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  • Lagos, Nigeria
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  • August 21 2023

👨🏿‍🚀TechCabal Daily – Hey BDCs

In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning ICYMI, venture funding soared to $916 million in Q2, fueling innovation across the continent. And interestingly, energy startups are now leading the pack, securing a massive $486.9 million.  What’s happening with fintech startups? Is West Africa still the go-to destination for investors?  We’ve answered these questions in our State of Tech in Africa, Q2 2023 report. Download the report here to find answers and more.  In today’s edition Patricia converts users’ assets into tokens Twiga lays off 283 employees Nigeria reinstates BDCs Rethinking energy accessibility in Africa The World Wide Web3 Event: NTICE Expo 2023 Opportunities Crypto Patricia converts users’ assets into tokens Last week, Nigerian cryptocurrency exchange Patricia converted its user assets into its newly minted Patricia Token (PTK).  The move came as part of the relaunch of its app, Patricia Plus, which was originally launched in April 2023. Per the company, the move is a way to protect customer funds. The company noted that the PTK token is backed by the US dollar and that 1 PTK is equal to $1. Customers who had their funds converted to PTK will be able to access them through the Patricia Plus app. Unfortunately, it appears that users were not informed of the conversion beforehand. The question on many minds is if customers will be able to access their funds now.  Hanu Fejiro, CEO of Patricia ICYMI: Earlier in May, Patricia revealed that it suffered a hack in January 2022 which cost it nearly $2 million. Patricia partially froze withdrawals after the 2022 breach, allowing customers to deposit funds but not move them from wallet to wallet. Instead, Patricia offered to buy those coins from customers and pay them cash to manage the situation. This workaround continued until March 2023. By April 2023, the company launched Patricia Plus, its new app which had no withdrawal restrictions, which triggered a bank run and led to a deficit of 75 bitcoins. The company was then forced to reinstate the freeze in May 2023. Since then, customers have been unable to access their assets. And now, Patricia has converted it all to the new PTK.  An unstable token? Some experts have raised concerns about the legality of Patricia’s move and the stability of the PTK token. While some argue that the company cannot unilaterally convert customer funds to a new token, others argue that the token is not backed by any assets and that its value could fluctuate wildly. Zoom out: It is unclear what the next steps will be for Patricia and its customers. At this time, the company has not responded to questions from users or the media. The hack and the subsequent conversion of customer funds to PTK have left a cloud of uncertainty over Patricia and its future. 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. Layoffs Twiga breaks off more branches Peter Njonjo, CEO of Twiga Kenyan e-commerce startup Twiga is effecting another round of layoffs.  This time, the company will lay off ⅓ of its 850 employees—about 283 employees. This will be the startup’s second round of layoffs.  In November 2022, it laid off 21% of its then-workforce. About 211 employees were let go and its sales team was shuttered. In June 2023, it confirmed the layoffs to TechCabal but argued that it had not laid off its sales team, but had instead converted them to “free agents”. The company cited an increasingly challenging business environment as the reason for the second round of layoffs. Per CEO Peter Njonjo, Twiga has been “on a transformative path in the last few months to become a lean, agile, cost-efficient organisation, undertaking several interventions to adopt and sustain the business during these economic times.” Employees across its businesses in East Africa will be affected and the company noted that it will compensate them based on appropriate labour laws.  Twiga is still in Uganda: The CEO also denied rumours that the startup had exited Uganda. “There is no closure of operations, we continue to operate in Uganda, and our farm is operational,” said Njonjo.  When asked how Twiga is rebuilding confidence among investors and customers, Njonjo responded, “Our investors are fully supportive of this transformation with the objective of Twiga continuing to provide affordable goods and services to our customers into the foreseeable future.” Economy Nigeria reinstates BDCs Image Source: Zikoko Memes Nigeria’s central bank is bringing winds of change. Last week, the country’s apex bank ended a two-year ban on foreign exchange (FX) sales to Bureau de Change (BDC) operators. ICYMI: In 2021, ex-governor of the Central Bank of Nigeria (CBN) Godwin Emefiele halted the sale of FX to BDC operators. At the time, the bank accused BDC operators of speculative, rent-seeking behaviour, involvement in money laundering activities and illegal FX trading. And now? The apex bank believes lifting the ban will help ease the strain on exchange rates.  In its announcement, it noted that when BDCs buy and sell FX, the prices should be within 2.5% more or less than the average rate from the previous day. Following this announcement, the naira experienced a surge in value. By Friday morning, it traded at ₦855/$1 on the unofficial market and around ₦744 on the official market. Monitoring BDCs: The CBN has said that it will be issuing new guidelines for BDCs in the coming days. The guidelines will set out the specific requirements that BDCs must meet in order to be eligible to buy and sell FX. The CBN will also be monitoring the activities of BDCs closely to ensure that they are complying with the new guidelines. The bank has said that it will not hesitate to take action against any BDCs that are found to be violating the rules. TC Insights Rethinking energy accessibility in Africa Despite

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