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November 20 2023

TechCabal Daily – Za Za Zuum

In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning If your Google account has been inactive for two years, it will be deleted next Friday. Starting December 1, Google will start deleting accounts that have been inactive for two years or more—or since 2021. This includes the content of the account from emails to photos and calendar appointments. To save yourself, all you have to do is take your Google account as seriously as you do your New Year Resolution—sign in once a year and then pretend it doesn’t exist. In today’s edition Zazuu shuts down OpenAI’s board closes the door on its CEO Ghana’s apex bank bans eight fintechs Nigerian state to build 250 smart schools in 14 months The World Wide Web3 Jobs Shutdowns Zazuu shuts down Zazuu founders On Saturday, London-based startup Zazuu told TechCabal that it had shut down its services just one year after raising $2 million. Why? The startup, which is a marketplace for African remittance companies, said the shutdown was due to its inability to raise more funding. Founded in 2018 by Kay Akinwunmi, Korede Fanilola, Tosin Ekolie, and Tola Alade, Zazuu has raised about $2.2 million since its founding—a $200,000 seed round in 2018, and a $2 million raise in 2022. The company attracted investors including VC firms like Founders Factory Africa and Launch Africa, as well as angel investors like irokoTV founder Jason Njoku and Kuda CEO Babs Ogundeyi. During its run, Zazuu reportedly helped over 100,000 users find the best rates for sending money to Africa. With people paying as high as 22% in remittance fees, Zazuu’s service would have been attractive with the 1.5% which it offered. Unfortunately, as CEO Akinwunmi told TechCabal, the company found it difficult to explain its business to customers and partners. The big picture: Well, the big picture here is that more African startups are falling victim to the funding drought on the continent. By Q3 2022, African startups had amassed a staggering $4 billion in funding, yet in Q3 2023, the figure has dwindled to a more modest $2.8 billion. This year, at least eight African startups have shut down and half of them—Lazerpay, WhereIsMyTransport, Hytch, Zumi—shut down due to a lack of funding. 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. Big Tech OpenAI’s board closes door on Sam Altman If you can’t beat them, just delete them. Or at least that’s what the board of directors at OpenAI is doing to CEO Sam Altman. On Friday, the parent company of ChatGPT announced the sudden departure of CEO Sam Altman after the board of directors decided he was not being “candid in his communications” and could not be trusted to move the company forward. The board’s decision came a month after Altman announced a new feature that would allow users to build their own versions of ChatGPT—a service that is barely a year old, and achieved over 100 million active monthly users in its first quarter! Everyone’s shocked: Taking a leaf from Nigeria’s ex-president, the public has expressed shock at the board’s seemingly irrational decision. Sources close to the story report that Altman only found out about the decision minutes before he was informed in a Google Meet call. Image source: Zikoko Memes Following the announcement, co-founder and president of OpenAI Greg Brockman, who was also removed as chairman of the board, also quit in solidarity with Altman. Several senior researchers at the company also followed suit. Chief technology officer Mira Murati has been appointed interim CEO while the board searches for a permanent successor. Investors were blindsided: It also appears that investors were as blindsided by the changes as Altman and Brockman. Microsoft reportedly learnt of the change one minute before the OpenAI announcement was made. Forbes also reports that other investors were shocked by the news. CEO of Khosla Ventures Vinod Khosla took to Twitter to say, “To be clear, Khosla Ventures wants @sama [Sam Altman] back at @OpenAI but will back him in whatever he does next.” CTRL + Z: The board may be trying to undo its damage as Altman and Brockman are now in talks to return to their positions. The reversal is partly due to investor intervention—with Microsoft and Thrive Capital at the helm, and threats to the value of the startup. While nothing is set in stone yet, Altman is reportedly setting conditions for his return: he wants some members of the board gone, and stronger control. If he succeeds, the CEO will bring new meaning to what doesn’t kill a person makes them stronger…or had better start running. The big question that no one has answered yet is what brought on the board’s illogical and ill-timed decision. What does “candid in his communications” mean? And what does success look like to the board if what Altman is doing isn’t enough to “move the company forward”? Introducing: M-Pesa payments in Kenya Paystack enabled M-PESA payments for merchants in Kenya. See what Paystack has been up to in 2023 → Regulation Ghana’s apex bank bans eight fintechs The Central Bank of Ghana has barred eight money transfer organisations (MTOs) from operating in the country. The eight companies include Xoom, Wise, LemFi, Transfer Go, SendValu, Aza Finance, Boss Revolution and Supersonicz. What’s happening? Per the apex bank, these fintechs don’t have the regulatory approval to operate in Ghana. The bank has also warned all financial institutions in the country to stop dealing with these fintechs. “Approved MTOs are hereby reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines in respect of their operations,” the notice from the apex bank read. Ghana’s laws say companies can’t trade foreign currency without a licence. If caught doing so under Section 29.1, the companies could face a fine of up to seven hundred

