How uLesson became an online university from an “extra lesson” company
uLesson, Nigeria’s leading ed-tech, recently announced it had become a group with an online open university under it, the first in Nigeria. Here’s how they moved from K-12 to tertiary education. At 10:20 a.m. on October 28, 2023, Professor Tayo Arulogun, Miva open university’s vice chancellor, mounted the stage at The Podium event centre in Lagos, Nigeria, and kicked off the university’s first matriculation ceremony. With 532 students in Lagos and Abuja, Miva was making history as Nigeria’s first fully accredited online open university. Miva’s launch will contribute to solving the capacity problem in Nigeria’s tertiary education system. In 2014, for instance, almost 1.2 million candidates who sat for college-entry exams into Nigerian tertiary institutions didn’t gain admission. Nigeria’s 170 universities can only hold 1.8 million students, and there are not enough places for even those who pass college entry exams. “The traditional method of brick and mortar cannot address the demands of 50 to 60 million Nigerians trying to get into tertiary institutions at the same time,” said Sim Shagaya, the founder of uLesson Group, Miva’s parent company. “We have to be able to use the internet somehow.” Shagaya shared those thoughts in a 2014 interview when he was still CEO of Konga, Jumia’s e-commerce rival. He had a thesis for online education but would dedicate the next four years to building Konga before selling the company in 2018. With time on his hands, Shagaya launched uLesson, an edtech company targeting the k-12 category, in 2019. “I decided to revisit this education opportunity, which I had been thinking about for a while,” he told TechCabal in a virtual interview. L-R: Prof. Tayo Arulogun, VC of Miva University; Mr Sim Shagaya, founder and chancellor of Miva University; Iheanyi Akwitti, Miva University registrar. Photo credit: TechCabal/Muhammed Akinyemi Unlike most businesses, uLesson refined its business model away from Nigeria’s economic capital, Lagos, and major cities like Port Harcourt or Abuja. uLesson started building in Jos, a city not bothered by traffic congestion while taking advantage of a lockdown that forced staff to work from one building. Within four years, uLesson would grow to birth Miva University in one of the fastest business expansions in the edtech space. Here is how uLesson did it. uLesson’s Day 1 in Jos uLesson’s focus on K-12 education was new and important. As K-12 education was changing globally with technology-assisted learning, ed-techs like uLesson helped Nigeria attempt to catch up. uLesson’s approach involved three phases: pre-recorded content, live content, and personalised services. uLesson’s time in Jos (early 2019 to late 2020) was spent building the pre-recorded content library, which eventually became their best-selling product when they went to market in 2020. At inception, the learning content was accessible to students through USB dongles and an Android app which students could access without the internet. The live content had educators teach students in real time, and the personalised services allowed teachers to help students directly and also give them homework Having all the staff in one place, and building a massive library of educational content, meant that, for a long time, uLesson couldn’t pursue revenue. “We were trying to teach academic principles in a way that’s fun and engaging through rich animation and interaction between live humans and animation, and to test efficacy while we’re doing that,” Shagaya said. “It was very tough. It took a year and a half before we could even reasonably go to market.” uLesson’s residential and official quarters in a Jos neighbourhood. Photo credit: uLesson group uLesson planned to go to market in February 2020 in Nigeria, Ghana, Sierra Leone, and Gambia. To achieve that, they went into overdrive. First raise, COVID-19, and expansion challenges Late in 2019, Shagaya was on the phone with an old friend, Omobola Johnson, a one-time ICT Minister in Nigeria and now a partner at startup investment firm, TLCom. He mentioned uLesson to her and she was excited to invest in uLesson, as its overall objective matched what TLCom was looking to invest in. Johnson and her partner, Ido Sum, travelled from London to Abuja, from where they took a four-hour road trip to Jos, to see the uLesson team, discuss growth plans, and figure out how TLCom could support the company. In November 2019, uLesson announced its $3.1 million seed round led by TLCom. Johnson was not just a friend of Shagaya’s; she was now on uLesson’s board of directors with Sum. In 2020, months after uLesson brought all its staff to its Jos hub where they all lived and worked, and after it had raised capital, the COVID-19 lockdown started. Abdulafeez “Penzu” Ojetola, who was the pioneering illustrator at uLesson said of those days that: “Work needed to keep going, the library needed to be completed, [so] we didn’t stop work at all. We had two different lockdown shelters. One was the [residential] mansion and the other was the office complex. We had people who were cooking for us. Work was going on. We were not commuting, we lived in the same place. We got our salaries. We got our allowances. We needed to work overtime because we weren’t going anywhere.” Two other former employees who did not want to be quoted shared similar sentiments about work not stopping and everyone in Jos working round the clock. Ojetola said he “worked from 6 a.m. till 10 p.m. for weeks on end. There wasn’t much to be done because of the lockdown so we worked double time. The workload of six months was done in three months.” In 2020, uLesson went to market as planned. “The first product was very basic and was Android only. We covered only senior secondary school sciences,” Shagaya told TechCabal. While they had initially hoped to benefit from growing internet usage, Shagaya said the market let them know convincingly that “for us to provide a compelling academic experience, there had to be a physical component because of the internet issues that continued to challenge us.” As uLesson made more USB dongles,
Read MoreElectricity access in Africa exceeds previous estimates
