Pineapple raises $22 million Series B round
Pineapple, a South African insurtech startup, has raised $22 million in a Series B round, making it the most capitalised insurtech startup in Africa. Pineapple, a South African insurtech startup underwritten by Old Mutual Insure, Africa’s largest insurer, has raised $22 million in a Series B round to become Africa’s most-funded insurtech startup, surpassing Kenya’s Turaco. Having raised $5.4 million in a Series A round in 2021 and $1.9 million from a competition and seed round, Pineapple has now raised a total of $29.3 million. Pineapple’s funding round was led by new investors Futuregrowth, Talent10, and MIC, and existing investors Old Mutual ESD, Lireas Holdings, and ASISA ESD Fund. E4E Africa also participated in the round. “This funding round stands as a testament to our tech and AI-powered operating model, enabling our mission to offer affordable and comprehensive insurance to all South Africans,” said Marnus van Heerden, Pineapple’s CEO. Pineapple, which was founded by Matthew Elan Smith, Marnus van Heerden, Ndabenhle Junior Nglube, and Sizwe Ndlovu in 2017, offers its users cheap online insurance and returns unused premiums to its customers annually. User’s premiums go into their Pineapple wallets and these wallets in turn form a network of wallets and claims are paid from this wallet network. Pineapple’s services can be accessed entirely online and users only have to upload a picture of the item they want insured and can get a quote in less than 10 minutes. Although Africa is the second fastest-growing region for insurance in the world, the penetration rate for insurance hovers around 3%. The low demand for insurance across the continent can be tied to a lack of customer awareness and trust in traditional insurance companies. Pineapple says it appeals to its customers by offering an entirely digital experience and returning unused premiums to its customers yearly. The six-year-old shared in a statement that it provides insurance to thousands of customers, and almost half are first-time insurance buyers. “Pineapple’s innovative approach to insurance aligns seamlessly with our investment philosophy. Their exceptional growth and customer-centric model exemplify a potent combination of technology and market understanding,” said Amrish Narrandes, the Head of Futuregrowth Asset Management’s Private Equity/Venture Capital. Disrupting Insurance In South Africa: A Pineapple Story
Read MoreExclusive: Neighbourgood acquires traveltech startup Local Knowledge for $1.5 million
Neighbourgood, the South African real estate investment company with over 1,000 work and co-living spaces across Cape Town and San Francisco, has acquired traveltech startup Local Knowledge in a deal worth $1.5 million in cash and equity. The acquisition is crucial to Neighbourgood’s launch of a mobile app that recommends activities and tours to users. “We have been focused on building physical locations, but there was always a strategy to build technology that made the experience of living and working spaces better,” said Murray Clark, Neighbourgood’s founder. “The acquisition of Local Knowledge will help us accelerate that strategy.” Founded in 2020 and with a business presence in Cape Town and San Francisco, Neighbourgood provides co-living and co-working spaces for digital nomads and tourists. It has over 1,000 spaces and plans to build 650 more in 2024. Local Knowledge, on the other hand is a digital platform that provides users with curated recommendations for activities and tours in Cape Town. Key Takeaways Neighbourgood has acquired traveltech startup Local Knowledge for $1.5 million in cash and equity The company plans to incorporate Local Knowledge’s tech stack into its accommodation offering It also plans to accelerate expansion in the US Neighbourgood 2.0 launching in December Neighbourgood plans to also launch a co-working space offering called “Workclubs” which would cost from R990 a month in rental for a space accommodating 35 team members. This product and existing accommodation and experiences offerings will be launched as part of the Neighbourgood app experience on December 1. “Traditional workplaces are usually too big and expensive for the kind of clients we are targeting with this product,” Clark told TechCabal. “Ours will seek to be more affordable and also foster collaboration for tenant teams.” With Cape Town being one of the biggest startup hubs on the continent, Neighbourgood will be looking to service such teams looking for alternatives to other co-working space platforms like WeWork South Africa. In January, the company also plans to raise funding to finance its expansion in the US, where it currently has three locations.
