Ex-Jumia Ghana CEO, Sunil Natraj to head Jumia Nigeria
Jumia Nigeria has appointed former Jumia Ghana CEO, Sunil Natraj, to head the e-commerce business. Massimiliano Spalazzi, CEO of prominent e-commerce business Jumia Nigeria will be stepping down in December 2023 after working with Jumia Group for 11 years. Spalazzi, one of Jumia’s pioneer employees, will be replaced by Sunil Natraj, Jumia Ghana’s CEO, who was appointed last year. Natraj will start in his new role in January 2024. Natraj’s appointment was announced by Francis Dufay, the CEO of Jumia Group, at a media parley that was held today in Yaba, Lagos, Nigeria. “Jumia wants to be a Nigerian company and not a Lagos company. We want to continue what Spalazzi started,” Natraj said at the event. He shared that Jumia plans to expand to more Nigerian cities. Akure and Ilorin are two cities Jumia is considering. The e-commerce firm is also eyeing cities on the way to Ibadan, Warri and Benin in the first quarter of 2024. The broad plan is to build a network that will cover the country in entirety. “We are targeting cities with a population of more than 20,000 people,” Dufay said. He explained that expanding in this manner has worked for a few countries in Ghana, Cote d’Ivoire and Senegal. For him, Nigeria is Jumia’s biggest market. The CEO said the company has had its own fair share of challenges. Part of those challenges involved the reduction of its workforce in the fourth quarter of 2022, and cutting its advertising budgets by 73% in Q3 2023. The group also moved away from a focus on delivering low-ticket items.
Read MoreLipa Later acquires Sky.Garden for $1.6 million, keeps some staff
The relaunch arrives one year after Lipa Later announced it was interested in rejuvenating Sky.Garden’s e-commerce business. Sky.Garden, a Kenyan e-commerce platform founded in 2017, has relaunched its business one year after it was acquired by the buy-now-pay-later (BNPL) platform, Lipa Later. According to a statement from Lipa Later, Sky Garden’s business has been restructured after acquiring it for KES 250 million ($1.6 million per the current exchange rate). Lipa Later has confirmed to TechCabal that a section of former Sky.Garden’s 50 employees will continue working for the platform, although others have since left the company. It now has a total of 60 staff, and 40 more who are indirectly associated with the firm. “Ever since the acquisition, we have been undergoing a restructuring.” Juliet Wanjiru, head of e-commerce at Sky.Garden told TechCabal. “While we aimed to retain all staff, others pursued different opportunities.” Before Sky.Garden’s business started struggling due to low capital to run operations, it had raised $4 million in a Series A round in 2021. Prior to Lipa Later’s acquisition in November 2022, it had sealed a $600,000 deal, adding up to $5.2 million of overall funds raised from investors. Its former managing director, Martin Majlund, who left the company at the height of its struggles, revealed that 2022 was a challenging year for running B2C in East Africa, hence the call for new investment. The call for a new investor was answered by Lipa Later. Lipa Later has now introduced new features and products onto the platform “far beyond the boundaries of conventional online retail”. Customers will be able to buy products on credit using Lipa Later’s BNPL product. There is also a new product named Sky.Logistics, which will handle deliveries to customers. Merchants will also be able to access financing and transaction monitoring using Sky.Wallet. Recall that in September this year, Lipa Later was in the news over a $1.2 million crowdfunding programme. At the time, the company had said it was not crowdfunding out of necessity. “We recently raised a significant amount of debt investment; we have adequate funding,” Eric Muli, the founder and CEO of LipaLater, told TechCabal. “This public crowdfund is to raise equity investments to improve our debt-to-equity ratio,” Sky.Garden will run operations independently, just like Lipa Later. However, the two entities are under the Lipa Later Group “We have areas of synergy such as we offer Lipa Later as a payment option on Sky.Garden,” Wanjiru told TechCabal.
