This SA startup plans to eliminate digital payments failure in Africa. Here is how
Revio is a South African fintech startup looking to address digital payments failure on the continent. The startup has raised $1.1 million to expand its market presence. According to recent data, three out of every 10 digital payments in Africa fail. Causes of failure range from a fragmented payments landscape and invalid cards to dormant accounts and high dispute rates. These failures contribute to a $14 billion loss in recurring revenue for digital businesses across the continent annually. Revio is a South African fintech startup trying to address this pain point. It was founded in 2020 by Ruaan Botha after seeing how much time and manual effort businesses spend in engaging customers on outstanding and failed payments. The startup raised $1.1 million in November which it has used to drive its presence in other African markets including Nigeria. TechCabal caught up with Nicole Dunn, Revio’s Chief Commercial Operating Officer, to discuss the startup’s payments solution, its expansion ambitions, raising funding in a downturn, and the state of payments on the continent. Please tell us more about Revio and the problem the company is trying to address. Nicole Dunn: When we look at the African continent, we’ve had really rapid digitisation of historically cash economies in the last 10 years or so with pioneers like Flutterwave and Paystack really laying the groundwork for digital payments. But with that, and with some of the national sort of focus on financial inclusion, there’s been huge fragmentation that has resulted. We’ve got 54 markets, very different markets and 42 different currencies. But a stat you might not know is that we’ve got more than 280 different registered payment service providers, and that number is growing every month, if not every week. And so as a business looking to do the single most core thing I need to do as any company, which is collect revenue from my customers, I’m confronted with huge complexity on multiple levels. I not only need to incur the search cost of which are the most locally relevant and reliable payment methods in each market, I also have to negotiate with each of those gateways. And that’s not a one-off project. It’s an ongoing operational burden or headache I need to incur because APIs change, there are unique settlement flows, there are unique settlement structures and fee structures. And even if I get all that right, what we see is in African markets, payments fail more often than anywhere else in the world. We’re seeing on average a failure rate of 30% on recurring payments. In some markets that’s even higher, reaching 50%-60%. And there are also other payments that are specifically risky. For businesses, like insurance businesses, a first premium payment often has a success rate of less than 30%. And so really, what we are tackling at Revio is this fragmentation and failure problem where businesses are unable to collect revenue from their customers. Failures can be for a host of reasons including technical failures and connectivity issues. It can also be customer related, where it’s a cash flow issue on the consumer side, or you’re trying to debit from their bank account, but they’re predominantly cash or mobile money based. So, we’re really bridging that gap to help businesses localise their payments stack and collect revenue at scale. What challenges have you faced in trying to address these challenges and how have you been trying to address those challenges? ND: I think it’s been interesting for us to just discover how unique each market is in terms of the payment cultures, and the payment preferences. So even within a market, you can have high fragmentation where a different payment method is preferred for a higher-value payment versus a lower-value payment. So in South Africa, you have debit order as the most popular payment method for recurring payments, but then we see the card and instant EFT growing in popularity for one-off e-commerce payments. And so there’s just a kind of infinite complexity that exists here. So the way we have tackled this is through partnerships and leveraging what the gateways do very well, which is payment acceptance capabilities. So our platform has a single API that is pre-integrated with the best gateways and each of the markets that we’re currently operating in and where our clients want us to operate. We aggregate those payment gateways so that we’re not reinventing the processing infrastructure that is already there. But we are also abstracting the complexity that’s around that. So for technical failures, building optimisation, like smart transaction routing to route transactions to the gateway, where they’re likely to have the highest success rate, or being able to dynamically fail over, set up different business rules for transactions, and really understanding the root causes of the failure. If it is a customer-related issue, it’s about being able to trigger an engagement with that customer to prompt them to do something that remedies the problem. So that’s really our approach in brief. In November, you raised $1.1 million. What was your experience raising funds in a downturn? So we announced the round in November but we actually closed the transaction a little bit closer to July. So we really went out into the market as the downturn started and it was really, really bad. And it was particularly painful for me because a year prior, I had been on the venture capital side and saw deals happen at hugely inflated valuations. And now I had to give away a piece of our company for much less than I knew companies with much poorer fundamentals had gotten away with the year before. So personally, that was really difficult to make peace with. But there is some positive change from that downturn in that companies now have to focus on unit economics and shift away from growth at all cost. And so if you can demonstrate an understanding of your business model, and how that will ultimately scale into profitability, there
