Exclusive: YC-backed Cowrywise insists recent employee terminations were linked to performance reviews
Cowrywise, the YC-backed Nigerian fintech app that aggregates mutual funds for retail customers to invest in, has laid off five people across its marketing, engineering and customer success teams. “The company said the terminated roles no longer aligned with the company’s direction,” one person familiar with Cowrywise’s business told TechCabal. “Internal restructuring and evolving business needs were the reason for the layoffs.” Cowrywise, which employs 50 people, confirmed that five roles were terminated following an annual performance review but insists there were no layoffs. “Lay-offs are usually due to economic/business performance reasons, and this was not the case,” the company said in an email to TechCabal. At least one person with direct knowledge of the business painted a picture of a company that is evolving. “Cowrywise will be a totally different company in the coming years and will be more of a finance company than a fintech company,” said the person, who asked not to be named because they were not authorised to speak on the matter. Affected employees were paid three months’ salaries instead of one month’s salary dictated by their contract as part of their exit packages, an unusual move for people fired for performance reasons. Founded in 2017 by Edward Popoola and Razaq Ahmed, Cowrywise, a member of the YC’s Summer 2018 batch, has grown from launching with a savings feature to providing several investment opportunities to users in Nigeria. Per TechCrunch, the startup has over 220,000 users and raised a $3 million pre-Series A funding round led by Quona Capital in Jan 2021. In 2021, it received a license to operate as a fund manager from Nigeria’s capital markets regulator, the Securities and Exchange Commission (SEC). According to its website, the company has 19 SEC-licensed mutual funds investors can choose from, and at least 20% of the total mutual funds in the country are listed on its platform. Cowrywise’s layoffs occur within the context of economic uncertainty within the Nigerian tech sector. Several other tech companies have undertaken similar measures in recent months, highlighting the challenges of operating a startup in the country’s current macroeconomic conditions.
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New final payment dates for 2023 December SRD
As the holidays draw closer, the South Agabsoutlet diego-dalla-palma fracominaoutlet donkeyluckycat gioie-di-gea diegodellapalma 24h-bottle ovyescarpe lecopavillon blundstoneprezzi ynotsaldi negozitata gabsoutlet kleankanteentrinkflasche vondutchmutzenfrican government has announced the payment schedule for the Social Relief of Distress (SRD) grant for December 2023. This financial assistance is an ongoing effort to support individuals affected by the COVID-19 pandemic. SRD payment processing dates December 2023 Clients approved for the SRD grant for December 2023 can anticipate the processing of their payment between December 18 and 22, 2023. Viewing payment status for SRD December 2023 Throughout the aforementioned week, clients are strongly advised to regularly check their status on their portal via the SRD website. This online platform will provide specific details about the exact date when the payment is expected to be reflected in their respective bank accounts. This proactive step will help beneficiaries stay informed and prepared for the incoming funds. SRD December payment timeline Upon processing, it is essential to understand that the funds may take approximately 2-3 business days to reflect in the client’s bank account. Beneficiaries should anticipate this timeline and make necessary arrangements, considering the processing period and the subsequent time it takes for the funds to become accessible. Final thoughts Beneficiaries are urged to remain vigilant and utilise the resources provided by the SRD website to track their payment status accurately. Also, clients need to be aware of potential scams and prevalent fraudulent activities. Exercise caution when sharing personal information or financial details online or over the phone. The government or legitimate financial institutions will never request sensitive information via unsolicited calls or emails. Stay informed, stay cautious, and report any suspicious activity to the relevant authorities to safeguard yourself and others from falling victim to scams during this critical period. Timely updates and adherence to the outlined schedule will ensure a smooth and efficient process, allowing you to access much-needed assistance promptly.