Read MoreExclusive: Nigerian SME lender Lidya shutters European business
Lidya, the SME lending company founded by Tunde Kehinde, one of Jumia’s original co-founders, has closed its European lending business to focus on growing its new credit assessment and loan recovery offering for the Nigerian market. The 7-year-old company is leaving Poland and the Czech Republic 3 years after taking its small business lending business to Eastern Europe. It will now focus on Lydia Collect, a loan recovery tool initially developed last year for Lydia’s in-house SME lending business but has since become a linchpin for Lydia’s new business direction. “Nigeria’s tech-savvy lending ecosystem is the ideal launchpad for our solutions, which support data-driven decision-making,” Tunde Kehinde, co-founder and CEO of Lidya, said in a press statement. Lidya Collect was built on top of the technology that underpins Nigeria’s Global Standing Instruction (GSI), Carolina Rodriguez, Lidya’s communications lead, told TechCabal. The GSI is a last-resort system that allows connected lenders to directly debit the accounts of loan defaulters in other banks. Lidya said it worked with the Nigerian Inter-Bank Settlement System (NIBSS) to build Lidya Collect on top of the existing GSI infrastructure. The digital lender also announced Lidya Bridge, a credit assessment offering launched in October 2023. Bridge will analyse 300 data points from borrowers’ bank statements to make the process of assessing new loan customers smoother. Lidya will focus on selling Collect and Bridge to micro-finance institutions and other financial service providers. The company says it has already signed more than 50 lenders and microfinance banks. The company says it has analysed more than $50 billion of credit application data from 100,000 potential customers. 32,500 of those small businesses have received $150 million since its founding in 2016.
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A $1.63 million bounce back
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Do you remember Paxful, that bitcoin marketplace that shut down because all its staff—engineers, compliance team members, and security personnel—left to work elsewhere? Well, its CEO, Ray Youssef, has found a new adventure. Youssef was recently appointed CEO of a similar business, NoOnes. Like Paxful, NoOnes allows users to buy and sell bitcoin and stablecoins; and also like Paxful, most of NoOnes’ users are in Africa. So Youssef’s local knowledge should come in handy. In today’s edition Kenyan Sky.Garden relaunches after $1.63 million investment Mastercard invests $27 million in three African funds MTN launches AI chatbot Google postpones the launch of its generative AI model The World Wide Web3 Job openings Startups Sky.Garden relaunches after Lipa Later’s $1.6 million buyout Image source: Zikoko Memes Kenyan e-commerce startup Sky.Garden, has relaunched following a Ksh250 million ($1.6 million) buyout by BNLP company, Lipa Later Group in December 2022. The relaunch includes a move into social commerce and building a merchant marketplace to connect 100,000 merchants in the next year. A relaunch? Yes. In September 2022, Sky.Garden revealed plans to shut down its operations on October 16, 2022, citing difficulties in securing additional funding. However, in November 2022, the e-commerce startup rescinded its shutdown announcement, stating it had found a buyer without disclosing the buyer’s identity. In December, it was revealed that LipaLater had acquired Sky.Garden. Under new ownership, the e-commerce startup is relaunching with four new products. What products? Sky.Garden has introduced new products—Sky.Tickets, Sky.Logistics, Sky.Commerce, and Sky.Wallet—to support its expansion into social commerce. Sky.Wallet offers financing and bill payments, Sky.Logistics provides same-day delivery for local businesses, and Sky.Commerce integrates social interactions with e-commerce, revolutionising customers’ online shopping experience. Additionally, Sky.Garden has also introduced Lipa Later’s buy-now-pay-later model as a convenient alternative payment option. Zoom out: In September 2023, after Lipa Later secured $5 million in private debt issuance, the company still planned to raise $20 million for its expansion plans. This relaunch aligns with the growing e-commerce market expansion in Kenya and Africa, driven by increased internet penetration and more affordable data costs. 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 Mastercard invests $27 million in three African funds Mastercard, through its Africa growth fund, will invest in three African investment firms: Chui Ventures, VestedWorld, and SME Impact Fund. The three firms will receive $9 million, $10 million, and $8 million, respectively. Who are the invested companies? Chui Ventures is a Kenyan early-stage venture capital firm that invests in gender-inclusive startups in Kenya and Nigeria. The firm has a portfolio of over 20 startups, including Fastizers, CrowdForce, Taeillo, Pngme, and Lifestores Pharmacy. VestedWorld is a Nigerian impact investment firm that invests in businesses that are driving financial inclusion and social progress in Africa. The firm has a portfolio of over 30 businesses across Ghana, Kenya, and Nigeria, including Sabi, Shuttlers, Anka. SME