Read MoreJumia’s $19m loss is a bright spot as active customers decline in Q3
Jumia, one of Africa’s most prominent e-commerce businesses, cut its operating losses by more than half to $19m in the third quarter of 2023. It was a bright spot in a quarter that saw the company lose 800,000 active customers compared to the same period last year. The reduction in losses was thanks to increased cost discipline. A cash balance of $54 million–the company’s liquidity position is $147 million–has forced a significant reduction in expenditure. Under the leadership of Francis Dufay, the company cut expensive overhead by moving senior executives based in Dubai to Africa, reduced its workforce and moved away from a focus on delivering low-ticket items. Key takeaways: Jumia’s reported revenue of $44.9 million for the quarter It cut its operational losses to $19 million Quarterly active users declined to 2.3 million As part of cost-cutting initiatives, the company reduced its sales and advertising spend to $4.3 million, reducing advertising on “costly marketing channels and cutting consumer incentives.” The drop in advertising spending is steep (73%) compared to Q3 2022. Its general and administrative spending was also down to $17 million. Exclusive: Inside Francis Dufay’s urgent plans to rescue Jumia, the struggling Amazon of Africa Macroeconomic factors remain a challenge despite improved fundamentals Jumia’s Gross Merchandise Value, a measure of the value of all goods bought on its platform, declined to $181 million. The company blamed the reduction on currency devaluation across markets. “Eight out of ten local currencies in our countries of operation depreciated against the US Dollar,” Jumia said in its financial report. Spending power, impacted by rising inflation in key markets like Nigeria, Ghana and Egypt also contributed to a reduction in order volume and value. As a result, the company’s reported revenues of $44.9 million and gross profit of $25.1 million. Based on its goal to cut losses and move towards profitability, Jumia’s Q3 shows great progress. Yet it’s clear that there’s still work to be done; to deliver profits, it will need to grow revenues while keeping these costs low. The macroeconomic environment in all its markets will play a big role in reaching those goals.
Read MoreNigeria’s headline inflation rises again as rate hike meeting stalls
Nigeria’s headline inflation has jumped for the tenth consecutive month and hit an eighteen-year high, increasing the likelihood that the central bank will raise borrowing costs. Official data from Nigeria’s Bureau of Statistics (NBS) showed that October’s headline inflation number was 27.33%. The prices of bread and cereals, oil and fat, potatoes, yam and other tubers, fish, fruit, meat, vegetables and milk, cheese and eggs soared. NBS data showed food inflation hit 31.5% in October. “Normally, I get orders and inquiries daily, but now, no one is even willing to make inquiries or even order food,” Mariam Amoda, a food vendor told TechCabal. The Central Bank is expected to raise rates in its next Monetary Policy Meeting. The CBN failed to convene a scheduled (MPC) meeting in September to decide the nation’s interest rates for the first time in eight years. KPMG, a financial and business advisory firm, has predicted that Nigeria’s headline inflation will hit 30% by December 2023.
