country. Lipa Later made a swift and key move by acquiring the ecommerce platform SkyGarden when it faced sustainability challenges. This acquisition was instrumental in achieving Lipa Later’s goals, such as extending credit to small-scale retailers on the SkyGarden platform. Lipa Later has also partnered with Mastercard in a joint venture that aims to turbocharge the growth of BNPL payment solutions throughout Africa. The appeal of BNPL lies in its flexibility, which attracts consumers seeking to spread out their payments for purchases. This model is particularly trendy among the younger population and individuals without access to traditional credit facilities. According to Craft Silicon’s CEO, SpotIt is targeted at young people who want the convenience of spread-out payments. Fintech companies and startups have also played a vital role in driving Kenya’s BNPL market’s growth. Through partnerships with various online retailers, they have made BNPL options readily available to customers at checkout. While there is potential for growth and profitability, the BNPL market faces certain challenges. Responsible lending practices and ensuring customers can make repayments are essential considerations. It will be interesting to observe how the market progresses in the future, given its current players and opportunities for lucrative growth.
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Nigeria’s ChowCentral is one of three African startups in Y Combinator’s Summer 2023 batch
ChowCentral, a food-delivery startup, is one of three African startups selected for Y Combinator’s summer 2023 class. It extends Y Combinator’s bet on food delivery in Africa. ChowCentral, ‘a Nigerian startup building restaurant chains for Africans who want high-quality meals,’ has been accepted into Y Combinator’s Summer class of 2023. Only three African startups were selected in this year’s cohort, including Rwanda’s Eden Care and a yet-to-be-named startup from DRC Congo. ChowCental was founded by Tosin Onafuye, Christopher Obasi and Adeyemi Onafuye. As part of the announcement, Y Combinator shared that the startup currently brings in over $80,000 in monthly revenue and touted ChowCentral’s “delicious recipes and faster deliveries” as part of its appeal. ChowCentral was initially called 500 Chow and was launched in 2020 to deliver meals that cost ₦500 to ₦800, a value-led promise. According to its founders, “Chow Central started as a fun experiment shortly after we graduated from University. We created a virtual restaurant page on Twitter to sell affordable meals and also help underutilized restaurants get sales during the Covid lockdown.” Select from our range of tasty and cost friendly meal options. From quick meals to bulk meals, as well as events! We are open from Mondays to Saturdays between 9:00am and 7:00pm HOW TO ORDER: Visit https://t.co/oYcldppDgn or send us a DM or WhatsApp Message on 09021077210 pic.twitter.com/yaPk1wb0OZ — 500chow (@500chow) July 11, 2022 In its current iteration, ChowCentral operates a “central kitchen” and partners with “underutilized commercial kitchens” as fulfillment centers. On its website, ChowCentral is a food delivery service that allows customers to order meals from different restaurants, pay with their in-app wallet and track their orders in real-time. ChowCentral will join an increasingly competitive food delivery landscape with Jumia Food, Bolt Eats, Glovo, and AreaChops. Last week, TechCabal reported that Eden Life, a home service platform, was also experimenting with fast-food delivery. Y Combinator’s bet on food delivery startups in Africa In 2022, only eight African startups were selected for Y Combinator’s summer batch. While fintech startups had the most representation, with six of the eight startups, the other two were food delivery startups. Chowdeck and FoodCourt, two Lagos-based delivery startups, were the surprise inclusions in the 2022 summer batch. Both startups have seen significant growth in the last year. TechCabal reported last week that Chowdeck is rolling out grocery delivery services in Lagos. The addition of grocery delivery means Chowdeck will compete with Jumia on two key fronts. Y Combinator has good reason to be bullish on food delivery, having backed DoorDash in 2013. It has also backed numerous other food delivery startups. In 2021, it selected Vendease, a Nigerian B2B startup that serves restaurants.