Impact Fund, the third recipient of the fund recipients, is a Tanzanian fund manager dedicated to fostering growth in the country’s agricultural sector. The firm has made 44 investments worth over $15 million, directly impacting 23,000 smallholder farmers and generating more than 3,000 employment opportunities. Lights out: The latest investment brings Mastercard’s funds to five on the continent. The firm had previously invested $2.2 million in Aruwa Capital Management and $5 million in Inua Capital. Launched in 2022, the Africa Growth Fund is a $200 million fund aimed at bridging the financing gap in Africa’s impact investment landscape. The fund collaborates with a network of partners who offer comprehensive business development services to portfolio companies, including fund advisory, communications, and diversity/inclusion support. Telecom MTN launches AI Chatbot Image source: TechCabal MTN offers an AI chatbot for its employees alone. The telecom has launched SiYa, an in-house AI chatbot to assist employees with inquiries about company policies and share insights from MTN’s knowledge base. MTN expects the interactions with SiYa to shape the way customer engagement is done at the company. A little about SiYa: The chatbot, SiYa, takes its name from Siya Kolisi, the rugby Springbok captain. MTN said it chose the name to embody qualities—unity, harmony, and effective communication. It is unclear whether MTN is creating a version of SiYa for public use. But MTN South Africa is committed to helping its workforce benefit from the use of artificial intelligence-powered tools. This raises questions about whether other South African telecommunications companies will follow suit with similar AI-powered tools in the future. This is not MTN’s first rodeo at building AI-powered solutions. In 2019, MTN launched Mobile Money (MoMo) “chatbot”. The chatbot enabled users to navigate MTN’s MoMo services, including payments, on various social media platforms such as WhatsApp and Facebook Messenger and via SMS, and provide other useful information. Pay With Transfer support on the Paystack API We made it possible for merchants to white label a Pay with Transfer option on their custom checkout experience. Learn more → Big Tech Google’s Gemini AI launch delayed to 2024 Google has rescheduled its plans to launch its new AI model, Gemini, to early 2024. Sources with knowledge of the decision say the launch event was originally slated for next week, but the AI model is having challenges in responding to non-English prompts. Image source: Zikoko Memes How has Google been faring in the AI race so far? In recent years, Google AI has achieved notable milestones. In 2020, Google AI introduced Meena, an NLP model capable of engaging in human-like conversations. In 2022, the development of PaLM showcased a versatile machine learning model handling tasks like question answering, translation, and code generation. In 2023, Bard, Google’s large language model, emerged as a rival to OpenAI’s ChatGPT, uniquely capable of offering information on recent events, setting them apart. What’s different about Gemini? Gemini will stand out as a revolutionary multimodal AI system.
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Exclusive: Payday to be acquired by BitMama after $3m funding round in February
Payday, the once-high-flying fintech backed by Moniepoint, is in talks to be acquired by BitMama, a Nigerian crypto exchange startup, three months after TechCabal exclusively reported that it was speaking to potential buyers. BitMama, led by CEO Ruth Iselema, has reportedly offered PayDay investors $10 million worth of equity in the crypto company at a $30 million valuation. “Favour reached out to me because we’re building products beyond crypto; one of those products is Changera, and it made sense to me,” said Iselema. While Bitmama started as a crypto exchange, it now focuses on global services, including remittance, Iselema shared. Payday is now in talks with Bitmama For the potential acquirer, it will mean they don’t have to start Changera, Bitmama’s relatively new remittance service, from scratch. They’ll also not need to create a new software stack or spend on acquiring new users. “The deal is a work in progress,” maintained Favour Ori, the CEO and founder of Payday. “If the deal goes through, the result will be a strong team with much more efficiency.” Bitmama will take on Payday’s customer deposits and liabilities if the deal goes through, said one person close to the deal. Bitmama and Payday declined to comment on the deal, claiming that acquisition talks were far from done. Publicity highs and lows When Favour Ori started Payday, he gained positive publicity on Twitter with optimism for his version of the company’s future. The company also became a payment partner for Starlink, the Elon Musk-owned internet service provider. Ori’s brash style alsop attracted praise, with one founder admiring Ori’s style of “slapping down overly demanding customers.” Yet Payday had real problems. A wave of complaints claiming customer accounts had been blocked with no information was not disputed by the company, and discontent among employees soon revealed that Ori was earning a salary of $15,000 monthly before slashing it to control the company’s burn rate.
