Nigerian fintech Brass blames funding winter for customer withdrawal delays
Brass, a Nigerian fintech startup that provides business banking services to small business owners, has blamed persistent withdrawal delays on the funding environment and an increase in its number of customers. “The funding winter and the economic situation in Nigeria affect the abilities of companies of our kind to support many customers after some time,” said Sola Akindolu, the company’s CEO. [ad] While Brass raised $2m in 2021, Akindolu acknowledged the expensive nature of running a fintech startup. “You can say you want to disrupt banks; if you raise $1-2 million, you must raise $5-10 million in a few years. If it is overdue and you have not, things will get tricky,” said Akindolu. “You need access to ridiculous capital.” Brass approached Nomba as part of conversations around a fundraise, two sources said. One highly-placed person said the company also discussed raising debt financing and expects to close funding in two weeks. Exclusive: Bilha Ndirangu sues IFC-backed Africa’s Talking over removal as director [ad] “It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass said in response to questions about raising money from Nomba. “We have been approached and provided support too, even to competition. And you can generally confirm that. And no, we didn’t approach Nomba for equity financing.” Founded in 2020 by Akindolu, Brass was generally loved by its customers until withdrawal delays began around October 2023, three people said. “I could not pay my staff in Nigeria last month, and I also had to pause my building project because I could not buy materials,” said Samuel, a Brass user who claimed he could not transfer funds for over a month. TechCabal saw screenshots of his failed transactions. “I have over 10 million naira there and can’t even use my money.” Mercy, another Brass user, shared similar complaints after she tried to withdraw money from her account in December. “When I contacted Brass [about the transfer issues], I always got the same response: “We’re working on it.“ She was eventually able to make withdrawals. Despite the widespread nature of these complaints—there have been social media callouts of the CEO—Akindolu insists that only 80 businesses have experienced these delays. “Once escalated, the resolution does not take over 24 hours,” Akindolu claimed. The company also says that it is working hard to resolve the issues. Resolving customer complaints In February, Brass created a second Telegram channel to resolve user complaints, and screenshots showed that while customer complaints were acknowledged, they remained unsolved for weeks. The startup also changed the phone number of its customer care hotline several times without sharing it on social media. It forced users to share their complaints on X and Instagram, with at least several people sharing their frustration at the company’s poor communication. Akindolu disputes that characterisation. “I am very accessible. Customers even call me on my phone number to relay their complaints, and I attend to them as soon as possible,” Akindolu said. Staff cuts at Brass On Monday morning, Akindolu shared in a thread on X that Brass would furlough an undisclosed number of employees to cut costs. Impacted employees will continue to access “health insurance coverage and other benefits until we are able to bring them back in the following months,” Akindolu tweeted. “[Akindolu’s] communication with us on the matter was limited to the scope of the post he made online, an employee told TechCabal. [ad] Got a Tip?We’d like to hear from you. You can contact the authors of this article at muktar@bigcabal.com & ngozi@bigcabal.com. TechCabal protects the confidentiality of its sources.
