Founders Factory raises $113 million to fund African startups
Founders Factory Africa, an African early-stage startup accelerator and venture studio, has raised $113 million to fund African startups. The studio says it will become sector-agnostic and double down on addressing gender imbalances with the new funding. Founders Factory Africa has secured $114 million in funding to scale its model across the African tech ecosystem. The additional funding comes from the Mastercard Foundation and Johnson & Johnson Impact Ventures, an impact fund within the Johnson & Johnson Foundation, and follows on from previous investments by Standard Bank, the Small Foundation, and Netcare. Founders Factory’s portfolio cuts across 55 ventures in 11 African countries. The portfolio covers fintech and healthtech companies and includes Asaak, an asset financing startup for boda boda drivers in East Africa; Envisionit Deep AI, a South African medical technology company using AI to transform medical imaging diagnosis; Fresh Source, an Egyptian food tech startup. The studio says it will use this funding to become sector-agnostic, address gender imbalances in the ecosystem, broaden its capital investment offering to include non-dilutive capital, and strengthen internal capacity. An analysis of Founders Factory last fund. The venture studio combines a traditional venture capital approach with what it describes as, “bespoke hands-on venture support.” In addition to equity checks of up to $250,000 for ventures at the idea, pre-seed and seed stages, it can invest up to $300,000 in additional equity-free capital to “catalyse investments.” This non-dilutive funding is meant to provide founders with additional runway to pursue growth and catalyse other investors. “We are excited to have new and dynamic funding, which follows on from previous investments into Founders Factory Africa by Standard Bank Group, Small Foundation, and Netcare Group,” said Alina Truhina, co-founder of Founders Factory Africa. “Our new fund will allow us to continue supporting the continent’s most promising early-stage ventures – and their exceptional founders – with the capital and resources they need to fuel their growth,” said Sam Sturm, the chief portfolio officer of Founders Factory Africa.
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2023 to 2024 UI fees for old and new students
The University of Ibadan (UI), one of Nigeria’s most prestigious federal institutions of higher learning, has recently followed in the steps of the University of Lagos (Unilag) in increasing fees that new and returning students are billed to pay. Sequel to the Presidency’s debunk of tuition fee increment notions, the University of Ibadan in a document released regarding the proposed fees revision, implied accordingly that students are getting “Free Education” because the tuition fees box was marked “Nill”. Categorically, new University of Ibadan students making use of digital infrastructure, could alongside other mandatory fees like Technology Levy, be paying as much as ₦295,500. See the breakdown of the revised fees for old and returning students of the University of Ibadan below: New UI fees for new students 2023 New UI fees for returning students 2023 There are currently rumours that the premier University will also be increasing fees for services like online transcript application, certificate processing, and so on. Concerns regarding UI’s new fees on social media The fee review news has stirred and sparked debates and discussions across social media from demographics including students, parents, faculty members, and the general public. The increment has been touted to significantly increase the financial burden on students and by extension their guardians or parents. News coming from sources in the university administration cited various reasons for the fee hike, including the need to improve infrastructure, balance the costs of running with current economic realities, enhance academic quality, and attract top-notch faculty members. Proponents of the increment argue that such steps are necessary to maintain the university’s reputation and ensure its competitiveness on a global scale. However, critics contend that the sudden and substantial increase disproportionately affects students from low-income families and undermines the institution’s long-standing reputation of providing affordable education. One of the primary concerns arising from the fee increment is its potential impact on enrollment rates. As tuition becomes less affordable, many students might be forced to abandon their dreams of attending the University of Ibadan. This could lead to a decline in diversity, academic excellence, and a sense of inclusivity on campus. Moreover, critics worry that the financial burden might discourage prospective students from pursuing higher education altogether, perpetuating a cycle of limited opportunities and socio-economic disparities. Final thoughts As other federal universities like Obafemi Awolowo are expected to unveil their revised fees too, there’s a significant debate about the direction of higher education in Nigeria. The fees increment raise important questions about the affordability of education, equal access to opportunities, and the role of universities in society.