Read MoreMore capital needs to flow into northern Nigeria: An interview with Abubakar Nur Khalil, CEO of Recursive Capital
Since teaching himself to code in 2018, Abubakar Nur Khalil’s tech journey has evolved into him being one of the most prominent voices in the bitcoin space in Africa. Khalil is a bitcoin developer and CEO of Recursive Capital, an early-stage, Africa-focused, bitcoin VC fund launched in 2020. In December 2021, Recursive Capital, which started as a Web3 VC, rebranded to a bitcoin-only VC, citing “oversaturation” of the Web3 space. The company has invested in bitcoin startups, Fedi and Synota. Khalil is passionate about bitcoin and its potential to offer unique solutions to pressing issues in Africa, and his work at Recursive Capital is at the core of that. He also resides in Kaduna, a state in northern Nigeria, where the tech scene is still quite emergent, compared to that of other states in the country like Lagos. TechCabal had a chat with Khalil on a Saturday afternoon about the work that he does with Recursive Capital and his thoughts on how the northern tech ecosystem can overcome its challenges and grow beyond the stage it is now. What have you been up to at Recursive Capital? Abubakar Nur Khalil: A lot of our work this year has been refocusing on the bitcoin thesis. In general, it focuses on Africa, which is kind of the main priority for us, in terms of target geography. We’re looking at it specifically for two reasons: one, I believe it is going to be the development capital for bitcoin companies and development in general, and secondly, bitcoin provides unique solutions to the problems we face in Africa. The combination of those two things will culminate in having the most bleeding-edge bitcoin companies coming out of Africa. This is what our main operating thesis is, which is different from what we started with. At that time, it was mainly Web3, but my version of Web3 was bitcoin with privacy protocols. One of our priorities has been constant engagement with the general bitcoin ecosystem, both locally and globally. Every year we have a set of early-stage companies that we constantly engage with. We work with them to build them into investable companies. So, this year, we have been formalising that process. What are your plans for 2024? AK: Moving forward to 2024, the main priority will be even more formalisation of this process. A priority for 2024 is a lot more investments from our end. If you notice, this year, we had practically no investments and kind of paused to focus on other things. We’re also working to do a lot more research reports like ecosystem insights, etc. What are some thoughts about where the Nigerian tech ecosystem is at large? AK: One thing I noticed is that there’s a mismatch between priorities when it comes to a lot of founders in Africa. A lot of founders feel like the goal is for them to raise, as opposed to actually delivering on the project or whatever they’re building. I find it funny because, at the end of the day, venture capital is not always the best method for people to raise capital to grow their businesses. A lot of early-stage companies don’t necessarily need VC funding. They have small, nimble, most likely focused teams, which is a huge advantage. What happens at the end of the day is that when VC is introduced, they feel the need to start hiring. When a VC gives you capital, which essentially is a loan, you have to make good on that loan, whether that’s through growth or delivery of the product itself, to be cash flow positive and make a profit. As soon as you accept that capital, you’re driven to seek growth, and the cliche is to start hiring, which is what we tend to see across the globe. The problem with hiring is that you start to diverge in terms of your focus because you’re not bringing on people who have the same familiarity or who understand exactly where the goal should be. If you track the “progress” from the point where these companies accepted capital, you’ll see that nothing much has been done. In fact, they’ve probably convoluted the project to the point where it’s unrecognisable. Another major thing that shocked me about the ecosystem here was the valuations. My thinking was that California’s GDP is Africa’s GDP, so you know, we’re not necessarily going to be having crazy valuations. But, to my surprise, there seems to be a YC effect, which is a space term where a lot of companies just get into YC and come out feeling entitled, even when they have no MVP. How is Recursive Capital working to help people engage with bitcoin more sustainably? AK: The work has evolved quite a lot, and the first thing I should clarify is that this is a global effort. The thing that’s unique with the bitcoin space is that any sort of development or advancements people come up with that benefit bitcoin itself trickles down into every single participant around the globe. So, if folks that are building out in the Netherlands, for example, build a small library that could help do XYZ on bitcoin, someone in Zimbabwe, or Tanzania could leverage that and build on top of that. The good thing with this space is there are competitive benefits to every participant. A lot of it tends to be both bootstrapping and finding ways to adapt to the local environment you’re in, because again, obviously, not all spaces in the bitcoin space, in general, are equal. You have people in the developing markets, people in more mature markets and things like that, so this is to avoid a mismatch with regard to priorities or approaches, especially when it comes to education. There are a lot of things we have to move around and refocus on, depending on where we are. The majority of our work has been taking a step back, examining from all global trends exactly what the opportunities are in
