👨🏿🚀TechCabal Daily – Kenya will tax crypto users + content creators
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Eid ul Adha Kenya is keeping tabs on sex offenders, literally and digitally. The country has launched a digital sex offenders registry where you can easily find out if someone is a sex offender with just a few clicks. Isn’t that good news? The registry is reportedly the first of its kind in Africa. Do you know which other offenders we are personally keeping tabs on? Those who are combining the name of their family members and distant relatives with “@gmail.com” to win prizes of our referral programme. We see you and will reward your scam as detailed here on our T&Cs page. In today’s edition Kenya’s Finance Bill becomes law Smile Identity fires 10% of staff Heritage Bank customers suffer fund delays Kenya launches cybersecurity hackathon The World Wide Web3 Event: DBN Techpreneur Summit 2.0 Opportunities Legislation Bill to tax digital creators becomes a law Internet money has finally become real money in the eyes of the Kenyan government. Kenyan president William Ruto has signed the Finance Bill 2023 into law. From July 1, digital content creators, crypto traders, and digital lenders will begin to pay taxes. Image source: GIF Generator Content creators? Yes, the government has gotten wind of how much content creators are making from their social media platforms and from brand sponsorships. Now they want a piece of that cake. And it’s not just influencers. Affiliate marketers, photographers, musicians, skitmakers, bloggers—anyone who creates any kind of content and posts them on any platform and makes money from it. How much will they pay? At first the bill proposed a 15% tax, but digital creators kicked against it and the Kenyan National Assembly reduced it to 1.5%. So, from July 1, anyone who wants to pay a content creator is required by law to withhold 1.5% of the payment and remit it to the government. Digital lenders are not left out. Digital loans in Kenya are about to get more expensive as the new law now includes any charges on loans and lending transactions. Crypto bros too: As if the unyielding bear market is not discouraging enough, this new law is mandating a 3% tax on any digital asset being transferred or exchanged. It is called a Digital Asset Tax (DAT). Ironically, this news is coming just three weeks after the outgoing Kenya Central Bank governor, Patrick Njoroge, reiterated the apex bank’s anti-crypto stance. Zoom out: This development is similar to Nigeria amending its 2022 Finance Act to include a 10% tax on profits on digital assets. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today on moniepoint.com/ng. Layoffs Smile Identity lays off 10% of staff The Smile Identity Team Smile Identity isn’t smiling with its employees. The KYC compliance and ID verification startup recently laid off 10% of its staff, in early June. In a brief statement shared with TechCabal, the startup said the firing was a bid to “better navigate the changing macroeconomic landscape of the tech startup world”. Surprising turn of events. It is shocking that the five-year-old startup is tightening its belt as it recently raised a $20 million Series B round in February. It is even more shocking when you consider that during the raise announcement, the startup said that it would use the funds to hire more people for its operations across Africa. Any cause for concern? We don’t know. This news of job cuts is the only non-native development that has made the news so far. In fact, in April, the startup acquired Ghanaian identity verification software, Appruve, as part of its plan to expand its footprints across Africa. Smile Identity is currently in six markets across Africa: Nigeria, Kenya, South Africa, Ghana, Rwanda, and Uganda. It provides KYC for popular companies like Paystack, Binance, Kuda, Paxful, and Chippercash, among others. Cybersecurity Kenya launches cybersecurity hackathon and bootcamp Cybersecurity Bootcamp Winners of 2022 Kenya’s Communication Authority (CA) announced the launch of its 2023 bootcamp and hackathon series on Twitter. The initiative is organised in collaboration with Huawei and the Kenya Cybersecurity Forensics Association. The hackathon and bootcamp will serve as a lead-up to Cybersecurity Awareness Month (OCSAM) in October. About the initiative: The bootcamp offers an intensive and short-term training experience, featuring the Huawei certification e-learning course on cybersecurity, virtual lab exercises, and mentorship from industry experts. These sessions and courses are designed to equip participants with the necessary skills for a successful career in cybersecurity. A huge turnout:Over 6,000 students have enrolled in the online bootcamp and hackathon. The event was initiated in Nairobi and will expand to various towns across Kenya, such as Kisumu, Mombasa, Nyeri, and Eldoret. The top 100 students from each region will participate in the regional finals, in collaboration with university partners. Following the regional finals, the winning hackathon and bootcamp teams from each region will proceed to Mombasa for the national final. This prestigious event will be held during the October Cyber Security Awareness Month (OCSAM) and will include participation in the National OCSAM cyber security conference. Zoom out: Building upon the success of last year’s programme, which resulted in numerous students securing jobs across various sectors, this program aims to further empower participants for future opportunities. Banking Weeks after fraud allegations, Customers of Heritage Bank struggle to access funds Two weeks after Nigerian bank Heritage Bank dismissed rumours about an alleged ₦49 billion ($64 million) fraud, its customers are still struggling to access their funds, and are threatening a bank run. ICYMI: Earlier this month, there were viral reports that an IT employee of Heritage Bank stole ₦49 billion ($64 million) from the bank. Heritage Bank has denied the report, but its customers are not convinced as they have been experiencing persistent trouble withdrawing their money from ATMs or making digital transfers. Image source: TechCabal Growing distrust: The