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👨🏿🚀TechCabal Daily – Eskom is at risk of shut down
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning After being a founder for 10 years, Surayyah Ahmad accidentally got into venture capital investing. Now she runs a $20 million fund that supports outliers in a region that has been ignored by VCs for a very long time. Read about it here. Also please take this survey if you have been affected by the recent layoffs in the tech ecosystem. In today’s edition Eskom is at risk of shutdown Jenesys AI secures $1.1 million Nigeria awards $6,000 to 45 AI startups and researchers Bumpa acquires Fyyne Nigeria launches platform to curb fake drugs The World Wide Web3 Job Opportunities Power Eskom is at risk of shutdown Eskom’s emissions performance has taken a nosedive. The South African power company has released more harmful particles into the air for each unit of electricity it produces. How? Disclosed in Eskom’s interim results for the six months ending September 2023, the amount of these particles has doubled compared to last year and is now at 0.92 kilograms per megawatt-hour, specifically pointing to three power stations—Kendal, Kriel, and Matla—as the main contributors to the problem as they account for almost half of all the harmful particles released. As of September, 14 units within Eskom’s power generation system did not meet the average monthly limits for emissions set by regulations, putting 8,588 MW at risk of shutdown. What’s Eskom doing about it? Eskom attributes the elevated emissions to ageing abatement equipment, poor coal quality, and insufficient maintenance, and is actively engaging with the National Environmental Consultative and Advisory Forum regarding appeals on minimum emissions standards, with engagements extended until August 2024. The forum will make recommendations to the department of forestry, fisheries, and the environment, with minister Barbara Creecy set to rule on the appeals. Concerns about health impact persist, with Eskom previously identified as the world’s largest emitter of health-harming sulphur dioxide in 2021. The Centre for Research on Energy and Clean Air has again, in January, warned that air pollution from Eskom’s coal-fired plants could lead to 79,500 deaths by 2025. The power company also has projects underway at Kendal, Lethabo, Duvha, and Matla, that aim to reduce emissions and enhance the efficiency of abatement technologies, with most projects expected to conclude by March 2025. 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. Funding Jenesys AI secures $1.1 million pre-seed funding Jensys AI co-founders, Oluwatosin Dairo and Nicolai Thomson Jenesys AI, a B2B invoice management and payments startup, has secured $1.1 million in pre-seed funding. Founded by Nicolai Thomson and Oluwatosin Dairo, the company aims to redefine transactional accounting and compliance with AI, shifting human roles from operators to validators. The investment was led by Twin Path Ventures and joined by Fuel Ventures, Antler, Hatcher+, and angel investors from the US, UK, and Nigeria. AI-powered Jack takes the wheel: Jenesys AI’s copilot “Jack” handles invoice management, completing tasks like budgeting, bookkeeping, and compliance checks in less than 30 seconds before initiating domestic or global payments. This boosts cash flow efficiency and international supply chain payments. Integrating AI into finance: Along with securing pre-seed funding, the AI bookkeeper startup has also acquired VAT Key, a Danish digital TaxTech company for a six-figure sum, and welcomed its founder, Jonathan Bredo, as strategy manager to head payments and compliance. Introducing: BookingPress integration BookingPress helps you manage your appointment bookings end-to-end on WordPress. Get paid online via Paystack when you use BookingPress. Learn more → Funding Nigeria awards $6,000 to 45 AI startups and researchers Bosun Tijani, Nigeria’s minister of communication, innovation, and digital economy Nigeria is actively investing in AI development and application. Bosun Tijani, Nigeria’s minister of communication, innovation, and digital economy, has unveiled 45 startups and researchers chosen for the country’s first National AI Research Grant Scheme (NAIRS). Each recipient was vetted by a panel of 25 AI experts and will receive a grant of $6,000. What’s the vision? Tijani says it is to allow the recipients to “explore further opportunities to deepen their work and build a sustainable AI ecosystem in Nigeria”. Among the 45 beneficiaries, 11 startups secured funding to cover crucial sectors such as health, agriculture, education, finance, governance, utility, and environmental sustainability. Meet the startups: Lendsqr, Aurelius, Nurse Oge, Tamela, Quantum Innovative Tech Solutions Ltd, Life-Elixir Computers, Farmspeak Technology Limited, Gwin Technologies Limited, IDB Analytics, Edunetix, and Cardio Intel are the 11 startups chosen for NAIRS. The grant scheme aligns with Nigeria’s broader engagement in the global AI landscape, as evidenced