Read MoreCentral Bank’s new KYC rules may not curb fraud despite optimism
Effective April 2024, Nigerian financial institutions will be mandated to implement stricter Know Your Customer (KYC) measures, requiring all customers to provide their Bank Verification Number or a national identification number (NIN) for account or wallet opening. The rule change, made by Nigeria’s Central Bank, comes after several high-profile fraud incidents raised concerns about existing Know Your Customer (KYC) processes, but industry experts believe that it will not solve what is now described as a “fraud pandemic”. “The accounts used to perpetuate fraud have always had BVN and NIN,” said Adedeji Olowe, a financial industry veteran and founder of Lendsqr. Instead, he framed the problem as a “lack of rules and regulations to stop fraud”. Nevertheless, Olowe said the rules are welcome and wonders “why it hadn’t been done since”. Like many banking industry experts, Olowe believes neobanks will be most affected by the new rules. “I am wondering why this move hasn’t been done since; it is a very good move,” Olowe said. “These might affect the neobanks that are very untidy, but it is something they need to do.” While deposit money banks offer Tier-1 accounts—bank accounts that usually require no identification—neobanks like OPay and Palmpay may have popularised these easy-to-open accounts using the narrative of aiding financial inclusion. It has allowed them to onboard customers with little friction or without a need for national identity cards, which only 30% of Nigerians have. Yet, industry experts have criticised these lax KYC measures. In October, TechCabal reported that Fidelity Bank, a Nigerian commercial bank that holds ₦3.1 trillion ($3.9 billion) in consumer deposits, blocked several neobanks over concerns that neobank wallets and accounts are an easy way to move monies that had been fraudulently obtained. Another major bank held similar internal discussions, TechCabal reported at the time. The new directive is part of efforts to promote financial system stability and strengthen the Know Your Customer procedures in all financial institutions, said Nigeria’s Central Bank.
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Next Wave: Telecoms is the building block for tech innovation in Africa
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 3 December, 2023 Experts believe that Nigeria’s telecommunications and tech sector are working at cross purposes. A romance between the sectors could result in a win-win for both sides. Telecoms is said to be the foundation for the fourth industrial revolution, and a future in the fifth—as the worlds of AI, the Internet of Things (IoT), and big data begin to take centre stage. Research into the use of semiconductors and the integration of voice, audio, video, or data into one single network has today made the industry more viable to scale. As a result, more technology suppliers and service providers are establishing several ventures to contribute to the growing sector while enabling adequate competition to drive down prices of video, voice and data. In Nigeria, telecoms has contributed significantly to the Gross Domestic Product (GDP) of the country. Source: NBS Last year, the executive vice chairman of the Nigerian Communications Commission (NCC), Umar Danbatta, said telecoms contributed over $70 billion to Nigeria’s GDP. “The resultant effect of this is that, today, we now have over 210 million active telephone lines, representing 110% teledensity; and over 150 million internet subscribers as well as 45% broadband penetration which has enabled over 80 million broadband subscriptions,” he said in an address at the 2022 Africa Tech Alliance Forum. To date, telecoms is still one of the top contributors to Nigeria’s GDP, according to the National Bureau of Statistics’ third quarter 2023 report. The sector has the ability to drive financial inclusion of the country more than 60% if citizens’ phone numbers can be well integrated with banking and payment channels, thereby offering financial services for all. Article continues after this ad The Kaduna State Digital Public Infrastructure Playbook takes a deep exploratory dive into the process on how sub-national governments can build DPI at a state level. Download here Worry for the future of the telecoms sector Many analysts who spoke with me for this edition of Next Wave believe that the telecoms sector risks being abandoned under the current Bola Ahmed Tinubu administration. They believe that a tech-inclined minister of communications, innovation and digital economy, in the person of Bosun Tijani, may pay more attention to startups over legacy tech companies, like telcos. An expert who confided in me told me that a minister who understands the importance of telecoms and tech would be more successful in deepening Nigeria’s communication sector as a whole. “The last minister, Isa Pantami, was more concerned about