Read MoreExclusive: Bilha Ndirangu sues IFC-backed Africa’s Talking over removal as director
Bilha Ndirangu, a former director of the IFC-backed Africa’s Talking, is suing the company she cofounded for unlawful termination of her appointment seven months after she accused senior company officials of misconduct. Ndirangu told a court she was not allowed to contest her removal as required by law. She also argued that she was fired despite a court order restraining Africa’s Talking from removing her as a director. Three others, including Eston Maina, another co-founder and former CEO of Africa’s Talking, are also listed as petitioners. Africa’s Talking, Gikandi, and the shareholders’ trust are listed as defendants in a petition filed in a Nairobi High Court. Samuel Gikandi, Africa’s Talking current CEO, and other shareholders, including a trust that holds unvested shares for employees, voted to remove Ndirangu as director in June 2023, according to court documents seen by TechCabal. Ndirangu, who owns a 6.33% stake in the company, was immediately replaced. Africa’s Talking and Samuel Gikandi did not respond to TechCabal’s request for comments. After Ndirangu called for an independent investigation into misconduct claims at the company, she was removed to obstruct the investigation process, she told a court. “The unlawful removal of the 1st Applicant (Bilha Ndirangu) as a director and its intended ratification has caused undue prejudice to the Applicants (Africa’s Talking, the CEO and other shareholders), and urgent intervention by this Honourable Court is necessary to prevent irreparable harm,” one court filing said. Understanding Ndirangu’s removal To remove Ndirangu, the company’s board needed a majority vote of the shareholders. Court documents show that a trust (AT Group ESOP Trust)that holds unvested employee shares had to vote to satisfy that requirement. Ndirangu claims that the vote cast by the trust was illegal as the trust is inactive and lacks the right to vote her out. Ndirangu and her fellow petitioners own 20.83% of Africa’s Talking, while Gikandi and his team own 25.25% of the company. “If we exclude the 8th Respondent’s [AT Group ESOP Trust] invalid votes, the combined shareholding of ordinary shareholders in favor of the removal does not meet the necessary majority,” court documents said. “The applicants (led by Bilha) seek prompt resolution of this matter in the interest of justice, company stability, and shareholder protection,” reads a submission form to the courts, dated August 2023. Africa’s Talking was founded in 2010 by Bilha Ndirangu, Eston Kimani and Samuel Gikandi and became profitable between 2012 and 2013, according to one report. After bootstrapping the company for over seven years, the founders raised an $8.4 million Series A round in 2018, led by the International Finance Corporation (IFC). At the time, Ndirangu was COO and was promoted to CEO the following year. However, she left the company in 2021, in what court documents show was a forced exit. Gikandi then replaced her.
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Next Wave: How edtech can build the future of work
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 03 March, 2024 Edtech gained more popularity during the COVID pandemic, with many edtech startups—Nigeria’s uLesson and South Africa’s Foondamate, for example—thriving during the period. Between 2020 and 2021, funding for the edtech sector grew from $14.7 billion or 831 rounds in 2020 to $20.3 billion or 1,050 rounds in 2021—the highest peak in the sector. A few startups in that industry, like uLesson and Foondamate, targeted their services at pre-university pupils, often called K-12. But by the end of 2021, edtech’s initial use case for K-12 started to wobble. Investment in edtech startups in the last seven years. Chart by Stephen Agwaibor, TC Insights In 2022, edtech startups in Africa raised only $24.6 million or 0.7% of Africa’s total funding, according to data from Disrupt Africa. In the Big Deal’s report for January 2024, the only mention of edtech was an acquisition of Egyptian edtech Orcas by Baim, for an undisclosed amount. The rest of the report showed that agritech, fintech and climate tech attracted the most funding in January. In 2023, no edtech company was able to raise a venture round of $100 million or more, per Crunchbase. Year-to-date, global funding for edtech startups has fallen 89% to $2.2 billion or 232 rounds. Edtech has lofty aims, but there is a big question about whom the industry should be serving. Whom should edtech serve? Beyond the scary tale of a funding dry-up, what we are seeing here is edtech undergoing an interesting pivot many may have ignored. As the world healed from COVID, parents no longer needed or trusted digital schooling for their kids as much; they mostly found it to be an unnecessary extra expense added on to fees paid for brick-and-mortar schooling. uLesson, in recognition of the economic hardship its clients are facing, recently slashed educational software subscription fees by half indefinitely. But palliative moves like this can only do so much to boost the clientele of K-12 edtechs. Why? Physical schools are not going away anytime soon. Children have time to commit to the physical demands of learning; parents would therefore rather enrol their kids in a setting where their learning is easier to monitor and where there are minimal distractions. Besides, physical learning will always be a welcome