Read MoreVodacom insists Maziv acquisition is good for competition in SA despite regulator’s rejection
Following a decision by the competition commission to halt Vodacom’s intended acquisition of Maziv, the company has issued a response, rebutting the competition concerns outlined by the regulator. South African mobile network operator Vodacom has responded to a decision last week by the country’s competition regulator to halt its acquisition of Maziv, a holding company whose assets include fiber network operators Dark Fibre Africa (DFA) and Vumatel. “The Commission is of the view that the proposed transaction is likely to substantially prevent or lessen competition in several markets and that the conditions offered do not fully address the resultant harm to competition,” the regulator said. Additionally, the commission stated that the public interest commitments provided by the merger parties did not outweigh the competition concerns. In its response seen by TechCabal, Vodacom said it is disappointed in the regulator’s decision but intends to pursue other avenues to make its case. “Having engaged extensively with the Competition Commission’s investigative team since the proposed transaction was announced, Vodacom is surprised and disappointed with the Competition Commission’s recommendation given that both Vodacom and CIVH have endeavoured to thoroughly address competition-related concerns through a list of remedies and public interest commitments put forward to the Competition Commission,” said Vodacom Group spokesperson, Byron Kennedy. Furthermore, the company intends to showcase the strong public interest and pro-competitive advantages the proposed transaction would have on the fibre market and the country. Contrary to the commission’s conclusion, Vodacom believes the proposed transaction will help bridge the digital divide and enhance competition in the fibre market as the parties have committed to ensuring access to Maziv’s fibre assets. Vodacom’s commitment to ensuring that the deal bridges the digital divide in the country and fosters competition includes initiatives such as a commitment to create up to 10,000 new jobs and SMME development by establishing a new enterprise and supplier development fund to the tune of R300 million over three years. Maziv has also committed to passing at least one million new homes in lower-income areas with fibre infrastructure over five years. Furthermore, the company states that the investment, which is more than R13 billion, would come when attracting capital investment into South Africa is particularly challenging. Following the suggestion by the commission, the case will now move to the competition tribunal, which adjudicates on matters referred to by the commission. Should the tribunal uphold the recommendation by the commission not to greenlight the transaction, Vodacom has the option of going to the Competition Appeal Court, which considers appeals or reviews against tribunal decisions.
Read MoreKenya’s Revenue Authority is auctioning ‘overstayed items’ in Mombasa port
Kenya’s tax changes have sparked a cargo crisis at Mombasa port. Kenya Revenue Authority (KRA) is now auctioning overstayed goods with a $10 entry fee. The Kenyan tax regime has undergone critical changes in the past few months, introducing new regulations to widen the tax bracket. These legislative adjustments have compelled importers to forgo picking their cargo from the port. Amidst these strict regulations, the Kenya Revenue Authority (KRA) has not relaxed its stance on enforcing tax regulations. To this end, a substantial amount of cargo is yet to be retrieved from the port. In response, the KRA has launched an auction from August 14 to August 20. This auction presents an opportunity for the disposal of overstayed cargo. “KRA is running an online auction to sell overstayed cargo at the port of Mombasa. The auction is running from Monday 14th August 2023 to Sunday 20th August 2023,” KRA posted on X. A glance at the auction page show vehicles as some of the most popular items, alongside electronic devices such as computers and televisions. Bidding regulations Kenyans must have a valid iTax account and an active email to participate in the action exercise. Upon entry, a non-refundable $10 fee is then paid for auction participation. Items are auctioned on an “as-is” and “where-is” basis, precluding replacement requests or refunds. KRA says it reserves the right to modify auction lots before bidding starts. A successful bidder will then receive an invoice after the auction ends. Within 48 hours, the winner must send 100% of the bid amount. Failure to meet this deadline will result in the item being offered to the second-highest bidder. Winners are granted three days from payment to retrieve the item; otherwise, they become liable for warehouse expenses from the sale date onward. No additional tax for winning bids KRA adds that the bidding price is non-negotiable, and no taxes will be applied. However, upon winning, registration with National Transport and Safety Authority (NTSA) will be undertaken at a bidder’s cost. This mainly affects groups that will be bidding for the vehicles listed. The consolidated cargo question A few months ago, KRA introduced a new directive for importers of consolidated cargo, directing them to pay taxes based on transaction value, a shift from the previous fixed duty model of KES 200 (under $2) per kilogram for loose cargo, as part of an effort to address abuse of the initial cost-easing directive for small importers. Some importers of restricted items, including expensive mobile devices, television sets, and medical equipment, to name a few, had exploited loopholes to evade import permits. These importers circumvented using their PINs for declarations by opting for consolidation, resulting in owed VAT on their iTax PINs that could not be offset by sales VAT. To this end, the prices of devices shipped in as consolidated cargo have increased, as tax is now paid per item. A smartphone shortage is still due to importers neglecting to retrieve their cargo, which is presently stored in KRA warehouses. It has become clear that the KRA will not do a U-turn on the crisis, and importers will, in the long run, need to pay their fair share of taxes. However, this will see fewer smartphone retailers participate in the business thanks to the huge overheads.
