Exclusive: Flutterwave’s biggest revenue driver in 2023 is its enterprise segment
In an exclusive interview with TechCabal, Ross Haider, chief sales officer at Flutterwave, explained the company’s highest revenue-generating segment and the thinking behind the recent rollout of products. Over the last few years, Flutterwave has doubled down on consumer payment services with new products such as Send and Swap. However, in a chat with TechCabal, the company’s head chief sales officer, Ross Haider, said that enterprise services remain the most significant revenue driver for Flutterwave. “Based on our internal numbers, enterprise probably leads the way, and consumer is catching up. So it won’t be unfair to say that probably by the middle of 2024, both will be driving similar numbers,” Haider said. Flutterwave was founded in 2016 by Olugbenga ‘GB’ Agboola and Iyin Aboyeji to provide payment solutions to African merchants and everyday consumers. The business has scaled to several countries and supports other companies, including MTN and ride-hailing company Uber. But the company has attempted to go big in consumer payments. It launched Barter as a super app offering everything from airtime recharges to international remittances. But the product has struggled since it launched despite Flutterwave’s best efforts. In 2021, Flutterwave introduced Send, an international payments app that debuted with a notable partnership with Grammy-award-winning artist Wizkid. Over the last six months, and thanks to recent reforms by the Nigerian government, Flutterwave is reporting faster adoption on Send, its CEO told TechCabal. As listed on its website, Flutterwave offers a range of payment products for individuals, startups, and businesses. Under the Enterprise segment, its offerings include helping companies to accept online payments, cross-border payouts in different currencies, point-of-sale devices, virtual cards for business expenses, no-collateral loans, and recently Swap, a new product digitises the process of getting foreign exchange for Nigerians with the backing of Nigeria’s Central Bank. For the consumer segment, products include the payments app SendApp, a marketplace to shop from online businesses, buying event tickets, Swap, and Tuition, a product that allows African students to pay their international school fees in their local currencies. Flutterwave’s plan to float an initial public offering (IPO) has been in the works since last year but was delayed by the company’s regulatory troubles in Kenya. In August, Bloomberg reported that the fintech is still pressing ahead with the plan, though its CEO Agboola admitted that “the markets aren’t great right now,” a telltale sign that the listing could be slowed down. “When it is time, we will let you know for sure. Currently, we focus on customers, revenue, experience, and digital market expansion,” Agboola told TechCabal at an event in September. Haider said going public won’t affect the company’s sales and growth. “I don’t have any timeline on when or how the IPO would look, but I can tell you that from a growth perspective, we have seen tremendous growth within the organization. It [the IPO] doesn’t impact our sales operations in any way,” he told TechCabal.
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👨🏿🚀TechCabal Daily – Banking against Kenya’s data laws
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF The Utiva Scholarship is still up for grabs, but it expires today! Don’t miss this chance to win a full tuition scholarship to any Utiva programme of your choice. To enter, simply share your story with a photo of you from Moonshot on social media, tag Utiva, and use the hashtags #UtivaScholarship and #MoonshotbyTechcabal. So what are you waiting for? Share your story! In today’s edition Patricia denies having physical offices in Nigeria Kippa shuts down KippaPay World Bank suggest changes for Kenya’s data laws Vodacom fined R1 million Funding tracker The World Wide Web3 Job Opportunities Startups Patricia denies having physical offices in Nigeria If you’ve been online this week, then you’ve probably seen a TikTok where a concerned customer allegedly visits crypto startup Patricia’s office to find it empty. If you did, we’ve got news: Patricia says it doesn’t have physical offices in Nigeria. Yesterday, CEO Hanu Fejiro confirmed to TechCabal that the startup is fully remote. “The office in the video is an innovation hub set up (we announced in 2022), to offer free working spaces to Devs and Crypto enthusiasts, Patricia does not actively operate from that office,” he said. Fejiro also noted that the startup moved its headquarters to Lithuania in 2021 after Nigeria’s apex bank banned the country’s financial institutions from trading crypto. A new offer for customers: The CEO also confirmed that users with assets on the platform can now exchange their assets for shares. The offer was reported by TechPoint Africa earlier this week. In an email to TechCabal, the CEO revealed that the offer was initially proposed by numerous users. For users who agree, the shares will reportedly be managed by an SEC-licensed third-party trustee. The big picture: Patricia may find that its offer is a hard one to swallow for several users who have had their funds stuck on the platform since April 2023. So far, little has assuaged users doubts, especially not a unilateral conversion of user funds into the Patricia token. The startup, earlier this month, announced to frustrated users that it’s raising funds that will allow it relaunch its app and repay customers. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Fintech Kippa exits the agency banking business Kippa CEO Kennedy-Ekezie Kippa is shifting its focus to its core product. The Nigerian fintech, which provides bookkeeping and finance management tools for small businesses, is discontinuing its agency banking business, KippaPay. The startup also plans to lay off 40 employees associated with the product. In an official announcement, the company declared that KippaPay would be discontinued starting November 15. Sources also claim layoff notices have been sent out to affected staff, with their final day set for November 30. What went wrong? In September 2022,Kippa secured a super agent banking licence and then launched KippaPay. The startup’s late entry into the agency banking market was a disadvantage considering market leaders like TeamApt—now MoniePoint—and OPay both had headstarts in 2018. Also, the Nigerian economy was already struggling, making Kippa’s target customers price-sensitive. The devaluation of the naira made matters worse, increasing the cost of acquiring and maintaining POS terminals. This compounded Kippa’s difficulties as it competed with well-established players in the field. However, the company says the decision to discontinue KippaPay is part of a strategic effort to streamline its product offerings and focus on the most financially viable and successful aspects of its business. Zoom out: A source familiar with the company suggests that in the coming months, Kippa is also considering the possible discontinuation of Kippa Start, its business registration service that allows customers to register their small businesses online for ₦20,000 ($26).This would leave the company focusing on its core bookkeeping app, which has been popular among small business owners and reportedly has over 500,000 users. Paystack is live in Kenya After 10 months in private beta, Paystack announced that all business in Kenya could now accept payments with our growth tools. Learn more → Regulation World Bank suggest changes to Kenya’s data protection laws GIF source: Tenor The World Bank is flexing Kenya’s data protection laws. This week, the international financial organisation suggested changes to the Kenyan Data Protection Act of 2019, advising the Kenyan government against the localisation of data. What changes? The global lender has asked Kenya to revoke a law that forces companies to store sensitive personal data on servers located within the country. The World Bank says the law is limiting cross-border trade in digital services. It’s asking Kenya to upgrade its current Data Protection Act and adopt compatible and interoperable standards. It also adviced the scrapping of data localisation requirement for the Kenya’s Health Information System Policy. The big picture: The World Bank’s report proposes a flexible and standardised data sharing system for Eastern Africa, including countries outside the East African Community (EAC). The goal is to create a unified data market in the region by facilitating the integration of data processing and storage requirements. These suggestions from the global lender, however, are questionable in a time when other regions across the world are clamouring for localised data centres to protect the interest of their citizens. Should we be asking Kenya to review laws that many other regions, including the EU, are now enacting? Telecom Vodacom fined $52,666 for unfair contract cancellation fees GIF source: Tenor Vodacom has been caught in the act. The South African mobile network operator has been slapped with a R1 million ($52,666) administrative fine by the National Consumer Tribunal. Why? Vodacom was found guilty of violating sections of the Consumer Protection Act (CPA) by imposing hefty contract cancellation penalty fees. Between 2020 and 2022, Vodacom imposed a cancellation penalty of 75% of the remaining balance of clients’ fixed-term contracts on clients that cancelled their contracts early. This effectively denied
Read MorePatricia denies having physical offices, confirms offer to customers to convert debt tokens to company shares
Patricia has said it doesn’t have physical offices in Nigeria. The company also confirmed that it offered customers the option to convert their deposits to shares. Nigeria-focused crypto platform, Patricia has reacted to a video of its purported office making rounds on social media. The video, made by a frustrated customer, showed an empty workspace believed to be Patricia’s office, insinuating that the company had absconded with customers’ funds. In May, TechCabal reported that Patricia lost $2 million to a hack. While it has held town hall meetings and shared several plans around repaying customers, it has been met with skepticism. At its last town hall, it clarified a plan to convert user assets to Patricia tokens. With customers losing patience, the video that was posted on Instagram suggested that a customer had hoped to get answers from Patricia’s physical office. But in an email response to TechCabal, Hanu Fejiro, the company’s CEO, said it runs a fully remote structure. “The office in the video is an innovation hub set up (we announced in 2022), to offer free working spaces to Devs and Crypto enthusiasts, Patricia does not actively operate from that office,” he said. According to Fejiro, the company moved its headquarters to Villanius, Lithuania after the Central Bank of Nigeria (CBN) banned financial institutions from trading cryptocurrencies in 2021. “Our business model allows us and we have invested in infrastructure to run a fully remote model with team members spread across continents. As it stands, we do not have a registered office in Nigeria.” Fejiro also confirmed reports from earlier in the week that the company is asking users to convert their debt tokens to shares in the company. He said the move “forms an integral component of our strategy for fundraising and reorganizing our debts.” TechCabal had reported that the Lithuania-based company is raising new funds in its latest move to repay customers. Fejiro disclosed in the email that the company is “affording our users the opportunity to transform their debt tokens into convertible notes at a favorable discount in Patricia.” He claimed that numerous users have previously approached the company with the proposal and now Patricia is embracing it. “Please note that these shares will be managed by a SEC license trusted third-party, ensuring complete transparency,” he added. Patricia’s decision to convert the rest of its customers’ assets into a debt management token—the Patricia token—was met with mixed reactions from customers. The company is hoping that it can successfully use the debt management tokens to repay its customers, but its repayment plan is tied to the company’s profitability. But Patricia will have hard time convincing frustrated customers who want access to their money. Since April, customers have been unable to withdraw funds from the Patricia Plus app which triggered a bank run. Speaking at a virtual town hall meeting with customers on September 29, Patricia’s CEO disclosed that the Patricia Plus app—which will be relaunched soon—is currently under beta testing. Fejiro said in the email that customers have been notified of the plan to redeem their balances in batches as soon as the new app is launched.