Read MoreNigeria’s Gen X and baby boomers are finding joy and community while creating content on TikTok
As video social media apps such as TikTok become more popular, older adults are challenging the notion that these platforms are reserved for younger people. They are using the platforms to learn, find community and foster connections. Like most parents, Hajia Jarumai, a restaurant owner in Abuja, frowns at how much time her daughter spends on social media apps. She is especially worried that her daughter, Sarah, spends all day watching TikTok videos. But all that is changing now that Hajia is on TikTok, joining a small group of Gen X and baby boomers on the video-sharing platform. The numbers say that 14% of TikTok users are between the ages of 40 and 49, and only 7% are over the age of 50. Today, Hajia, like her daughter now spends time watching and swiping videos on TikTok—but it wasn’t love at first swipe. Hajia told TechCabal, “I first joined in March 2022, but I hardly went on there because I didn’t like the kind of videos they were showing me.” At the time, the app often showed her dancing videos but soon, the algorithm learned that she preferred cooking videos and comedy skits. Hajia estimates that she spends about four hours a day on TikTok. “Before TikTok, I used to watch cooking videos on YouTube to improve my business. But I prefer TikTok because the videos are shorter and more interesting.” Hajia also shares some of the videos she finds useful to her staff as a way to encourage them to join the app and learn new recipes.” Bimbo, a fifty-three-year-old woman who lives in Kaduna admits she’s addicted to TikTok. “You think you’re only going to watch one video and next thing you know, it has been over four hours. I once watched the entire season of a show on TikTok!” But it’s not only about fun for Bimbo. In TikTok, she has found a community that helped her through a difficult period. “When I was going through a hard time in my marriage and the death of my baby, TikTok really helped me. I found videos of mature people like me—even older—sharing their experiences and also sharing advice for people going through similar situations.” Despite spending a lot of time on the app, Bimbo hasn’t created any videos. “I don’t have the skill or the confidence to do that. Recording videos for these apps look like they take a lot of time and effort, and I’m not sure that I can do that,” she said. Unlike Bimbo, Aanu, a 50-year-old certified menopause well-being practitioner and content creator has about 360 videos on TikTok and 16,400 followers. She says that content creation can be challenging and time-consuming, especially for older people who are not as tech-savvy as the younger generation. “We weren’t born in the computer age and so navigating these devices and platforms takes a lot of effort and practice.” Aanu began creating content on TikTok and other platforms in 2022. Having taken the jump to create content, she’s passionate about reaching more people and growing her community. “I started out creating content on perimenopause for younger women, but I received an overwhelming amount of feedback from older women sharing their stories. Now, I also create content for older women going through menopause and content to help older women in their 50s stay fit and healthy.” Research suggests that adults in their 40s and 50s can benefit from interactions on social media apps. According to this report, adults experience a peak in loneliness as they approach their late-40s to mid-50s and psychiatrist Philip Jestes says this loneliness is sometimes caused by a decline in social interactions. Cole, a 63-year-old professor in Freetown, Sierra Leone, is no stranger to loneliness. He has three children, all of whom are in universities abroad. Two of his three children are content creators. Since retirement, Cole takes care of his guinea pigs and visits friends occasionally. TikTok and Instagram help him stave off boredom and lets him stay in touch with family. “I watch a lot of videos of people travelling to new places and doing new things. My family and friends are all on TikTok and Instagram as well, and I go there to catch up with them and see what fun things they’re up to. They’re not here with me so these forums show me what they’re up to and I do not get to feel left out of their lives. I enjoy seeing the interesting videos about what they’re eating, where they’re going, what they’re doing.” But it’s impossible to talk about TikTok without highlighting the many privacy concerns that policy analysts have with the app. Robert Potter, the CEO of Internet 2.0, claims TikTok has significantly more permission than it needs when the app is launched on a device. This makes the app a good place for scam artists who target vulnerable older people. Cole’s daughter Kayla, who’s also a content creator, isn’t worried about her father being on TikTok. She teaches him about staying safe online and emphasises the need to not share his location or other personal details. If anything, having her dad follow her on TikTok makes her “hyper-aware” of the kind of content she posts and shares. Ultimately, while TikTok has been linked to mental health problems like anxiety and depression in younger adults, an analysis claims that older people don’t have the need for validation younger people experience on the app, making it easier for the platform to provide for them a stronger sense of community and self-discovery.