This article was contributed to TechCabal by Seth Onyango via bird story agency. Emerging data is shedding new light on the electricity landscape in Africa, indicating the oft-cited statistics of those without power might be considerably lower than recent figures indicated. Fresh analysis suggests that more and more homes and businesses are being powered by off-grid solutions, a factor that was not accounted for in past estimates. The World Energy Outlook 2023 notes a significant uptick in the number of homes and businesses turning to solar power to meet their energy needs. “This reversion was partially offset by robust growth in solar home system sales, which provide electricity to households not connected to electric grids. Sales of these systems surged past pre-pandemic levels last year, with strong growth in West and East Africa,” the outlook states in part. “Thanks to increased solar home systems sales, Nigeria saw its population without access continue to drop during the crisis.” In a recent analysis, the news platform Semafor suggested that “one of the reasons that number seems to have been unchanged for some while now is that a lot of work is being done to expand access and increasingly by non-traditional grid buildouts.” Traditional approaches to measuring electricity access have predominantly focused on the expansion of national power grids, overlooking the rise of domestic solar energy and pay-as-you-go (PAYG) solutions whose numbers are hard to capture. The sun is fast being recognised as the one universal resource for all Africans. Solar home systems sales soared to record levels in 2022, with most imported from China. These systems accounted for half of the increase in electricity access in Africa in the same year. The significance of solar power is further emphasised by its provision of electricity to over 8% of households in sub-Saharan Africa that have access. According to the Africa Solar Industry Association’s (AFSIA) Africa Solar Outlook 2023 report, the commercial and industrial segment registered a year-on-year growth of 61.5% in the previous year. In terms of major installations, some 949 MW of additional solar energy was installed across the continent in 2022, a 14% year-on-year increment from the 833 MW added to the grid in 2021. With 284 MW, Angola had the most installations in 2022. The top five include Angola, South Africa (111.8 MW), Egypt (80 MW), Ghana (71.3 MW), and Mozambique (41.9 MW). The report states, “Africa is now home to more than 10 GW of identified solar projects.” However, estimates from state-run utility Eskom indicate that South Africa alone added more than 1,000 megawatts (MW) of private solar capacity in just two months in 2023, according to news platform Semafor. The increase in solar installations to June was more than what was added in the preceding six months, highlighting not just South Africa’s but the continent’s solar power potential. The installations came on the back of increased power outages across the national grid. “What you’re seeing in these numbers is households and the private sector taking matters into their own hands,” Wikus Kruger, director of the Power Futures Lab at the University of Cape Town told Semafor. “It’s being driven not by government policy per se, but by desperation.” Chinese customs data reveals significant solar panel imports into South Africa, totalling over 5GW (or US$1.1 billion) since January 2022, with 3.7GW in 2023 alone While solar installation capacity in Africa has historically been driven by a few “hot spots” such as South Africa, Morocco, and Egypt, more countries are now adopting solar initiatives. This trend towards decentralised, non-grid solutions like solar home systems and PAYG models is revolutionising electricity access in Africa. These methods are not only proven to be more adaptable to the diverse and often remote landscapes of the continent but also offer a more cost-effective and rapid deployment compared to traditional grid extensions. The PAYG model, in particular, is making solar energy financially accessible to more households by allowing users to pay for their energy consumption in small, manageable instalments. Kenyan PAYG operator M-KOPA recently launched in Soweto as the company expands across Africa. Countries like Côte d’Ivoire, Kenya, Ghana, and Senegal are nearing their targets for universal access, showcasing the potential of these innovative approaches.
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👨🏿🚀TechCabal Daily – Putin’ in the time
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy new month And happy birthday, in arrears, to ChatGPT! On November 30, 2022, the AI service was released and it amassed over 100 million active users within just three months—the fastest growth rate ever recorded for a consumer app. Since ChatGPT came into our lives, several companies from Google and Amazon to Microsoft have released their own AI chatbots/services that make everyone’s jobs, assignments, and businesses easier! In today’s edition Putin’s daughter to offer digital training to Africans Musk claims Neuralink hasn’t killed any chimps Nigerians don’t care about black Friday South Africa releases crypto licence updates Funding tracker The World Wide Web3 Job openings Governance Putin’s daughter offers digital expertise to Africa Katerina Tikhonova, general director of Russia’s NIDF Delegates from 36 African countries have been invited to Moscow next month to pitch digital services to Russian investors and IT specialists. The project is supported by the Innopraktika Centre, which is affiliated with the National Intellectual Development Foundation where Russia’s President Vladimir Putin’s younger daughter, Katerina Tikhonova, is the general director. What is the project about? Delegates from Africa first convened on July 28, at the Second Russia–Africa Economic and Humanitarian Forum, to discuss the project stylised as “e-Governance Knowledge Sharing Programme”. The programme aims to promote the exchange of knowledge and experience in the field of e-governance between Russia and African countries. The programme will provide training, including lectures, seminars, workshops, and other learning activities led by Russian and African experts. The training will cover the theoretical aspects of e-governance, regulations, and technological solutions, with a focus on practical case studies. The programme will also include excursions and visits to partner companies’ offices. Andrey Maslov, deputy executive director for Innopraktika, said the project was pivotal due to a significant demand for digitisation of public services, and high growth rates in African countries. A wider angle: The move is seen as Putin’s way of forming alliance with Africa to counter the impact of US and European sanctions over Russia’s war in Ukraine. By showcasing its proficiency in digital solutions across a wide spectrum—cybersecurity, public services, and electronic voting—Russia can potentially establish itself as a formidable contender in the ongoing geopolitical rivalry with China, the United States, and the European Union for influence in Africa. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Big tech Musk says monkey deaths aren’t related to Neuralik implants Elon Musk’s Neuralink is under scrutiny. The company is being accused of mistreating monkeys used in its experiments. What experiments? Neuralink is creating a brain-interface chip that can be implanted in the brain. According to the company, the chip will allow people with paralysis or other disabilities to control devices with their minds, and it will also be used to treat neurological disorders or improve human cognitive abilities. Speaking at a New York Times Dealbook conference, Musk reiterated previous statements from his social media platform, X, asserting that Neuralink had “never caused the death of a monkey”. He explained that the company chose terminally ill monkeys for experiments, to “minimise risk to healthy monkeys,” further highlighting that the monkeys live in what he described as a “monkey paradise,” located in Fremont, California. A different narrative: Musk’s statement comes as the company faces an investigation into its animal treatment practices. Veterinary records obtained by the Physicians Committee for Responsible Medicine (PCRM) from UC Davis, where Neuralink previously conducted its primate studies, found that twelve “previously healthy” monkeys had to be put down due to symptoms like bloody diarrhoea, paralysis, and brain swelling post-implant. In a letter to the US Securities and Exchange Commission (SEC), the PCRM alleged that Musk’s assurances about Neuralink’s safety misled investors. In August, Neuralink raised $280 million in a funding round led by Peter Thiel’s Founders Fund. According to a filing published by the SEC, the company increased its previous funding by $43 million, from $280 million to $323 million, in the same month. Zoom out: After receiving approval from the Food and Drug Administration (FDA) in May, Neuralink has announced the commencement of in-human trials for individuals with quadriplegia, with the study expected to span six years. Economy Black Friday fizzles out in Nigeria GIF source: Tenor Despite retailers offering discounts of up to 40%, stores across Nigeria are witnessing a noticeably low turnout for the 2023 Black Friday season. Black Friday, a day of big discounts, is not as popular as it once was due to high inflation and low purchasing power. Under President Bola Tinubu’s reforms, Nigerians have prioritised spending on essentials like food and housing, with most believing there is no difference between shopping during Black Friday and shopping days after the offer expires. Here’s why: 2023 started with a cash crunch in Q1 that strained finance and reduced household spending. As of October 2023, inflation had risen consistently, reaching an 18-year high of 27.33% and was predicted by KPMG to hit 30% in November. Food inflation soared to 31.5%, forcing several Nigerians to rely on social welfare programs to survive. The Central Bank of Nigeria (CBN) delayed holding rate meetings to address the escalating inflation, which further complicated the economic landscape. The decline in Black Friday enthusiasm has also reportedly made businesses forgo exclusive deals this year considering the low turnouts this season. Checkout the Paystack Changelog Paystack enabled single and bulk transfers to M-PESA Consumer Wallets for merchants in Kenya. See what Paystack has been up to in 2023 → Crypto South Africa releases crypto licence updates South Africa’s Financial Sector Conduct Authority (FSCA) has released new updates on the licence status for crypto asset service providers in the country. As of November 2023, the FSCA received 128 renewal applications. State of the licences: Only 36 of the 128 licence application assessments were complete; the regulatory body said it would present
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Nigerians don’t care about Black Friday
The Black Friday sales, where shoppers get discounts as high as 80% on goods, are no longer attractive to customers due to paltry discounts and inflationary hikes. Every November, on the first Friday after Thanksgiving celebrations in the United States, retail stores slash the prices of many of their goods to attract higher patronage from shoppers. This culture of heavily discounting the price of goods is what is today known as Black Friday, said to be the busiest shopping day of the year in the US. Black Friday sales usually extend throughout the weekend until Monday, known as Cyber Monday. Around the world, shoppers keep an eye out for mouth-watering Black Friday deals from their favourite retail brands and outlets. But this year in Lagos, Nigeria’s most populated and technologically advanced city, all of that Black Friday fever seems gone. Low turnout for Black Friday On Cyber Monday, at the Opebi branch of retail chain store Spar, less than 20 cars drove into the store’s premises to shop. On the shopping floor were banners that said Spar would run Black Friday deals up to 40% off until November 30. But the scant number of customers ambling down the aisles, in no rush to grab cheap items off the shelves, seemed either oblivious to this or simply didn’t care. At the Ikeja branch of ShopRite, another retail chain store, the situation was no different. At least four customers told TechCabal that the discounts on offer at the store were too low for them to bother. With the purchasing power of Nigerians wilting under rapidly rising inflation this past year, discounts on goods make little difference towards conserving people’s spend. “The purchasing power of Nigerians has been significantly eroded as a result of the surge in the price of pretty much everything. People are now forced to prioritise their spending and avoid what they do not need,” Samuel Oyekanmi, a financial analyst, told TechCabal. A shopping floor of one of the stores visited. Credit: Joseph Olaoluwa/TechCabal Nigerians had a rough start to 2023. The first quarter began with a cash crunch that overwhelmed the financial sector and further crushed household spending. As of October 2023, inflation has consecutively increased every month to an 18-year high of 27.33%. Food inflation also increased to 31.5%, forcing several Nigerians to opt for social welfare programmes to get by. The majority of spending was reserved only for necessities like food and housing under the latest reforms by Nigeria’s president Bola Tinubu. The Central Bank of Nigeria (CBN) paid lip service to the surging inflation, refusing to hold rate meetings to curb it, thereby complicating the situation. These policy reforms have lately impacted Nigerians’ shopping habits. Shoppers told TechCabal that there was no need to act in a frenzy over discounts that may not stretch beyond ₦5,000 ($6.30) less than the full price. “Black Friday is an illusion to us,” Frank Obogai, a middle-aged man shopping with his friend at ShopRite Ikeja, told TechCabal. “There is no difference between shopping today and shopping days after ShopRite’s offers [expire]. What is the difference between ₦5,000 ($6.30) or ₦2,000 ($2.52)?” Obong*, an online shopper, told me he got shoes and some food items on Jumia last year for his wedding, at discounted prices. This year, “things were tight,” he said. Black Friday sales were introduced to Nigeria in 2014 by the e-commerce platform, Jumia. Other e-commerce platforms followed later. However, adoption is low with the platforms’ customers. Adobe Analytics reported Black Friday generated $9.8 billion in US online sales, up from 7.5% the previous year. The CEO of a Nigerian e-commerce platform, who spoke to TechCabal under anonymity, said that inflationary pressures and poor purchasing power have affected the e-commerce sector in the country. “Things are collapsing for everybody. Also, the country has fundamental, structural and skill problems that won’t change overnight.” Declining trend of Black Friday searches in Nigeria on Google Trends. Credit: Google Trends No more Black Friday discounts An Instagram vendor who sells hair extensions and refused to be named said she is not thinking of doing any exclusive Black Friday deals. “I can always give a discount on my daily purchases, though,” she added. Although businesses in other parts of the world use Black Friday deals to maximise their profit over a weekend, Oyekanmi the financial analyst told TechCabal that buyers don’t believe that businesses in Nigeria are offering any of the discounts, as claimed. “Companies are in business to make a profit and would not sell lower than cost price,” Oyekanmi said. “The question asked by an average buyer would be, why would there be a 20%, 30% discount in this high inflationary environment?” *Name has been changed.
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How can alternative payments improve Africa’s digital payment landscape?
Image source: Africa Bussiness Insider At first glance, Africa’s B2B payments sector looks like a saturated market. Many high-profile companies have emerged over the years to process payments on behalf of global merchants. Yet, despite its rapid growth in recent years, Africa’s payments sector is barely scratching the surface. Africa’s payment landscape is diverse and multifaceted, marked by the lack of widespread card penetration and the preference for localised payment methods over traditional credit or debit cards. The continent has the lowest credit card penetration in the world (3%). This makes the reliance on cash a persistent challenge to the growth of digital payments in Africa. The fragmentation and diversity of Africa’s payment sector, diverse payment preferences, and varying technological infrastructures across different regions are all challenges the sector is still plagued with and act as deterrents for global merchants to accept local payment methods. The mix of payment methods varies from country to country. For instance, in Nigeria, account-based transfers and debit cards prevail. In Kenya and Ghana, where there’s lower bank penetration, mobile money reigns, and in South Africa, cards are more popular. With the low credit and debit card penetration, and the regulatory barriers of payments across the continent, alternative payment methods (APMs) are filling the financial inclusion gaps, catering to the diverse needs and preferences of its population spread across 54 countries. Many African consumers now prefer to transact through various alternative payment modes, such as mobile money, bank transfers, digital wallets, and cash-based systems because of the ease of making payments without the hurdles of traditional digital banking systems. Africa now accounts for nearly 70% of the volume and more than half of mobile money users worldwide. At a recent edition of TechCabal Live in partnership with EBANX on Friday, November 17 Juliana Etcheverry, Director Of Strategic Payment Partnerships & Market Expansion, EBANX noted that “The rise of the use of APMs is fueled by the instantaneousness of it. People want to be able to make instant payments and not have to jump through multiple hoops.” At the event, the untapped opportunities in Africa’s digital payment market, with a focus on the learnings from Latin America and the similarities in both regions were discussed. The rise of APMs in Africa holds immense promise for the future of digital payments on the continent and its benefits are far-reaching. One of the most significant hurdles for international businesses entering African markets has been the challenge of adapting to local payment preferences across all countries. These payment methods bridge the gap between global merchants and African consumers, fostering greater inclusivity and accessibility in the digital marketplace. Businesses can now effectively navigate this intricate landscape, offering consumers the flexibility to transact in ways that resonate with their habits and lifestyles. Additionally, APMs empower small and medium-sized enterprises (SMEs) by providing them with efficient and cost-effective payment solutions, thereby fueling economic growth and entrepreneurship. APMs contribute significantly to financial inclusion, bringing previously unbanked populations into the formal financial ecosystem. This was reechoed by Wiza Jalakasi, Director, Africa Market Development, EBANX on TC Live. “APMs bridge the gap between the online and offline world, as people can now make digital payments through the use of vouchers, mobile money, etc,” he said. Moreover, the evolution of alternative payment methods in Africa paves the way for innovation and adaptation. Companies that invest in understanding and integrating these payment methods position themselves at the forefront of innovation, gaining a competitive edge in an ever-evolving market. By aligning with local preferences, businesses can build trust, enhance customer loyalty, and establish sustainable, long-term relationships with African consumers. By 2025, at least 70% of all online transactions across the continent are expected to be done with alternative payment methods, such as digital wallets, mobile money, and instant payments. The rapid rise of APMs in Africa points to one thing: these methods will power Africa’s digital economy. ******* This article is part of the TechCabal Live series brought to you by TechCabal in partnership with EBANX. EBANX is a digital platform that leads in providing alternative payment methods like digital wallets, instant payments, mobile money, and vouchers.