November 18 2023

Tanzania’s NALA wants to make Rwanda a settlement hub for East Africa

NALA Money, the Tanzanian business and consumer cross-border payments fintech backed by Bessemer Ventures and Accel, says it plans to make Rwanda a settlement hub for its East African remittance business. Making Rwanda a settlement hub means that all international money transfers that Nala processes for beneficiaries in East Africa will first terminate in Rwanda before it is settled into the accounts of beneficiaries across the region. In June this year, Flutterwave one of Africa’s most-valued privately held fintech, announced a similar plan after it acquired a payment service provider (PSP) licence in Rwanda. Nala Money, which allows residents in the United Kingdom, Canada and the United States to send money to 9 African countries, recently acquired a licence from Rwanda’s apex financial regulator, the National Bank of Rwanda. The licence will allow the company to cut out middlemen and offer cheaper international money transfers, Nicolai Eddy, chief operating officer of Nala told TechCabal. “It means we can aggregate the payment channels ourselves,” Eddy said, “We want to go deeper and a PSP licence also means that we can process remittance payments for third-party providers and integrate with local banks and telcos.” A PSP licence in Rwanda means NALA can offer money transfer services through established players like Western Union, potentially opening up a new distribution and customer acquisition front for the business. Previously a fintech like NALA would have to rely on payment aggregators like Cellulant, DPO Payment or Onafriq (previously MFS Africa) in order to disburse payments to its customers in Rwanda. Per the World Bank, remittances as a percentage of GDP reached 3.6% ($474 million) in 2022. Altogether, Kenya Uganda, Tanzania and Rwanda received roughly $6.36 billion in remittances last year, World Bank data shows. Rwanda hopes to become a leading hub for financial services firms. The 2022–2027 fintech plan of Rwanda’s ICT Ministry says it hopes to build, “the narrative that Rwanda is the gateway for entering the African fintech market.” Some of the continent’s biggest fintechs already operate in the country with ChipperCash and Paystack being the most recent entrants.

November 18 2023

Ghana’s Central Bank may fine Lemfi, Wise, others for unapproved FX operations

Ghana’s Central Bank has barred eight money transfer organisations (MTOs) from offering remittance services without regulatory approval. According to a notice seen by TechCabal, these companies include LemFi, Wise, Transfer Go, PayPal’s Xoom, SendValu, Boss Revolution, Aza Finance, and Supersonicz. According to the notice seen by TechCabal, the Central Bank warned the public, commercial banks, dedicated electronic money issuers (DEMI), and enhanced payments service providers (EPSP) about dealing with the listed companies. Section 3.1 of Ghana’s Foreign Exchange Act, 2006 (Act 723) prohibits dealing in foreign exchange without a licence. According to Section 29.1 of the Act, operating without a licence attracts a fine “of not more than seven hundred penalty units or a term of imprisonment of not more than eighteen months or both.” “Approved MTOs are hereby reminded to terminate their foreign exchange flows through their partner institutions only and to adhere strictly to all guidelines in respect of their operations,” the notice from Ghana’s Central Bank read. For many African countries, remittances are an important source of foreign exchange. According to World Bank data, remittance inflows to Sub-Saharan Africa, grew an estimated 5.2% to $53 billion in 2022, compared with 16.4% in the previous year.