Read MoreTechCabal will host its flagship tech conference, Moonshot, in October
For the past 10 years, TechCabal has been committed to the African tech ecosystem through consistent reporting and relevant industry events. This year, TechCabal will bring together all of the relevant stakeholders in the African tech space in what will be its biggest conference ever. TechCabal will host Moonshot, an event that will convene the most audacious players in Africa’s tech scene, from founders to business leaders; startups to enterprise companies; venture capitalists and government officials. In this completely physical two-day event, attendees will network, collaborate, share ideas, and celebrate innovation on the continent. There will be a host of activities, including exhibitions, product and investor-pitch showcases, and the opportunity to interact with key stakeholders in the African tech ecosystem. In the span of two days, Moonshot will feature five content tracks (mini-conferences) namely: Future of Commerce: Our flagship conference, which debuted in 2021, will now be part of our bigger conference, Moonshot. It will feature themes such as financial inclusion, fintech, logistics, and e-commerce. Emerging Tech Fest: This will be a mini-conference focused on exciting topics such as artificial intelligence (AI), machine learning, Web3, crypto, the metaverse, and other future tech. Startup Festival: This track will focus on all things startups, including workshops and founder-consumer interactions. It will feature a startup clinic, as well as activities around venture capital and talent discovery. Big Tech & Enterprise Conference – This track is dedicated to themes in big tech like telecoms, broadband, and energy, etc. Entering Tech Festival – This is a mini-conference targeted at students and entry-level professionals. There will be conversations around exciting trends for young people, including content and gaming, among others. Moonshot is a conference for everyone—tech enthusiasts, founders, investors, and policymakers. You can join the waitlist here. We’re open to sponsorship and content partnership opportunities for the various activities that will take place during the Moonshot conference. For more information on partnership opportunities, please send an email to ads@bigcabal.com.
Read More
Flutterwave wants to make Kigali its settlement hub in East Africa
Kigali wants to establish itself as a leading technology centre for African companies. Flutterwave, like several of Africa’s biggest fintechs, is turning to the ambitious East African country to give their operations a surer footing. Flutterwave has been operating in Rwanda since 2020. But now the company wants to deepen its roots in the landlocked East African country by making it a settlement hub for payment operations in the region. In April 2023, several media outlets quoted Oluwabankole Falade, Fluterwave’s chief regulatory and government relations officer as saying that Flutterwave was committed to opening a Kenya office and making it the company’s regional hub. But the fintech has struggled to get a payment provider licence in Kenya amidst a spate of lawsuits and allegations of money laundering. Flutterwave has refuted the allegations and while some of the lawsuits have been withdrawn, other existing lawsuits which continue to make their way through Kenya’s legal system. Kigali scores a win with Flutterwave In March, Flutterwave announced that it had acquired Electronic Money Issuer (EMI) and Remittance licences in Rwanda. Both licences allow Flutterwave to hold money in wallets (like mobile money providers) and also process cross-border transactions. Flutterwave’s history with Rwanda dates back to 2019 when the company acquired a payment service provider licence in 2019. It was the first African country where Flutterwave got a payments provider licence after Nigeria. “Rwanda is big for us because it is one of the only markets where we have every licence you can think of,” the Flutterwave chief executive enthused. “We’ve got plans to have a financial operations centre set up in Rwanda, where all our settlement across the region goes from here. Everyone has supported us to make that happen. So it makes sense to put something in this market and scale it from here,” Agboola told TechCabal. “It’s not about the size of the market, it’s about market readiness. They’re ready here,” he added. While Agboola admits that “Rwanda is a small market,” he acknowledges that the East African country has ambitions of being a premier destination for foreign investment funds management into Africa. African fintechs are turning to Kigali ChipperCash which announced its entry into Rwanda is one of the fintechs attracted by the landlocked country’s fintech support system. Like Flutterwave, other African fintech