by its participation in the “Bletchley Declaration“, alongside two other African nations. Zoom out: Nigeria is actively developing its national AI strategy. Per Microsoft co-founder Bill Gates’ recent prediction for the future impact of technology on healthcare, education, and the workforce, Africa could see widespread AI adoption within three years. How do Nigerians save and spend? Did you know that 64% of Nigerians save a portion of their monthly income? Read PiggyVest’s first-ever savings report to see more about how Nigerians save and spend here. E-commerce Bumpa acquires Fyyne Co-founders of Bumpa, Kelvin Umechukwu and Adetunji Opayele Bumpa, a Nigerian e-commerce company, has acquired Fyyne, a beauty marketplace. The terms of the deal were undisclosed. Fynne? Launched in 2020, the startup provides tools that black barbers and hairstylists need to run their businesses. In January 2022, Fyyne launched a new app that allows users to easily find, book, and pay for hairstyling services from black hairstylists while enabling independent black hairstylists and barbers to promote their skills and make money. Terms of the deal: The move comes one year after Fyyne launched its beauty tech platform and secured undisclosed pre-seed funding. Fyyne will continue to operate as an independent platform, while Bumpa will take over its technology, customer base, and some team members. As part of the deal, two co-founders of Fyyne,
Read MoreNomba lays off employees after winding down retention team
The department shutdown at Nomba follows a hiring freeze, but the company says that there is nothing out of the ordinary.diego-dalla-palma akutrekkingshop legioiedigea and-camicie gioie-di-gea mandarinaduckoutlet loevenichmutze guardianiscarpe loevenichhutkaufen kleankanteentrinkflasche 24bottles akuscarpe 24bottles harmontblainescarpe kleankanteentrinkflasche Nomba, a Nigerian agency banking startup, has shut down its customer retention department, laying off an undisclosed number of its staff and absorbing the rest to its other teams. Around the same time, the former leader of the now-absolved customer retention team moved to the switching company Interswitch. According to reliable sources, there is also a hiring freeze across the company. Nomba’s CEO, Adeyinka Adewale, told TechCabal that the layoffs were performance-based and merely a part of the cyclical life of the customer retention team, which he claims works on time-bound projects. He told TechCabal that they were hired on a fixed-term contract but did not specify how many staff were on the team before and after the firings. “We have over 350 staff, and at one point or another, employees go beyond their job descriptions to do things like sales, customer support, and customer retention,” said Adewale. “We only set up this team when we have a drive to retain customers, and sometimes the team members are let go if they do not meet expectations.” Adewale did not specify how many employees were let go from the team but said that high performers were absorbed into full-time roles in other teams like customer support and sales because they had spent considerable time understanding its over 300,000 customers. On the other hand, Adewale confirmed reports of a hiring freeze across the company. “Q3 is when we make critical plans that will only mature in next year, so it makes better business sense to hire the necessary talent till then.” He said the company will inevitably see a lot of new hires by February. This year has seen job cuts from well-funded fintech companies like Paystack, and even Nomba’s former competitor Kippa which recently exited the agency banking sector due to currency inflation and decreasing margins. Up until now, there has been no news of layoffs from Nomba, which announced a $30 million pre-Series B funding raise in May. The company raised the funding at a $150 million valuation led by San Francisco-based Base10 partners, with participation from Helios Digital Ventures, Shopify, Partech, and Khosla Ventures. Formerly known as Kudi, the YC-backed company has substantially evolved from a natural language processing bot that assists people trying to make online payments to being a fully licensed payment service provider in Nigeria. Namba told TechCabal that it supports more than 300,000 businesses with its banking and payment solutions. In May, the company also claimed to process $1 billion in monthly transactions. The company provides POS devices, and it has added omnichannel features that can reduce reconciliation time and financial errors for enterprise customers. “We have included menu software that allows waiters to take orders directly on the device. This will greatly reduce revenue losses for restaurants who often have to make several reconciliations on the backend,” the CEO told TechCabal. The company also said that it has partnered with several FMCG businesses, and it hopes to partner with startups like restaurant-tech Vendease to extend the reconciliation feature of its omnichannel POS devices to more inventory-based businesses.