November 18 2023

Zazuu, a payment marketplace for remittance services, has shut down

Zazuu, a London-based fintech that built a marketplace for African remittance companies and raised more than $2 million, has shut down, citing a lack of funding. Zazuu, the fintech marketplace for cross-border payment networks in Africa that raised over $2 million from investors like Launch Africa and Founders Factory, has shut down after failing to raise funding. “We explored every option before making this decision,” the company said in a LinkedIn post announcing the closure. Zazuu was founded by Kay Akinwunmi (CEO), Korede Fanilola (COO), Tosin Ekolie (CTO), and Tola Alade (CDO) in 2018 and raised a $200,000 seed round from Launch Africa and ODBA in August 2021. A year later, the company raised $2 million from Launch Africa, Founders Factory Africa, ODBA, HoaQ, Tinie Tempah, Jason Njoku, Babs Ogundeyi, and other angel investors. How strategic partnerships helped Kay Akinwunmi build Zazuu Africa has the highest rate for remittance services for any continent; the average rate for sending money to the continent from Europe hovers around 9% and could be as high as 22% in some instances. Zazuu, which started as a simple Facebook and Telegram chatbot informing users of daily FX rates, evolved into a full-blown aggregator that listed more than 17 Africa-focused remittance providers on its platform before its closure. The startup operated on the belief that a marketplace where customers could choose the cheapest remittance option could help lower prices by bringing transparency and increasing competition. Akinwunmi told TechCabal in March 2022 that Zazuu had the lowest rate anyone transferring money to Africa could get on the platform, at 1.5%. The startup also said that almost a hundred thousand users had used its Search and Compare service, which customers used to compare prices to find the best rates for sending money to Africa. Adewunmi told TechCabal in May 2022 that one of the challenges Zazuu faced in its earlier stages was explaining to customers and potential partners what they were trying to build. He added that another challenge Zazuu faced was licensing requirements and the costs attached to them. Zazuu’s shutdown is another in a series of startups shutting down this year as funding dries up for Africa’s tech ecosystem. By the end of October, African startups had raised less than $2.8 billion this year, which represents less than half of the $6 billion raised last year. Lazerpay, a crypto startup that shut down in April, also blamed a lack of funding for its closure. WhereIsMyTransport, a South African mobility startup, also shut down in October, citing an inability to raise new funding. What does it look like to build a payment network marketplace?

November 17 2023

Exclusive: Leatherback CEO Ibrahim Ibitade Denies Hiding from EFCC After Wanted Notice