Read MoreEXCLUSIVE:Zambia is ready to be Africa’s next major tech hub, says tech minister
Zambia’s tech ecosystem has seen unprecedented growth in recent times, with industry players endorsing it as the next major hub in Africa. Honourable Felix Mutati, the minister of technology and science, tells TechCabal about the state of the tech industry in the country. Two months ago, when pan-African e-commerce startup Wasoko announced its entry into the Zambian market, Daniel Yu, the company’s founder and CEO, cited “high smartphone usage and a pro-business government administration keen on expanding the country’s digital economy” as the reason for setting up shop in the southern African nation. Wasoko is not the only tech company to recently set up shop in “Zed”, as the country is affectionately known by its 19 million inhabitants. Subscription video-on-demand platform Wi-flix, technology infrastructure company Liquid Intelligent Technologies, crypto exchange VALR, and fintech unicorn Chipper Cash have all entered the Zambia market in the last year. inq. has also announced it will be setting up its Artificial Intelligence centre of excellence in the country. So promising is the Zambia tech ecosystem that Vitalik Buterin, co-founder and inventor of Ethereum, the world’s second-largest cryptocurrency, has also expressed his support for its tech scene following a 2019 visit to the country and a virtual meeting with President Hichilema in 2022. So what are they doing differently in Zambia that is making a lot of technology companies want to do business there? TechCabal spoke to Honourable Felix Mutati, Zambia’s minister of technology and science, about what policy measures the country has employed to boost technology, the challenges the government has faced in this process and how they have addressed them. He also speaks on what the future holds for the technology sector in Zambia and why investors should flock to the southern African nation. TechCabal: How has Zambia managed to create an enabling environment for a fast-growing tech ecosystem in the last two years? Felix Mutati: First of all, we carried out an assessment in terms of how prepared the economy was to be able to be driven by technology. When we did that assessment, about two years ago, we found that if we were going to have a digital transformation of the country, we were only 45% ready. From those findings, we knew that there was some heavy lifting to be done to get that readiness from 45% to 100%. That heavy lifting was to be done through five pillars. The first pillar was the concept of a digital government and this basically means how does government work itself incorporate technology? How does government work with the citizens? And how does government work with business? From that assessment, I mentioned, we had realised that government preparedness in that regard was around 34%. The next pillar we assessed was digital financial inclusion where we were at almost 70%. In digital literacy and skills, were at 34% while for the digital infrastructure pillar, we were at 54%. On the last pillar, digital innovation and entrepreneurship, we were at about 40%. Having defined the pillars and assessed our preparedness in each of them, we had an idea of what we needed to do in each of the pillars to move forward. We understood that first, we needed to create a correct policy and from that, we began the journey to construct the ICT policy which was approved by the cabinet last week. In terms of the enabling legal framework, we looked at our data protection and cybersecurity and cybercrime in electronic transactions because those are key in terms of having an enabling environment that drives the digital transformation of the economy. So, that was the first phase. The next step was identifying ways to support our preparedness in those pillars. Number one was facilitating connectivity. How do we use digital infrastructure to connect businesses, citizens and government? What sort of technology did we need to deploy? So, in terms of enabling connectivity, we looked at a combination of communication towers and satellites. We did a proof of concept in ten provinces and identified that it would be cheaper to use low-orbit satellites in places where planting communication powers would be impractical and expensive. Having done that, our goal was to have 100% coverage by 2030 but because of the investments that we have done in the last two years, we have revised that target to have 100% by 2024. The next step was facilitating what is called a national digital identity. In order to have this digital identity, we needed to have a harmonisation of data because what we have now is an identity that is not connected. Data literally stands alone. Now the cost of facilitating that harmonisation is enormous to the government. I’ll give you an example. There are some government programmes that we are providing to citizens and because each programme is independent of the next programme, there are silos. To address that, we embarked on what we call “interoperability system handshake”. Through that, we can connect all these platforms so that they can communicate with each other across the entire digital ecosystem. Financial sector systems can talk to government systems which can talk to citizen systems and so on. Then there was the pillar of cyber resilience. By cyber resilience, it means that when you transact, the transaction must be complete and we are waiting to complete that because that is the only way you can create trust and confidence in digital technology, hence increasing adoption in the process. Otherwise, if you don’t have trust and confidence in digital technologies, it will not grow. The last step to address was concerning partnerships and collaborations. Here, we are saying how do we collaborate with citizens and the private sector for success. We found that what was holding back investments, particularly from the private sector, were some things including administrative barriers, procedures and other rigidities. I’ll give an example. If a telco company want to plant a tower, the regulator needs to carry out an environmental assessment. They have to go and
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The leading African tech moves from July 2023