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New updates, fees, dates for JAMB CBT 2024/2025
The Joint Admissions and Matriculation Board (JAMB) has officially announced the schedule for the 2024/2025 Unified Tertiary Matriculation Examination (UTME) and Direct Entry. The highly anticipated computer-based examination, which serves as a gateway for Nigerian students into tertiary institutions, comes with crucial dates and guidelines that aspiring candidates need to heed. Joint Admissions and Matriculation Board 2024 registration period The registration for the CBT JAMB 2024/2025 UTME and Direct Entry will kick off on the 15th of January 2024, marking the commencement of the application process for prospective candidates. Registration deadline and fees Aspiring UTME and DE candidates should take note of the deadline set for the 26th of February 2024 and 28th of March 2024 respectively for completing their registration. The registration fee for both UTME and Direct Entry has been fixed at ₦6,200. Foreign students will pay $30 only. JAMB prescribed literary text 2024 For the 2024/2025 UTME, candidates must read the prescribed novel The Life Changer by Khadija Abubakar Jalli. A comprehensive understanding of this literary piece is crucial, as questions related to it will feature in the Use-of-English examination. Examination slip reprinting The reprinting of JAMB examination slips is set to commence on the 10th of April 2024. Candidates are urged to promptly reprint their slips to access essential details such as the examination date, time, and venue. JAMB mock examination 2024 An optional mock examination for the 2024/2025 UTME has been scheduled for the 7th of March 2024. Candidates have the choice to participate in this preparatory test, providing an opportunity to familiarise themselves with the exam format. Candidates opting for the mock exam will pay a total of ₦7,700. UTME commencement and duration The main Joint Admissions and Matriculation Board 2024/2025 UTME is slated to begin on the 19th of April 2024 and will run through to the 29th of April 2024. Candidates are strongly advised to constantly check for JAMB updates as these dates may be changed if need be.
Read MoreCan Aduna Capital’s $20m fund bring northern Nigeria’s tech ecosystem into the foray?
Ask An Investor edition featuring Surayyah Ahmad and Sanusi Ismail, general partners at Aduna Capital. In November, Surayyah Ahmad and Sanusi Ismail announced the launch of Aduna Capital, a $20 million fund targeted at discovering and nurturing early-stage tech founders across Africa, with a keen focus on the northern Nigeria startup ecosystem. For this edition of Ask An Investor, TechCabal spoke to Ahmad and Ismail about why the fund will focus on northern Nigeria, their experience in raising a fund during a VC crunch and more. Please share a bit of background on your VC journey Surayyah Ahmad: I’ve been a founder for almost 10 years, having started an e-commerce and fulfilment service company that was based in Abuja. Back then, I honestly didn’t like the support that I could get in the ecosystem probably because there was no ecosystem to start with. So it was quite a struggle raising funds and I ended up raising around $250,000. In 2019, I had to do an M&A deal because the economy wasn’t aligning with the company’s growth. We merged with a company that was trying to enter the same market. After that, I started another company in the UK. That is when I accidentally got into VC, mostly due to my knowledge of the African market and serving as a venture partner to a couple of VCs in London. But what was clear at the time was that though I was sourcing deals, I couldn’t source deals from my community in northern Nigeria. There were incredible founders but the issue was that they were more technical and could not put a story together to get investors to be interested in their companies. It struck me that I was working in the wrong environment where I wasn’t making a lot of impact. I was doing TTLabs, in the UK, as a venture partner sourcing deals for VCs. So I decided to repurpose TTLabs into something that could become an accelerator helping founders in northern Nigeria. So we would incubate them for six months, and then put them through our process to getting funded. Now, I think it was like a Pandora’s Box in that the more we did those things, the more we realised that the problem was deeper. So Sanusi and I as well as a few other friends aligned on solving this problem. We functioned as business angels because we’ve been investing in other companies. So we thought, how about we come together as an angel syndicate and start to invest in these companies ourselves? So what started as an angel investment syndicate got a lot of traction and interest and eventually evolved into the fully-fledged fund Aduna Capital is today. Sanusi Ismaila: I think that all of my experience has led up to this. Firstly having started my own software company in the past and gone through the struggles, knowing where the shoe pinches at times, understanding what it is like to have a vision and want to get it done but not have people think that it’s possible. Having seen people from a certain region with brilliant ideas that are built into products, and then seeing them struggle to raise capital, I can relate to the problems we are