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This fintech is persuading wealthy Africans to turn idle cash into loans for startups
B54, a Lagos-based business-lending fintech, is giving startups struggling to raise growth-stage venture capital an alternative, as the slowdown in large funding rounds begins to bite high-growth companies. The B2B fintech aggregates idle cash from financial institutions and wealthy Africans and lends it to fast-growing businesses in West Africa that need working capital. Lanre Oyedotun, co-founder and chief executive of B54, says his firm offers a viable option for startups who need capital for day-to-day operations without sacrificing ownership. It’s the fintechisation of a trend that started last year as convertible notes (loans that convert into shares after some time or an event) took the world of venture capital by storm. In Africa, about 26% of 2022’s record venture funding haul ($1.7 billion of $6.5 billion) was in the form of venture debt. Today even venture debt is hard to come by as investors count their losses from inflated valuations. So growth-stage companies and SMEs in Africa in particular, are in a challenging spot. Their needs are bigger than what micro-finance banks can provide, and customer demand remains high in some cases. These companies often fall short of the working capital they need to cover the daily expenses of a growing business as revenue income from sales can stretch over days, weeks or even months. In 2018 the World Bank said businesses like this in Africa faced a shortfall of $330 billion of loans that could help them meet demand and grow. But SMEs in Africa only get a fraction of that. “There’s a massive gap in the market for platforms aggregators whether they are tech-enabled or not tech-enabled,” Oyedotun told TechCabal. Oyedotun is perhaps best known for founding Delivery Science (later FieldInsight), a now-defunct data and logistics management software firm. He cofounded B54, his newest venture in 2022 with his long-time partner, Babawole Akin-Aina. According to Pitchbook data, B54 counts Lateral Frontiers, Full Circle Africa, Adamantium Fund, Atlantica Ventures and New York-based Everywhere Ventures as investors in a 2022 $2 million seed round. Unlike what you would expect, B54 does not lend directly to SMEs. Instead, it acts like a digital private bank that gets money from financial institutions and wealthy individuals and creates credit lines, that customers can draw from. Financial institutions or wealthy people lending through B54 may choose to simply give B54 the money to manage, or be more hands-on in choosing what businesses their money goes to through a marketplace system. These investors (which include small banks) are attracted by the potential to earn more interest income in the short term from idle cash; compared to what they would typically get by investing in fixed and longer-term traditional assets. For wealthy Africans who do not want their money to sit in illiquid low-interest-bearing deposit accounts, B54 holds forth a bargain. Credit lines typically start from N50 million ($63,000) and interest rates for a typical 90-day loan are north of 30%, TechCabal learned. As a rule, the company does not invest in consumer lending fintechs, preferring instead to give loans to other MSME business lenders. But payment processors, agent banking companies, international money transfer services and even B2B retail marketplaces that offer users trade credit are fair game. Remittance startups, for example, often claim to settle customer transactions as near-instantly as possible, as a unique value proposition. But the reality is that it takes days for the money to traverse the complex world of international funds transfer. Stablecoins have greatly reduced this, but the unregulated world of crypto also has a frequent liquidity problem. Thus remittance companies that promise same-day or even minutes-only (international) money transfers can quickly come under pressure to keep their promises. B54’s short-term credit theoretically allows these types of companies to cover their obligations and meet customer expectations. The startup also wants to extend its loan business to companies that are not primarily software-based but need working capital needs and generate recurring revenue. “We found out there are a few people who being tech savvy is a barrier for who also do good business if you remove those barriers,” Oyedotun said.