Read MoreFlutterwave surmounts legal obstruction to boost its offering in Kenya
This article was contributed to TechCabal by Seth Onyango via bird story agency. Fintech giant, Flutterwave has overcome legal challenges that threatened to cripple an ambitious growth strategy that made it the darling of venture capitalists internationally. “After considering all the facts presented to this court, as well as my earlier ruling on the agency’s request for withdrawal of this suit, the withdrawal is hereby allowed and this suit is marked as withdrawn,” High Court Judge Nixon Sifuna said in a ruling handed down in Nairobi. The judge criticised Kenya’s Assets Recovery Agency (ARA) for initiating the case without completing investigations, deeming the action “inappropriate, negligent, reckless, and absurd”. Flutterwave had grown to become an investor’s darling on the continent and the removal of legal challenges in the key East African markets sets the stage for a face-off with M-Pesa, the region’s mobile money behemoth. The Nigerian-based company, which offers a range of payment solutions for individuals and businesses across Africa, faced a series of legal challenges in Kenya after the ARA accused it of money laundering in 2020 and froze its accounts. Founded in 2016 by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya, Flutterwave is headquartered in San Francisco and Lagos and is currently valued at some US$3 billion. That makes it the most highly valued startup in Africa, overtaking previous records set by OPay, a fintech firm backed by SoftBank, and Chipper Cash, a cross-border payments platform supported by FTX, (both were valued at US$ 2 billion, in 2022). Flutterwave always denied the allegations brought by the ARA and challenged the court order, arguing that it had complied with all the regulatory requirements and obtained a license from the Central Bank of Kenya (CBK) in 2019. After months of litigation by the ARA, the judgement cleared the way for the fintech firm to resume operations in Kenya. The company may also chase a much-anticipated initial public offering (IPO) which could see it listing its shares in the territories where it operates. The end of Flutterwave’s legal woes could be a game changer in Kenya and East Africa, as the company seeks to expand its presence and compete with the dominant player, M-Pesa. M-PESA, which is owned by Safaricom, the largest mobile network operator in Kenya, has more than 55 million users and processes over 80% of the country’s digital payments. It has extended its services to other countries in the region. Kenya’s digital payments sector is often criticised for its complacency due to a lack of robust challenges to M-Pesa’s dominance. Flutterwave operates in more than 30 African countries and supports over 30 currencies, making cross-border transactions and remittances easy. The service has partnered with global payment platforms such as PayPal, Stripe, and Visa, enabling its customers to access a wider range of payment options and markets. The fintech startup also offers online checkout, e-commerce, invoicing, payment links, and virtual cards. According to a report by the World Bank, Kenya has one of the highest fees for mobile money transactions in Africa, averaging 11% of the transaction value. Flutterwave’s entry could significantly lower those fees as it chases its ambition to become the leading payment platform in Africa and beyond.
Read MoreCopia, Kenya’s offline e-commerce king, wants more customers to order from its mobile app
Copia Global, the Kenyan e-commerce startup that has raised $107m in venture funding across seven funding rounds, is launching a campaign to drive more sales through its mobile app. The company, which currently collects and delivers customer orders through 50,000 agents, is taking advantage of the fact that most low- and medium-income Kenyans now have smartphones. “We started with an offline experience because our customers were offline, but now we can fully focus on transitioning all to our app,” said Tim Steel, CEO of Copia, in a statement seen by TechCabal. Currently, most of Copia’s two million customers place orders for household items, electronics, or packaged foodstuff in person at neighbourhood shops, via USSD, or even call in orders (via phone) to their local shopkeepers. Copia’s new campaign will focus on helping these users transition to placing orders on its mobile app. “The goal is increased direct engagement with our customers so that they can see all our products and the pricing which is difficult when you are in an offline environment,” Steel told TechCabal on a call. The company launched a similar campaign last year to help agents use smartphones more, leading to an increase in the use of its agent marketplace app from 5% to 80%. A key driver of success was that Copia offered smartphone financing to its agent network. It will offer the same smartphone financing facility to allow current offline and new customers to purchase smartphones (and higher ticket items) and pay in bits. Founded in 2013 by Tracey Turner and Jonathan Lewis, Copia relies on a network of 50,000 street shops in small towns and semi-rural areas in Kenya to collect and deliver orders. Increasing app usage will change this model as customers rely less on nearby shops, which double as Copia agents to place orders. These shops will still serve as pickup locations, and shopkeepers will still earn commissions from app orders. Copia says it can better control the shopping experience, have complete visibility over how customers place orders, and even begin to customise offerings based on a customer’s historical preferences. Kenya’s smartphone usage has increased More Kenyans now own and use smartphones than ever, and mobile internet packages’ costs have fallen steadily since the early 2010s. A Kantar East Africa study commissioned by Copia said 73% of middle and low-income consumers in Kenya now own smartphones. Per the report, half of Copia customers who currently own smartphones use the internet at least once weekly. Given current trends, more Kenyans will transition to smartphones as prices fall and smartphone financing becomes more accessible. “Copia is usually the first commerce app our consumers experience, so we have a real responsibility to bring the world to their fingertips,” said Tim Steel. It’s an admission that Copia’s target demographic (rural and peri-urban) are not digital natives and may have difficulty weaning themselves off agents. In January 2022, Copia announced a $50 million series C round. This year, the company has cut at least 700 internal roles, in addition to shuttering a recently launched Ugandan business. In addition to its e-commerce business, Copia runs several brand product lines and operates two facilities that produce and package sugar and rice.