Read MoreSafaricom Ethiopia picks MTN exec as its new CEO
Anwar Soussa, the CEO of Safaricom Ethiopia, is leaving in July, and Wim Vanhelleputte from MTN Group will take over his role in September. A few days ago, Safaricom Ethiopia announced the departure of its first CEO, Anwar Soussa. Soussa’s stint at the helm of the new telco started in August 2021. According to Safaricom Ethiopia, he will leave the carrier at the end of July 2023. Safaricom Ethiopia’s parent company, Safaricom (Kenya), has revealed that Wim Vanhelleputte will take over from Soussa. Wim will take over the new role after working at MTN Group, where he served as operations executive—markets, since August 2022. READ MORE: Safaricom Ethiopia gets mobile money licence 7 months after Ethiopia entry A statement from Safaricom Kenya reads, “We are pleased to announce the appointment of Wim Vanhelleputte as the chief executive officer of Safaricom Ethiopia effective 1st September 2023. Wim brings extensive leadership experience and deep industry knowledge, having worked in the telecommunications industry across multiple markets in sub-Saharan Africa for over 25 years. He joins Safaricom Ethiopia from MTN Group, where he was the operations executive—markets since August 2022, and he was responsible for the performance and governance of four operating companies in West and Central Africa.” Before his role at MTN Group, Vanhelleputte was CEO of MTN Uganda since 2016. From 2009 to 2015, Vanhelleputte served as the CEO of MTN Côte d’Ivoire. He briefly joined Airtel Africa between 2015 and 2016, first as the regional director for francophone Africa, and later as the cluster CEO for Airtel DRC and Congo. Over his career, Vanhelleputte has worked extensively in the telco space, including as CEO at Sentel GSM in Senegal, managing director of TchadMobile in Chad, and general manager at Telcel Gabon, among other key roles. “As Wim joins us, we have planned for a seamless transition to ensure that we maintain our momentum so far in delivering our vision to transform lives through a digital future for all Ethiopians,” concludes Safaricom. Safaricom Ethiopia, which generated KES 562.4 million (over $4 million) in revenue in the last financial year, started commercial operations in October 2022 after months of tests and customer onboarding. It has since grown its user base to over 4 million customers.
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Heritage Bank’s appeals for patience infuriates impatient customers experiencing fund delays
Thirteen days after Heritage Bank dismissed rumours about an alleged ₦49 billion fraud, customers are still struggling to access their funds, and many may be ditching the bank’s services for alternatives. Nigeria’s Heritage Bank has asked its customers to be patient and calm regarding the current difficulties they are experiencing with withdrawing their funds from the bank. According to Ozena Utulu, the bank’s corporate communications manager, Heritage Bank is undergoing a series of upgrades, a situation that has already been communicated to customers in an email, which she shared with TechCabal. “Before now, we have told them about upgrades we are running. We are communicating to our customers via email, and even on our social media, on updates we are carrying out,” she said on a phone call. Email message forwarded to Heritage Bank customers. Credit: Heritage Bank Unsatisfied banking customers But the bank’s customers are not satisfied with these explanations. An Abuja-based broadcast journalist, Leah Katung-Babatunde, told TechCabal that all through last week, the bank refused to dispense cash, and even after she opted for a digital transfer of her funds, that took longer than expected. She has now decided to move her money to another bank in small amounts, even though she didn’t state where. Rumour has it that a member of Heritage Bank’s information technology team is behind the ₦49 billion fraud, but the bank has denied this. A customer, Esther Onwubuya, is inclined to think that there is some truth to the rumours. She spent three days last week trying to withdraw funds from her father’s pension from the bank. “One thing I am sure of is, their statement [posted online and their social media accounts] is a lie. Their head of IT stole the money and they have blocked all channels to remove funds from the bank to other banks,” she told TechCabal. Onwubuya further shared that the bank’s daily withdrawal limit keeps getting reduced. “It was ₦20,000 and then it became ₦10,000, so you can’t remove all your money. The only way to move your money is with a current cheque transfer to a beneficiary bank, and that’s only for current accounts,” she said. Onwubuya got her money after appealing to the bank officials to consider her sick father’s condition. “Due to my dad’s health issues, they pitied us and we had to do two over-the-counter withdrawals at two different branches,” she told TechCabal. Ifeoma, the daughter of a customer, who spoke to TechCabal, said that her mother was not so successful when she approached one of Heritage Bank’s branches in Sango-Ota, Ogun state, to withdraw money. “My mum went to