trying to solve as Aduna Capital. So all of that all of that experience aligns with the firm’s mandate to take some bets that most other firms will not take. We are looking at a region that most other firms are not looking at. We know that there’s a lot of potential in northern Nigeria and we hope that by pioneering investing in the region, eventually, other firms will follow suit. TC: The fund will have an explicit focus on northern Nigeria startups. Please elaborate on this decision SA: So part of what we realised was that Lagos has gotten so much traction and investor interest that although there are incredible founders in Lagos, there are also people who can get funding just because they’ve started a company with a lot of noise. I’m sure you’ve seen the recent news on founder dishonesty and whatnot going on in the ecosystem. Northern Nigeria is different in that it subscribes to what is called the honour system. It’s a very high-trust environment and there are a lot of founders doing some amazing things quietly. Additionally, over 60% of Nigeria’s population currently resides in the north so when people put on their pitch deck that Nigeria is a massive market, the majority of that market resides in the north. But as Nigeria is also predicted to become the fourth largest country in the world by 2050, 70% of our population will recite in the north. SI: There is a geographical advantage in that the north is surrounded by Francophone countries, Niger, Chad, and Cameroon and a lot of trade happens between these countries. I think as other companies are focused on expanding to Ghana, Kenya, South Africa, etc, we are looking to explore the potential of expanding from northern Nigeria to other Francophone countries. It’s about looking at the other side of opportunities that not everybody is looking at. So we see the North as a ready market to launch products and expand to other parts of Africa. We want to support outliers that are currently in this region. A lot of them have been bootstrapping and have raised small ticket funds but have not raised anything after that. And it’s not because they’re not bankable companies. When you see their books, you’ll see that they are doing very good numbers and are sustainable as well. It’s just because they don’t know how to raise and that we haven’t built an ecosystem of raising VC funding in northern Nigeria. And that’s what Aduna Capital is trying to change. What has been your experience raising funds in the current funding winter when LP funds are hard to come by? SA: It’s an ongoing experience because we have not closed the fund but
Read MoreVenture Capital in Africa: Investment trends and forecasts
This article was contributed to TechCabal by Rossie E. Turman III. In November 2023, Will Stevens, the consul general at the U.S. Consulate General in Lagos, Nigeria, told the Global Tech Africa Conference that approximately 40% of venture capital (VC) investment in Africa came from the U.S. and 60% of African startups are incorporated in the U.S. He added that African startups raised $4.8 billion—an average of over $1 million every two hours—in 2022. While Stevens’ comments were intended to highlight the importance of Africa and its VC ecosystem to the U.S., his reported comments are misleading without further context. Investors and founders seeking to fully understand the African VC ecosystem must educate themselves on (i) the trends and factors behind these numbers; (ii) the legal and regulatory framework impacting the structuring of Africa-focused VC investments; and (iii) how the factors impacting investment in Africa specifically drive VC investment. Africa operations, U.S. domicile The U.S. VC ecosystem represented approximately 51.49% of global VC capital invested in Q2 2023, according to KPMG. In addition, the U.S. population of the African diaspora is larger than Africa’s 10th largest country. So it is unsurprising that U.S. VC investment represents a significant portion of investment in the African ecosystem. The more pertinent question is: Why is there so little U.S. VC investment in the African startup ecosystem? One factor inhibiting more investment in African startups is global investors’ expectations of preferential rights in their investments, memorialised through contracts and revisions to emerging companies’ organisational and governance documents. To reduce transaction costs and legal ambiguity, investors typically invest using familiar transaction structures and contracts, with a consistent choice of governing law and venue. This mitigates the risk of unanticipated or unintended outcomes from courts in atypical jurisdictions or courts applying an atypical choice of law. The preferred choice of law for transactions in the U.S. VC market is Delaware, which provides clarity on how provisions affecting investors’ preferred rights are interpreted and enforced. In fact, many global investors in U.S.-based VC funds require that the investments of such funds be made in Delaware-domiciled companies. Investing in the parent of an emerging company allows the capture of all the value associated with rapid scaling and growth. Investors and founders increasingly engage in transactions that restructure existing African startups to create Delaware parent companies. While African startups may be based or have significant operations in African countries, if the company’s ultimate parent or holding company is a Delaware corporation, investors reduce their risk by investing in a U.S.