development where screen time can cause eye fatigue and shortsightedness. Partner Content: Read: How Filmmakers Mart is changing filmmaking in Africa by solving production problems here. All that said, working professionals may be a stronger market for online education providers, as they either need to juggle necessary part-time education with full-time jobs; or get a skill-driven education in order to advance their careers. Thanks to our current learning economy, working professionals are upskilling towards in-demand roles, consistent with a reconfiguration of the labour market rooted in technological adoption. A 2021 Workplace Learning Trends Report by Udemy revealed that industries have increased demand for data analysis and data science expertise. Data like the above may be responsible for why edtech companies focused on skill-driven education for working professionals are either successful (AltSchool) or will be (Miva University). Next Wave continues after this ad. Talent PEO Africa launches in Kenya, offering comprehensive HR solutions for businesses. From EOR services to recruitment and HR consulting, we simplify operations for seamless growth. Partner with us to tap into Kenya’s talent, navigate regulations, and achieve success. Contact us at www.talentpeo.com or kenya@talentpeo.com. In recent times, Nigerian edtech startup, AltSchool, has garnered public trust with a track record of supporting about 60,000 learners across 105 countries since its inception in 2021. Its curriculum covers business, data, engineering, media, and the creative economy. Many of these courses are sought after in today’s work industries. Miva University, a Nigerian online university by the founders of uLesson, currently offers courses like cyber security, data science, software engineering, and business management—all listed as in-demand disciplines under the World Economic Forum (WEF) future of work in 2023. One of the goals of Miva University, according to its website, is to award its students degrees that get them hired. If edtech will thrive in 2024, it is worth considering that the days of schooling under-16 kids online may be well behind us. The parents who wield the power, resources and disposition to sign their children onto these platforms are more inclined to restrict their kids’ internet use. This is in contrast to working professionals whose concerns are tilted towards using education, by any means, to upgrade their skills. The future of edtech must therefore shift towards employability and the honing of skills that would matter in the future of work. Africa’s population is poised to double by 2050. With a median age population of below-20, this represents a huge talent pool that, if well harnessed by education, can fuel much-needed innovation. Joseph Olaoluwa Senior Reporter, TechCabal Thank you for reading this far. Feel free to email joseph.olaoluwa[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri) brief of all the technology and business stories you need to know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay engaged in our real-time conversations on
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👨🏿🚀TechCabal Daily – South Africa’s new limits
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Malawi’s tech scene isn’t perfect. It’s riddled with poor internet penetration at 24%, and complex regulations, but the country is still making this work. In fact, it’s one of the few African countries that’s actively working on a startup bill to help attract foreign investments. Here’s why Malawi’s government is putting its money where its mouth is to build a thriving tech hub. In today’s edition Nigeria suspends 4,000 BDCs Regulators in SA want new data rules South Africa’s business registry hacked Musk sues OpenAI The World Wide Web3 Opportunities Regulation Nigeria withdraws BDC operator licences BDC operators in Nigeria can’t catch a break just yet. Days after the Nigerian apex bank released a roaster of sweeping reforms against Bureau De Change operators in the country—which included setting a $500 transaction cap on the purchase and sales of the dollar by cash, selling FX to qualified BDC, and sending operators into hiding—the apex bank isn’t finished just yet. Last week, the CBN withdrew the licences of more than 4,000 BDCs, citing noncompliance with anti-money laundering and terrorism financing regulations, non-payment of required fees, and failure to render returns. The new reforms come days after the CBN reversed its three-year ban on supplying FX to BDCs. Under the new guidelines, BDCs can only sell foreign currency to customers at a maximum markup of 1% on top of the price they paid the CBN. If this works, it could align the country’s official exchange rates with its black market rates. While the overarching aim of the multiple reforms is keeping the dollar at bay against the naira, the CBN says it hopes to “bring some sanity to an industry that arguably no longer serves the interests of those whom it was meant to protect.” Access payments with Moniepoint You don’t have to take our word for it. Give it a shot like he did Click here to experience fast and reliable personal banking with Moniepoint. Regulation ICASA proposes new rules for South Africa’s cellular networks Across social media, we’ve seen reports of internet users complaining about poor data plans. If it’s not news about one network consuming more data than revealed, it’s another network redefining what a 24-hour data