the bank on Tuesday [last week] to withdraw because she doesn’t have an ATM card, and she was told there was no internet network to withdraw. They asked her to come back the following day. She went back and was told that there’s still no network,” Ifeoma complained. But that was not all. Further inquiry revealed that the money Ifeoma’s mother had in the bank did not tally with what she had saved. She asked for her bank statements, but the bank officials could not provide it. Growing distrust amongst customers A Twitter user by name, Okoro Chinyere, has threatened to sue the bank. “I’ll be taking legal action against @heritagebankplc. The damage is enormous,” he tweeted on the morning of June 23, 2023. Other customers may not be keen to take legal steps, but some have decided to move on from the bank. Katung-Babatunde said she has had to resort to causing a scene at the bank while issuing threats, just to get access to her funds. She and Onwubuya confirmed that many customers may have begun to move their funds from the bank. “We are starting the process of transferring the pension account to another bank,” she told TechCabal. “Every day we went there, people were agitated,” she added. Speaking in Heritage Bank’s defence, Utulu responded that service downtimes are a common phenomenon within the sector. “Customers are aware of the upgrades. We are just trying [our best].”
Read MoreKenya expands tax net by going after influencer and crypto earnings
Kenya’s Finance Bill 2023, recently passed and signed into law, impacts digital content creators, crypto traders, and digital lenders. Content creators will now face taxes on their earnings, while crypto traders will be subject to a digital asset tax. Kenya’s controversial Finance Bill 2023 is now law after the national assembly passed the proposal, which was signed by President William Ruto. The bill affects many people in the digital space, including content creators and crypto traders. Content creators, for instance, will now have to pay tax based on the earnings they get from their work. The government has possibly been eyeing the industry ever since it gained popularity among thousands of Kenyans who create content for their social media pages. Some creators are also paid handsomely by the brands they push on their platforms, and part of their earnings will now be subject to some tax. READ MORE: Kenya’s government proposes new bill to tax content creators Online influencers could lose big earnings The law defines “digital content monetisation” as offering entertainment, social, literary, artistic, educational, or other material electronically through any medium or channel for payment. This can be done through various methods, including website advertisements, social media platforms, brand sponsorships, affiliate marketing, subscription services, merchandise sales, exclusive content membership programs, licensing content (such as photographs or music), user-generated projects, and crowdfunding. The bill proposed to impose a 15% withholding tax (WHT) on income earned from digital content monetisation. However, the national assembly adjusted that value downwards to 1.5%. This means that from July 1, any time a content creator receives payment for their work, the payer will be required to withhold 1.5% of the payment and remit it to the government. The idea behind the proposal is to include digital content businesses within the scope of taxation, given their significant growth in recent times. One possible way that creators will attempt to retain their earnings is by adjusting their rate cards to their business partners, but will it be done? READ MORE: Taxing creativity: Kenyan content creators pushback against proposed taxes Crypto traders have not been spared The bill suggested implementing a digital asset tax (DAT) that must be paid on earnings obtained from the transfer or trade of digital assets. According to the bill’s definition, a digital asset is anything valuable without physical presence, such as crypto, NFTs, or other digital representations. These assets are generated through cryptographic methods or alternative means and serve as a digital representation of value that can be electronically transferred, stored, or exchanged. Based on the law, platform owners will deduct Digital Asset Tax (DAT) at 3% from the value of the digital asset being transferred or exchanged. In the case of non-resident platform owners, they will remit the tax within 24 hours after making the deduction. A few notes can be made from the law. First, making a deduction within 24 hours of trading is a short period that will not excite many crypto traders. Secondly, the law says it will tax turnover other than gains, effectively meaning that some crypto traders may eventually stop trading altogether as it will not be lucrative anymore. Expensive digital loans Kenya has only licensed 32 loan apps after the Central Bank of Kenya (CBK) directed to have them freshly registered. Kenyans tend to prefer digital loans because they are offered without collateral. However, lenders use other forms of guarantees, such as personal data, which they tend to abuse. For this reason, they were asked to stop their operations and register their businesses afresh after meeting some requirements. The new law has widened the definition of ‘fees’ to encompass any charges associated with lending activities conducted by digital lenders. This expansion entails all costs linked to such transactions within the scope of excisable duty. The outcome of the law is that the cost of borrowing from digital apps (such as Branch and Tala) will increase. All these changes will come into effect from July 1, 2023.