Read MoreConstellr wants to enhance farming in Africa with data
Constellr’s data will contribute to Africa’s agriculture industry by helping smallholder farmers prepare for climate change and understand changing planting seasons. Constellr, a German-based satellite data company, is offering land surface temperature (LST) data to African farmers to help them plan for better harvests and face climate change. What is LST, and why is it important? Land surface temperature is a measurement of how hot to the touch the land is, and how safe it is for planting crops over time. An understanding of this data can protect farmers from severe losses and boost food production, Rosa Schmidt, marketing project manager for constellr, told TechCabal in an email. In farming, temperatures are one of the primary determinants of plant growth and availability of produce. Instability or lack of understanding of the soil’s temperature impacts the outcome for farmers. As farming depends primarily on rain, LST will become “instrumental in drought monitoring by pinpointing areas experiencing water stress. This early detection empowers farmers to proactively adapt strategies, whether by adjusting planting schedules or opting for drought-resistant crop varieties. Farmers can also promptly detect abnormal temperature patterns indicative of other types of crop stress (e.g., from diseases) and adapt their approaches to ensure healthier and more productive crops,” Schmidt explained. Africa’s agriculture industry, despite its promise of a bright future, faces challenges such as “unequal access to resources, climate constraints, lacking infrastructure, technologies that are not equipped to handle varying economic and ecological situations, increasingly competitive markets, and low remuneration,” according to consulting firm Morgan Philips. Constellr is expanding into Africa, starting with Morocco, South Africa, and Zimbabwe. “With Africa poised for the highest population growth and impact of climate change but also being the continent with the highest potential for a jump in agriculture productivity, this [expansion] holds even greater significance,” Schmidt said. Data for everyone In Africa where a significant percentage of farmers are uneducated, LST data is inaccessible to the average farmer, despite its merits of helping farmers plan their planting and harvest seasons better. Only 15 out of 54 African countries have launched satellites into space and can gather EO data. Countries like Nigeria and Ghana have used these satellites to aid farming, but the data is usually expensive and hard to obtain. Smallholder farmers who need it the most, can’t access LST data. As water scarcity concerns continue to stand in the way of achieving $1 trillion in revenue in the African agriculture industry, companies like constellr promise to make the data available and affordable to support a sustainable and more efficient farming ecosystem. Constellr’s plan to make LST data available to more farmers, according to Schmidt, involves a four-pronged partnership approach with commercial companies, intergovernmental remote sensing institutions, space agencies, and NGOs. By working with the four partners, constellr will share the cost of accessibility across partners so that the end users, farmers, will get it at affordable rates. When asked about their pricing model, Schmidt said the company will provide locally contextualised rates across different countries. By using local NGOs and intergovernmental institutions, data will be available to farmers in summarised bits over different farming seasons, and may go as far as being read on the radio and in local newspapers to make it more accessible. For a start, Schmidt confirmed that constellr has “a handful of projects and partners in Africa for whom our goal is generating positive environmental and economic impact”. These partners will be their starting point.