1. Funding: H2 is off to a slow start In July 2023, 23 African tech startups raised $132.2 million from 25 fully disclosed* raises. Compared to July 2022’s $239.7 million total raise, this represents a 44% YoY decrease. It is, however, a slight increase—about 4.75%—from June 2023 when African startups raised $126.2 million in total. Per region, East African startups took the lead with 35.8% of the funding, $47.4 million across startups in Rwanda, Kenya and Uganda. Central Africa makes a rare second place with 30.2% of the July raises—$40 million raised by cleantech startup Nuru. West Africa and North Africa come in third and fourth with $35.7 million and $9.1 million raised respectively, while Southern Africa has only one fully disclosed raise in July 2023, a $100,000 round raised by South African edutech CatalyzU. African tech moves from July 2023, Image Source: Timi Odueso/TechCabal Per sector, cleantech startups retained the lead with 30.2% of the raises—once again, led by Nuru’s $40 million round. Last month, cleantech startups 41%, about $52.3 million, of the $126.3 million raised. The other leading sectors for July 2023 are e-commerce/retail with $21.9 million raised, healthtech with $20.6 million raised, and fintech with $13.7 million in raises. African tech moves from July 2023, Image Source: Timi Odueso/TechCabal The top 5 disclosed deals of the month are: DRC’s cleantech startup Nuru’s $40 million Series B raise. Rwandan e-commerce startup Kasha’s $21 million Series B raise. Kenyan healthtech MyDawa’s $20 million raise. Nigerian startup Terragon’s $9 million raise. Nigerian logistics startup Moove’s $8 million raise. *Note: This data is inclusive only of funding deals announced in July 2023. Raises are often announced later than when the deals are actually made. This data also excludes estimated grants from accelerators. 2. Legislation: Kenya Finance Act is free, Uganda to tax foreign companies In July, Kenya’s Court of Appeal lifted the freeze order on the implementation of the country’s newly-enacted Finance Act. The lift came after Kenya’s Treasury Cabinet Secretary, Njuguna Ndung’u revealed that the country was losing Ksh500 million ($3.5 million) for every day the Act wasn’t enforced. Now, the country will go on to generate Ksh211 billion ($1.4) from taxes created by the Act. In more news about taxes, Uganda has enacted a new law that will tax foreign companies domiciled in the country. The country’s amended Income Tax Act now imposes a 5% tax on income earned by foreign companies operating in the country. 3. Crypto: SA and Namibia say crypto platforms need licences Last month, Namibia gave crypto a side hug as the country officially approved the licensing of crypto platforms. It doesn’t mean crypto is legal tender just yet, though. It just means the Namibia Virtual Assets Act of 2023 now mandates all crypto platforms in the country to hold a licence before they can operate. South Africa reinforced similar rules. Per the Financial Sector Conduct Authority (FSCA), all crypto exchange platforms in the country will have to apply for licences by November 30 or face the law. Nigeria, on the other hand, confirmed that global crypto platform Binance was indeed operating without necessary approvals in the country. It also warned all crypto investment platforms against soliciting Nigerian investors. 4. Internet: Starlink launches in Kenya and Malawi, Safaricom to launch satellite internet service In July, Starlink launched in two new African countries: Malawi and Kenya. The service launched in Malawi about a week after it launched in Kenya. At least six African countries including Nigeria, Mauritius, Rwanda, and Mozambique, now have the satellite internet service. The service is set to launch in 17 more African countries in 2023, including Zambia and Angola. Meanwhile, the service may see some competition in Kenya where telecoms Safaricom has partnered with AST SpaceMobile to launch its own satellite internet services. 5. Telecoms: Airtel Africa and MTN Nigeria record losses Nigeria’s shaky forex market is eating into telecoms profits. In July, Airtel Africa revealed it recorded a $151 million loss in Q1 2023. The telecom blamed the loss on currency devaluation and foreign exchange issues in Nigeria. While another telecom, MTN Nigeria, did not record a loss per se, it did record a decrease in its profits for H1. It recorded ₦128 billion ($165 million) in profit for H1 2023, 29.14% shy of the ₦181 billion ($234 million) it recorded in H1 2022. 6. Internet ban: Senegal blocks internet access again, Ethiopia ends ban Senegal shut down its internet again in July. Per the government, the shutdown was enforced to reduce hateful messages circulating online following protests over the arrest of Ousmane Sonko who ran for president in Senegal’s 2019 election. This follows events in June where the government shut down the internet twice for the same reason. Ethiopia, however, ended its five-month social media ban which it put in place after planned protests erupted across the country. 7. Mergers, Acquisitions and Expansions: Access Bank acquires Stanchart, Safaricom expands to Asia In big moves, British multinational bank Standard Chartered (StanChart) revealed, in July, that it had completed negotiations to have all its sub-Saharan African assets acquired by Nigeria’s Access Bank. The deal, which is set for competition in 2024, will see StanChart sell its subsidiaries in Angola, Cameroon, Gambia, and Sierra Leone, with the exception of StanChart’s Nigerian subsidy. Safaricom, on the other hand, is planning an expansion into Asia with a partnership that will allow M-PESA customers send and receive money to over 200 million individuals in Bangladesh and Pakistan. style=”text-decoration: none; font-weight: 700 !important; font-style: normal !important; color:#14A673 !important;” 8. Venture Capital: Safaricom incorporates two new subsidiaries In more news about Safaricom, the telecom is pushing deeper into Kenya’s venture capital space with the launch of two new subsidiaries. In July, it set up two new entities that will invest in startups: one in seed-stage startups, and another in growth-stage startups. The seed-stage subsidiary will complement Safaricom’s already existing million-dollar fund, Spark Fund, while the growth-stage subsidiary will invest in well-established startups that will be key to
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WorldCoin’s parent company is indeed registered as a data processor in Kenya