-based company subject to Delaware and U.S. laws and regulations, with protections for preferred equity and debt investments and favourable tax treatment. A corporate structure with a Delaware-domiciled parent company and a local African-domiciled operating company or companies allows the emerging company to raise capital in the largest VC market in the world while maintaining the benefit of local operations. Local operations are necessary to establish product-market fit and may also provide a reduction in cash burn if critical services and personnel for the emerging company are available in the African countries of operation. The appeal of African startups to U.S. investors Investment in African startups is driven by the same factors that drive VC investment in other markets: Total Addressable Market: The current population of the continent of Africa is estimated to be approximately 1.48 billion people. Literally, over 40 of the world’s newest consumers will be located on the continent of Africa. Add in the African diaspora and the TAM grows. Need for Innovation: The continent of Africa is large, creating a drive for technological innovation. For example: Fintech limits the need for a cost-prohibitive physical network of bank branches across a large geography. Global Market Conditions: The global IPO market and late-stage VC financing continue to struggle, but global early-stage VC maintains a healthy, although muted, run. Currently, African VC activity is overweight in early-stage investor activity. African VC Ecosystem Structural Hedge: The spectacular meltdown of certain late-stage companies due to fraud and malfeasance is underrepresented in the African startup ecosystem, in part due to the additional due diligence most investors conduct when investing in African startups as well as the smaller number of African late-stage venture-backed companies. Operating Company Cost: In an environment where capital is scarce, an emerging company’s ability to manage its burn rate is prized. The African startup ecosystem supports fiscal austerity; its founders are well acquainted with resource scarcity and have adapted to it. Not all historical trends are positive U.S. VC investment in the African startup ecosystem is likely to continue in a direction consistent with historical trends. Without thoughtful and intentional intervention, however, less positive trends may also emerge. Companies led by white males or Africans with strong “Western” backgrounds will attract more VC investment than comparable companies in the African startup ecosystem, as investors undervalue the need and advantages of local knowledge. Companies will be predominantly male-led, ignoring the outsized opportunity to invest in female-led companies, given other indices of gender advancement on the African continent. Global VC will continue to underinvest in the African VC ecosystem compared to other VC markets. The global VC market will be surprised by outsized exits and returns emanating from the African VC ecosystem, leading to fear of missing out and less disciplined investment in the next wave. More copycat, trend-based, or under-researched investments, combined with poor due diligence, will lead to a lowering of returns in the African VC ecosystem. African emerging companies will be challenged by the need to scale to meet investor expectations and by founders’ limited knowledge of and access to regional markets beyond their own. Investment may increase in themes that attract VC backing in Western markets but that do not translate well operationally in many African markets. To fully realise the promise of the African VC ecosystem, both investors and founders must continue to educate themselves on optimal frameworks, factors, and influences that may perpetuate positive outcomes. Rossie E. Turman III is a Partner at Lowenstein
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👨🏿🚀TechCabal Daily: Chipper Cash may be profitable in 2024
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning In Kenya, telecoms company Airtel is battling regulators to dodge a probe of alleged vendor bullying. The regulator—Competition Authority of Kenya—is bent on investigating and taking action against the telco over alleged abuse of buyer power. Anyways, while corporate giants like Airtel grapple with power dynamics, countless individuals face the fallout of industry shifts. If you’ve been caught in the recent tech layoff wave, please share your experience in our survey. In today’s edition Lesotho’s central bank suffers cyberattack Chippercash may be profitable in 2024 Is Pezesha’s liquidation suit premature? Ride-hailing apps facing scrutiny in Zambia Starlink launches in Eswatini The World Wide Web3 Job Opportunities Banking Lesotho’s central bank suffers cyberattack Lesotho’s Central Bank On December 11, 2023, the Central Bank of Lesotho discovered that a cybersecurity incident had affected its system. The apex bank has restored transfers, but it advised customers to expect delays as the processing of payments is done manually. What attack? While the nature of the attack was not disclosed, the attack led to several outages and affected the country’s National Payments System, which facilitates inter-bank transactions. Zoom out: According to local media, there are concerns that the current wave of attacks might affect Lesotho’s exchange rate against the rand. Lesotho’s incident is not a standalone incident in southern Africa. The Development Bank of Southern Africa confirmed in June that it was hit by ransomware. 