Ibrahim Ibitade, the CEO of Leatherback, a fintech startup that provides cross-border payments to customers in seven countries, has said he is not hiding after Nigeria’s Economic and Financial Crimes Commission (EFCC) declared him wanted on Thursday afternoon. According to an Instagram post from the commission, 31-year-old Ibitade is wanted in connection with allegations of conspiracy and obtaining money under pretense. A source at the EFCC, a law enforcement agency that investigates financial crime, confirmed the authenticity of the notice but did not provide further details. “Since this investigation began, Leatherback has supported the EFCC with multiple resources and documentary evidence that has aided this investigation,” said Ibrahim Ibitade on a phone call with TechCabal. “We have done as much as required to ensure the authorities have all the necessary information. My team has spent 35 of the last 60 days at the EFCC offices in Lagos and Abuja. We are not hiding from the EFCC.” Leatherback, SDQ Financials and a complex EFCC case Three sources with direct knowledge of the matter told TechCabal that the EFCC is investigating fraud involving a company called SDQ Financials, an incident first reported by TechCabal in September. According to the Corporate Affairs Commission website, SDQ Financials is incorporated in Nigeria, and only one individual, Lawal Mohammed Kazeem, is listed as having significant control of the company. SDQ did not respond to TechCabal’s request for comments. However, six people with knowledge of the matter said SDQ Financials, a merchant on Leatherback, promised several companies and individuals better FX rates than what was obtainable on Nigeria’s black market. Those sources said several prominent companies, including a publicly listed company, gave billions of Naira to SDQ Financials, an unregulated entity with very little publicly available information, for FX deals. Sources described deals similar to those done by Float, a company that lost at least ₦5 billion in customer deposits. Leatherback said the statement and facts of the issue it shared with this publication in September remain unchanged. According to Leatherback, SDQ Financials is a merchant that uses Leatherback’s Naira and USD wallets. The company said it completed a Know Your Customer (KYC) onboarding process for SDQ Financials and kept records of its transactions, as mandated by law. It denies any direct involvement with SDQ Financials and says it did not know about the fraud allegedly perpetrated by SDQ Financials. A financial services expert told this publication that the EFCC began investigating Leatherack because some of the Naira funds reportedly received by SDQ Financials were traced to Leatherback’s wallets. It is unclear how much the EFCC is trying to actively recover, but two sources say at least ₦3 billion remains unaccounted for. The EFCC has not shared any information on the specifics of its investigation. Nonetheless, Leatherback says it is unfazed and believes it is being bullied. “If a commercial bank in Nigeria issues an account to an individual or a business and that business goes to defraud other people, will you declare the CEO of the commercial bank wanted?” Ibitade asked. Zedcrest Capital, Leatherback’s lead investor in its 2022 $10 million raise, declined to comment on any part of this story.

November 17 2023

Safaricom Ethiopia makes $43,368 in M-PESA revenue three months after launch

Safaricom Ethiopia has made KES 7.2 million ($43,368) in M-PESA revenue three months after it launched in August 2023. M-PESA Ethiopia has a customer base of 1.2 million users, with 67% actively using the product. The mobile money product registered 22,700 M-PESA agents who have facilitated transactions with a total volume of 2 million and a value of KES 43.7 billion ($287 million). In Kenya, where M-PESA has been in operation since 2007, revenue grew by 16.5% year-on-year (YoY) to KES 66.23 billion ($436 million), aided by a 12.0% YoY increase in average revenue per user (ARPU) to KES 344.05 ($2.26). Ethiopia’s other performance metrics undermined Safaricom Group’s earnings, which reported a drop in profits for HY2024, compared to a similar period in 2023. This decline is thanks to heightened financial strain on customers, higher taxes, and currency devaluation. Despite a $400 million investment by the Group, which consists of Safaricom Kenya and Ethiopia, operations in the new market are yet to yield positive returns. After-tax profits dropped for the group Safaricom Group’s profit after tax was KES 27.187 billion ($179 million) in the half-year (HY) ending in September 2023, down from KES 30.229 billion ($199 million) recorded in the previous year. In contrast, Safaricom Kenya’s profit after tax grew to KES 40.609 billion ($267 million) in the HY under analysis, up from KES 35.732 billion ($235 million) in a similar period in 2022. “The period under review was challenging for the business, our consumers, and the country at large. Our performance has been exceptional despite these strong headwinds caused majorly by strong economic headwinds,” said Safaricom Kenya CEO Peter Ndegwa in a statement. Safaricom launched in the Ethiopian market in October 2022, months after testing its services in multiple cities with a population of over 120 million people. The venture was started following a bidding exercise in which Safaricom, along with its partners Vodafone Group, Vodacom Group, Sumitomo Corporation, an international trading and business investment company, and British International Investment (BII), the UK’s development finance institution, emerged as the winners with a bid of $850 million. However, it was not clear at the time if Safaricom would launch its flagship product, M-PESA, in its new market. The development was clear after Ethiopian authorities licenced M-PESA in May 2023 at $150 million. M-PESA operations started months later, in August 2023. Ndegwa said that the telco will not change its guidance for the Ethiopian market, although changes will be made in its Kenyan operations. “We are also revising the Kenya Capex guidance due to the foreign exchange impact from the depreciating Kenyan shilling from KSES 42 – 45 billion to KES 45 – 48 billion, consequently changing the Group guidance to KShs 85 – 93Bn. Ethiopia’s guidance remains unchanged,” he said.