Read MoreMastercard to buy a minority stake in MTN’s fintech unit, after investing $100m in Airtel’s fintech
Two years after investing $100 million in Airtel’s mobile money business, Mastercard Inc. has agreed to buy a small portion of the fintech business of MTN Group Ltd., another telecom company in Africa. Payment processor Mastercard Inc. has agreed to buy a minority stake in the fintech business of MTN Group Ltd., a major telecom company in Africa. MTN’s CEO, Ralph Mupita, says that they’re finalising the investment arrangements, as reported by Bloomberg. The cornerstone of MTN’s fintech endeavours is its mobile money product, MoMo, which has been valued at $5.2 billion, nearly 40% of MTN’s total market capitalisation. This follows Mastercard’s $100 million investment in Airtel Mobile Commerce BV, the holding company for Airtel Africa’s mobile money operations. With the investment, Mastercard bought a minority stake in the fintech arm of the telecom, just like it is set to do in MTN. [ad] Mastercard has previously connected its virtual payment service to MTN wallets, enabling MTN customers to make international payments online without needing a bank account. This puts MTN in competition with established fintech companies such as Flutterwave, and other major telecom contenders like Airtel Africa Plc, Safaricom Plc, and Vodacom Group Ltd. have also ventured into the fintech sector. MTN had previously shared plans to raise around $1.3 billion by selling assets. These plans include recent actions like selling and leasing back assets in West Africa and South Africa. This involves things like mobile-phone towers and their share in IHS Holding Ltd., a tower company listed in New York. However, the sale of this share has been postponed due to a disagreement with the management of IHS Holding.
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Next Wave: How much digitisation will be enough for B2B e-commerce in Africa?
Cet article est aussi disponible en français <!– In partnership with –> First published 13 August 2023 This week, I’ll take a break from the ecosystem review series to share a bit of my evolving thoughts on B2B retail digitisation in the past few weeks. The summary is that hurting FMCG sales leaves a question mark over how thick the digital layer in FMCG retail should be. It’s hard to write about digitising FMCG from the outside. You don’t see the people issues, infrastructure problems and numbers that insiders deal with 40+ hours every week. But there are threads and jigsaw pieces that we can put together to create a picture. Besides, digitising FMCG exists inside the context of the traditional consumer goods business, a world that I am not completely unfamiliar with at the retail distribution level. Google is not the best place to find an accurate picture of most things. But it can be a useful puzzle piece. So let’s start from there. A quick web search with the keywords “b2b e-commerce in Africa” returned this. Screengrab Sunday August 13, 2023. The top two results that could fit into this screengrab were a partner article on TechCabal and a Rest of World’s report on how the venture downturn has affected these firms. Here’s a quote from the Rest of World piece. In March 2023, Zumi, a Kenyan B2B e-commerce startup, shut down due to its inability to raise capital. In January, Wabi, an e-commerce platform backed by Coca-Cola, announced it was shutting down operations in five African markets, including Nigeria, Kenya, and Egypt. Before its closure, the business had heavily discounted its products to drive customer growth. Late last year, MarketForce, a Kenyan B2B startup, had a round of layoffs six months after raising $40 million in funding, citing harsh market conditions. The full RoW story points to razor thin margins and an unwillingness by venture firms to fund the business that they mostly encouraged to optimise for growth, as a reason for the struggles B2B retail firms in Africa face. But that is not all of the picture. An important part of the story is that Africa’s fast-moving consumer goods sector is itself changing. A big part of these changes has nothing to do with venture funding since it comes from the impact of inflation, lower consumer spending, rising energy costs, and heavier import bills courtest of tight forex conditions. What’s more? It is impacting everyone. B2B retail startup or regular distributor. The national specifics differ, but the broad contours are similar. Changing winds The set of the sails not the wind. Photo by Richard Horne on Unsplash When I visited Copia’s headquarters, which doubles as a distribution centre in Tatu City, just outside Nairobi three months ago, I was impressed by the well-oiled operation, thoughtful processes and vertical integration (Copia runs a packaging operation for its rice and sugar brands). Could I have predicted a layoff two months later? No. I absolutely did not expect it. And I don’t think Tim Steel foresaw telling 350 people there was no work to accommodate them three months after leaving Uganda, either. The same goes for Twiga’s several rounds of layoffs and a transfer of what was seen as a move to integrate crop production into its business mix to another firm. But it happened. Even though we did not (at least I didn’t) foresee this trajectory, the markings of a slowdown in the pace of B2B e-commerce were already