Many people have been asking whether WorldCoin complies with data protection laws in Kenya. It turns out that it is, although Kenyans might not be aware of their rights spelled out in the law. Worldcoin, a blockchain company founded by OpenAI chief Sam Altman, is offering Kenyans free tokens in exchange for their iris scans. The tokens are currently worth about $54 or KES 7,000, which is significant for many Kenyans. The Worldcoin project has been met with some privacy concerns, as the iris scans could be used to create a universal ID system. However, Worldcoin says data from the iris scans will be hidden with encryption technology and the biometric information deleted. But privacy experts and even Vitalik Buterin, founder of Ethereum, have raised doubts mainly about how trusted the orbs are. TechCrunch previously reported hacks of Worldcoin orb operators. Biometric Update, a digital ID focused publication, has also reported iris scans from other sources and processed WorldID being traded on the dark web. The Worldcoin project has been popular in Kenya, with long queues forming at shopping malls where the iris scans are being taken. Some crypto firms in Kenya, including Nuzo, are also taking advantage of the popularity of Worldcoin, offering to help people convert their tokens to cash. In the past week, the World App, a cryptocurrency wallet for WorldCoin, has seen a surge and claimed the top spot on the download charts of the play store in Kenya. TechCabal has established that WorldCoid is registered as a data processor by the office of the data protection commissioner (ODPC) under its parent company’s name, Tools for Humanity GmbH. However, the company is based in Berlin. This means it has permission from Kenyan authorities to collect private data from locals. This snippet shows that Tools for Humanity is indeed registered as a data processor in Kenya Under the Data Protection Act 2021, anyone who acts as a data controller or processor must register with the data commissioner. The law directs data controllers and processors to handle data lawfully, be mindful of limiting data collection, restrict further data processing, and ensure data quality. They must establish and maintain robust security measures to safeguard personal data. The law requires data controllers and processors to store personal data covered by the Act within Kenya. Cross-border processing of sensitive personal data is prohibited. Still, exceptions may apply with specific conditions, such as providing safeguards to the data commissioner, obtaining explicit consent from data subjects after informing them of potential risks, or when the transfer is necessary for contract performance. The Act also grants exemptions from its provisions in national security cases, legal requirements, crime prevention, apprehension, or prosecution. So far, none of these exceptions has been detailed by the data commissioner’s office, and none of our attempts to seek clarification has borne fruit. Non-compliance with the Data Protection Act 2021 attracts a penalty of up to KES 5 million ($35,000) or 1% of the undertaking’s annual turnover, whichever is lower. Individuals face a fine of up to KES 3 million ($21,000), imprisonment of up to ten years, or both. The law applies to all companies processing personal data of data subjects in Kenya, regardless of location. Data subjects, including those who had their iris scanned, can request confirmation, location, and purpose of data processing. They can also request to have their information erased from the processors’ systems.
Read MoreTraction raises $6 million in seed funding to expand operations
Access to credit facilities, business tools, and payment options is a problem for many SMEs in Nigeria, particularly those operating in the unorganised sector. Traction, a Nigerian-based startup, is addressing the challenge. For a small business in Nigeria, getting a loan from the bank is like finding a diamond in the rough. While there are over 41.5 million SMEs in the country—95% of these do not have access to formal financing—less than 1% of the total banking credit is given to small businesses. Nigerian banks offer loans to small businesses after conducting their due diligence, which takes a considerable amount of time and is often riddled with stringent conditions. Traction, a Nigerian-based merchant solution platform, is addressing these challenges faced by small businesses. The startup has raised $6 million in seed round. The funding round was led by Multiply Partners and Ventures Platform with participation from P1 Ventures and other investors. According to Traction, the new funding will be used to drive expansion, accelerate the company’s growth, and strengthen the company’s team. Another challenge faced by small businesses is their inability to manage their operations properly due to their heavy reliance on paper. Despite owning smartphones, most business owners continue to manage their operations on paper, thereby missing out on the opportunity to access formal financial services solutions. As a result, many businesses struggle to expand and capitalise on economies of scale, with some even facing liquidation despite having profitable business models. Traction is providing business tools and payment solutions for this small businesses to enable them to scale and avoid the risk of liquidation. Through its one-stop platform, the startup enables businesses to accept payments, manage finances, and access essential operational tools. With Traction, business owners can accept payments via POS terminals or virtual accounts, use point-of-sale software to record their sales, track inventory, and manage customers through CRM & loyalty solutions. Speaking on the raise, Dotun Olowoporoku, General Partner, Ventures Platform, said, “Traction stands out as more than a payment processor. It is an indispensable growth partner for Nigerian SMEs. The company’s industry-specific software, including its financial services marketplace, offers relevant business solutions, affordable capital, and insurance. We’re excited about the team’s ability to continue delivering product innovation and Traction’s potential to unlock immense value for SMEs, which are the bedrock of Africa’s economy.” According to a statement seen by TechCabal, Traction claims to serve over 70,000 businesses in Nigeria. While the seed funding has been focused on scaling operations in Nigeria, Traction plans to explore growth outside Nigeria in the next 18 months.