Read MoreInside Savant’s 20 years of backing South African hardware and deeptech startups
Francois Malan, incubator CEO at investment firm Savant Capital, speaks on the firm’s investment strategy over the last 20 years, as well as the future of hardware and deeptech in South Africa. In this episode of Ask An Investor, TechCabal caught up with Francois Malan, the incubator CEO at South Africa-based venture capital firm, Savant. Founded in 2004, Savant focuses on making investments in hardware and deeptech startups in South Africa. Savant was founded on the need to bridge the funding gap which existed for technology businesses. It initially started offering incubation support for startups, and in 2019 added a venture investment element after it raised its first fund. With over 20 portfolio companies, Savant has invested in sectors ranging from agritech to healthtech, with a keen focus on also providing technical support via an in-house incubator in addition to the capital injection. The firm has so far raised one fund, the Savant Venture Fund I, which is almost fully deployed. A second fund worth R500 million is in the pipeline. Please share more about Savant Francois Malan: Savant was founded in 2004, by Nick Allen and Kate Turner Smith who were, at the time, coming out of the government-funded Life Sciences incubator and realising they they very limited in their abilities to really help technology businesses. So we started off as an incubator and operated as an incubator up to 2019. By that time, we were also managing a seed fund on behalf of the Technology Innovation Agency and finding funding for our companies otherwise. We then established the Savant Venture Fund I based on the pipeline that we had available, with support from the SA SME fund and also the IDC and TR along as additional LPs. So we’ve got various components to surround the venture fund, one being the incubator where we build businesses and then also an investment readiness programme, which we launched for the first time in 2022. We’ll be running a second iteration of that in the coming year. Can you please expound more on the fund and the type of investments it makes? FM: We have approximately R155 million (~$8 million) in assets under management in this component of funding available to us. We have invested in 23 businesses over the last four and a half years, varying in stages from pre-seed to seed and pre-Series A. We invest in hardware and deeptech-focused businesses solving real-world problems with strong science and engineering innovations. Our portfolio has startups in agritech, healthtech, cleantech, and much more. We are in the process of investing in a semiconductor startup based in Pretoria. We have found a range of really fantastic innovators and scientists and engineers in the local market who are doing really fantastic stuff and that’s where we like to play. You recently made an investment in a startup called BurnStar. Can you please share more details on that FM: BurnStar is an early-stage business in the hydrogen space. They make clean hydrogen which is extremely cost-competitive and carbon-friendly. It is a world-leading technology in the renewable energy space not only as an energy carrier but also to replace dirty hydrogen in other applications like steel manufacturing and industrial processing. It was founded by Johan Brandt about four years ago based on his PhD research and we bought into the novelty of the technology and the commercial application of it. What would you say is your investment strategy? FM: The Savant Fund 1 strategy is focused on finding South Africa-developed science and engineering innovations, based on strong science and engineering technologies. Although developed by SA teams, we are also looking for businesses that we can take into other markets, whether that’s across the continent or into other parts of the world. We’re looking for companies that have innovative solutions to real problems. Companies that understand who their customer is, and what problem they’re solving for that customer. Those are the really key understandings. We want to see differentiation. We try not to invest in businesses that are doing B2B solutions. We like to see strong technical teams with a component of business understanding. We have now almost fully deployed Fund 1, having committed basically the full funds we had available. And we’re now in the process of raising Savant Fund II which will be a green economy-focused fund. We are targeting R500 million (~$26 million) for it with the most focus again on South African startups. We will also be targeting other regions on a 70:30 ratio so as to play to our strengths which is our experience in the SA market. What challenges have you faced in your operations? FM: I would have expectations in terms of valuations. We’ve been very thorough and conservative in our valuation approaches. The opportunities haven’t gone away in the market but expectations of significant valuations have changed over time particularly when you move from one round to another. There have been some scenarios where people went in at valuations that were unsustainable in the long run, and perhaps have been burnt a little bit. We did see a number of deals that we really liked over the last couple of years that we didn’t invest in because their valuations, in our opinions, were out of sync with what we felt those companies should be. But I think by and large, the investments that we have made have been well-valued. And we expect that when we go into the next rounds, we do expect reasonable significant upticks in our valuations. So I think we’ve done well to weather the challenges and I think playing in a niche has kind of insulated us a little bit. Playing in the hardware and deep tech space means that we have been a bit insulated from a lot of the hype in other industries. What would you say is the future of hardware and deeptech innovation in South Africa? FM: Savant was founded on the back of a realisation and acknowledgement that there’s