Read MoreSA, Denmark, and Netherlands team up to launch $1 billion green hydrogen fund
South Africa, Denmark, and the Netherlands have teamed up to launch SA-H2, a $1 billion fund with a mandate to bolster green hydrogen projects in South Africa. The fund will be backed by numerous financiers, including the Dutch investment entity, Invest International, which contributed $50 million. The rest of the fund is set to be raised over the next two years, with contribution from various financiers, including the Development Bank of Southern Africa, Industrial Development Corporation, and insurance firm Sanlam, with management set to be handled by the Dutch Climate Fund Managers. Speaking at the launch of the fund in Pretoria during the state visits of Dutch and Danish prime ministers Mark Rutte and Mette Fredeiksen, South Africa president Cyril Ramaphosa stated that the fund will contribute in tackling the country’s electricity crisis and achieving long-term energy security through renewable energy. “From solar to biogas, from wind to battery storage, these investments are leading one of the most important growth industries in our country,” he stated. In terms of the deployment of the fund, the focus will be on early investment opportunities in a technology set to play a transformative role in achieving global emission reduction targets, with a goal to stimulate significant advancements in the green hydrogen sector. As Eskom’s struggles continue, South Africa seems to be seeking alternative energy sources to support the crumbling national grid. In April, the city of Cape Town also announced a $65 million solar PV and solar battery project to tackle loadshedding.
Read MoreHow business trips can propel African startups to success
Noel K. Tshiani, founder of Congo Business Network, reflects on a recent trip from New York to Paris to participate in Viva Technology, Europe’s leading startup and tech event that was held in Paris from June 14 to 17, 2023. From this experience, he advises startups from Africa on how to maximise the benefits of business trips overseas. In today’s interconnected world, success for entrepreneurs relies on their ability to expand their horizons and tap into global markets. While virtual meetings on Zoom have become commonplace, nothing can replace the power of face-to-face conversations. In this piece for TechCabal, I discuss the value of business trips for entrepreneurs in Africa, with a specific focus on how travelling overseas to attend major business events in Europe can significantly increase a startup’s chances of success, especially for those from French-speaking countries who are looking for investors and strategic business partners with major corporate brands. 1. Breaking barriers and cultivating networks Business trips present a unique opportunity to overcome geographical barriers and develop valuable networks. Attending conferences such as Viva Technology or Ambition Africa in Europe allows African entrepreneurs to meet industry leaders, speak with potential investors, and connect with entrepreneurs who share similar ambitions. These face-to-face interactions foster trust, establish meaningful connections, and open doors to new collaborations that can propel startups forward. 2. Embracing cultural exchange and innovation Exposure to different cultures provides a fertile ground for innovation and growth. By immersing themselves in European business events, African entrepreneurs will gain insights into global trends, diverse perspectives, and emerging technologies such as the rise of artificial intelligence. This exposure sparks creativity, challenges conventional thinking, and enables entrepreneurs to bring fresh ideas back to their home markets, fostering innovation across various sectors, from fintech to agritech. 3. Accessing global markets and investment opportunities Business trips serve as a gateway to global markets and investment opportunities. Europe, with its vibrant startup ecosystem and thriving business environment, offers a multitude of prospects for African entrepreneurs. Notably, France stands out as the top startup ecosystem in the European Union. Attending conferences in Paris provides a real opportunity to showcase a startup’s solutions, connect with experienced accelerators such as Station F, attract international clients, and potentially secure funding from institutional investors such as Partech Africa. 4. Enhancing business sense and industry knowledge Attending tech startup events overseas delivers a unique learning experience. African entrepreneurs can access cutting-edge industry insights, attend workshops, and learn from renowned leaders such as Elon Musk and Marc Benioff who both recently attended Viva Technology in Paris. This exposure helps African entrepreneurs to refine their business sense, stay ahead of industry trends, and gain a competitive edge in their respective niches. 5. Bridging the perception gap Africa’s potential often goes unnoticed in Europe due to misconceptions and limited exposure to major brands. Actively participating in international business events allows African entrepreneurs to challenge stereotypes and showcase the diversity of the entrepreneurial ecosystems in Africa. Doing so promotes a positive narrative, highlighting the immense talent, innovation, and untapped opportunities in the continent in countries such as Senegal, Cameroon, Côte d’Ivoire, and the Democratic Republic of Congo. Things to know before embarking on a business trip To fully maximise the benefits of a business trip, African entrepreneurs should approach their travels strategically, focusing on key areas that can enhance their experiences and success outcomes. 