clear by the start of this year. While there are probably funding–tied factors, some of the biggest trials facing a future where FMCG is broadly digitised have little to do with more VC money. In “Walking through the valley of the shadow of death”, one of this year’s March issue of Next Wave, I wrote that a chain of economic crises facing African countries was expressing itself at retail shops across Africa by both strengthening informality and reducing spending. Here’s an excerpt from that piece. All of this economic mumbo-jumbo is most accurately expressed at food stalls and grocery shops. As Egypt clearly understands, ahead of the Ramadan fast, the country’s national leadership opened Egypt’s annual Ramadan food drives three months ahead of schedule to help combat rising food prices, courtesy of a shortage in the supply of food and, more importantly, a shortage of the foreign currency needed to release food that has already arrived from Egyptian ports. As the economic crisis bites, it is strengthening informal retail markets. For example, the Tuesday street market in the densely populated El Talbia neighbourhood, one of Cairo’s poorest, is growing in popularity and attracting new shoppers every week who come from all over the Cairo area, for cheap prices. …I’ve walked you through all of this just to say that the economic situation as expressed in FX and debt crises for countries where imported food makes up a huge chunk of how people are fed is not looking bright. The very next week, Chernay Johnson, then the Research Director of DFS Lab followed up that issue with a stellar contribution on the intricacies of serving the consumer goods market in Africa. The conclusion was that: …no one B2B market player is near maturity in Africa’s retail sector. At full scale, the dynamics around unit economics could (and will) look a lot different as strong network effects multiply the profitability of a few market leaders. This is only starting to happen in the race to digitise retail in Africa, and we’ll continue to patiently keep an eye on emerging trends. Some careful combination of experimentation will no doubt bring progress, on a continent for which there is no tried and tested formula. But we think this will take more time than the pitch decks predict. Reread the last sentence. Why could it take more time for B2B players serving the retail market to reach maturity and find scale? Some thoughts. #1 Building asset-light but fully digital platforms might have a
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👨🏿🚀TechCabal Daily – A strike of genius?
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Looks like Muskerberg event might not happen after all. Yesterday, Meta CEO said he’s ready to move on from the planned fight as his opponent, Tesla CEO Elon Musk, doesn’t appear to be ready..or serious. Since Musk and Zuckerberg agreed to a fight in June, the world has waited to finally see the rich eat themselves. So far, only the Meta CEO has shown any enthusiasm with Musk delaying for several reasons including surgery, and more recently, a request for a practice match with Zuckerberg. C’mon Elon, you can do it, pave the way, put your back into it. In today’s edition South African taxi drivers call off strike Kobo360 CEO appointed commissioner China reduces screen time for children How fintechs should adapt to FX reforms The World Wide Web3 Event: The Moonshot Conference Job openings Mobility South African taxi drivers call off strike South Africa’s mobility industry is once again in the news. Last month, it was because Uber drivers were implicated in attacks on passengers. This month, it’s because taxi drivers in Cape Town embarked on a week-long strike that caused hardships for everyone from commuters to e-hailing drivers. On Thursday, August 10, eight days after it began, the strike was called off. Why did they strike? Late in July, the city of Cape Town implemented a new by-law that allows the city to impound vehicles that don’t have licence plates displayed. Under the old laws of 1996, drivers who did not display licences were simply fined but their cars weren’t confiscated. This new law, however, means something different. Subsequently, on August 3, the Western Cape branch of the South African National Taxi Council (SANTACO) announced a one-week strike which immediately turned violent after the government began impounding cars under the new law. The taxi drivers, at the time, vowed to strike until the new law was repealed. Image source: Reuters Five dead and 120 arrested: Angry protesters took the street, torching buses and cars that refused to join in the strike action. Per South African police minister Bheki Cele, five people were reportedly killed during the protests while 120 suspects have been arrested in connection to the violence. SANTACO also says about R120 million ($6 million) was lost in income and properties during the strike. Many others were affected by the strike action including commuters as taxis make up 75% of transportation in the province. Local media reported that dozens of passengers who could not get buses or ride-hailing services slept at bus stations or their workplaces. Even ride-hailing services who did not join the strike and were caught with commuters had their cars burnt. Zoom out: After eight days, the association called off the strike as SANTACO and the government reached an agreement that would see to the release of impounded vehicles. The new laws will still be in force, under the agreement, but a task team with participation from SANTACO will define which offences other than operating without a licence will make drivers liable for impoundment. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. Ecosystem Kobo360 CEO appointed commissioner in Nigeria Obi Ozor, CEO of Kobo360 Nigeria’s tech ecosystem is slowly infiltrating governance. Last week, Obi Ozor, CEO of logistics startup Kobo360, was appointed commissioner of transport in Enugu, Nigeria. This comes weeks after founder of incubator CcHub Bosun Tijani was nominated and confirmed as a federal minister for the country’s new regime. Ozor was one of 20 ministers appointed by state governor Peter Mba who, in his speech, said that the commissioners were appointed based on their experience and track record. The Kobo360 founder spent five years studying in a seminary before serving as Kobo360’s CEO for the same duration. Prior to this, he held positions at JP Morgan and was the director of operations at Uber Nigeria. Kobo360 which Ozor co-founded with Ife Oyedele in 2017 is a digital logistics platform that enables cargo owners to book freight trucks via phone or online. If anyone knows about transportation, it’s definitely Ozor. The big picture: While startup founders have previously been appointed to governmental roles in Nigeria, such as Oswald Guobadia during President Buhari’s administration, the appointments of Ozor and Tijani offer fresh recognition for the Nigerian tech sector. With governmental barriers now reduced, the Nigerian tech ecosystem is poised for its next phase of growth. Discover Trends with Smile Identity Download the Smile ID State of KYC in Africa Report on the latest trends in identity verification across Africa, highlighting the power of biometric verification and document verification in combating fraud. It is a must-read for any business looking to acquire users across Africa and keep up with fraud trends. Global News China reduces screen time for minors For kids in China, the word “Tik Tok” will have a different meaning. Earlier this month, the Cyber Administration of China released a new proposal that will reduce screen time for minors to two hours. ICYMI: In 2021, the Chinese government implemented new laws that limited the number of hours minors can spend gaming online. Minors were barred from gaming during the weekdays, and weekend gaming was limited to three hours. At the time, Douyin—China’s alternative to TikTok—also implemented new policies that limited the amount of time children under 14 could spend on the app to 40 minutes per day. GIF Source: Zikoko Memes Limited screen time: Now, under the proposed laws, all minors—people under 18—will have limited screen time. With “Minor Mode” on across devices, no minor will be able to access their screen between 10 PM and 6 AM. Kids under eight can use their phones for up to 40 minutes daily. Those aged 8 to 16 are allotted an hour of screen time, and those between 16 and 18 can
Read MoreObi Ozor, Kobo360 CEO appointed commissioner in Enugu
Obi Ozor, the CEO of Kobo360, a logistics startup, has been appointed as commissioner of transport in Enugu, Nigeria. This comes a week after Bosun Tijani’s ministerial confirmation, signifying new heights for the country’s startup ecosystem. On Thursday, Peter Mba, the governor of Enugu, appointed 20 commissioners who will support the implementation of his policies in the eastern Nigerian state. The newly sworn-in commissioners include Obi Ozor, the CEO of Kobo360, a Nigerian logistics startup. Ozor will serve as the commissioner of transportation in Mba’s cabinet. In his speech, Mba said that the commissioners were appointed based on their experience and track record. “It’s our hope that you are going to bring those experiences to bear and to work for the people of Enugu State,” he added. Mba also spoke of his ambition for Enugu and charged the commissioners to help achieve it. “We want to attract investments to Enugu and it will require you, deploying not only your skills, but also making sure that you acquire those new skills that we need to fix the challenges of breaking new grounds of economic development and growth.” My Life In Tech: In Obi Ozor’s world, audacity is king Trained in a seminary for 5 years, Ozor has been CEO of Kobo360 for 5 years. Before that, he worked at JP Morgan and Uber Nigeria as its Director of Operations. Kobo360 was launched in 2017 in Nigeria by Obi Ozor and Ife Oyedele, who exited the startup last year. Through its digital logistics platform, cargo owners can request freight trucks using either their phones or the web and have their goods picked up and delivered to the required location. This appointment comes a week after President Tinubu appointed Bosun Tijani as a minister. Although it’s not the first time that startup founders are appointed to serve in a government capacity in Nigeria (Oswald Guobadia, a two-time founder’s role in Buhari’s administration, comes to mind), Ozor and Tijani’s appointments create a new level of validation for Nigeria’s tech ecosystem. No longer faced with barriers at the government level, the next steps for Nigeria’s tech ecosystem’s growth are already underway. What does Nigeria need from its digital economy minister?