plan means. The South African government wants to stop that, and it proposed a rule in 2022, that says all data bundles must be valid for six months. However, concerns were raised by stakeholders regarding bundle expiry rules, out-of-bundle rates, and clarity on rollover and transfer provisions. Now, the Independent Communications Authority of South Africa (ICASA) has published a revised draft amendment to its End-user and Subscriber Service Charter (EUSSC) Regulations, following concerns raised by stakeholders. The proposed amendments: Mobile network bundles will be used based on their expiration order, with those expiring earliest being utilised first. Unused data on medium-term—7-30 days—and long-term bundles—over 30 days— will roll over. Networks must also notify users at 50%, 80%, and 100% of their bundle usage. Additionally, mandatory mobile data rollovers for up to three months post-activation will be enforced, along with the validity period of bundles being extended if a network fault prevents use. Consumers can also transfer bundles between SIM cards on the same network. style=”text-decoration: none; font-weight: 700 !important; font-style: normal !important; color:#14A673 !important;”Zoom out: The revised regulation is a positive development for South Africa’s 45.34 million active internet users, which includes approximately 26 million individuals utilising social media. It grants them greater autonomy over their data bundles. Cybersecurity South Africa’s business registry, CIPC, hacked In South Africa, there’s been a growing concern about cyberattacks on government entities. In 2020, the Ministry of Justice was hacked, and R10 million ($536,000) was stolen from the Guardian’s Fund. In August 2023, the Department of Defense was attacked in a cyber hack that leaked President Cyril Ramaphosa’s phone number. The trend isn’t dying down across the “cybercrime hub of Africa The news: In the country’s latest hack, on February 29, 2024, the Companies and Intellectual Property Commission (CIPC), responsible for managing roughly 2.1 million active businesses and overseeing intellectual property rights, experienced a data breach compromising their personal information and that of their at least 500 employees. Although the full extent of the compromised data remains undisclosed, 2.6 million people are estimated to have been affected. What’s the CIPC doing about it? To prevent further damage, specific CIPC systems were immediately shut down, but it is still unknown the motive behind the cyberattack and the responsible party. However, there are concerns regarding the exposure of sensitive information such as directors’ and owners’ details, as well as patent and trademark holders’ data. Affected clients are urged to monitor credit card transactions closely and authorise only known and valid requests. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. AI Elon Musk in legal wrangle with OpenAI OpenAI, makers of ChatGPT, in 2015 started as a non-profit research company focused on developing safe and beneficial artificial intelligence. Its founders—Elon Musk, Sam Altman and Ilya Sutskever—launched the company with one goal in mind: to develop super-intelligence for the good of all. Fast forward to 2018, and Microsoft waltzes in with a cool $1 billion, a move that would alter the direction of the company. While the cash flow was sweet, it raised eyebrows, particularly from Elon Musk who raised concerns about the company’s impending profit motives. Musk would later leave the company’s board in 2018 due to these concerns. By 2023, months after the release of ChatGPT, OpenAI switched gears from its initial non-profit mission and began pursuing profitability. This got Musk more infuriated, making him increasingly critical of the company—and the dangers of AI and artificial general intelligence. Now, the billionaire wants to settle the dispute
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Why Malawi’s nascent tech ecosystem is ripe for growth
Malawi is not exactly famous for its vibrant tech ecosystem as a result of several factors. The country has an internet penetration rate of only 24% in a population of 20 million people, a virtually non-existent venture capital ecosystem, and a limited presence of leading continental and global tech companies. However, due to efforts from the innovators, public and private sectors, as well as development institutions, this is slowly changing. In July, the country will for the first time, host the 2024 Africa Smart Cities Congress. The congress aims to promote smart city innovations from Malawi and the rest of Africa and present them to the world. The country was chosen for its efforts in building out smart cities as evidenced by the Mvera Innovation City, a smart city project in Lilongwe which is nearing completion. “The fact that we will have global innovators here shows that Malawi’s innovation is getting the recognition it deserves from the world,” said Christine Mhone, ambassador of the African Smart Cities Innovation Foundation. Even Africa’s most valuable startup, Flutterwave, is paving the way for entry into the Malawi market. The company recently received a license from the country’s central bank to facilitate remittance payments into the country. These developments beg the question, how exactly are Malawi’s ecosystem stakeholders changing the narrative about its tech innovation landscape? According to Vincent Kumwenda, former CEO of incubator mHub, these enabling