1. Research extensively One of the fundamental steps is conducting thorough research before embarking on the trip. Dive deep into the conference agenda, study the list of speakers and attendees meticulously. By doing so, you can identify the most relevant sessions to attend, potential collaborators to connect with, and valuable networking opportunities to explore. Additionally, take some time to familiarise yourself with the city or country you will be visiting. This will provide insights into the local culture, customs, visa requirements, and business etiquette, ensuring that you navigate the environment with confidence and peace of mind. 2. Network strategically Polishing your networking skills is crucial when attending business conferences overseas. Prepare a compelling elevator pitch that showcases your unique value proposition as an entrepreneur in Africa. Be open and proactive in building relationships with individuals from diverse backgrounds. Engage in meaningful conversations, actively listen to others, and seek opportunities to offer value and support. Remember, effective networking can lead to fundraising for your startup, valuable partnerships, collaborations, and mentorship opportunities. 3. Know the local culture A key aspect of successful business interactions abroad is being culturally sensitive. Take the time to familiarise yourself with the cultural norms and etiquette of the host country. Show respect for local customs, traditions, and social norms. Being aware of and sensitive to cultural differences will enable you to establish strong connections, build trust, and foster successful collaborations. 4. Have a collaborative mindset Approach the conference with a mindset of collaboration rather than competition. Embrace the opportunity to connect and engage with fellow entrepreneurs, industry leaders, and potential partners. Seek mutually beneficial partnerships and explore ways to contribute to the global business community. By fostering a collaborative mindset, you can create a supportive network that uplifts and accelerates the growth of all involved. 5. Reserve your flights and hotel early When reserving your flight and lodging, consider practical factors such as the time difference and potential jet lag. Arriving well-rested and adjusted to the new time zone will ensure you’re in optimal condition for the conference. Additionally, look for hotels or meeting spaces that offer amenities tailored to your business needs, such as reliable Wi-Fi, well-equipped conference rooms, on-site printers, fitness facilities, and nearby restaurants with healthy dining options. 6. Pack a variety of clothes When packing for your business trip, pack smartly and consider the nature of the conference and its associated side events. Include appropriate business attire for formal occasions and television appearances. Additionally, pack casual clothes suitable for informal networking or tourism. If you are based in a French-speaking country, remember to bring marketing materials in English to give to potential
Read MoreMeet South Africa’s Google Black Founders Fund recipients
TechCabal spoke to two of the three South African startups selected for the Google Black Founders Fund. Last week, Google announced the startups selected for the third cohort of the Google Black Founders Fund. The $4 million fund seeks to help tackle systemic racial inequality in venture capital (VC) funding by providing equity-free grants and mentoring to early-stage, Black-led, and high-growth businesses across Africa and Europe. This year, 25 African startups were selected, of which 72% are led or co-founded by women. Of the 25, three are from South Africa—Excel@Uni, HealthDart, and ZinaCare. TechCabal caught up with Excel@Uni and HealthDart to get their thoughts on being selected for the programme, the pain points their startups are addressing, how they plan to leverage being a part of the programme, and much more. Excel@Uni In South Africa, only an estimated 26% of university students graduate within the prescribed time for their degree due to high tuition fees, limited access to scholarships and grants, and the need to work part-time or full-time jobs to support themselves or their families. Furthermore, Stats SA indicates that only 2.1% of unemployed people are university graduates, while 7.5% have other tertiary qualifications. The remaining 90% of unemployed people do not have any tertiary qualifications. While tertiary institutions and student funders—bursaries/scholarships—acknowledge the urgency of improving student success rates and career readiness. They however lack the tools, internal resources, and coordination to implement the pillars of student success at scale. Excel@Uni, a South African edtech platform caters to this need by increasing the odds of youths graduating on time, training them to be work-ready, and earning an income from their studies. This is why Lungelo Gumede, CEO of Excel@Uni told TechCabal belives “The status quo has thus failed to produce graduates at the pace and quality required. When underwhelming or stagnant persistence, retention, and completion rates are reviewed, it becomes clear that the funds invested in students today are not realising their full potential.” According to Gumede, being recognised by Google is a form of validation for the startup’s mission. He said funds received from Google’s Black Founders Fund will be used to deepen the startup’s market research. “Being recognised by an organisation like Google is a great form of validation for our mission, so naturally the team is ecstatic to have Google as a partner on our journey,” he told TechCabal. “We hope that it will help us to extend our market reach, as we try to encourage more scholarship