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Venture studios are South Africa’s recipe for building startups in an uncertain economy
Venture studios are becoming a default matron—and surrogate in many cases— for early-stage companies in South Africa. South African startups appear to have weathered the double whammy of a funding crunch and declining economic landscapes better than their Big 4 peers. The country is also a leader in venture building. The two points appear unrelated at first glance, but is South Africa’s concentration of venture builders an underestimated edge? I think so. In the second quarter of 2023, South Africa recorded a 12% decline in funding compared to the amount of investment received in the same reporting period in 2022, according to a TC Insights report. But in the previous quarter of 2023, South Africa was the only country in the big four ecosystems (Egypt, Kenya, Nigeria, and South Africa) to record increased funding (by 22%) relative to its performance in Q1 of 2022. Source: State of Tech in Africa Q2 2023, TC Insights Two quarters is probably not a good indicator of investor sentiment in Southern Africa, and the prevailing wind does not suggest that the venture funding freeze will thaw soon. But still, it is a relative net gain. This is partly explained by the fact that South Africa is not heavily dependent on capital from foreign investment firms. “While there is a general slowdown, more funds in South Africa are closing compared to elsewhere on the continent,” David Saunders, director of growth and strategy at Briter, a research firm told TechCabal. Regardless of funding performance, South African startups have to deal with the wider economic headwinds that have slowed growth to a crawl. Individuals, big businesses and small businesses alike have all been affected by a cost-of-living crisis and rolling blackouts. “It’s hard to ignore the macro environment at the moment. South African consumers are financially distressed, large enterprises are cutting capital expenditure, and power outages continue, putting pressure on startups both commercially and operationally,” Nicole Dunn, co-founder and executive at Revio, a South African payments and invoicing startup told TechCabal. Despite this, she is upbeat about the prospects of South African startups, even though she concedes that a few might fail. During the funding boom, startups in East and West Africa saw more deal activity at the early stage and tended to raise significant sums as they reached the later growth stage. This helped fuel the rise of unicorns (young and fast-growing companies valued at more than $1 billion) and a U-shaped startup funding pattern, Saunders explained. South Africa on the other hand, follows an inverted U pattern. There was less deal activity at earlier stages. But significantly more deals were consummated for companies at their mid-stage. This was followed by a decline in funding for later-stage ventures. That South African startups exit early” might partly explain this U-shaped pattern. Keet van Zyl, co-founder and partner at venture capital firm Knife Capital, believes there is some legitimacy to the hypotheses. Because of the “significant follow-on financing gap for high-growth local startups with proven traction,” it makes more sense to sell to a bigger and older company, van Zyl told TechCabal’s Ephraim Modise earlier this year. His firm just closed a $50 million fund to back startups with “high exit potential.” Against this backdrop of an ecosystem with more exits on average compared to their peers. And participation from larger corporates. venture building is becoming the matron—and surrogate in some cases— for early-stage companies in South Africa. Venture builders find their mojo As economic headwinds become stronger and set against the context of a global decline in venture funding, venture builders have emerged as dominant players in South Africa’s startup scene. Especially at the early stage. Venture building is a more hands-on investing model where an in-house team of experts work to build ideas or young companies into full-fledged businesses. Startups get capital and talent who work full or part-time to design products build the startup from the earliest stages and the venture builder gets a significant portion of discounted ownership in the fledgling business. Some venture studios simply charge fees for their services. One such studio is Specno, an app development agency that combines building apps for clients with high-touch venture investing and consulting. It was founded in 2018 by Daniel Novitzkas and Jacques Jordaan as a side project during their post-graduate program at Stellenbosch University, South Africa. The now five-year-old company has grown from a team of two to a 40-person with clients in South Africa, the Netherlands, the United States, and the United Kingdom. It recently opened an office in the Netherlands. From its head office in Century City, an