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 Chipper Cash may be profitable in 2024 Image source: Zikoko Memes Chipper Cash, a prominent African fintech startup once grappling with heavy losses, is now set to achieve profitability by early 2024, according to a former executive who claimed to have spearheaded the company’s dramatic turnaround. Turn around from what? In a LinkedIn post yesterday, Zain Hirani announced his departure from Chipper Cash after a year-long tenure as the director of revenue strategy. He says that upon joining in 2022, the company which was once valued at $2 billion had burned through $250 million of the over $300 million funding it raised. The then-unicorn was also struggling with unsustainable losses driven by a “growth at all costs” strategy. Around the same time, two of its major investors, FTX and SVB, collapsed. Things have changed now: Per Hirani’s post, the company’s contribution margin turned positive after six months of review of product economics and commercial contracts, with better financial discipline and laying off over 50% of its workforce. Its most recent layoff was announced a little over a week ago. The company also slashed the salaries of its remaining US and UK employees. How does Chipper Cash make money? The company operates a cross-border payments service that reportedly enables five million customers across Africa, the UK, and the US to send and receive money from eight countries, including Nigeria (Africa’s biggest economy by population and GDP) and South Africa. It runs a virtual card business in partnership with Visa and allows users to make peer-to-peer transactions without charging a commission upfront. The fintech makes revenue from the exchange rate arbitrage involved in international fund transfers. In addition to global fund transfers, the service helps merchants accept payments online. Two months ago Chipper announced the launch of Chipper ID, an AI-driven verification and onboarding tool built specifically for the African continent. Introducing: BookingPress integration BookingPress helps you manage your appointment bookings end-to-end on WordPress. Get paid online via Paystack when you use BookingPress. Learn more → E-commerce Is Pezesha’s liquidation suit premature? Image source: Zikoko Memes Tesh Mbaabu, CEO of a Kenyan B2B e-commerce startup,MarketForce, has questioned the approach Pezesha—a startup that offers business loans-as-a-service—takes to resolve a debt crisis. What happened? In April 2021, Marketforce and Pezesha teamed up to allow Pezesha to provide affordable financing for inventory and wholesale distribution to merchants working with Marketforce. However, in a petition filed in September 2023, Pezesha asked a Kenyan court to liquidate Marketforce’s assets over an unpaid debt. Pezesha claims that Marketforce owes them a lot of money but hasn’t shared specific information about why the debt exists or the exact amount they’re trying to get back from Marketforce. Although Pezesha did not explicitly state in its legal action that it aimed to collect outstanding debts arising from the 2021 inventory financing agreement with Marketforce, Mbaabu hinted that this might be the case. Zoom out: Marketforce puzzle is not a first. Twiga, the Kenyan e-commerce startup, was sued by cloud service vendor Incentro, which asked a court to declare it bankrupt and force Twiga to repay its debts. The dispute is still being discussed privately between the two firms. Since its launch, Marketforce has raised $42.5 million in funding, the most recent being a $40 million Series A funding round led by V8 Capital Partners, a venture capital firm based in London and Lagos. How do Nigerians save and spend? Did you know that 64% of Nigerians save a portion of their monthly income? Read PiggyVest’s first-ever savings report to see more about how Nigerians save and spend here. Mobility Lusaka’s leading ride-hailing apps facing scrutiny Image source: Zikoko Memes Drivers on Lusaka’s most popular leading ride-hailing platforms Yango and GO aren’t having a jolly ride at work. They do not like that the platforms prioritise customer acquisition over driver welfare. The drivers have previously, in March and May, protested against the platforms’ way of doing business in the Zambian city. During the May protests, some drivers impounded the cars of drivers who decided not to join the protests. What is Yango and GO doing wrong? These platforms are locked in a price war, and guess who’s getting squeezed into the back seat? Yep, the drivers. The discounts and lower prices the platforms keep throwing to get more users are driving down the drivers’ earnings. Their expenses
Read MoreNairaland blackout: Popular online forum shutdown by Cloudfare over undisclosed abuse