the National Identification Number (NIN) and telcos. This current one is interested in tech startups,” the source, a famed journalist, told me. Pantami is recognised for his reforms in creating a digital identity for most Nigerians, which was initially criticised because of the cumbersome process involved. Many Nigerians had to queue for hours on end just to link their NINs to their subscriber identification modules (SIM). Apart from the clamour from Nigerians who thought the NIN-SIM exercise was needless, leader of the terrorist group Boko Haram, Abubakar Shekau, threatened the ex-minister for the move. But the linking of NINs to SIMs has today turned out to serve as an infrastructure in verifying the identity of Nigerians. Tijani, in October 2023, revealed a blueprint that will enable Nigeria to thrive in the digital age through digital technology and innovation. The blueprint stands on five pillars which are: knowledge; policy; infrastructure, innovation, entrepreneurship and capital (IEC); and trade. Knowledge will be concerned with the growth of talent, research and digital literacy while policy will help to encourage investment, research and intellectual property. Infrastructure will focus on broadband penetration, the development of communication satellites, and spectrum management. Innovation, entrepreneurship and capital will concern itself with the growth and sustainability of startups, while trade will be bullish on positioning Nigeria as a top technology centre to the world. Despite these glowing moves, Tijani has ignored the telecom industry’s recent struggles. For instance, 9Mobile, the fourth-largest operator in the market, has continued to shrink in market size since 2014, when the company had 20.2 million mobile subscribers. Currently, it has lost over 7 million subscribers between 2014 and 2023 and is slowly losing its status as the network of choice. The latest NBS telecoms data shows that 9Mobile had the lowest share of internet subscribers in Q1 2023. 9Mobile had 4.2 million internet subscribers while MTN had the largest share with 67 million. Recently, news spread that 9Mobile may be up for acquisition. If that eventually comes to fruition, it shrinks the sector further. MTN Nigeria and Airtel Africa have also not had it better. Both telcos have suffered declining profits, related to macroeconomic challenges. Yet, the minister is yet to speak on these matters. In May 2023, active broadband subscriptions dropped from 96,169,176 to 86,993,472 in August 2023, while broadband penetration also dropped to 45.57% in August 2023 from 48.28% in May 2023, heightening worries by the Association of Licensed Telecoms Operators of Nigeria (ALTON) on the growth of the sector. Still, the minister is yet to resolve right-of-way fees that operators face—a move that can deepen broadband infrastructure. So far, only seven states in Nigeria are implementing reduced right-of-way fees. There is a need for Tijani to pay attention to some of these issues and urgently hold meetings with the rest of the 29 states if he is ever going to achieve his infrastructure blueprint of 95,000 kilometres of fibre optic cables in the country. Article continues after this ad Unlock opportunities for growth. Apply for the develoPPP Ventures Program to receive €1,000 in matching funds, and technical assistance to propel your business forward. Apply before December 31st,
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Naspers thinks Amazon will lose in South Africa
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning MultiChoice is leaving its users spoilt for choice with a new streaming app GOtv Stream, which launched in Kenya yesterday. The app will allow users to download or watch movies, sports shows and shows live on phones, tablets, and web platforms. This launch comes hot on the heels of its recently reported triumph over Netflix. Weeks ago, we reported that MultiChoice’s other product ShowMax surpassed Netflix as the market leader. The year is coming to an end, but it looks like Multichoice is only getting started. In today’s edition Naspers thinks Amazon will lose in South Africa Cell C remains insolvent AstraZeneca to use AI to maintain 6 million Trees in Kenya TC Insights: Can Africans save now, buy later? The World Wide Web3 Job openings E-commerce Naspers thinks Amazon will lose in South Africa Image source: TechCabal Naspers, owner of South African e-commerce platform Takealot, has broken its silence on the company’s brooding competition with e-commerce giant Amazon…and it sounds assured of victory. Amazon has been in talks with South Africa’s regulators concerning its plans to launch in the country in 2024. It has begun fighting for Takealot’s market share by slashing the money it charges sellers on its platforms from R400 ($21.44) per month to only R1 ($0.054) per month. Despite this aggressive move by Amazon, the Takealot owner says that it is “untroubled” by the competition. What cards does Takealot have up its sleeve? Anyone would be scared when a large global company like Amazon enters a country. Amazon is already throwing around a lot of money to gain both consumers and sellers to its side, but per Sunday Times, Naspers is prepared to make necessary investments in Takealot to maintain its position as the market leader. Naspers South Africa CEO Phuthi Mahanyele-Dabengwa thinks that winning over a market requires more than just deep pockets—it takes understanding the locals’ needs. Per MyBroadband, Mahanyele-Dabengwa said that Amazon has previously failed in certain markets because of the lack of local knowledge of businesses that are there. Naspers is betting on Takealot’s experience of doing business in the country to give them a competitive advantage. The true winners: In this e-commerce face-off, the ultimate victor might just be the South African consumer. In pricing battles, both Takealot and Amazon will vie for their loyalty and wallets. It’s a win-win for shoppers and sellers alike. 