Read MoreConvergence Partners wants to drive infrastructure development in Africa with $296 million fund
In this edition of Ask An Investor, TechCabal spoke to Andile Ngcaba, chairman of Convergence Partners, about the state of digital infrastructure in Africa. In January, Convergence Partners, a pan-African ICT investment firm, announced that it closed its Convergence Partners Digital Infrastructure Fund (CPDIF) at $296 million, surpassing its initial target by over 18%. The fund was backed by a combination of existing and new investors, which include global and regional development finance institutions (DFIs), pension funds, and financial institutions based in Europe and Africa. The Convergence Partners Digital Infrastructure Fund is the firm’s biggest fund to date and brings its total funds under management to over $600 million. The fund is focused on investing in digital infrastructure opportunities across sub-Saharan Africa, including fibre networks, data centres, wireless networks, towers, cloud, Internet of Things (IoT), and artificial intelligence (AI). Additionally, the fund aims to develop and support initiatives that promote access to education, financial services, healthcare, and other essential services through digital technologies. The fund has invested in numerous companies including Yellow, 42Market, inq, SEACOM, and most recently, CSquared. In this week’s edition of Ask An Investor, Andile Ngcaba, chairman of Convergence Partners, talks to TechCabal about the importance of infrastructure investment, the company’s investment philosophy, and more. TechCabal: Please share more information on the CPDIF Andile Ngcaba: According to the ITU Partner2Connect Digital Coalition study, the world currently has a $428 billion digital infrastructure gap, the majority of that being in developing regions like Africa. Africa’s youthful population, the majority of whom are digital natives who require the internet to study and work, makes addressing this need more pressing. With that in mind, the CPDIF is designed to invest capital in digital infrastructure such as optic fibres and data centres. Having closed the fund, we have started deploying capital in several companies including Yellow, 42Markets, and CSquared. It takes a lot of time to build digital infrastructure so we as Africans need to start now if we want our continent to partake in the Fourth Industrial Revolution. It is only after building the infrastructure that we can be successful in adding applications like fintech, e-commerce, and healthtech solutions on top and driving digital adoption. How important is it that Africa builds its own digital infrastructure? AN: It is important to understand the macroeconomics of Africa including the demographics. The fact that we have so many people moving into the cities means they have to be connected. They need the internet and they need to be online to access education, healthcare, and agriculture services. We today talk about generative AI and large language models which need data centres to process huge volumes of data. But to be able to do that, we need to build our own data centres, so that African data can be in the African continent. But these data centres cannot live in isolation because they need optic fibre from the data centre to another data centre, a 5g tower or base station needs optic fibre to your home, etc. So there is a need to fund all these various infrastructure components because we understand what the future is going to look like. The fund has invested in numerous companies so far. Please share the rationale for how you decide to invest in companies. AN: We are an impact investor. That means we want to invest in companies that are cognizant of their environmental, social and good governance requirements. We are not only about how successful the company is but also its level of impact on society. I mean, there must be profits and generate returns to shareholders but their impact beyond that must also be clear. They must treat staff well, look after the environment and adjacent communities, and operate within the right governance frameworks. If you take a company like Yellow, they are helping finance home solar panels in Malawi which changes the lives of people there. If you take CSQuared, they are building fibre in some of the remotest areas in countries like the DRC, Togo, and Liberia which connects those people to the rest of the world. This is what we want to see as an impact investor. At the moment, do you think that Africa’s infrastructure is on pace to meet the continent’s innovation needs? AN: I wouldn’t even start to say that this is enough. We need more capital in Africa because as I stated beforehand, the world has a $428 billion infrastructure gap with Africa being one of the areas with one of the leading deficits. The way technology is evolving means that we will always be playing catch up. An example is the transformer models needed to train large language models. Even developed nations are struggling with chipset shortages to go into the servers which train these models. And these countries have been building infrastructure way before us. There have been supply chain problems in the world so in Africa, we need to secure our supply chain. Basically, we need to build data centres and put servers for AI and machine learning in those data centres and much more. Unfortunately, because of global macroeconomic issues affecting supply chain and chipset shortages, the world is also slowly getting behind that curve of innovation today because it takes six or seven months to access some of the servers required to run these complex processes. So what I’m saying is that Africa is not the only one impacted by such challenges. We need to rethink about supply chain and resources. With these challenges in mind, Africa must think about producing its own chipsets. Africa must think about how to use the rare earth elements around and be able to produce electronics and chipsets. Africa will have two and a half billion people by 2050 and we cannot be a net importer of servers, phones, computers, and the like. To be able to do that, we need to have stronger research and development efforts. We need to understand that we have all
Read MoreMedia entrepreneur Fatu Ogwuche launches YouTube show for tech founders to tell their stories
On Tuesday, Backstories with Fatu premiered on YouTube. Backstories with Fatu is a YouTube show hosted by tech entrepreneur Fatu Ogwuche on her channel Big Tech This Week, in which she discusses the backstories of some of the most prominent people in the African tech ecosystem and the pivotal events that made them who they are today. The first episode, which featured a conversation with Kola Aina, a renowned entrepreneur and founding partner of Ventures Platform, covered a variety of topics, including his background before becoming a tech investor, and what he looks out for when backing founders. The chat lasted about 40 minutes and came across as quite relaxed and candid, like a discussion between friends. Ogwuche and Aina discussed the Paystack exit and what it meant for him as one of their investors, the Nigerian Startup Bill, some of his losses as an investor, and his interesting art collection. The highlight of the interview was Aina sharing how Ventures Platform stepped in to resolve the ThriveAgric crisis in 2020. The agro-crowdfunding startup couldn’t repay retail investors due to the loss incurred by the COVID-19 pandemic, which led to countless fraud allegations on social media. Aina also shared how much his personal rule of not backing founders whom he doesn’t consider to be fundamentally nice people saves him from being burnt in the investing business. “We want to back founders who are decent people,” Aina said, “who treat their co-founders and employees decently, and who are respectful. Because, to be honest, it ultimately bubbles to the top.” Ogwuche said the purpose of the series goes beyond just entertainment. “It serves as a launchpad for emerging tech entrepreneurs, providing them with actionable insights and mentorship from seasoned industry veterans,” she revealed in a press release. “For established tech insiders, the interviews offer a glimpse into the future of the ever-evolving ecosystem,” she added. Ogwuche writes a weekly newsletter also called Big Tech This Week, a popular newsletter covering the African tech ecosystem. This season of Backstories will feature interviews with three other innovators in tech and business, including Odun Eweniyi of Piggyvest and Olumide Soyombo of Voltron Capital. To watch the first episode and look out for coming ones, visit Ogwuche’s YouTube channel here.