Nairaland, a popular Nigerian online forum and the country’s seventh-most-visited website, is in blackout mode after Cloudflare, an American content delivery company, yanked its server offline on Monday. Seun Osewa, Nairaland’s enigmatic founder, confirmed the shutdown on Monday, sharing that Cloudflare implemented a takedown after an abuse report filed two weeks ago. The nature of the abuse remains unclear. Osewa first tweeted on Monday evening that Nairaland’s website was down due to “an unscheduled maintenance operation” by Cloudflare. By Tuesday afternoon, Osewa tweeted that the Nairaland forum was taken down for a different reason. “Nairaland’s server was taken down because I overlooked an abuse report that was originally sent on the 14th. After the takedown, I removed the offensive content,” his tweet read. “The technical support team has informed me that only the abuse team has the power to reinstate our server, that their review could take up to 48 hours, and that nothing can be done to speed up the process. I’ve been informed that the only thing I can do is wait. It’s humbling,” Osewa did not respond to multiple requests for comments from TechCabal. “Cloudflare offers security and reliability services to millions of websites, helping prevent online abuse and make the Internet more secure,” Cloudflare shared on its website. The company prohibits hate speech, malware, and copyright infringement. Launched in 2005, Nairaland is Nigeria’s most popular online forum. With around 3 million registered users, it allows users to create content around a wide range of topics and has helped build communities around news, politics, entertainment, and technology. Yet, Nairaland has often been criticised for lax content moderation and a staid design, which has not changed since its launch. Nairaland’s takedown will draw relevant questions about the rashness of Cloudflare’s decision. “Will Cloudflare take down Reddit, the popular American online forum, for instance, for a similar incident,” one media expert who spoke to TechCabal asked. Osewa’s tweets show that the timeline for resolving the incident remains unclear. Nairaland’s disappearance leaves a sizeable void in the Nigerian online space and while there are questions around the future of the platform, it’s clear that it will need to evolve and make some changes when it returns.
Read MoreSandbox’s platform wants to connect product managers with employers
Sandbox’s platform will allow companies to find vetted product management talent with ease across Africa. Sandbox is a talent-matching platform built for product managers in the African tech ecosystem to find work locally and internationally. “It’s like Toptal, but for product managers,” Khadijah Atere, who works as product operations manager at Sandbox, told TechCabal over X (formerly Twitter) while trying to explain their unique offering. Founded by Samuel Tobi and Princess Akari, the company started as a product within the People in Product (PIP) community, “a volunteer-driven community of product managers making a measurable impact and helping one another grow,” according to the PIP website. Ijaola David, Sandbox’s product lead, told TechCabal over a video call that a lot of the support for the company has come from the PIP community. David, a project manager with over five years of experience, said he saw the need for Sandbox when he was starting professionally. “The issue was there weren’t a lot of jobs for product managers. I was lucky to stumble into this role that has become my career,” he said. To help other product managers make better decisions and have more high-quality choices, he and some other friends from the PIP community started Sandbox. While the platform is still new, having only officially kicked off in 2023, David says they are “Africa’s first core product management matching platform.” TechCabal asked how Sandbox matches product management talents with companies that need them and David explained that Sandbox has an assessment for all PMs on the platform. The assessment helps them segment entrants by experience, skill set, and specialisation. “So anyone that wants to hire, all you have to do is go on our website, fill out the form, tell us what the JD looks like, and we will now go to our talent pool and find matching talents,” David said. Sandbox does not currently train newbies to become PMs, according to David and Atere. Their first phase of operations is focusing on helping existing talents to match with companies that need their services. Nonetheless, the platform currently hosts talents with as little as zero years of experience to as much as 10. Although it’s still in its infancy, David confirmed to TechCabal that they are already a revenue-generating entity from companies that are hiring the PMs in their network. The revenue comes in the form of service charges and consultation fees at the moment, with plans to introduce other models in the future. Meanwhile, Sandbox is taking a slow approach to raising external funding. David said that because of the PIP community, operational expenses are low. “If we ever need to raise [money] from institutional investors, it should be because we’ve seen that there’s a potential revenue point that we need to invest in and we need to expand there. Maybe we need legal and compliance issues, or we need to expand into a market and they have compliance requirements and we know, once we are in there, we will blow up. Then it’ll make sense to raise money for such expansion.”
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