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. Climate AstraZeneca to use AI to maintain 6 million trees in Kenya Biopharmaceutical company AstraZeneca wants to plant up to six million trees across Kenya, and it’s going to use artificial intelligence to monitor them. The reforestation project will cover more than 3,500 hectares of land. This follows the country’s recent announcement of a new nationwide holiday for tree planting. ICYMI: As part of a plan to plant 15 million trees in 10 years, Kenya assigned 13 November as a public holiday for its residents. The East African country hopes that this will reverse the climate change which has been resulting in disasters like flooding. The tree planting will be monitored through an internet app, the Jaza Miti app, which has reportedly seen over two million registrations. What will the AI technology do? It will monitor tree health, long-term survival and carbon sequestration. However, technology is not enough. Per ITNewsAfrica, over 5,000 local farmers and local community members will be engaged in AstraZeneca’s project. Aside from Kenya, AstraZeneca has also planted millions of trees in Ghana and Rwanda since the project began in 2021. The project has engaged 1,200 farmers across 23 communities. In Rwanda, 6,000 farming households are signed up for the project to grow a range of indigenous and fruit tree species. Telecom Cell C remains insolvent Image source: Daily Maverick South African mobile operator Cell C is still grappling with insolvency, with liabilities towering almost three times higher than its assets. The latest report tells us that Cell C still has more debts than assets with a gap of R9.294 billion ($499.9 million). Side bar: The full-year 2022 results come after the largest shareholder in Cell C, international telecom Blue Label, concluded a series of agreements with Cell C and its financial stakeholders to restructure and refinance the mobile operator. The agreements led to the settlement of debts at a discounted rate of 20 cents to the rand, aiming to ease Cell C’s hefty debt load. After this move, Cell C’s immediate debts dropped from R17.691 billion ($950.87 million) to R10.732 billion ($576.83 million). However, non-current liabilities increased by R1.1 billion ($58.9 million) due to an increase in contract liabilities and other payables. The company is still optimistic: Cell C is staying positive Despite losing many subscribers over the last two years (going from 17.2 million to 8.2 million). Per MyBroadband, its revenue for the year up to September 2023 is holding strong at R10.09 billion ($542 million), just a bit less than the R10.14 billion ($454 million) in 2022. Plus, the company is banking on a fresh start with a new management team, showing that it’s ready for the road ahead in the competitive mobile market. Pay With Transfer support on the Paystack API We made it possible for merchants to white label a Pay with Transfer option on their custom checkout experience. Learn more → TC Insights Can Africans save now, buy later? Fintech is one of the vibrant sectors in Africa’s rising tech ecosystem. The sector received $1.45 billion in funding for 2022, a 39.3% increase from the previous year, 2021, and has seen massive acquisitions. According to an EY report, consumer lending accounts for 23% of fintech businesses, surpassing consumer payments which accounts for 17%. Consumer lending manifests across the continent through the buy now, pay later model (BNPL), giving customers instant access to
Read MoreHow Namibia’s ecosystem can boost its venture capital attractiveness
Besides one startup, Namibia’s startup ecosystem is not widely known. Can addressing its challenges unleash its opportunities? In the last few years, numerous innovative startups have sprung up in Namibia. There are LEFA and Intercity both of which drove mobility in the southern African nation as well as Tutors Hub which pioneered edtech. And there is PayToday and PayPulse, which introduced digital payments to Namibia as well as Macquire Medical which pioneered telemedicine in the country. However, these and many more startups in the country, despite their innovations, have not been able to position the country’s ecosystem as a destination for investment. Startups in Namibia still struggle with raising venture capital, an important component of building scalable and impactful technology companies. From conversations with various ecosystem stakeholders, numerous ecosystem challenges contribute to this shortfall. According to data by Statista, in 2022, only three Namibian startups raised venture funding, totalling $15.21 million. The majority of this funding—$15 million to be precise—went to logistics startup JABU. JABU Logistics, which has raised over $18 