Read MoreBlockchain 2.0: Building the next generation of African blockchain products
Moonshot by TechCabal is the conference that brings together Africa’s tech ecosystem in person to network, collaborate, share insights and celebrate innovation. Join us in Lagos on October 11 and 12. In this first article built around the conference, Ngozi Chukwu argues for a positive outlook on blockchain adoption, made possible by persistent tech builders, growing government support and renewed investor optimism. While blockchain technology has many doubters, many experts insist that it could solve some of Africa’s problems. Cross-border payments, inflation hedge, database management and transparency in healthcare and agriculture, intellectual property protection, and election management were some of the use cases to test blockchain’s prowess. The race to launch the definitive Web3 apps to solve these problems for Africans has been in earnest, backed by eager investors. Today, the excitement has mellowed, especially with popular exchanges like FTX going defunct or declaring bankruptcy. The future of blockchain feels uncertain with AI taking the spotlight. Now that hype is muted, builders—who have been accused of romanticising the technology—and critics agree on one thing: for Africa, blockchain is not just a nice-to-have but an essential solution to some of its problems. The once-bright future of the technology is now riddled with many unanswered questions, chief of which is: what does the next-generation of blockchain technology look like? The road ahead Toffene Kama, a principal investor at VC firm Mercy Corps, told TechCabal that he thinks “the next generation of blockchain technology will come from builders who obsess over the real problems that Africans are facing, instead of mirroring Western behaviours”. He said that startups that do the latter can’t stand the test of time. An example is how startups that enabled crypto exchanges in Africa are shutting down completely or discontinuing the service to focus on other parts of their businesses. Nosakhare Oyegun, product partnership lead at Kuda, explained, on The Open Africa Podcast, that the serial closures of crypto exchanges are due to the African market shirking off hobbies it acquired during the COVID pandemic. “People wanting to sit down and look at charts is not normal behaviour. People do not buy Nigerian stocks and just start monitoring them. That was never the way crypto was going to break into mainstream consciousness,” he said. On the other hand, everyone seems to agree that banking cross-border payment is a great opportunity where blockchain technology can truly shine in Africa, especially if the user experience is simplified. Africa’s international payment space is still dollar-dominated, but what buyers and sellers interacting from different countries want is to handle the cash in their own currencies. “Nigerians still have a list of items which the government prohibits them from spending forex on. The interesting blockchain companies are those that can say I can help you send your naira and have your Chinese supplier receive it in yen [China’s currency]. Imagine doing that for exotic currencies within Africa such as sending naira to a Zambian in the kwacha currency,” Nosakhare added. Partnerships with traditional institutions Oluwaseun Adeyanju, founder of web3-focused publication Mariblock is also excited about blockchain-powered remittance and foresees more blockchain startups making partnerships with legacy financial institutions like some already do. “This is because they have the distribution which blockchain startups need to scale in the space,” he said. There is already a trend of traditional financial institutions like banks adopting private blockchains in different African countries. In Nigeria, startups like Zone Technology reported that it was using private blockchain to facilitate payments among one-third of Nigerian commercial banks, including Guaranty Trust Bank, Zenith Bank, and United Bank for Africa (UBA). In South Africa, banks like Nedbank, Standard Bank, and the South African Reserve Bank have private blockchain networks too. Homegrown blockchain infrastructure Another consensus among experts like Shodipo Ayomide, an engineer and blockchain advocate, is that we should optimistically watch out for startups developing homegrown blockchain infrastructure for other developers to build with. “A really good example of startups creating tools for others to build financial products is BitPowr [a startup which poses as the AWS of Africa]. Even during the bull run, they have been reporting high volumes of transactions and they are positioned to do even more with time,” he told TechCabal. There are also startups like Mara that are building layer 2 blockchains on networks like Ethereum to enable faster transaction speeds and cost-effective gas fees. Decentralised finance for lending, fractional assets, and crowdfunding “Decentralized finance (DeFi) is one of the developments I am highly excited about,” Oluwaseun told TechCabal. There are startups lowering the bar for investment and enabling people to own and earn from fractions of real-life assets like real estate. DeFi is also enabling cross-border investment into the global south. “It is typically hard for people to invest in Africa from places like Singapore and other parts of Asia but this technology removes the restrictions imposed by borders,” Oluwaseun added. The same technology is also being applied to develop lending and crowdfunding services which already have evident demand in the market. There is high optimism among blockchain users, but the affordability and accessibility of blockchain technology will be crucial factors in driving its adoption among more Africans. Samuel Akpan, a spokesperson for web3 company ConsenSys, told TechCabal, “Over half of the respondents in a survey, we conducted associate blockchain with the future of money, while 48% view it as the future of digital ownership.” He thinks that things can only get better as blockchain infrastructures have evolved to become more user-friendly and developer-friendly through the introduction of things like account abstraction and EigenLayer. Also, there are a few startups like Machankura that are already responding to barriers to the technology like low smartphone and internet penetration by making blockchain applications accessible to feature phone users. Even government digital currencies like the e-cedi and e-naira are accessible on feature phones. Mixed feelings among investors These questions about the future of blockchain technology are coming up amidst waning funding deals and a series of startup shutdowns. Investors