policies, as well as programmes from international development partners and innovative entrepreneurs, have played a large role in growing the country’s ecosystem. Despite the progress made, issues of poor infrastructure, unclear regulatory frameworks, and lack of funding for innovators persist, Kumwenda told TechCabal. “There are efforts to address these challenges, so I would say, slowly and surely, we are on our way to becoming a tech hub of note.” mHub was one of the first digital hubs in Malawi. Image source: mHub The role of government and international organisations Malawi’s technology sector regulator, the Malawi Communications Regulatory Authority (MACRA), is trying to use its regulatory powers to strike a balance between enabling innovation and also ensuring that innovators abide by the country’s laws. Last year, Malawi was one of the first southern African nations to license Starlink to facilitate internet connectivity. On the other hand, MACRA also barred MultiChoice from increasing prices for its DStv service, leading to the pan-African broadcaster terminating service in the country. The two parties eventually reached an agreement to bring the service back. MACRA also recently signed an MOU with the organisers of the Africa Smart Cities Conference to offer support for the initiative. Besides enforcing regulatory compliance, MACRA is also actively involved in helping startups build innovative solutions. Through the Muuni Fund, an ICT research & innovation fund that aims to provide seed money to nurture and incubate local innovations across Malawi, MACRA is currently working with 70 startups across the country to help them launch technology products and services into the market. In the next financial year, the Muuni Fund aims to assist as many as 250 startups, an ambitious 257% from the current cohort. “The Muuni Fund encourages local solutions for local problems. But most importantly, it creates a sustainable framework that will allow local innovators to come to market, be competitive and survive,” added Suleman. In support of these initiatives by the public sector are international development institutions. As head of exploration of the United Nations Development Programme’s Accelerator Lab, McDonald Nyoni is responsible for identifying innovative local solutions that contribute to the achievement of the Sustainable Development Goals (SDGs). Some of the Lab’s mandates include identifying and supporting innovations that address some of Malawi’s pressing challenges, such as access to housing, financial inclusion, access to renewable energy sources and poverty eradication. In August 2023, UNDP Malawi launched Fin Mobile, a digital banking app for SMEs. Additionally, the Lab is also working with the government to build an innovation bridge portal which will connect innovators with the private sector and international organisations to explore potential synergies. “Because of the strategic partnerships with the government, I would say the future of innovation in Malawi is very bright,” Nyoni told TechCabal. “The Accelerator Lab’s external facing model allows us to address challenges which impact people, which significantly increases its impact.” It all comes down to the startups Because of challenges like lack of access to funding, technical talent, and a complex regulatory framework, the country does not have the most vibrant startup ecosystem. However, this could change soon. In addition to the Muuni Fund by MACRA, Malawi is currently in the process of drafting a startup bill which is expected to be tabled in parliament by the end of the year. The bill aims to address the challenges faced by startups in the country, including simplifying investing for foreign investors and also streamlining and simplifying regulatory requirements. One such startup is Mlimipay, founded by Stanislaus Sakwiya in 2021. The company has developed a digital wallet designed exclusively for smallholder farmers in Malawi who find difficulties accessing mainstream financial systems. Startups like MlimiPay are building innovations which promote inclusion. Image source: MlimiPay “In Malawi, access to funding as well as a complex regulatory framework are major hurdles to the success of startups,” Sakwinya told TechCabal. This point is reiterated by Samuel Chiwanda, co-founder of fintech startup ClickMobile. Founded in 2010, ClickMobile specialises in mobile messaging solutions via platforms such as SMS and USSD, which are vital for rural area dwellers where internet penetration is low. “Most people have brilliant ideas, but funding is very hard to come by. The little funding available is sometimes not best utilised by recipients,” Chiwanda said. To ensure that startups have access to technical talent and the requisite business development skills they need to build sustainable enterprises, incubators like Ntha Foundation are playing their part. Founded by Nthanda Manduwi in 2018, the foundation was one of eight hubs to receive $250,000 in funding from the Malawian government in 2021 to train 500 innovators in digital
Read MoreCBN revokes 4,173 BDC operator licenses one week after new guidelines