million, according to Crunchbase and is present in three countries, is an outlier in Namibia. Founded in 2020 by David Akinin, the startup enables shops and bars to place orders digitally to stock up their shops. It currently operates in Zambia and South Africa and was part of Y Combinator’s Summer 2021 batch. In May 2022, it raised $15 million in funding, led by Tiger Global. “There is enough adoption of technology in the country to achieve scale. Namibia is definitely a small country, [but] it has a lot of opportunities,” said Kevin Hassan Abadi, partner and director of products at JABU. Challenges facing Namibia’s quest to be a VC destination Namibia has a small and sparsely distributed population of 2.5 million people and extreme economic inequality only surpassed by South Africa. It also grapples with multidimensional poverty, a small financial sector, and an almost non-existent local venture capital industry. Even StartUp Namibia, which was set up by the German development agency GIZ to support the country’s fledgling ecosystem, shut its doors earlier this year. An amalgamation of these factors contributes to a landscape which makes building a venture scalable company challenging. However, according to some investment professionals in the country, the issue is not a lack of capital in the country but, rather, a disconnect between the requirements of capital providers and the needs of startups. Jesaya Hano Oshike is a seasoned investment professional with over 10 years’ experience in the field. He is co-founder of Windhoek-based Basecamp Business Incubator and was also one of the founding members of the Namibia Business Angel Network. “Even though there is dry powder in the market, investors argue that startups are not investable because they are way too risky in the early stages,” Oshike told TechCabal. “But the reason startups are not investable is because no one is willing to give them funds for them to actually build out their businesses.” To address this chicken-and-egg conundrum, Oshike believes that business development via entities like the Basecamp Business Incubator is vital in accelerating the process of business model validation and investment readiness for startups. This point is further reinforced by Meike Neitz, co-founder of the business development community “It Takes A Village”. “There is a lack of support in the form of a business-friendly environment for startups to mature beyond their first two years of existence,” Neitz told TechCabal. “A lot of effort to that end at the moment is spearheaded by individuals as well as private enterprises, which is nowhere near enough. ”Although there have been government initiatives such as the Namibia Investment Promotion Board in that regard, Netz believes there is still a lot of work to do. “Big institutions like banks are willing to sponsor startup-related events but they are not willing to be more active in availing funds,” she added. “Also, I believe that corporates should be more willing to adopt the solutions of startups. That would go a long way in helping them get traction and validating themselves to investors.” According to Fillemon Nangolo, founder of Tololi Market, a B2B logistics startup which enables retailers to procure produce from farmers, the reputation of digital solutions also contributes to stunting the growth of startups, which in turn shuns investors away. During the COVID-19 lockdowns, e-commerce and logistics startups boomed in the country. However, amongst the legitimate businesses, there were also bad actors who scammed consumers. As reported in TransUnion, some faux e-commerce websites scammed consumers into buying fake or non-existent products. Others scammed consumers into downloading phishing software. “Namibia doesn’t have the biggest population, so as soon as one person gets scammed online, word of mouth spreads very quickly and suddenly 100 people do not want to use online platforms because of that [person’s] experience,” Nangolo told TechCabal. Nangolo’s Tololi Market is currently in the market to raise seed capital of $720,000 to scale its operations, and recently pitched to CcHub Namibia. Another challenge reiterated by founders that TechCabal spoke to is a need for more technical talent in the country. With only two public tertiary education institutions, startups in the country are not exactly spoilt for choice when it comes to sourcing talent. Additionally, Namibia’s stringent immigration laws make it difficult for startups to source talent from abroad. “Namibia makes almost the biggest investment in education on the continent as a percentage of GDP, but if you look at the ICT graduates specifically, we produce the lowest number of graduates,” Anicia Peters, CEO of the National Commission on Research, Science and Technology, told TechCabal. “So there is a shortage of skills to advance the country’s digitalisation ambitions.” Peters chaired the task force set up by Namibia’s president Hage Gottfried Geingob in 2022 to investigate impediments to the country’s Fourth Industrial Revolution ambitions. To address the skills shortage challenge, Peters and her team recommended [pdf] that the country invest more into upskilling graduates to match modern requirements, doubling down on homegrown research and development efforts, and establishing a national
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