Read MoreExclusive: With three years of runway left, Kippa explains why it exited agency banking
When Kippa announced an $8.4m raise in September 2022, the argument for KippaPay, its agency banking business, was clear: 500k merchants who used Kippa for bookkeeping and inventory management could make extra money. The theory was that these merchants would easily double as agents, meaning Kippa would get into the segment with already guaranteed agents. It was a sensible strategy considering that 60% of Nigerian agent outlets operate agency businesses alongside their existing ones. Yet, Kippa has pulled back one year after it began its push into agency banking. Per Techpoint Africa, OPay and Moniepoint account for 57% of agents in the market, making them market leaders—many agents often work for multiple fintechs or banks. It is a keenly contested space. “I would say this very clearly that competition is not why this decision was made,” said Kennedy Ekezie-Joseph, Kippa’s CEO. “As an ecosystem, we’re not yet at the point of maturity where competition can kill any startup. I do not know any startup that has died because they were outcompeted.” Kippa’s Origin Story Kippa was launched in June 2021 by co-founders Kennedy Ekezie-Joseph, Duke Ekezie and Jephthah Uche and received funding from Target Global, Saison Capital and other VC firms. While the company started by offering bookkeeping services to Small and Medium Businesses (SMBs), Ekezie said the goal was always to add other services. In September 2022, it launched Kippa Start, a business registration platform for SMEs. KippaPay, its agency banking offering, was the pièce de résistance and was launched after Kippa secured a super agent licence. “The super agent licence allows merchants and typical neighbourhood shops who already use our bookkeeping app into a one-stop-shop for essential financial services for their customers,” Ekezie-Joseph told Techcrunch in 2022. But Kippa is beating a retreat from agency banking after the 500,000 merchants it acquired by 2022 struggled as the Nigerian economy slowed. According to Ekezie-Joseph, the inability of SMBs to weather such difficulties shows how much work still needs to be done to support them. His view emphasises the difficulty of building a business that supports small businesses in Nigeria. With many SMBs especially vulnerable to macroeconomic shocks, the companies that serve them are in a race to squeeze as much value from them before they fail. “We had a significant focus on profitable merchants in tier-two cities, but the past six months have been horrendous for them. Socioeconomic fluctuations have exposed the volatility of this segment,” said Ekezie-Joseph. Kippa’s decision to retreat from agency banking will cost 40 employees their jobs. The company says it will not need to cut more jobs as it confirmed that it will shutter Kippa Start. Ekezie-Joseph said the decision to shut down KippaPay was down to a mix of factors: the struggles of SMEs, Naira devaluation and a market that evolved while the company was executing its thesis. How Naira devaluation affected Kippa’s agency banking push One of the costs in agency banking is hardware cost. Agents use POS terminals that are either given to them for free by the banks or fintechs, or buy these terminals at 15-20% of their actual cost. This arrangement makes it easier for fintechs to sign on agents; fintechs then recoup the cost of the devices from the agent’s transactions. It assumes that agents will facilitate enough transactions to make the free or subsidised POS terminal worth it, so it is a volume game from the jump. While the early entrants had a favorable FX regime to buy these terminals and years to build up supply, Kippa entered the market in late 2022. By 2023, the Naira devaluation brought new challenges. “Every agency banking player buys its terminals in US dollars at a fixed cost,” said Ekezie-Joesph. “We bought our terminals when the dollar was N465 to the dollar, and as of today, the dollar is ₦1,100.” With the exchange rate figures provided by Ekezie-Joseph, a POS terminal from a Chinese e-commerce website quoted at $70 went from ₦32,550 to ₦77,000 today. There are other costs, like managing relationships and providing support. While aggregators –individuals or businesses that help you recruit, train and manage agents–help in parts of the process, there’s still work to be done in acquiring them. According to one person familiar with the agent banking market, one of the market leaders had 6,000 relationship managers in 2022. For Kippa, which earns Naira revenues, a circular problem emerged: it needed to deploy more terminals to raise its revenues, but that would increase its cost. The only way out was to pass on some of the cost to customers. Price sensitivity and macroeconomic challenges affected Kippa’s thesis In June 2023, Kippa raised the prices it charged on transfers, and it quickly learned how price-sensitive the market is. “We tried to increase our prices to ₦35 to grow margins when devaluation kicked in. But the amount of backlash the price increase was met with and the