upscale suburb in Cape Town, Specno serves roughly 100 global clients and portfolio companies with a mix of corporate and technical consulting, a paid accelerator program and investment support. Specno does not have a fund it invests from, but it taps a network of 250 global angel investors and also invests capital from its business in favoured startups. Novitzkas says they plan to raise a fund for their investments. Right now, his firm focuses on helping startups “unlock their competitive advantage to growth.” “We reverse engineer the process of raising funding,” Novitzkas said, adding that its investor network allows it to help up to 6 startups find funding in a typical month. Experience, a steady hand, and appropriate doses of focus and tests are part of the critical appeal of venture builders. Venture studios usually have a broad network of corporate clients or are directly funded by corporates. This network can prove useful as early customers, potential investors or even acquirers in the long run. Depending on the type of venture, Louis Buys, Founder and CEO of The Delta, also headquartered in Cape Town says his firm provides anchor support and taps its corporate venture-backed network to build early revenue pipelines. “A revenue pipeline is the best security for [future fundraising],” he explained to TechCabal. So “Customer relationships for early traction is probably the most important thing,” he says South African startups should
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Kenya police seize Worldcoin equipment
Lire en français Read this email in French. Editor’s Note Week 32, 2023 Read time: 5 minutes Hello Time for your weekly dose of African tech-tastic updates . Your thoughts mean the world to us, so please sprinkle a little magic on our TC Weekender by sharing your insights in this 3-minute survey. Pamela Tetteh Editor, TechCabal. Editor’s Picks Kenya police seize Worldcoin equipment Kenyan law enforcers stormed into a Nairobi warehouse and carted away equipment belonging to Worldcoin – the crypto project scanning people’s eyes in exchange for about $50. Learn more. Senegal arrests Starlink sellers After hitting the off-switch on the internet, the Senegalese government is now rounding up Starlink sellers, accusing them of illegally hooking folks up with internet. Learn more. Sendy is in acquisition talks Word on the street is that Kenyan logistics startup Sendy is deep in talks with potential buyers. Learn more. Vodacom acquisition of Maziv halts South Africa’s competition referee just blew the whistle on Vodacom’s game plan to snatch up Maziv, the owner of Dark Fibre Africa, South Africa’s second-largest fibre network operator. Learn more. DStv exits Malawi Looks like the show’s over for DStv in Malawi. Multichoice is unplugging the service after a court order to cease any further subscription price hikes. . Learn more. TC Live: Reducing the cost of crossborder payments Join us next Friday at 11 AM (WAT) with experts in the payment and international trade industry as they share perspectives and potential solutions on navigating the challenges of cross-border payment in Africa. Register here Slow internet in SA The West African Cable System (WACS) and the South Atlantic 3 that connect South Africa to the global network broke. South Africans were left to juggle load shedding and internet speeds that move slower than a snail. Learn more. Payday on Twitter for Nigerians Several Nigerian influencers and X (formerly Twitter) Premium users were greeted with credit alerts, receiving payments of between $251 and $500 for being active on the platform. Learn more. Safaricom finalises $257 million deal Safaricom Ethiopia has bagged $257 million from the World Bank’s private investment arm for its greenfield telecommunications project. Learn more. The African startups in Ycombinator’s summer class Y Combinator has dropped the curtain on its star-studded lineup for the Summer 2023 class. There are three African startups on the list. Meet them. Who brought the money this week? Nigerian mobility company Moove raised $76 million in an undisclosed funding round led by Mubadala Investment Company with participation from Blackrock and other undisclosed investors. Talents Arena, an Egyptian human resource(HR) company, raised $750,000 in pre-seed funding from UI investment. Egypt-based Bugaurd, a cybersecurity company, secured $500,000 in seed funding. FinMeUp, a South-African fintech company, raised undisclosed funding from SAAD and Blu Sky Investments. What else to read this weekend? Africa should not play catchup with AI regulation Unresolved challenges threaten to limit Nigeria’s digital payments growth Content creation is booming in Botswana but monetisation remains a puzzle Inside ChowCentral: Y Combinator’s latest food delivery bet in Africa Written by: Ngozi Chukwu Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender [ad]
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