November 17 2023

Navigating the transition: African banks take over after international lenders exit

This article was contributed to TechCabal by Conrad Onyango via bird story agency. In early 2022, UK-headquartered Standard Chartered Bank announced it was exiting five African countries and partially exiting two others – breaking its ‘here for good’ brand promise after more than a century on the continent. A year earlier, another British-based bank but a fairly new entrant, Atlas Mara withdrew from seven markets, walking away from its bold statement, “Africa: too big to ignore”, after only seven years. Barclays sold its majority stake in Barclays Africa Group in 2017 and in August 2022 sold its remaining stake in the rebranded ABSA, exiting a region it had first entered 90 years before. Credit Suisse and France’s BNP Paribas also pulled out in 2022. The reasons for exit, they said, was generally a need to refocus on core markets to achieve growth and scale due to the challenging African retail banking environment. Many of the more than 1,000 financial industry players gathered in Lome, Togo in mid-November to debate how the industry can unlock a US$1.5 trillion potential market by expanding banking, insurance and capital markets penetration, had a very different view. Many of the sessions were made public via the internet. “There are still numerous opportunities out there including those presented by the exit of international financiers and we are poised to take advantage of that,” said United Bank for Africa (UBA), Chief Executive Officer, Marufatu Abiola. “Africa can only be developed by Africans. We need to increase our size, increase our capacities, We need to believe more and invest more in Africa,” Lagos-headquartered UBA, with a presence in 20 countries, said it is keen on expanding to all African countries either through organic growth or acquisitions. “Both can be considered. The exit of international players presents a unique opportunity. If there is an opportunity to acquire, to merge or grow organically, I don’t think any of those is off the table,” said Abiola. International Finance Corporation (IFC) Vice President Africa, Sergio Pimenta shared similar sentiments, painting a bigger picture of the rising demand for growth capital on the continent. “The opportunities are very significant and the demand is very strong. We are also seeing shifts in these demands and one of them is regionalisation of the market, as companies, banks and other financial institutions in Africa look at the regional markets. And that’s a very in-depth movement and trend that creates a lot of demand,” Pimenta said. He also singled out rapid urbanisation, climate change and digitalisation as drivers of key opportunities that financial firms should tap into for growth. In 2022, the IFC had a record year, with US$43 billion of capital deployed across the world. US$11.5 billion of that was deployed to Africa, the largest amount it has ever deployed on the continent. Yet despite the positive prospects clearly identified by a wide range of bankers, Africa continues to be profiled as a risky playground. African Guarantee Fund Group Chief Executive Officer, Jules Ngankam said one of the major challenges facing Africa is a huge gap between the real and perceived risk at the sovereign level and an even worse gap at the small and medium enterprise (SME) level. “Of all the financial crises we have had around the world, none of these came from Africa, but people still believe that it’s the riskiest continent,” posed Ngankam. In a risk analysis of Africa’s insurance industry, Namibia National Reinsurance Corporation, Managing Director, Patty Karuaihe-Martin said while the average loss ratio in Africa was 70%, Europe’s ranged over 90% and would also cross the 100% mark. “Only about 3% of the world’s largest losses occur in Africa. All this data shows Africa’s portfolio is not risky. I must admit we have some challenges, we will not say it’s easy to do business in Africa due to data inadequacy and low insurance penetration,” she said. The three giant international rating agencies consistently downgraded the credit risk profiles of major African economies in the first six months of 2023. Moody’s, Standard and Fitch have together actioned 13 negative ratings, out of which seven were downgrades and the remaining were negative changes in the outlook of 11 African countries. Among the countries that have suffered credit rating downgrades are Nigeria, Kenya, Egypt, Tunisia and Ghana, hurting their prospects of tapping into the global markets for cheap credit. “We need to offer investors an instrument that enables them to absorb that perceived risk,” said Ngankam. In its latest Africa Sovereign Credit Rating Review 2023, the African Union mulls examining the feasibility of establishing an African Credit Rating Agency (ACRA) as an independent entity of the Union to provide alternative credit ratings to the ‘big three’. “It is envisaged that the ACRA would provide balanced and comprehensive opinions on African credit instruments to support affordable access to capital and the development of domestic financial markets,” said AU in the review. To strengthen Africa’s financial industry, Abiola suggested harmonising and strengthening regulatory and governance structures and interconnecting regional central banks to remove artificial barriers.