Read MoreHow the Congo Business Summit can help Nigerian startups expand to Kinshasa
Noel K. Tshiani is the managing director of Congo Business Summit, a flagship conference and expo organised by Congo Business Network. The network works with startups, corporations, and government officials in the Democratic Republic of Congo and abroad. With a profound dedication to innovation, the organisation is passionate about nurturing and advancing the country’s startup and tech ecosystems, recognising the transformative impact they can have on the country’s economy. With the unveiling of Congo Business Summit today, August 1, 2023, the Democratic Republic of Congo (DRC) emerges prominently as a thriving hub of untapped potential and innovation, presenting an exciting destination for Nigerian tech startups seeking to expand and flourish. Congo Business Summit, scheduled to be held at Pullman Kinshasa Grand Hotel from October 12 to 13, 2023, is the largest gathering of startups, innovation leaders, and investors in the DRC. The event is designed to foster insightful conversations, encourage strategic networking, and cultivate partnerships. Alongside exhibitors, panels, and workshops focusing on startups, entrepreneurship, investments, and technology, the summit guarantees participants, particularly startups, extensive media coverage and valuable connections to a variety of investors. The DRC, a country of 100 million people, has experienced steady economic growth and an impressive digital transformation. This momentum has been further strengthened by the creation of the Ministry of Digital Affairs over the past two years, as well as the adoption of the startup law on September 8, 2022, which reflects the country’s commitment to building the digital economy and supporting tech entrepreneurship. Nigerian tech startups are presented with a rich and promising landscape, ripe with opportunities for those seeking to explore new markets and embark on transformative avenues for growth. The strategic positioning of the DRC, bordering nine nations, offers an additional potential consumer base of around 250 million people. Clearly, this is an opportunity too significant for any ambitious entrepreneur to bypass. While the story of the DRC has been told primarily through the lens of its natural resources, estimated at nearly $24 trillion, the scope of the country’s business potential, especially beyond the mining sector, has been largely ignored. With its youthful and vibrant population, coupled with low labour costs and an expansive domestic market, the DRC offers a wealth of opportunities for innovative startups looking to establish a presence on the international stage. That is why Nigerian tech startups can draw inspiration from successful corporations closer to home. Access Bank, FirstBank DRC, and United Bank for Africa serve as exemplary success stories, illustrating the potential and triumph of Nigerian companies that have boldly and effectively expanded into the vibrant and opportunity-rich Congolese market. Pioneering startups in sectors such as fintech, edtech, agritech, insurtech and medtech will find a dynamic and receptive audience at Congo Business Summit in Kinshasa in October. With its evolving technology infrastructure and growing demand for innovative solutions to everyday challenges, from financial inclusion to quality education, accessible healthcare and sustainable agriculture, the DRC offers a fertile environment for expansion. Congo Business Summit provides a unique setting for Nigerian tech startups to interact with their Congolese counterparts, potential business partners, journalists and government ministers. This rare opportunity offers a unique opportunity to gain first-hand knowledge and deep insights into the dynamics of doing business in the DRC, navigating the regulatory environment, comprehending the subtleties of consumer behaviour, and forging fruitful strategic partnerships. Nigerian tech startups should view the DRC market not only as a fertile ground for their own growth and expansion, but as an important stage on which they can play a transformative role in the socio-economic advancement and mutual prosperity of both nations. By introducing innovative solutions and services, Nigerian startups can address key challenges, create jobs, improve living standards and enhance collective prosperity. Open and ready for business, the DRC showcases a vast landscape teeming with limitless opportunities for ambitious Nigerian tech startups ready to expand their horizons. As we look forward to the Congo Business Summit in October at Pullman Kinshasa Grand Hotel, I encourage Nigerian tech startups to explore the untapped potential the DRC has to offer in the heart of Africa. I am convinced that Nigerian tech startups have the potential to forge innovative paths, transform industries, create value, and ignite sustainable development across borders. The future is not just a distant dream, but an immediate and vibrant reality, filled with limitless possibilities, echoing from the heart of Africa.