donors to provide much-needed funding for tertiary students. We will play our part by using technology to ensure that the processes related to scholarship funding are as seamless as possible, alleviating the admin burden and ensuring that donors receive the return on investment in the form of higher completion stats and work-ready students,” he added. Excel@Uni builds software for student funders in South Africa that helps them to manage their data and make iterative improvements to their student success interventions. In addition to building software, Excel@Uni provides a collection of digital peer-to-peer wrap-around support offerings to assist customers—bursaries/scholarships—to achieve the necessary outcome of career readiness for students. “Our wrap-around support offerings include digitally enabled peer-to-peer private tutoring, peer-to-peer mentoring, career readiness resources and bursary/scholarship administration. We are adamant about taking scholarships and student success to the next level,” Gumede told TechCabal. While Excel@Uni is hoping to explore opportunities beyond its local scholarship market in the distant future, the edtech startup is keen on using Google Cloud’s offering to improve user experience of its app. HealthDart Fifty per cent of South Africans report visiting a pharmacy at least once a month, and 30% of adults are on chronic medication, per this report. However, accessing medication and enabling health consultations are often costly and inefficient processes. By leveraging technology, HealthDart enables patients to save up to 70% on medication and primary healthcare costs while receiving appropriate treatment for their health issues. For Njabulo Skhosana, CEO of HealthDart, it hasn’t been smooth sailing addressing the problem. “One of the key challenges was identifying the most effective approach to streamlining access to medication and healthcare consultations,” he told TechCabal. “Additionally, we encountered difficulties in optimising our technology stack to keep data costs low for lower-income customers. Despite these challenges, we have been dedicated to continuous improvement, actively seeking feedback from users and adapting our solutions to meet their needs.” Being selected as part of Google’s Founders Fund gives HealthDart access to Google’s cloud products and services. For Skhosana, tech-enabled healthcare is the future of healthcare; he asserted that HealthDart is on a mission to leverage technology to improve access to quality healthcare. “Our mission is to improve access to quality healthcare and medication by leveraging digital pharmacy, telemedicine, and health insurance integrations,” he said.
Read MoreSolcon Capital is betting on the future of deep tech. Here is why
A conversation with Andile Ngcaba, founder of Convergence Partners Investments, and CEO Pramod Venkatesh about the company’s rebranding to Solcon Capital. Earlier this month, technology investment firm Convergence Partners Investments announced its rebrand to Solcon Capital. Founded by South African businessman Andile Ngcaba in 2003, the firm was the first vehicle structured as a permanent capital vehicle in the Convergence Partners stable, which focuses on private equity through its current and future digital infrastructure funds. Under the new brand, Solcon Capital will focus on international deep tech investments in generative AI and large language models (LLM), synthetic data and big data, cybersecurity, and quantum computing in South Africa, India, and Southeast Asia. TechCabal spoke to Andile Ngcaba as well as Pramod Venkatesh, the CEO of Solcon Capital, to find out more about the rebranding, the rationale behind investing in deep tech, the potential impact of deep tech technologies in Africa and much more. What was the rationale behind the rebrand from Convergence Partners Investments to Solcon Capital? Pramod Venkatesh: Convergence Partners Investment has been operational in and investing in tech assets, both in Africa and globally, for the last 20 years. As part of that commemoration of 20 years in the market, one of the things we wanted to do was to establish the next rule of how we are going to take this forward. The current strategy for Convergence Partners Investments focuses on bringing technological breakthroughs in terms of infrastructure development, software and everything else into Africa and the rest of the world. As part of the rebrand to Solcon Capital, we have unveiled our 2035 strategy with a core focus on making permanent capital investments in deep tech in markets like India, Southeast Asia and the US. So effectively, we are now moving ahead from being an Africa-focused tech company to more of a global focused company. Andile Ngcaba: In the last 20 years, we have been investing in a number of companies building satellites, submarine cables, and being involved in deep software companies, and many other investments. Convergence Partners Investments, the entity rebranding to Solcon Capital, is a permanent capital vehicle investing on a very long-term basis in the companies we take equity in. We don’t have a timeline for exit and can invest for 15 years and beyond. To explain the name, Solcon is short for solar constant which refers to the measurement of the intensity of sun rays as they go through the atmosphere into Earth. We chose the name because of our involvement in space technologies, and our continued interest in space science. If you look at the logo, it shows 1011, which is a binary code. 10 means two and 11 means three, so the logo is a representation of the fact that the rebranding happened in 2023. Please share more information about Solcon Capital’s 2035 strategy. PV: In coming up with the