threat of user churn made us revert to ₦25.” Agents, who often work for multiple platforms and can easily switch, are hard to put in a box and can control their own prices. In July, Nigeria’s agent banking association announced a controversial price hike; while financial services providers held prices steady, the agents wanted customers to pay more. Beyond this, Ekezie-Joseph said that the hundreds of thousands of merchants Kippa was banking on to double as agents had problems with their primary businesses. Nigeria’s infamous cash crunch in the first quarter and double-digit inflation affected economic activity. The fuel subsidy removal, which was to herald other reforms, has been unpopular and slowed the appetite for further reforms. Late to the party? Being late to the agent banking party increases the scale of difficulty for any new entrant into agency banking. In theory, agents move to the company that offers the best price. Yet an agency banking expert said market leaders have the pockets to defend their market share and often offer promotions or lower costs whenever a new player enters the
Read MoreBolt drivers in Abuja ignore security concerns, insist on offline trips
Bolt drivers in Abuja are taking offline trips to avoid paying Bolt’s high commissions. But what about the safety of passengers? One night in August, Safiya Usman, ordered a ride home on the Bolt app after meeting her friends for drinks. As soon as she got into the Toyota Corolla, the driver asked if it was a card or cash trip, to which she replied, “Card.” After asking how much the trip fare was, he informed her that he would only embark on the trip if they took it “offline”, to which she agreed as she didn’t want to spend more time waiting for another ride. It wasn’t until the next morning that Usman realised that she had left her purse in the car, and wasn’t able to reach the driver as the trip had been cancelled. Luckily for Usman, her driver was an honest man and returned her purse the next day. But things could have ended badly, as there is no way to trace a driver if one agrees to an offline trip. Offline trips on ride-hailing platforms like Bolt have become increasingly popular in Abuja since the fuel hike in May. Although fares were increased by about 30–40% after an extended conversation between the drivers and the company, the drivers still insist that the new prices are insufficient to cover operating costs, and have resorted to duplicitous means to avoid remitting the 25% commission to the company. Safety concerns in Abuja make offline trips a risky venture In the past few months, cases of “one-chance” kidnappings have been pervasive in Nigeria’s capital. These incidents are perpetrated by criminals who pose as taxi drivers to rob, kidnap or even murder unsuspecting passengers. For a number of people in Abuja now, moving within the city comes with an added layer of fear, which they try to assuage by opting for ride-hailing apps, as opposed to buses or taxis. Riders can access the names and plate numbers of drivers, and can even share trip details with friends if they feel that they are in danger. With offline trips, the entire safety point is defeated, according to Precious who works in a restaurant in the city. Since the news of taxi kidnappings and killings spread, she has started to use only ride-hailing apps to return home from work, even if they cost more. “I don’t bother to use Bolt again because almost every time, the drivers request an offline trip and even go as far as emotionally blackmailing you when you refuse,” she said.“I always refuse though because I don’t see the point. The only reason I’m [opting for Bolt instead] of going to take a bus or taxi at the junction is so that I can report if anything happens or my friends know the details of my car and driver at least,” she concluded. Lower costs for Bolt rides in Abuja raise questions about equity Bolt rides are cheaper in Abuja than in other cities like Lagos, which is due to lower operational, regulatory, and taxational costs, according to the company. However, the price of fuel in both cities is the same, forcing drivers in Abuja to question the fairness of the situation. “Our peers in Lagos are earning way more than us,” Austin, a bolt driver in Abuja shared as we waited for the traffic light to turn red. “I have friends there and know how much they earn per trip. Here, you do a trip of 30 minutes and Bolt charges ₦2,000, out of which I have to give them a commission. How much do you think I spend on fuel in a day?” he asked rhetorically. According to Charles*, another Bolt driver, conducting offline trips is the only way to earn a profitable income with the ride-hailing app in Abuja. “After buying fuel at a high rate of ₦630 per litre, and Bolt takes their 25% commission from every trip, amongst other expenses, how much do we have left?” he questioned. According to him, certain customers willingly opt for an offline trip because they are aware that the job no longer provides adequate earnings for the drivers. However, he has also come across customers who decline offline trips due to concerns about their safety. “Sometimes, I don’t ask. I have my way of doing it,” says David* when asked about the responses he gets from his customers after asking for an offline trip. “I can run an offline trip without you knowing and it will show on your phone that the trip is still on. Most customers don’t agree to do it because they feel unsafe, so I don’t bother asking,” David shared. *Names have been changed to protect the identity of anonymous sources.