Nigeria’s Central Bank has revoked the license of more than 4,000 Bureau De Change operators (BDCs) weeks after sharing important rule changes for their operations. The affected operators failed to pay necessary fees, render returns or comply with anti-money laundering and terrorism financing regulations, the apex bank said in a statement on Friday. “The CBN is revising the regulatory and supervisory guidelines for Bureau de Change operations in Nigeria. Compliance with the new requirements will be mandatory for all stakeholders in the sector when the revised guidelines become effective,” the statement said. The revocation of the licences comes just four days after the Central Bank reversed its three-year stance on selling dollars to eligible BDCs. The U-turn came days after the Central Bank released new rules for BDCs that required them to be more transparent. Under the new rules, operators must have external auditors, digitally integrate with the CBN, and link all transactions to an active bank verification number (BVN). The Central Bank also increased the minimum capital requirements for BDCs to N2 billion for Tier 1 license holders and N500 million for Tier 2 licenses. This range of measures by the Central Bank seeks to give the apex bank insight into transactions from the parallel market. On Wednesday, the National Security Adviser (NSA) arrested two Binance executives after authorities demanded to see a list of Nigerians who use Binance for peer-to-peer trading of the USDT/NGN. “What we’re hoping to accomplish by this, frankly, is to bring some sanity to an industry that arguably no longer serves the interests of those whom it was meant to protect,” CBN governor Olayemi Cardoso said at the end of the rate-setting meeting on Tuesday. TechCabal reported on Monday that the fear of being arrested by officials of Nigeria’s anti-graft agency, the Economic and Financial Crimes Commission (EFCC), has driven currency traders away from street trading. Nigerian regulators have declared open season on business. It’s already causing chaos
Read MoreZoho maintains local currency payments over dollar in Kenya and Nigeria as inflation rises
For now, Zoho will continue charging customers in local currency in Nigeria and Kenya amidst surging inflation. Zoho, a global company that creates cloud-based business tools, said on February 29 that it would continue charging customers in Africa and the Middle East in local currency. The decision may boost profits as the company weathers inflation and currency depreciation in markets such as Kenya and Nigeria. “We are not going to change how we bill our customers at all,” Veerakumar Natarajan, country head, Zoho Kenya, told TechCabal. Zoho, however, cautioned that while its billing model will remain, there are possibilities for price adjustments in the future. With rising business costs, some companies have substantially reduced their expenses. However, per Zoho, which launched a local office in Kenya in May 2023, its partner network jumped by 212%, partly because customers continue to use its products since they pay in Kenyan shillings. “Customers are happy to stay with us because we charge in Kenya shillings. This is not the case with rivals, who bill their clients in US dollars,” Natarajan added. READ MORE: Nigerians feel the pinch as January headline inflation hits 29.90% and food prices soar Zoho said it uses a local currency billing strategy in key African and Middle Eastern markets. The approach allows clients in Nigeria, South Africa, Saudi Arabia, and Dubai to pay for Zoho’s customer relationship management software in their local currency. Natarajan said, “In Africa, our strategy is different because we charge in local currency and extend a discount as well.” When it set its price for Kenyan customers, the exchange rate was KES 100 to the US dollar. Currently, the currency has depreciated to KES 146 to the US dollar. According to Natarajan, the weakening Kenyan shilling may compel Zoho to revise its product prices upwards, but there are no such plans soon. For now, Zoho said it can offset the weakening Kenyan shilling by attracting more customers who pay in local currency. As the Kenyan shilling weakens, businesses are concerned about the safety of their dollar-based earnings. Fears include lower income, instability, and compromised livelihoods. Kenya Power, a power distributor, is facing KES 3.19 billion in losses and is considering switching to USD billing, raising concerns about the future of the local currency. READ MORE: Ethiopia’s inflation jumps to 28.7% as central bank acknowledges alleviation difficulties
Read MoreHow 2Africa Subsea Cable landing in Nigeria can propel regional ecosystem growth
This article was contributed to TechCabal by Uche Aniche. 2Africa project is a Subsea Cable connecting three continents and about 33 countries in Africa, including Nigeria. At 45,000km, it is the world’s longest submarine cable and is expected to connect about 1.3 billion people and deepen 4G and 5G Internet penetration to more remote locations. The subsea cable, owned by 2Africa Consortium —led by Meta— has now reached the shores of Nigeria through Lagos and Akwa Ibom states. The Akwa Ibom landing location which is managed by MainOne is at Ibeno and feelers suggest Rivers and Akwa Ibom states are the main focus for now. Doors are however open for other states in the region if enough interest is generated. Here are the top five ways I believe this represents a game changer for the extended business communities in general and the startup ecosystem within the regions in particular: Improved & Faster Internet Connection The deep-sea cable project will connect 32 other African countries and directly support economic development in Africa. This will foster further growth of 4G and 5G and increase