Read MoreRemedial Health raises $12 million in Series A round
In Nigeria, four out of ten packs of medicine sold are counterfeits. While counterfeit drugs sabotage the local pharmaceutical industry and compromise the treatment of diseases, Remedial Health, a Nigerian health tech startup, is addressing this issue and regularising its supply chain. In Nigeria, four out of ten packs of medicine sold are counterfeits. About 267,000 people die every year as a result of fake and substandard medications. Counterfeit drugs deplete Nigerians’ trust in the country’s healthcare system, sabotage the local pharmaceutical industry, compromise the treatment of diseases, and kill people. While there have been efforts by the Federal Government to solve this problem, Remedial Health, a Nigerian health tech startup, is solving this problem. The health tech startup has raised $12 million in Series A funding—a mix of debt and equity—led by US-based venture capital firm QED Investors and Ventures Platform. The investment represents QED’s second investment in an African startup and Ventures Platform’s first Series A investment. Ycombinator, Tencent, and Gaingels also participated in the round. This new funding will enable Remedial Health to deepen the reach of its services across Nigeria—currently, the startup operates in 34 of Nigeria’s 36 states. Founded in 2021 by Samuel Okwuada and Victor Benjamin, Remedial Health offers digital procurement and patient medication records (PMR) platforms that make it easier for neighbourhood pharmacies, Patent and Proprietary Medicine Vendors (PPMVs), and hospitals to access affordable and authentic retail medicines. Samuel Okwuada, CEO and co-founder of Remedial Health, while speaking on the raise said, “We are delighted to have raised these funds, particularly with the wider context of the global funding downturn and the wide range of economic headwinds in Nigeria. Our continued growth has put us in a strong position to deliver our mission of creating a tech-enabled, pharmacy-centred healthcare network, and we are looking forward to leveraging these funds to achieve more success.” During the peak of the COVID-19 pandemic, Okwuada discovered a market gap and a problem with the drug supply chain: hospitals that needed drugs could not access them due to the markets being shut down. “So I said look, we really need to standardize the supply chain for medicine in Africa,” Okwuada told TechCabal. Okwuada and his team began digitalizing the sale of drugs. Healthcare providers can buy vetted medications through the Remedial App and receive them within 24 hours via Remedial Health’s logistics network. Remedial also offers pharmacies and PPMVs credit to fund inventory purchases and provide employee loans and salary advances. Through its ‘Buy Now Pay Later’ solution, pharmacies on the Remedial can get stock delivered within 24 hours and pay for it later, while Remedia Health charges a little interest. This process strips pharmacies and local drug stores of the tedious paperwork, huge deposits and collateral involved in getting regular loans from the bank to do their business. Pharmacies that opt for the BNPL solution of Remedial Health have a repayment period of 14 days, while hospitals and government institutions have an extended period of 30 days and 60 days, respectively. Logistics pose a challenge Nigeria has three major pharmaceutical market hubs; Idumota in Lagos state, Kano, and Onitsha in Anambra state. Remedial Health reaches the entire nation by establishing regional hubs in different zones across the country to enable a seamless experience. However, moving shipments from one point to another remains a challenge. Okwuada asserts that bad road networks, unreliable third parties, law enforcement and various tax collectors pose a big challenge. “Getting items from point A to point B seems simple, but it’s very difficult to do in Nigeria. Especially when you are now on the interstates like you are moving between states.” According to a statement seen by TechCabal, Remedial Health, works with more than 300 manufacturers and serves more than 5,000 hospitals, pharmacies and PPMVs across 34 of Nigeria’s 36 states. According to Remedial’s CEO, 30 new stores have been opened due to Remedial’s financing offering. Okwuada claims the startup sold over 100,000,000 individual packs of medicine in 2022. “If you apply the 40% counterfeit rule, it means that as a company, we replaced 40 million counterfeit drugs in the Nigeria market,” said Okwuada. While Remedial Health is disrupting the drug supply chain in Nigeria and fighting the long battle against the spread of counterfeit drugs, Okwuada is keen on deepening Remedial Health’s market presence in the country. “The goal is to become the operating system for pharmacies in Nigeria at least within the next 18 to 24 months,” he said. “Right now, the goal is to deepen our presence in Nigeria. We have about 10% of the market share. So, we have a very long way to go before we start thinking of expanding to other countries, and we feel that once you have a significant market share in Nigeria, it’s going to be a lot easier to replicate in other countries.”