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3 million technical talent portal: features, FAQs, and more
The technology minister’s 3 Million Technical Talent (3MTT) program wants to train 3 million Nigerians by 2027 using the 1-10-100 model. Bosun Tijani, Nigeria’s Nigeria’s minister of communications, innovation, and digital economy, announced at TechCabal’s Moonshot conference on October 11, that the ministry was going to train three million technical talents over the next four years. The minister said he would use a 1-10-100-model. This means training 1% of the three million in three months, then 10% over a defined period, then 100%. Days later, the 3 Million Technical Talent (3MTT) portal was launched. TechCabal visited the 3MTT website, hosted by the National Information Technology Development Agency (NITDA) and powered by Prembly, a Nigerian compliance and security infrastructure company. The website is easy to navigate, with the three primary segments —about 3MTT, how to apply, and FAQs— hanging on the top right corner. A significant feature missing from the website is an accessibility tool. The white and green colour-themed website may be difficult to use for people with varying degrees of visual impairments. While checking the website, we found some important information for applicants and anyone interested in the 3MTT program. Some of the information is inserted into extra documents embedded on the website. For instance, if you’re wondering where the tutors will come from, or what their registration is like, we have the answers. Courses The courses are listed as “skills in focus” on the main page, although you’ve to scroll down further to find the registration link. In the first phase, 3MTT will focus on twelve technical skills, namely; Software Development, UI/UX Design, Data Analysis & Visualisation, Quality Assurance, Product Management, Data Science, Animation, AI / Machine Learning, Cybersecurity, Game Development, Cloud Computing, and Dev Ops. These courses were selected in light of Bosun Tijani’s vision of positioning “Nigeria in the top 25% percentile in research globally across six pivotal Fourth Industrial Revolution (4IR) technological domains, including artificial Intelligence (AI), Unmanned Aerial Vehicles (UAVs), Internet of Things (IoT), robotics, blockchain, and additive manufacturing”. 3MTT fellowship application process The fellowship is a five-stage application process where applicants will be asked to submit bio-data, contact information, background skills & employment status, training program choices, and finally a confirmation page to ensure the accuracy of data. It took us five minutes to complete an application form. A useful feature while selecting the course on the form is that prospective fellows get to see a summary of what their program entails, while also filling in what level of expertise they currently have. Perhaps, this will be used to separate fellows when the program starts. The process is completed after a candidate submits either their National Identification Number (NIN) or Bank Verification Number (BVN). An email is sent to candidates immediately, informing them that they’ll hear back if selected. 3MTT trainers’ application process One of the technology minister’s objectives is to “increase the level of digital literacy of our population to 70% by the end of 2027”. To support this, the 3MTT is looking to utilise as many talented people as it can access. Hence, it has a portal for trainers to join the 3MTT program. The trainers will support the program’s first three months and help to define a model that will be replicated during the 10% and 100% phases. Trainers are expected across the 12 courses. The 3MTT has a training providers requirements document which says trainers will create curriculum and training methods, provide proof of training experience, with a preference for trainers with internship model experience, be able to use a hybrid teaching system that’s inclusive, have the capacity to operate in chosen states or regions and create learning benchmarks with at least 80% completion rates among fellows. While the process for the trainers is important to get the best, we wonder if Nigeria’s tech ecosystem currently boasts of enough trainers to handle three million people training on this scale. Placement One of the extra requirements for trainers is that they must have the ability to provide placement for fellows within their care. This means the ministry expects the trainers to be organisations and not individuals. The 3MTT program demands that training providers should be able to place at least 50% of fellows in jobs that match their skill level within three months of completing the program. What this means for fellows is that the majority of them are assured of a job opportunity or internship at the end of their program. To ensure continuous growth, the 3MTT portal says providers have to “accurately evaluate the impact of the training on these individuals. It is essential for providers to have a system that periodically tracks the development of the fellows alongside their employers”. Timeline The program started with a call for fellows and training providers on October 13 and will move to the selection phase from November 1, 2023. The program will kick off on November 15, and will run for three months. The program uses an iterative model that will take lessons from one phase to improve the next phase. While the first phase is expected to end by February 2024, a new timeline will be shared as the 1% stage ends. Partners can join the program The program is calling for partners who want to sponsor the 3MTT program through direct or indirect funding, equipment, physical spaces and other infrastructural support, device support, local and international job placements, support for programme execution, and other forms of support possible. Interested parties can apply to be sponsors here. An easy guess is that where program trainers are unable to find employment for all fellows, the partners will support them by helping with placements. FAQs The homepage ends with an FAQ section for fellows and trainers. It answers questions like the form of financial support available, among other important things.
Read MoreExclusive: Kippa lays off 40 employees as it exits agency banking
Finance management startup Kippa has discontinued its agency banking business and will also lay off the 40 employees who support the product. Kippa may also shelve another product, Kippa Start, in the coming months. Nigerian bookkeeping and finance startup Kippa has announced in a blog post that it will be shelving its agency banking business, KippaPay. TechCabal can exclusively report that Kippa has laid off 40 employees; reliable sources said layoff notices have been sent out and that the last day for affected employees is November 30. A spokesperson for the company confirmed the layoffs. “Those who will be staying back are directly connected to our other current and developing product lines,” Kippa said in an email to TechCabal. Kippa raised $8.4 million in September 2022 from global investors, including Goodwater Capital, TEN13 VC, Rocketship VC, Saison Capital, and others, for a push into agency banking after acquiring a super agent licence. Agency banking is a tightly contested space where incumbents with deep pockets—OPay and Moniepoint—have significant market share. The company recruited ex-regulators and former senior executives at top fintech startups, including OPay, BharatPe, Khatabook, TeamApt, OKCredit, NIBSS, and Unified Payments, amongst others, for its uphill fight. At the peak of its business, Kippa had around 15,000 agents, yet it struggled with margins. “The macroeconomic conditions in Nigeria, especially the devaluation of the naira, ate deeply into our margins, and our customers’ businesses have suffered over the past six months,” said a Kippa spokesperson. In his blog post announcing the discontinuation of KippaPay, Ekezie said, “Starting November 15, our KippaPay product will no longer be available for use by merchants. For now, the startup will be resolving any pending settlements and helping its merchants and partners transition off the product.” According to the source, the company will soon shutter Kippa Start, which allows users to register their small businesses online for ₦20,000 ($26). “This would leave us with just the bookkeeping app that made [Kippa’s] users fall in love with them,” said one employee. Kippa’s bookkeeping mobile app allows small business owners to keep track of their daily income and expense transactions, issue invoices, provide receipts to their customers and create marketing materials like business cards. It also keeps track of their debtors. Someone familiar with Kippa’s business also told TechCabal that the company plans to scrap Kippa Start, its business registration product, in the coming months. “We had achieved most of our revenue goal for the year by Q1, so it’s not like this decision is because the company has poor revenue,” said an employee who declined to be named to speak freely. According to them, the company decided to pull off the product to save the increasing cost of running the POS product.