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👨🏿🚀TechCabal Daily – Nigeria removes deadline for old notes submission
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday It’s Spotify Wrapped season—the time of the year when the music streaming app tells you how bad your taste in music is. This year, in addition to showing users their top songs and artists, Spotify is also assigning users cities based on their listening habits—we hear most Nigerians have been assigned Ibadan. To find your Spotify Wrapped, open your app and it should be staring you in the face. If not, go to the top menu, scroll left, and you’ll see a Wrapped button. In today’s edition Nigeria removes deadline for old notes submission Ronaldo sued for Binance promotion Bolt expels 5,000 Kenyan drivers Starlink is still illegal in South Africa 8 startups selected for Grindstone Africa accelerator programme The World Wide Web3 Opportunities Policy Nigeria’s Supreme Court removes deadline for submission of old naira notes GIF source: Tenor Nigerians can now rest easy. The Nigeria Supreme Court has ruled that the old naira notes will remain legal tender in the country until further notice. ICYMI: In October 2022, former CBN Governor, Godwin Emefiele, announced the apex banks’ plan to redesign and circulate a new series of three banknotes—₦200, ₦500 and ₦1,000—and gave the country three months to submit old banknotes. The short notice triggered a cash scarcity that crippled its economy. However, in March 2023, the Supreme Court ruled that the CBN didn’t provide adequate notice to the public and ordered that the old version of the notes remain as legal tender alongside the new notes until December 31, 2023. Ten days later, the CBN discontinued its naira redesign policy. Despite the governor’s reassurances about sufficient cash availability, the country still experienced a challenging shortage of cash. As the deadline drew closer, the federal government filed for an extension to the December 31 deadline a few days back, citing concerns about a potential economic crisis if the old notes were demonetised. Now, the apex court has ruled today that the notes will remain legal tender and be accepted for transactions until further notice, cancelling the December 2023 deadline. 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. Crypto Ronaldo sued for Binance promotion GIF Source: Tenor Cristiano Ronaldo has bagged a lawsuit for promoting an NFT product on the world’s largest cryptocurrency exchange, Binance. Investors who filed the lawsuit claimed Ronaldo used his robust social media following—850 million followers across social media—to promote investments in unregistered securities on the crypto exchange. The plaintiffs claimed to have suffered losses from the promotion. A missed goal: The football star entered a multi-year contract with Binance in 2022 to create a series of NFT collections for sale on the company’s platform, among many other things. The allegation comes shortly after Ronaldo shared updates on social media about making new content for the crypto exchange platform. Binance, which has had a rocky few months, is again the subject of scrutiny. The crypto exchange was forced to replace its CEO Changpeng Zhao who admitted to facilitating transactions with sanctioned groups and encouraging US users to obscure their locations. Binance was fined of up to $4 million for the violation. The company is also expected to make a complete exit from the US. Lights out: Ronaldo’s case is not the first of celebrities accused of their promotion of products. In 2021, Kardashian was sued for promoting the cryptocurrency EthereumMax without disclosing that she had been paid to do so. The lawsuit alleged that Kardashian’s promotion had caused investors to lose millions of dollars. The reality TV Star later agreed to pay $1.26 million to settle the charges after the US Securities and Exchange Commission found her guilty of not disclosing she was paid to promote the cryptocurrency asset. Mobility Bolt expels 5,000 Kenyan drivers in six months Image Source: Bolt Over the past six months, Bolt has expelled 5,000 Kenyan drivers who failed to comply with safety regulations or have been involved in safety-related issues. The Estonian ride-hailing company discontinued affected driver accounts following a recent directive from the National Transport and Safety Authority (NTSA). What directive? In October, the NTSA asked Bolt to present a comprehensive plan addressing safety concerns raised by riders and drivers over the years, including issues regarding illegal commission charges, and also terminate its booking charge— a service fee levied directly to passengers using its platform, which sparked disagreements between drivers and customers. The directive was a pre-requisite for Bolt to renew its annual licence. To meet this requirement, Bolt developed a safety plan and also terminated the controversial booking charge. The ride-hailing company also invested KESS20 million ($130,000) toward safety-related practices in Kenya. What practices? Bolt’s safety measures include a random driver selfie check, rider and driver training programmes, and strict compliance enforcement with immediate consequences for violators, including permanent suspension from the platform. The company has also enhanced reporting tools to facilitate the reporting of safety concerns. The ride-hailing company has met NTSA’s primary demands and its operating licence has been renewed for the next financial year. Checkout the Paystack Changelog Paystack enabled single and bulk transfers to M-PESA Consumer Wallets for merchants in Kenya. See what Paystack has been up to in 2023 → Policy ICASA warns against using Starlink’s services in South Africa Image source: YungNollywood The Independent Communications Authority of South Africa (ICASA) has again, issued a warning, against the illegal use and provision of Starlink satellite broadband services within the country. This warning comes days after Starlink’s rival, OneWeb, launched its broadband service in South Africa. Notably, Starlink has been unable to secure an operating licence in South Africa due to its refusal to surrender a 30% stake in its service to historically disadvantaged groups. Although the service isn’t “officially” available in South Africa, ICASA is aware of the offering of satellite internet services using Starlink terminals in
Read MoreOpen borders and financial inclusion are key to triggering Africa’s economic miracles