November 17 2023

TechCabal Daily – inDrive launches $100 million venture fund

In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Can we guess your password? NordVPN recently released a report on the most common passwords across 35 countries, and this year, South Africa is the only African country that made the list. The most common password globally is still “12345”, while the most common in South Africa is admin. The countrys top 20 passwords also included “Mandela1964”. BTW In 2021, Nigerians proved that prayer is truly the master key as the country ranked first for the country with the most religious passwords including words like “pastor”, “godisgood”, and “prayer”. In today’s edition inDrive launches $100 million venture fund Cellulant receives payment provider licence in Egypt Paystack reduces its workforce Funding tracker The World Wide Web3 Job Openings Mobility inDrive launches New Ventures arm to invest $100 million in startups inDrive is fueling the flames of innovation. The mobility platform has launched a new venture and merger and acquisition (M&A) arm, New Ventures Investments, with a dedicated fund of up to $100 million to invest in promising startups. New Ventures will be led by investment professional, Andries Smit, who will be joining the company as the vice president. The investment criteria: inDrive’s New Ventures unit will target post-seed/pre-Series A companies with proven product-market fit, rapid organic growth, healthy economics, and cash flow. The company will focus on rapid growth and reduce positive community impact with investments spread across companies tackling injustice and improving the lives of individuals and communities. In February this year, inDrive raised a $150 million debt funding round from General Catalyst to expand into new verticals and cities. The New Ventures division positions inDrive to further expand its impact in the global startup ecosystem. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Fintech Cellulant secures licence to enhance payment solutions in Egypt Celullant Egypt PSP licences Celullant is expanding its African footprint. The pan-African fintech has secured a licence as a Payment Service Provider and Payment Facilitator in Egypt. Cellulant will empower global and regional merchants in Egypt to effortlessly manage B2B and B2C payments locally and internationally. The company’s solutions support mobile money, wallets, cash, cards, and direct bank transfers across multiple payment methods and currencies. Empowering seamless transactions: Over the past three years, Cellulant has invested in its real-time payment solutions, including checkout, in-store, payouts, payment links, and a robust business dashboard, powered by its single API payment platform—Tingg. Today, Cellulant operates in 35 markets, holding licences and physical offices in 18 countries. In November 2022, the fintech was granted a Payment Operator licence by the Bank of Uganda. It also got its licence renewed by the Central Bank of Nigeria (CBN) in February 2023. Paystack begins early access program in three new countries In August 2023, Paystack reduced payout time for ZAR payments in South Africa to just 2 working days. See what Paystack has been up to in 2023 → Layoffs Paystack lays off 33 workers Nigerian fintech startup Paystack is laying off 33 employees in Europe and UAE. The company’s CEO, Shola Akinlade said the company is doing this to reduce its operations outside Africa. Side bar: This is the company’s first layoffs since the layoff wave started last year. However, Stripe, an American fintech which acquired Paystack for$200 million in 2020, laid off 14% of its workforce in November last year. Why is this happening now? The African countries where Paystack primarily operates have seen devaluations. In Nigeria, the currency devalued by more than half since June this year. In Kenya, the fintech’s second market, the shilling has fallen by almost 20% from this time last year. The inflation in Ghana has been challenging too. What will happen to exiting employees? Paystack is offering all affected employees a sevrance package which includes four months of salaries, three months of health insurance, and accelerated equity vesting. The company is also helping them search for new roles by connecting the employees to its wide network. In other news: The company is launching new products. In October, Paystack announced that it is launching virtual terminals that will enable merchants to accept payments with bank transfers for multi-person businesses. It also announced a direct debit product that will allow Nigerian businesses to charge customers’ bank accounts directly. Attend the Tek Experts Webinar Tek Experts, a leading global provider of technical talent solutions through its cybersecurity brand, is set to hold a webinar themed “Ensuring Cybersecurity Resilience in Financial Services Companies in Nigeria”, to address cybersecurity challenges in the industry Date: Wednesday, 22nd November, 2023 at 12:30 WAT. To register for free, please click here. TC Insights Funding tracker Image source: TC insights This week, Pineapple, a South African insurtech startup, raised $21.3 million in Series B funding. Futuregrowth, Talent10, and MIC led the funding round. It also received additional investment support from existing investors, including Old Mutual ESD, Lireas Holdings, ASISA ESD Fund, and E4E Africa. Here are other deals for the week: Shekel Mobility, the Nigerian B2B trading platform for auto dealers in Africa, secured a $7 million seed in a round led by Ventures Platform and MaC VC. Akhdar, an Egyptian ed-tech startup, secured an undisclosed six-figure dollar funding round from Saudi Arabia-based venture studio, Value Maker Studio (VMS). That’s it for this week! Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. You can also visit DealFlow, our real-time funding tracker. Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $37,556 + 6.54% + 31.8% Ether $2,055 + 3.91% + 29.2% Kaspa $0.13 + 13.49% + 179.29% Solana $59.51 – 8.57% + 147.22% * Data as of 06:20 AM WAT, November 17, 2023. Sourcing for institutional size liquidity for African currencies to G25 currencies including USD, GBP and EUR is a pain. Oneliquidity is Africa’s leading Liquidity provider; we provide the