strategy, we were looking at various different technologies which are going to be prominent in the next 10 to 15 years. And what we did was, we looked at how the market was reacting to those technologies, and also at the company’s growth, and we figured out the four most important areas we are going to be focusing on in terms of the strategy. Those are Artificial Intelligence, Web3, Space Tech, and Cybersecurity. With AI and generative AI, as you can see, that has taken the world by storm. Of course, artificial intelligence is not new but what has happened in the last one year or so is the advanced advent of generative AI, and the accessibility of AI to all right now. It’s already having a huge impact on companies but it is our belief that it’s going to be much more advanced as we move forward. So as part of our strategy, AI will be a focus of ours. The next area of focus in the 2035 strategy is Web 3.0. Now, that focus area does not mean that we’re going to be investing in cryptocurrencies or any of those. Our focus is mainly on the underlying technology, which is blockchain, and we are very bullish on that. What you see now is decentralisation having a huge impact in terms of how we look at certain industries like finance, infrastructure, etc and we will be looking at companies building products around that concept. And then we also have space tech in our strategy. When space tech is mentioned, it is mostly seen as something which is mainly for governments because it is such a massive and capital-heavy industry. But as Convergence, we have actually launched satellites before so for us, space tech is not necessarily about launching satellites, but the data which is being generated. If you look at companies like SpaceX, you see that there is definitely a huge amount of what you call “democratisation of space”, which means now you see private industry players are able to actually launch satellites. In terms of our focus, it’s going to be more on low elliptical orbit satellites. We believe that as time progresses, launching satellites is going to get cheaper so we will leverage that to launch satellites whose data we are going to use to build products and solutions. We understand that there are companies which might be still in the early stage of space tech right now but we do see some mature companies as well which are, for example, building analytics for farmers using the data from space on satellites. Those are the types of companies we will be looking to invest in. Lastly, in terms of areas of focus of our 2035 strategy, will be cybersecurity. As things become smarter, bad actors are also becoming smarter. For example, with the advent of AI came things like deep fakes . As the world gets smarter, the cybersecurity landscape is also going to see a major shift. We are extremely bullish on backing companies building products addressing the need for a safer internet. So in
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👨🏿🚀TechCabal Daily – Eyowo denies shutdown news
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning A reminder that if you’re participating in our referral programme, your referrals will only count if the email addresses are valid, i.e. you can only refer real people. So if you’re creating fake emails from existing domains in hopes of gaming the system, we’ve got bad news for you: it’s not going to work. We’re investing as much time in our stack as Elon Musk is investing in his upcoming match with Mark Zuckerberg. Check out our T&Cs page to see what you should and shouldn’t do. In today’s edition Eyowo denies shutdown rumours Refugees in Uganda get free internet Safaricom leads mobile money race Lagos to cement its position as a frontier tech city The World Wide Web3 Event: The Moonshot Conference Opportunities News Eyowo denies shutdown rumours Digital bank Eyowo has denied news of its shutdown. Yesterday, tech publication Technext, in an exclusive, reported that the Nigerian startup allegedly would shut down on June 27. An email from the startup’s founders attributed the closure to recent “market complications”. Eyowo co-CEOs Yomi Adedeji and Omoseindemi Olobayo, however, told TechCabal that the company has no plans to shut down. Eyowo co-CEOs Omoseindemi Olobayo and Yomi Adedeji Upcoming layoffs and a shuttered project: Olobayo, who confirmed that the company sent emails to employees about significant changes at Eyowo, claimed that the news reports making the rounds misinterpreted the email. Eyowo is decommissioning a product—Kwiksell, a retail management tool and has let go of employees whose roles have consequently become redundant “The company is indeed letting go of employees, but the number is 13 out of the current workforce of 110,” Olobayo said. A new model: Olobayo explained to TechCabal that the company is not dissolving but evolving into a different kind of business and mindset. Co-CEO Yomi Adedeji added, “We started out as an enterprise-focused company, but we have been evolving into a retail business that offers entrepreneurs and individuals a roadmap for their money. Today, we stepped into a new phase, which requires changing our enterprise DNA to a retail-focused DNA.” In a tweet posted last night, the company announced a pivot to a direct-to-consumers (D2C) operating model where it will “deliver revenue to selected entrepreneurs”. It also noted that its product, Eyowo X—which suffered a brief pause after the Central Bank of Nigeria (CBN) pulled its licence in May—would not be affected. Zoom out: Earlier this year, employees at the company revealed that it had suffered several setbacks stemming from struggling products. At the time, the company admitted that its setbacks had caused several salary delays for its employees. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today on moniepoint.com/ng. Internet Refugees in Uganda get free internet Image soucre: Zikoko Memes In partnership with the World Bank, the Ugandan government is set to provide free internet access to refugees in Uganda. The partnership is created through the Universal Digital Acceleration Programme which is set to launch on July 1. Side bar: Uganda is home to most of the refugees in Africa. Many people flee there from unstable countries like South Sudan, the Democratic Republic of Congo, Somalia, Rwanda, Eritrea and Burundi, where political unrest exists. Per the United Nations, in April 2023, the country hosted 1.535 million refugees. More about the free internet: The people in these refugee camps are finding ways to support themselves and the World Bank wants to help them by giving them access to the internet through its Universal Digital Acceleration programme. According to Techpoint, the programme entails expanding the computer lab and providing free internet connection at Refugee and Hope International, a non-profit refugee home in Kampala. Fintech Safaricom leads the pack of mobile money players M-PESA is eating its rivals for breakfast, lunch and dinner. Reports by Kenya’s Communications Authority show that Safaricom’s M-PESA rules the Kenyan mobile money jungle with a roaring 96.5% market share. This leaves Airtel Money with 3.4% of the market and T-Kash of Telkom Kenya with 0.1%. M-PESA continues to lead the mobile money race by a landslide despite all the Kenyan central bank has done to level the playing field for other telecoms providing the same service. Image source: YungNolly What has the central bank done? One of the most notable is interoperability. The Central Bank of Kenya (CBK) lobbied for mobile money interoperability so that customers could access Safaricom bill payment services using either T-Kash or Airtel Money wallets. So far, it looks like Safaricom has taken up the most space in CBK’s lobby. Winning on every side: Safaricom is at the forefront of the subscription game with a staggering 43.7 million users. Its competitors—Airtel Kenya, Telkom Kenya, Equitel, and JTL—follow behind with 17.6 million, 2.7 million, 1.5 million, and 368,250 SIM subscriptions, respectively. It is also the only operator that offers 5G commercially. So, if you spot a Kenyan rocking a shiny new 5G device from Xiaomi, Samsung, or Apple, chances are they’re using Safaricom. Airtel and Telkom have their work cut out for them, it seems. Economy Lagos to cement position as frontier tech city Image source: TechCabal According to Disrupt Africa, startups based in Lagos accounted for over 87% of total tech startup funding in Nigeria, as of 2022. In the same year, the startup ecosystem in Lagos was ranked 82 out of 100 globally, from 41 the previous year, according to StartupBlink Global Startup Ecosystem Index 2023. Of course, the ascendancy of Lagos as an African tech powerhouse can be attributed to two key factors. First, the number of tech hubs in the city has grown from 10 to 85 in five years. Second, Lagos boasts a large pool of tech talent, with 67% of Nigeria’s developers choosing to stay in the city, as reported by a survey conducted by DevCenter. Amid this digital evolution, the Lagos
Read MoreExclusive: Eyowo denies reports of a shutdown as it lays off 13 employees
Digital bank Eyowo has denied the reports claiming that it is shutting down on June 27. The CEO and founder confirmed that instead, the firm is decommissioning a product and letting go of about 11% of its employees. The Softcom-owned digital bank Eyowo has denied reports of a shutdown. Earlier today, TechNext published a news report claiming that Eyowo will shut down on June 27. A screenshot of an Eyowo email to employees accompanied the report. The email referenced an upcoming round of layoffs. Part of the email also said, “We are wrapping up Softcom and Eyowo as you know it.” Despite the email’s phrasing, Eyowo told TechCabal that it is not shutting down. The company’s executives clarified that the company is decommissioning a product—Kwiksell, a retail management tool and has let go of employees whose roles have consequently become redundant. The CEO of Eyowo, Omoseindemi Olobayo, speaking to TechCabal, confirmed that they sent emails to employees about significant changes at Eyowo. He, however, claimed that the news reports making the rounds misinterpreted the email. “The company is indeed letting go of employees, but the number is 13 out of the current workforce of 110,” Seinde said. The email published by TechNext read, “We are wrapping up Softcom and Eyowo as you know it. This means all our processes, procedures, responsibilities, and departments have now been dissolved.” Olobayo explained to TechCabal, “The company as an entity is not dissolving but evolving into a different kind of business and mindset.” The CEO Yomi added, “We started out as an enterprise-focused company, but we have been evolving into a retail business that offers entrepreneurs and individuals a roadmap for their money. Today, we stepped into a new phase, which requires changing our enterprise DNA to a retail-focused DNA.” The company confirmed that although the email mentioned dissolving departments, they are letting go of thirteen employees out of the 110 currently working there. “We are decommissioning a product, and that means some roles will no longer be needed. Additionally, when we mentioned dissolving departments in the email, it signifies that the team will no longer work in silos but will function in a closer and more integrated manner.” *This is a developing story
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