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👨🏿🚀TechCabal Daily – MSMEats
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy new month Vote for TechCabal! We’ve been nominated for the “Best Educative Content Creator” award at the Social Media Awards. We’d like to win so our EIC can give take us on a real deep dive at the beach. If you’d like to support our ministry of utmost enjoyment, please take a few minutes to vote for us here. In today’s edition Nigeria pledges $164 million to MSMEs and startups Senegal shuts down its internet again SA sends Google packing startups OPay’s CEO steps down The World Wide Web3: Nigeria confirms Binance’s illegality Event: TC Live Opportunities Economy Nigeria pledges $164 million to MSMEs and startups African telecoms are taking a beating, and Nigeria’s shaky forex market is all to blame. Could it be a good time to be a small business in Nigeria? Amidst economic hardships brought on by an abrupt removal of fuel subsidies and new forex policies, Nigeria’s new president, Bola Ahmed Tinubu, is moving to bolster the country’s informal sector. In a broadcast yesterday, the president announced that the country had earmarked ₦125 billion ($164 million) to “energise” the informal sector, especially micro, small, and medium-sized enterprises (MSMEs). President Bola Ahmed Tinubu How will this work? By March 2024, the country plans to provide grants of ₦50,000 ($65) each to 1,300 MSMEs in all 774 local governments across the country. About 100,000 MSMEs and startups will also share a ₦75 billion fund ($98.6 million) from which they can apply for ₦500,000 ($657) to ₦1 million ($1,315) loans at a competitive interest rate of 9% per annum. Manufacturers also get a cut: Per the president, a ₦75 billion ($98.6 million) fund has also been allocated for manufacturers in the country. This fund will support 75 enterprises, each accessing “₦1 billion ($1.3 million) credit at 9% per annum with a maximum of 60 months repayment for long-term loans and 12 months for working capital”. At this time, nothing is known about the application process for these funds. This is a developing story. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. Internet Senegal shuts down its internet again Image source: DMforCredit, Lol, but we’re serious. Once again, the Senegalese government has shut down access to the internet. If this feels like like déjà vu, it is probably because this happened twice in June, following the arrest of Ousmane Sonko who ran for president in Senegal’s 2019 election. Why is this happening again? In a tweet, the government announced it is shutting off access to the internet to maintain public order. Apparently, there have been some hateful messages circulating on social media and stirring up trouble. The citizens are protesting Ousmane Sonko’s arrest as they think that it is politically motivated to prevent him from contesting in the 2024 election. Senegal, where approximately 58% of the population are internet users, has a history of using social media restrictions to control protests. In 2021, the authorities reportedly limited access to social media and messaging apps, in addition to measures targeting traditional media. Zoom out: Internet shutdowns have become somewhat of a go-to move for governments seeking to assert control. Nigeria previously banned its residents from using Twitter from June 5, 2021, to January 13, 2022, because Twitter temporarily suspended the country’s President Muhammadu Buhari over an offensive tweet. Last year, seven African countries imposed shutdowns nine times. In the year before, 12 countries disrupted the internet 19 times. Is it really that hard to find a balance between openness and order, or will the internet continue to be a pawn in the political game? Discover Trends with Smile Identity Download the Smile ID State of KYC in Africa Report on the latest trends in identity verification across Africa, highlighting the power of biometric verification and document verification in combating fraud. It is a must-read for any business looking to acquire users across Africa and keep up with fraud trends. Policy South Africa’s Competition Commission imposes new restrictions on websites GIF Source: Tenor Small businesses in South Africa can breathe easy. Yesterday, the country’s Competition Commission released its final Online Intermediation Platforms Market Inquiry report. The report represents the culmination of nearly two years of investigations into both local and international business-to-consumer (B2C) online platform markets. It identifies specific features that have a negative impact on competition within these markets. The results: The commission imposes new restrictions on Google, booking.com, Takealotand other websites to ensure that digital competition is fair and smaller businesses can compete online. Why the new restrictions? After an investigation, the Competition Commission found that Google’s business model and dominance negatively impact online platform competition. Additionally, the price parity requirement implemented by Booking.com prevents customers from listing services and products at lower prices on competing platforms. Launched in February 2021, the publication of the final report was delayed by several months after the Competition Commission published a provisional report with recommendations in July 2022. To address the distortion, the Competition Commission has implemented remedial measures on Google, aimed at enhancing visibility for smaller South African platforms in both paid and organic search results. Furthermore, it has directed Booking.com to discontinue its price parity requirement and notify all hotels and accommodation providers on its platform in South Africa about this alteration. Booking.com is also “required to put in place substantial programmes to provide funding of initiatives in the identification, onboarding, promotion and growth of small and medium enterprises (SMEs) that are black-owned and/or in black communities on the Booking.com platform.” All platforms will be given time to implement the remedial actions depending on the complexity of the remedy. Fintech President of Opay Nigeria resigns after two years Ex-President Olu Akanmu and MD Dauda Gotring Yesterday, Olu Akanmu, announced his resignation as president and co-CEO of Opay Nigeria. Moving forward:
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