broadband penetration to millions of people and businesses across the continent. At 180 terabytes per second, this will deliver high-speed internet to homes, offices, government institutions, and others in the region. Speedup Economic Growth According to the International Telecommunications Union (ITU global study), it was estimated that on average, an increase of 10% in mobile broadband penetration yielded an increase of 1.5% in GDP. We expect this cable landing and subsequent last-mile distribution activities to further grow the economy of the regions in particular and Nigeria by extension. Talent Attraction & Rapid Growth of the Startup Ecosystem We expect more companies to set up in the region leading to more talents choosing to live and work here. This will have some ramifications for the economy of the region but more importantly, it would attract and deliver more experienced professionals to the startup ecosystem, some of whom could become founders or work in some of the innovative startups that call the region home. This would also attract more investors. Affordable Internet Access We expect increased competition to lead to affordable Internet access. The 2Africa Cable will bring the total number of cable landings in Nigeria to seven. However, it is the only subsea cable to successfully land on the southern coast of Nigeria designed to deliver more than the total combined capacity of all subsea cables currently serving Africa at a capacity of up to 180 terabytes per second (Tbps). Job Creation & Youth Engagement The Cable landing will create hundreds —and probably thousands— of direct jobs via the rise of last-mile Internet service providers that are required to get Internet connections direct to homes and offices. Many more direct and indirect jobs will be created through several new Internet-enabled businesses such as data centres, cloud companies, and outsourcing agencies, among others. Additionally, affordable Internet will lead to more engaged young people who will connect and plug into several Internet-based opportunities and commercial recreational activities such as e-sports and gaming. Uche is the Convener of #StartupSouth, an organization that promotes and advocates for the development of the startup ecosystem in the South-South/South-East region of Nigeria.
Read MoreinDrive introduces commission charge in Botswana as Bolt arrives
inDrive, the California-headquartered ride-hailing app, which launched in Botswana in 2019, has introduced a 10% commission charge for drivers in Botswana, effective from February 28. The introduction coincides with the launch of Bolt in the country on the same day, setting the ground for an interesting ride-hailing battle. According to the company, introducing the commission charge forms part of a strategy to make further investments in Botswana, which inDrive describes as a “top priority market”. “After operating without commissions for five years, this aligns with our strategic goals to provide fair urban mobility access to more customers in Botswana,” said Vincent Lilane, business development representative, at inDrive in Southern Africa. Since inDrive’s launch in Botswana in February 2019, drivers have been operating it commission-free. Drivers who spoke to TechCabal differed on the introduction of the commission fee. One driver, who has been using the service for almost two years, stated that the commission was not an issue as they knew about it beforehand. “They are a business too, so it makes sense for them to want to make money,” the driver said. However, another driver said it was unfair for inDrive to start charging commissions before addressing some issues drivers had earlier communicated. “inDrive has to put a minimum on what riders can offer for rides,” he said. “Some of these rides are so cheap, and we only accept them because of desperation.” inDrive’s model allows riders to set a price for a ride which a driver can accept or refuse. Since launching in Botswana five years ago, the service has had mixed fortunes. Although it has grown in popularity as an alternative to public transport, it has also faced allegations of driver misconduct and has encountered pushback from local public transport operators who accuse them of taking away their business.
Read MoreNigeria fines Binance $10bn amidst investigation of crypto exchange
Nigerian authorities have imposed a $10 billion fine on Binance, the global crypto exchange at the center of a crypto crackdown in the country, Premium Times reported on Friday morning. Authorities have accused Binance of benefiting from “illegal transactions,” the report quoted a presidential aide as saying. The fine comes barely 48 hours after news broke that security agencies detained two executives of the global crypto exchange. Both executives flew to Nigeria last week following a ban on their website and were arrested by the office of the National Security Adviser (NSA). While the NSA initially denied reports of any arrests, it later confirmed that it was investigating Binance but did not share any details of the investigation. On Tuesday, Olayemi Cardoso, the central bank governor, claimed “$26 billion has passed through Binance Nigeria from sources and users who we cannot identify.” There have been reports that the government has asked Binance for user data and details. It is unclear if the company has handed over the requested data. *This is a developing story.
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