companies are turning to Kigali as they expand across Africa. Unlike Egypt, Nigeria, Kenya and South Africa, Rwanda has neither the population nor the economic prowess to make acquiring licences in Rwanda a priority. A GDP of $11 billion caters to 13 million Rwandans. Namibia with a comparable GDP has only 2.5 million people. Namibia has an extensive South Atlantic coastline, a strong mining industry and two ports. Rwanda relies on imports through Dar es Salaam and Mombasa. But a series of strong regulatory reforms and an ambitious push to become an international financial centre catering especially to financial technology firms has won the appeal of fintech firms in Africa. “In the last 3 years, Rwanda’s government approved 19 laws designed to ease business and make the country an attractive destination for firms that want firm legal and governance frameworks for their African operations,” said Jean-Marie Kananura, acting chief investment officer for KIFC. KIFC’s parent body, Rwanda Finance Limited, is headed by Tidjane Thiam, former chief executive officer of Swiss bank Credit Suisse. MFS Africa, NALA and ChipperCash (which launched operations in Rwanda this week) are among some of the fintech companies that have recently created Rwandan operations. At the just-concluded Inclusive Fintech Forum in Kigali, which had in attendance, the presidents of Rwanda and Zambia, MFS Africa founder and CEO, Dare Okoudjou asked both presidents to create bilateral agreements that would allow fintech licence “passporting”. This would at least in theory mean that a fintech licenced in Zambia could use the same licence in Rwanda because their regulatory regimes have been harmonised. Kigali has found support for its ambition in the middle east and Southeast Asia. It is deepening its relationship with the Qatar Financial Centre, Britain’s Jersey Finance, and Singapore’s Monetary Authority (the body in charge of Singapore’s International Finance Centre). At the forum this week, it signed an MOU with the Africa Business Angel Network (ABAN). The MOU TechCabal learned, means the angel investment network will be able to structure its special purpose investment vehicles (SPVs) in Rwanda. Kigali’s International Financial Centre is only 3 years old (it was launched in early 2020). But it has moved at a rapid pace to reform or create new laws and build partnerships and people are taking notice. In the latest Global Financial Centre Index published by Z/Yen, a City of London commercial think tank, Kigali ranks above Kuwait City in the middle east, Nairobi and Lagos only behind Mauritius, Cape Town and Johannesburg.
Read MoreFlutterwave and Microsoft enter 5-year strategic partnership
Flutterwave’s technological partnership with Microsoft will power the fintech’s payment beyond Africa. Flutterwave has entered into a five-year technological agreement with technology giant, Microsoft. The partnership will see the fintech company build a new generation of payment services on Microsoft Azure, powering payments infrastructure across the African continent and beyond. This partnership, according to a statement forwarded to TechCabal, will enable the African payment firm to service multinational firms. Some of them include facilitating payments of Uber, Netflix, and Microsoft, solidifying Azure’s role in facilitating a seamless, reliable, and secure payment experience. Flutterwave looks to onboard its products such as Flutterwave for Business, Send by Flutterwave, Flutterwave Store, and Flutterwave for Fintech Platform, onto Microsoft’s Azure Cloud Platform. The goal is to offer payment services to-and-from Africa. On the part of both sides, this is a welcome development. Microsoft Corporation General Manager, Mike Gaal notes that the partnership is motivated by the support Microsoft Azure provides for Flutterwave’s core operations. “Our mission is to empower every person and every organization on the planet to achieve more. Working with Flutterwave will take us a step closer to achieving our mission In Africa,” Gaal said. CEO of Flutterwave, Olugbenga Agboola acknowledges Microsoft’s support in their success story. “As we manage high-volume payment processing, particularly during peak periods, the robustness, reliability, and scalability of Microsoft Azure becomes critical. As such, deepening our collaboration with Microsoft is the most logical step forward for us,” Agboola said. Flutterwave’s Chief Technology Officer (CTO), Gurbhej Dhillon is hopeful the partnership can scale their platform. “Their platform (Microsoft) provides us with significant developer leverage, which we can harness in service of our clients. Looking to the future, we are excited about the possibilities of scaling with Azure OpenAI Service, which will enable us to serve even more merchants worldwide,” Dhillon said.