Read More2023 Africa Tech Festival parades powerful line-up of speakers
Top-notch speaker list, including several government ministers, exemplifies the importance of tech to drive Africa’s needed economic big boom. Africa’s potential in economics, digital penetration, and business has positioned it for explosive growth, but there are challenges it must overcome first. These challenges, alongside innovative solutions, will be spotlighted at the 2023 Africa Tech Festival, happening in Cape Town, from November 13–16. The festival will feature a strong line-up of headline speakers, including several African government ministers. “Businesses across Africa have benefited enormously from leap-frogging traditional technology to the digital world and wireless connectivity, and this is spurring incredible growth across the continent,” says James Williams, director of events at Informa Tech, organisers of the festival. “The incredible advantages of digitalisation are, however, dependent on a plentiful and reliable source of power, and it’s essential that the public sector has strong strategies in place to drive this growth.” Among the 200-plus speakers, presenters, and panellists will be Gwede Mantashe, minister of mineral resources and energy and Kgosientsho Ramokgopa, South Africa’s minister for electricity, both of whom will be providing insight on how the South African government is tackling load shedding and the country’s energy crisis. There will also be a panel on “Universal power access: Plotting a route through Africa’s electricity challenge”, which will place the future of digital transformation on the shoulders of electricity and citizens’ access to energy. In Africa, energy insecurity has been a chronic inhibitor of economic development for decades, and continues to cripple enterprise growth and innovation, and these panels will unpack why a staggering 30 of Africa’s 54 nations face daily power shortages and supply interruptions, all of which cause economic havoc to local businesses and hamper consumer activity. Another key area of public-sector engagement with the tech sector will be discussed in the keynote panel “Unleashing digital prosperity: How progressive policy is shaping Africa’s tech transformation”. This session will present African ministers from across the continent with an opportunity to share how they are tailoring policy to their unique national priorities. “The process of developing and implementing policy across myriad industries and sectors is, however, an inherently complex and lengthy process and relies heavily on industry consultation, sector-specific legislation and flexibility to evolve with rapidly changing sectors,” says Williams, highlighting the importance of the growing number of ministerial delegations at Africa Tech Festival year on year. Other African ministers of government that will be in attendance are Ousmane Gaoual Diallo, the Republic of Guinea’s minister of posts, telecommunications and digital economy; Peya Mushelenga, Namibia’s minister of information and communication technology; and Audrin Mathe, executive director and permanent secretary in the ministry of information and communication technology. Other high-level speakers that will be sharing with the government delegates over the three days of the festival are Dion Jerling, co-founder, Connect Earth; Richard Cazalet, head of strategy, Telkom SA; Robert Aouad, CEO, ISOCEL Telecom; Russell Southwood, CEO, Balancing Act; Vuyani Tati, managing partner, AfriTech Catalytic Growth Fund; Jocelyn Nyaguse, head of marketing and storytelling, Startupbootcamp AfriTech; Calvin Govender, general manager ICT fixed services, MTN; Marjorie Saint-Lot, country manager, Ghana and the Ivory Coast, Uber; Evan Jones, CEO, The Collective X; Nfaly Sylla, ministry of posts, telecommunications and digital economy, Republic of Guinea; Kellie Murungi, chief investments officer, East African Power; John Davies, TMT Analyst, Bloomberg Intelligence; and many others. The Africa Tech Festival is the meeting place of Africa’s largest community of tech champions and offers this vibrant grouping the ideal space to connect and interact. For more information, please visit the festival website, and to get your tickets, click this link.