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👨🏿🚀TechCabal Daily – Google asks Nigeria to dismiss $150 million suit
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Today’s newsletter is dedicated to everyone who tweeted about Blue Eye Samurai on Netflix. It may not have changed this editor’s life as many of you claimed it would , but it sure helped him have several satisfactory meals. Speaking of Netflix, ICYMI, it’s not leading Africa’s streaming market anymore. Showmax now leads with 1.8 million subscribers across the continent while Netflix has 1.6 million. What’s more, South Africa is the only giant of Africa Netflix knows as the country accounts for majority of the subscribers. Anyway, that’s old news. Here’s today’s. In today’s edition SEC halts trading of Tingo shares Google asks Nigeria to dismiss $150 million suit Nigeria to provide 3,000 paid internships with UNDP Vodacom’s earnings shrink due to Ethiopian foray The World Wide Web3 Opportunities Companies SEC halts trading of Tingo Group shares Image source: Zikoko Memes Remember Tingo Group—that Nigerian agri-fintech that was called an “exceptionally obvious scam”? Well, the US Securities and Exchange Commission (SEC) has suspended trading activity of its shares on the stock exchange from November 14 to November 28, 2023. There has been alarming information in public documents by and about the company, and the SEC wants to make sure that Tingo Group is not deceiving the public. What is Tingo saying now? The company did not comment on the SEC’s announcement. Yesterday, Tingo released its financial reports for the third quarter of 2023, claiming $586.2 million in net revenues and gross profits of $137.9 million. ICYMI: Six months ago, Hindenburg Research, an investigative firm wrote a scathing report about Tingo. Hindenburg alleged that Tingo’s public financial statements were fabricated. It also alleged that Tingo falsified reports about partnerships, projects, and expansions. Tingo denied the allegations, but the company’s share price crashed by 55% following the damning report. Zoom out: One week ago, Tingo Group’s CEO Dozy Mmobuosi announced that he had founded a new club football called Club 1472. The news came seven months after his £115 million ($124.89 million) takeover of Sheffield United failed. His new club will compete with Nigerian clubs like Sporting Lagos which is also owned by a Nigerian tech founder, Paystack’s Shola Akinde. 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 Google asks court to dismiss Nigerian’s $150 million lawsuit GIF source: Tenor In a legal twist that could rival a Silicon Valley drama, Google, the tech juggernaut, is facing off against a Nigerian, Chianugo Peter, in a $150 million lawsuit. The lawsuit, which also involves GoDaddy.com, revolves around the shutdown of Peter’s domain name—YouTubeAudio.com—which Peter bought eight years ago from GoDaddy to host his application. Google, the parent company of YouTube, says that Peter’s domain name infringes on its trademark rights. On the other hand, Peter says that he bought the domain name in good faith. He also alleges that GoDaddy and Google encouraged him to make use of the YouTubeAudio.com domain name for the past eight years. Unmeritorious or Unstoppable? Google, the second defendant in this legal showdown, isn’t pulling any punches. In a statement filed on November 10, the company asked a high court in Abuja to dismiss Peter’s claims as “unmeritorious” and “unworthy.” They argue that Peter didn’t act in good faith and even approached Google before starting operations, acknowledging the tech giant’s rights. What Peter wants: A number of things. Peter wants a declaration that he rightfully registered the YouTube Audio business name and secured the YouTubeAudio.com domain name in good faith from GoDaddy. He also wants $50 million for the 8 years of promotional work and marketing efforts. He also wants to be paid $100,000,000 for loss of anticipated profits associated with the brand equity and goodwill of YouTube Audio and YouTube Audio.com domain name. He also wants ₦50,000,000 ($62,292) for fresh registrations and securing an alternative domain name, along with ₦10,000,000 ($12,458) for legal expenses in prosecuting this suit. Google’s reaction: Google counteracts, claiming that Peter lacks a bona fide claim and doesn’t own the YouTube trademark. According to Google, they are the international owners of the “YOUTUBE” trademark, registered in Nigeria since 2007, predating Peter’s use by eight years. Missing from the spotlight: During a recent court appearance, Google’s defence was acknowledged, but GoDaddy.com is yet to join the legal dance floor. The court granted an extension to Google’s legal team, and the next hearing is set for February 12, 2024. Get faster ZAR payouts with Paystack In August 2023, Paystack reduced payout time for ZAR payments in South Africa to just 2 working days. See what Paystack has been up to in 2023 → Economy Nigeria to provide 3,000 paid tech internships with UNDP Bosun