November 16 2023

Paystack to lay off 33 employees in the UAE and Europe

Paystack, the Nigerian fintech acquired in 2020 for $200 million by Stripe, is laying off 33 workers in Europe and UAE. The company’s CEO, Shola Akinlade confirmed this in a tweet today, saying the layoff is happening because Paystack is reducing its operations outside Africa. “In the last 3 years, our hiring philosophy was to recruit great talent regardless of location, including opening an engineering hub in Dubai,” Akinlade revealed in the tweet. “We’re changing our operating model to prioritise locating team members within the markets we serve, to localise costs and get closer to customers.” According to Akinlade, the affected staff will be getting a severance package which includes four months’ salary, accelerating equity vesting, and an extension of health insurance by three months. Paystack’s primary market is Nigeria, where the local currency has been devalued by more than half since June this year. In Kenya, the fintech’s second market, the shilling has fallen by almost 20% from this time last year. The fintech also operates in South Africa and Ghana, countries where inflation continues to erode purchasing power and pose a challenge for businesses and governments. In November last year, Paystack’s parent company, Stripe laid off 14% of its workforce. The US payment giant further reduced headcount in June this year, according to reporting from The Information. Per LinkedIn data, Paystack has 27 employees in the United Arab Emirates, 25 employees live in the United Kingdom. And seven other staffers reside in the European Union countries of Germany, Portugal, and France, data from LinkedIn shows. The layoffs come at a time Paystack is expanding its offerings to take advantage of the surge in electronic payments in its primary market, Nigeria. In October, TechCabal exclusively reported that Paystack is launching virtual terminals, a new product that allows merchants to accept payments with bank transfers for multi-person businesses. More recently, the Stripe-owned fintech announced a direct debit product that will allow Nigerian businesses to charge customers’ bank accounts directly.