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👨🏿🚀TechCabal Daily – Safaricom now owns M-Pesa Holding
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday Twitter—or X—won’t be free for long. Yesterday, the platform started charging new users in the Philippines and New Zealand a $1 annual fee to join the app. Existing users are exempt from the “Not A Bot” fee, but anyone who wants to join the platform from these regions will have to fork over $1 to write on the platform. The new move will help reduce the amount of spambots and fake activity prevalent in those regions. They’ll be able to read for free, but they’ll have to pay 100 pennies to share their thoughts. In today’s edition Safaricom fully acquires M-Pesa Holding LeapFrog to invest $1 billion in Africa VIBRA shuts down in Africa Kuramo to invest $150 million in female-led startups Nigerian e-hailing drivers demand safety measures The World Wide Web3 Opportunities Acquisitions Safaricom fully acquires M-Pesa Holding GIF source: Tenor Safaricom now fully owns M-Pesa Holding. Yesterday, the telecommunications company announced its acquisition of the entire issued share capital of M-Pesa Holding Company Limited (MPHCL). Per the statement, Safaricom and its parent company, Vodafone International Holdings B.V., had reached an agreement on April 17, 2023, for Safaricom to acquire Vodafone’s entire 100% stake in M-Pesa Holding Company Limited from Vodafone BV. This comes after Vodafones’s CEO Margherita Della said the company was looking to simplify its processes to restore its competitive edge. ICYMI: The agreement was that Vodacom would sell M-Pesa trust company to Safaricom for $1. After receiving approval from shareholders and the relevant regulators, the deal has been sealed. M-Pesa Holdings is different from the M-Pesa service Safaricom offers. M-Pesa Holdings is a corporate trustee that holds all deposits of the M-Pesa service and invests them for the benefit of the customers. Zoom out: The holding company, per Vodafone, had €1.2 billion ($1.3 billion), as at April 2023, in customer funds which Safaricom could invest in short-term securities. 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 LeapFrog Investments to invest $1 billion fund in Africa Image Source: YungNollywood This private equity firm is betting on the future of African startups, one leap at a time. LeapFrog Investments, a private equity firm investing in Asia and Africa, is set to raise $1 billion for its new fund, Emerging Consumer Fund IV. The fund will be invested in healthcare and financial businesses on the continent. A $1 billion fund: Several institutional investors and limited partners have backed the Emerging Consumer Fund IV. These include the European Investment Bank (EIB) and the International Finance Corporation (IFC) which have committed $60 million and $50 million, respectively. Other investors include Prudential Financials ($500 million), AIA Group ($200 million), and Temasek, a Singapore-based investment company. The fund will hold a final close by February 2024. LeapFrog says it will make initial investments of $30–$70 million in 18–20 high-growth businesses. Since launching Fund IV in 2022, LeapFrog investment has invested in Sun King and Jumo in South Africa, Interswitch in Nigeria, Goodlife Pharmacy in Kenya, and Pyramid Group, which distributes orthopaedic and cardiac equipment. Lights out: LeapFrog’s Emerging Consumer Fund IV is a part of the growing queue of global investment firms and development finance institutions who are pumping VC dollars on the continent amidst the gruelling funding winter. Startups Crypto platform, VIBRA, shuts down in all three markets Vincent Li, co-founder of VIBRA. Image source: Afrikanheroes Another setback has befallen the African crypto ecosystem. VIBRA, the Africa-focused crypto platform co-founded by Vincent Li—co-founder of web3 accelerator Adaverse—has shut down in all three of its markets: Nigeria, Ghana, and Kenya. This development contradicts earlier reports that indicated the shutdown was limited to Nigeria alone. What went wrong? Vincent Li stated that the company is currently undergoing a significant pivot. However, multiple reliable sources, including former employees who chose to resign, offer a different perspective. A former employee disclosed that in July, the team of over ten individuals was given the ultimatum to resign or face termination. During this period, it became evident that the company was grappling with existential challenges. In the same month, VIBRA communicated to its users, via email, that it would discontinue services by July 15. Although Li stated that the discontinuation was specific to Nigerian users, messages in the company’s Telegram group suggested a broader closure. Another ex-employee stated that user engagement on the VIBRA app had dwindled, and revenue from transaction fees had fallen. Furthermore, VIBRA had an education initiative, VIBRAinClass, where experts could earn money for teaching Africans about blockchain. However, an ex-employee claimed that VIBRA had a challenge in achieving substantial user turnover from their education initiative, and that may have contributed to the company’s closure. There’s more: Aside from educating users about cryptocurrencies, VIBRA also relied on offering incentives to acquire customers, a common strategy among blockchain startups. However, this approach turned out to be costly for the company. VIBRA joins other Africancrypto startups that have closed in 2023, including LazerPay, which shut down its operations in April, and Pillow, which shut down in June. Accept payments fast with the Paystack Virtual Terminal Paystack Virtual Terminal helps businesses accept blazing fast in-person payments at scale, with ZERO hardware costs. Enjoy instant transfer confirmations via WhatsApp, multiple in-person payment channels, and more. Learn more. Funding Kuramo Capital to invest $150 million in African women-led startups Executives of the Kuramo Capital and Kuramo Foundation Kuramo Capital Management, a private equity firm will invest $150 million in female-led startups across Africa over the next decade, according to a TechTrends KE report. The sub-Saharan Africa-focused investment management firm will make these investments through its Moremi platform—an initiative that empowers women enterprises and promotes gender-equitable fund management. The Moremi platform offers an accelerator programme, a warehousing/lending facility, and a Fund of funds. Kuramo has unveiled the first cohort of the accelerator programme consisting of 40 female
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