Tijani. Minister of Comms, Innovation, and Digital Economy. Image source: TechCabal Nigeria’s plan to upskill its citizens is coming with practical applications. Yesterday, the minister of communications, innovation and digital economy Bosun Tijani announced that the country had partnered with the United Nations Development Programme (UNDP) to provide 3,000 internships to its 3MTT fellows. JSYK: In October, the ministry announced its 3 Million Technical Talent Programme (3MTT) which is set to see three million Nigerians trained in digital skills by 2027. Per Tijani, 3MTT has a 1-10-100 plan in place: 1% of the three million trained in three months, then 10% over a defined period, then 100%. In the first phase, which is set for November 2023–February 2024, 3MTT will focus on twelve technical skills including software development, UI/UX and AI/Machine Learning. Now, the 3MTT fellows will also be provided with practical experience as well. The UNDP will provide a 12-month paid internship for 3,000 fellows to “allow them to apply the skills they learn in the programme.” It’s unknown, at this time, if the internships will apply only to the first cohort of 30,000 fellows who are set to graduate in
Read MoreUnion Bank is now a private company one year after ₦191bn acquisition
Union Bank, Nigeria’s second-oldest deposit money bank, will no longer be listed on the Nigerian Exchange Group (NGX) one year after its acquisition by TitanTrust. The ₦191 billion acquisition—a crucial part of TitanTrust’s five-year plan to join Nigeria’s elite league of tier-1 banks—means TitanTrust now has ₦1.53 Trillion in customer deposits. As part of the delisting process, Union Bank will buy out all its remaining shareholders. The bank is offering ₦7.70 per share, compared to the ₦7 per share that TitanTrust paid when it acquired 89.3% of Union Bank’s shares. It closed today at ₦6.70 per share, from ₦6.50 when the markets opened. “This move is an effort to attract larger private investments to reconsolidate our position as one of the top pioneer Banks in Nigeria,” said Mudassir Amray, the CEO of Union Bank. This is the third time a Nigerian company will go private in one year. Ardova Plc ended its 53-year run on the NGX in July 2023. Rak Unity Petroleum, the first indigenous company to be quoted on the exchange, voluntarily delisted from the Nigerian bourse last month after undergoing a liquidation process. Five more companies will delist from the stock exchange, including GlaxoSmithKline (GSK), PZ Cusson, Oando, Coronation Insurance, and Capital Hotel. Recent data from the Nigerian bourse showed that a total of 121 quoted companies have been delisted from the official list of the NGX between 2002 to 2022.
Read MoreBreaking: SEC halts trading of Tingo Group shares to protect investors
America’s Securities and Exchange Commission (SEC) has suspended trading activity for Tingo Group on the stock exchange. Tingo is a Nigeria-focused agriculture company that claims to provide a marketplace and payment services for farmers in the country. The self-described “agri-fintech” company is listed on the NASDAQ, which requires it to comply with US regulations and corporate governance standards. However, Tingo has been the subject of controversy following a June 2023 report by Hindenburg Research alleging its business in Nigeria is a fraud. Hindenburg Research is an American short-seller that bets against companies’ stock and then publishes damaging reports on them. The scathing report alleged that Tingo is an “exceptionally obvious scam” and further disputed several claims by its founder Dozy Mmobuosi, about developing “the first mobile payment app in Nigeria.” Tingo’s share price crashed by half following the damning report. “The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of [Tingo],” the SEC wrote in its suspension notice published Tuesday. According to the notice, the suspension is linked to “questions and concerns regarding publicly available information about Tingo Group, including press releases and periodic filings.” The suspension of trading will last from November 14 to November 28, 2023. Tingo did not immediately respond to TechCabal’s request for comments. According to US federal securities laws, the SEC can suspend trading in any stock “for up to ten trading days in the public interest and for the protection of investors.” Earlier today, Tingo released its financial reports for the third quarter of 2023, claiming $586.2 million in net revenues and gross profits of $137.9 million. It did not comment on the SEC’s announcement. However, in September, three months after the allegations by Hindenburg Group, Tingo declared itself innocent of all allegations after claiming it had hired outside counsel. It said the allegations that its financial statements were misstated by hundreds of millions were due to “typographical errors” while denying other allegations. Shortseller Hindenburg Research calls Tingo Group an exceptionally obvious scam
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