This article was contributed to TechCabal by Uzochukwu Mbamalu, founder and CEO, Palremit. According to Statista, Africa’s GDP per capita reached $2,150.6 in 2022—its highest value since 2015—and this figure is projected to reach $2,700 by 2026. This comes as no surprise, with the continent fast becoming a hub for technology adoption. With the recent trend of open borders seen across the continent, particularly in Rwanda, Kenya, Uganda, and Ethiopia, analysts have now predicted the continent to benefit more than ever from cross-border technology and knowledge transfer, the net present value (NPV) of skilled workers, labour quality, and intra-African trade. Current state of open borders in Africa Africa is witnessing a gradual shift towards open borders. Several policies and agreements are promoting regional integration and facilitating cross-border trade and mobility. African Unioun’s 2063 vision The African Union (AU), with the creation of the African Continental Free Trade Area (AfCFTA), has been actively promoting the idea of open borders. Their Agenda 2063 initiative seeks to establish a unified African market where people, goods and services can move freely. Regional Economic Communities (RECs) RECs such as the East African Community (EAC) and Economic Community of West African States (ECOWAS) were created to foster visa openness between member countries. This, in turn, facilitated easy transfer of skill, labour, and technology; as well as regional reciprocity. RECs help by implementing open-border policies and regional agreements that encourage trade and mobility, which reduce fringes in mobility for net-positive skilled workers, and allow African collective economies thrive from new technology knowledge, access to financial technologies and infrastructure for cross-border remittance, tourism growth, and increase in communities’ economies through economic migration. Proof of economic impact of open borders Countries around the globe operate open borders amongst themselves (like the Schengen Area) to promote bilateral and multilateral diplomacy. Others do so solely to learn by knowledge, technology, and skill transfer; or to grow tourism. The biggest fear for open border policies have been the economic disparities that lesser-developed countries face when they open themselves up to African citizens from more advanced, developed countries. Countries like Singapore and Seychelles are testament to the economic miracle that open border policies have on nations that take the bold leap. The Singapore “miracle” Singapore has one of the best economies in the world, evident in its high GDP per capita value. Singapore operates a free market by opening itself as an exciting hub for enterprises to set up and grow thriving businesses. Some might say Singapore landed its fair fortune given its ideal location for trade and logistics which has majorly attracted foreign direct investment from multinational corporations. But the truth is: its trade policies have also largely contributed to this. Most African cities are ideal for foreign investment opportunities. Hubs like Lagos and Kigali are prime examples. Kigali has thrived on tourism and travel. And, with its recent open border announcement, it is expected to attract more talents. Singapore’s open-trade policies have fostered its economic growth. This has led it to operate a diversified economy across manufacturing, finance, logistics, and technology. African countries can learn from each other through more intra-African collaboration, and exchange more technologies between themselves. including fintech. Singapore has a very attractive ecosystem for innovation and entrepreneurship. This is why it attracts foreign investment from high-value multinationals, including top-rig manufacturers in the energy industry. Africa currently sits at the bottom as the continent with the lowest GDP per capita. This value doesn’t reflect the enterprising spirit Africans are known for. One way we can learn from open-trade policies is to identify ways the African continent can benefit from the economic benefits that African citizens bring. Seychelles Seychelles had the highest GDP per capita in Africa in 2022; the country has thrived from tourism, fishing, and agriculture. Seychelles leads the way for the one of the most visa-free countries to travel to. A 2022 AVOI report showed that only 54% of intra-African travel are either visa-free or visa on arrival. If more countries, particularly in the southern and central African regions, begin to open up their borders to African citizens or set up more sophisticated processes for e-visas, this will facilitate more trade. MSMEs will benefit from transferred access to financial services by migrants, increasing their tax benefits for these countries. For instance, Flutterwave, Payoneer, Geegpay and Palremit offer a multi-currency swap feature that allows expatriates to exchange currencies with ease when they travel across the continent or overseas. This transferred access can facilitate more trade for agriculture, commerce, and other economic areas that move the needle in Africa. Financial inclusion and open borders in Africa The impact of financial inclusion on economic growth in Africa is multi-faceted. But, specifically, open borders will create a more extensive market for financial institutions, making it economically viable to reach underserved regions and communities in lesser-developed economies. For instance, African fintech providers like Flutterwave, Paystack, and Palremit are expanding into Sudan’s rural economy. Secondly, migrants face the challenge of expensive cross-border remittance and lack of access to banking services (like access to credit and their credit history) when they travel. But with more expansive financial technology across Africa, migrants and rural communities can benefit from these technologies via foreign trades and easier means to move goods around and exchange currencies between suppliers and buyers at low fees, thus contributing to Africa’s financial inclusion dream. Financial inclusion can be well established by facilitating digital financial services, education and literacy, public-private partnership, infrastructural development, and regulatory harmonisation across all African countries. Future prospects In the coming years, Africa’s economic miracle would be a testament to the power of leveraging and exploring regional integration to increase trade and foreign investment. The strategic implementation of these initiatives and the continued focus on overcoming challenges will be the keys to unleashing Africa’s full economic potential and fostering shared prosperity across the continent.
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