November 16 2023

Female founders are imagining a world without investors

At the AWS Startups Women’s Demo Day Lagos organized by the cloud provider and VC firm Ajim Capital, female founders and investors talked about the less generous VC landscape. “It used to be all success stories last year,” Chioma Okotcha, chief operations officer at fintech startup PayHippo, said, comparing her fintech’s fundraising journey in the past to what’s happening this year as investor appetite has shrunk. Okotcha said this while speaking on a fireside chat at the AWS Startups Women’s Demo Day that was held in Lagos. Other speakers on the chat, which tackled how founders were navigating the challenging funding atmosphere, were Eunice Ajim, founder of VC firm Ajim Capital, who moderated the discussion; Damilola Olokesusi, founder of mobility startup Shuttlers; and Omoyeni Olulana, co-founder of spend management platform Flex Finance. All three founders speaking to Eunice Ajim had raised a combined amount of over $10 million in disclosed funding. Olokesusi, who first raised $1.6 million in 2021 and then $4 million this year, told Ajim, “I didn’t think it would be hard to raise money again, but our last raise this year was the toughest.” [ad] This year has been the slowest year for deals since the pandemic, both in volume and amount. Investor appetite has been impacted by the global economic downturn, and female founders, who already get less than 2% of African investment, seem to be in a more precarious situation. Olulana of Flex Finance disclosed that she and her team pitched to about 2,000 investors to close their most recent round. “I think you need to isolate the no’s because those can be very disempowering,” she advised, “especially when you say it’s only happening because you are a woman.” Olunana advised founders to spread their nets wide and send cold emails to as many investors as suit the needs of their startups. [ad] In a separate chat with Ajim, Oyin Solebo, managing director of the Techstars accelerator in Lagos, acknowledged that deals are taking much longer to close because founders are being asked harder and unexpected questions. “Are you building something that you have unmanageable demand for?” she said. “Is your revenue going up double-figure month-on-month? Have you got retention?” Solebo’s statement about investor behaviour lends credence to recent reports that show that investors are less keen on investing in growth-stage startups than they used to be. “Far too many founders raised at ridiculous valuations, and now the pressure is too much for them,” she said. [ad] Regarding the pressure on investors, Egunjobi said, “There is sometimes a myth that money comes easily to us. Investors, like founders, are also being extremely careful with money as they need to return profit back to investors. How else will they get follow-on funding?” Egunjobi, whose firm is currently raising its second fund, said things may be better if VC firms got more local investments. “Seventy-seven percent of capital came from foreign investors,” she said. “While that is not a bad thing, it also shows where the control sits.” Egunjobi thinks there needs to be more indigenous funds. He added: “We have a lot of angel networks across the continent—in Kenya, Tunisia, Morocco and more. But it is just not sufficient.” Preparing for the worst Some founders are already imagining a world where there will be no further VC investments, and asking themselves how they would keep the lights on in such circumstances. Olokesusi, who bootstrapped for years before fundraising, said she has chosen to be obsessed with her customers. “My customers are my best friends, not investors. They are the ones that will ensure you have payroll. We have customers that have been with us for 4–5 years.” Okotcha also advised that more founders have a tighter grip on their operating costs. “Whether you are in the growth or seed stage, pay attention to the cost of payroll, technology, rent, etc. This can help you stretch your resources for longer.” Okotcha disclosed, however, that PayHippo is planning to raise again in the near future. “We will raise again, but with a differentspective,” she said.