Read More
👨🏿🚀TechCabal Daily – Another Pricey load-shedding loss
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF The rich are beating themselves…or at least they want to. Billionaires Elon Musk and Mark Zuckerberg have expressed interest in fighting one another. Elon Musk, on Wedneday, tweeted that he would be “up for a cage fight” with Zuckerberg, and the Meta CEO shot back by posting a screenshot of Musk’s tweet with the caption “send me location.” Now the world waits with bated breath to watch what will possibly be the shortest match in history. In today’s edition Mr Price blames load-shedding for $54 million loss Safaricom forms partnership to tackle M-Pesa fraud Student expulsion in Nigeria sparks digital rights debate Funding Tracker The World Wide Web3 Event: The Moonshot Conference Job openings Retail Mr Price blames load-shedding for $54 million revenue loss According to its latest financial results released on Thursday, South African retail giant Mr Price lost R1 billion ($54 million) in revenue. The company cites load-shedding as the major cause of the loss as a result of over 318,000 of trading hours lost in the past financial year. Image source: Zikoko Memes It’s all load-shedding’s fault: Additionally, the company stated that the indirect impacts of load-shedding such as changing customer shopping behaviour and lower levels of consumer confidence, as well as the need to mark down unsold stock, further exacerbated the company’s poor performance. To counter the impact of load shedding on its operations going forward, Mr Price stated that it has accelerated its energy continuity roll-out plans and invested R220 million in backup solutions, including inverters and batteries, which will cover all its stores by the end of June. Zoom out: Mr Price joins other publicly traded companies including MultiChoice, Vodacom, Telkom, and MTN, who have blamed their suboptimal performances on load-shedding. 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. Cybersecurity Safaricom forms partnership to tackle M-Pesa fraud Image source: GIPHY The Directorate of Criminal Investigations (DCI) and Safaricom have joined forces to investigate M-Pesa fraud conducted through the telco’s mobile network. Today, over 30 million people use M-Pesa in Kenya. M-Pesa has been huge for Kenya’s economy and, unfortunately, for scammers too. Numerous fraud allegations: Safaricom has faced multiple M-Pesa fraud allegations, including SIM swap fraud, where fraudsters replace and take over a customer’s line, and a fraud network that exploits the Fuliza service—a Safaricom M-Pesa overdraft feature—to illicitly steal money. Measures taken: Although Safaricom introduced measures to curb sim fraud, the telecom and security agencies acknowledge the importance of adopting a new approach. A key aspect will be fostering information sharing. Both parties will join forces to raise awareness and educate the public about digital crime. Through diverse platforms, including social media, they are dedicated to informing the public on identifying and avoiding potential traps. The telco, relevant authorities, and millions of M-Pesa users share the hope that this partnership will yield tangible results and benefits for all parties involved. Digital rights Student expulsion in Nigeria sparks digital rights debate At the University of Abuja in Nigeria, a student sent a WhatsApp message that invoked an expulsion and a debate on digital rights. Cyprian Igwe, a student union executive and sociology major, sent a message to the Student Union’s WhatsApp group stating his displeasure at the university’s decision to increase tuition fees by 50% on April 29, 2023. That message got him expelled. Image source: GIPHY Why did he get expelled? Cyprian was accused of circulating an “inciteful press release”, in a suspension letter signed by Alkasim Umar, the university’s deputy registrar. Part of the letter states, “Your actions are capable of jeopardising the peaceful smooth conduct of academic activities in the university and a breach of the university matriculation oath. By the powers conferred on the vice chancellor, as contained in the University of Abuja Act, he on behalf of the senate, has directed your immediate rustication from the university. Accordingly, you are banned from all university campuses pending the determination of the case.” A stroke of luck: Fortune smiled upon Cyprian in May 2023 when his tweet gained traction among journalists and activists. The subsequent media frenzy exerted enough pressure on the university, compelling them to backtrack on their decision and re-admit Cyprian as a student. Similar cases: Aderemi Ojo, the former President of the University of Ibadan student Union was expelled after a 2017 protest. Similarly, in 2010, four student union leaders at the University of Nigeria faced expulsion for protesting against a tuition fee increase. Zoom out: Observers, including journalists and lawyers, argue that the university’s actions violated Cyprian’s digital rights, encompassing freedom of expression and privacy. The perplexing aspect remains how the University authorities discovered Cyprian’s message within a private WhatsApp group. TC Insights Funding Tracker Image source: TechCabal Insights This week, South African solar energy company Yellow raised $14 million in Series B funding, in a round led by Convergence Partners. Other participating investors include the Energy Entrepreneurs Growth Fund and Platform Investment Partners. Here are the other deals this week: Nigerian electronics B2B marketplace Eze received $3.7 million in seed funding. The round was led by Right Side Capital Management, and other participating investors included C2 Ventures, Boro Capital, EVPI Investments, and several angel investors. Egypt’s fintech company Agel raised an undisclosed amount in pre-seed funding led by Plus Venture Capital (+VC), Seedstars International Ventures, and Flat6labs. Other participating investors included SEEDRA Ventures, Banque Misr Acceleration Program, and angel investors. That’s it for this week! Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. You can also visit DealFlow, our real-time funding tracker. Download the Citizen Election Report The Citizen Election Report is now out! This is a go-to guide for navigating Nigeria’s political scene. It offers valuable insights into Nigeria’s political history, analysis of political parties and key events, elections, governance, and how young people can shape
Read MoreTelkom Kenya’s network outage blamed on tower blackout by American company
Multiple entities have owned Telkom Kenya over the years. Currently, the government runs the carrier, but poorly. Will it ever catch a break? Telkom Kenya is the country’s third-largest operator behind Safaricom and Airtel Kenya. Its operations have been marred by interruptions and customer complaints over the last couple of days. It has a little over 3 million mobile subscribers as of December 2022. Safaricom leads with about 65 million subscribers, followed by Airtel Kenya at under 18 million. Over the last few days, the telco has been unable to say which areas and services have been affected explicitly. Tower shutdown In 2018, Telkom Kenya and the American Tower Corporation (ATC) announced a deal that would see ATC acquire up to 723 towers from Telkom Kenya. The transaction was expected to improve Telkom Kenya’s network quality and reliability and expand ATC’s presence in Kenya. The deal was completed by the end of 2018. According to people familiar with the matter, Telkom had anticipated that it would cut operational costs by selling its towers and leasing them from whichever company owned them. According to a report published by Kenya Broadcasting Corporation (KBC), Telkom Kenya owes the ATC KES 200 million ($1.4 million). These charges haven’t been remitted to the tower company, which has reportedly switched off half the masts leased to Telkom. The tower blackout is what has been causing interruptions within the Telkom network. TechCabal wanted to substantiate these claims, but a statement, signed by the telco’s CEO Mugo Kibati, reads, “Service provision has been impacted in some parts of the country resulting in service degradation. We apologise for the inconvenience caused to our esteemed customers. Telkom is actively engaging all stakeholders to restore the impacted services. Telkom Kenya and its stakeholders are in the midst of reviewing the short to long-term strategic imperatives that will improve and guarantee services to our esteemed customers.” How did Telkom get here after years of promises and network improvements? Why do customers report the same network concerns that were promised to be addressed years ago? Could the latest network blackouts be related to possible tower shutdowns? A brief ownership history of Telkom Kenya In 2022, the Kenyan government acquired a majority stake in Telkom Kenya. The deal was seen as a way for the government to boost Telkom Kenya’s performance and competitiveness in the telecoms market. This was not the intended goal, following conflicting reports that were revealed later. Telkom Kenya has been and continues to struggle to compete with market leader Safaricom. The government hoped that by acquiring the carrier, it would be able to turn it around. The deal was reportedly worth KES 6.09 billion ($43 million). Telkom Kenya, formerly known as Orange Kenya, was one of the three mobile operators in Kenya when it seriously sought to enter the telco space in 2007 after France Telecom acquired more than half of the company’s shares and named it Orange Kenya. Going back a few years, Telkom (basically Kenya’s first operator) is the predecessor to Safaricom. Safaricom was opened as its subsidiary in 1997 before it was purchased by Vodafone in 2000. Nevertheless, Telkom (then known as Orange Kenya) was acquired by Helios Investment Partners in 2016 and rebranded back to Telkom Kenya in 2017. It was also the second telco in Kenya to roll out 4G services in 2018 after Safaricom. After revamping it from Orange Money, Telkom operates a mobile money product called T-Kash. Both T-Kash and Airtel Kenya’s Airtel Money have been unable to match Safaricom’s M-PESA, which continues to lead Kenya’s mobile money space. According to the Communications Authority of Kenya’s sector statistics, M-PESA leads the pack at 96.8% in subscriptions, followed by Airtel Money at 3.1%. T-Kash closes the chart at 0.1%. Multiple publications have mentioned the controversial acquisition of Telkom Kenya, which did not receive approval from the company’s board, according to reports. The board members did not authorize the deal, which gave the government full ownership of Telkom. This development raises questions about the acquisition’s legitimacy and whether the government should bail it out of its financial constraints. It would also be interesting to see how Telkom will untangle itself from its current mess.
Read MoreTuma raises the largest round for a Congolese fintech startup
Tuma, a Congolese fintech startup, has raised the largest investment round in fintech for the Congolese tech ecosystem ever. Tuma, a fintech startup in the Democratic Republic of Congo (DRC), has raised $500,000 in funding—the largest investment round for a Congolese fintech ever. The round saw participation from Visa, Visible Hands, and the Social Justice Fund. The two-year-old startup says that the funding will allow it to expand into other markets and improve its product offerings. Last year, according to Partech, the Congolese startup ecosystem raised $38 million (98% went to crypto firm Jambo) in funding after raising $1 million in 2022, making it the 11th most funded African country. Much of this funding has gone into the fintech industry, as the country’s financial system remains incapable of solving its problems. The country’s bank penetration rate hovers around 6%, and only 25% of the population has an account with a financial institution. Founded by Elijah Lubala and Mpilo Makae, Tuma is trying to bring financial inclusion to Congo by providing a digital solution that allows merchants to receive card payments on their phones. Almost half of the country has a mobile phone. Using software POS technology, the startup can transform any phone into a POS by allowing customers to tap their cards on the back of the phone. Tuma has partnered with other financial institutions like UBA Bank Group, Credit Bank Kenya, InTouch, Appiawave, Cellulant, and Seerbit to make this possible. Tuma’s funding comes after the DRC government introduced a startup act last year. The startup bill was signed into law on September 8, 2022, by President Felix Tshisekedi and was designed to attract investment and support the tech innovators and entrepreneurs contributing to the country’s digital transformation. “This act and other steps by the DRC government will help put the country back on the map of credible African tech ecosystems with a visible legal framework, making it easier for investors to come in,” Hannah Subayi, co-founder of DRC Impact Angels, told TechCabal last year. With Tuma’s funding, it seems like Subayi was right.
Read MoreOne year after expanding to Nigeria, Crypto platform Pillow is exiting the country
Crypto startup Pillow which enabled users in Nigeria and Ghana to save and invest crypto assets ceases operations, cites regulatory climate as the reason. The Singapore-based crypto startup Pillow recently announced its decision to discontinue its services, a year after expanding its services to Nigeria and Ghana. The startup offered features such as saving, spending, and investing in cryptocurrency, attributed its closure to the “current regulatory climate and its impact on associated financial infrastructure.” Pillow disclosed this via in-app message to its user base, reportedly over 75,000 individuals across 60 different countries, asking them to withdraw their funds promptly. To facilitate the process, the company has set a deadline of July 31st, 2023, for users to withdraw their holdings. While the app will be removed from the Play Store by that date, the platform plans to suspend bank withdrawals on July 7th, with crypto withdrawals to follow on July 31st. The company’s founders, Arindam Roy, Rajath KM, and Kartik Mishra, have not publicly announced the news, but the closure marks the end of Pillow’s mission to provide a means for individuals in emerging markets to combat inflation. The startup had raised approximately $21 million from 15 investors to support this goal. Pillow’s decision is arguably a surprising turn of even as a few months ago, the startup was advertising job vacancies. However, this highlights the pressure faced by crypto startups in navigating regulatory environments, across the world.
Read MoreMr Price records R1 billion loss in revenue, blames loadshedding
According to its latest financial results, Mr. Price has lost R1 billion in revenue as a result of loadshedding. South African retail giant Mr. Price cites loadshedding as the major cause of the company’s loss of R1 billion in revenue, as a result of over 318,000 lost trading hours in the past financial year. Additionally, the company stated that the indirect impacts of loadshedding such as changing customer shopping behavior and lower levels of consumer confidence, as well as the need to mark down unsold stock, further exacerbated the company’s poor performance in the second half of the year. While revenue for the year through March rose by 17%, Mr. Price reported a 7% drop in net income and its full-year dividend of 7.596 rand per share. “The potential higher stages of loadshedding throughout winter threaten to extend this disruptive retail cycle. Loadshedding has become a permanent and tiresome obstacle to businesses in South Africa and the cost of doing business has materially increased, stifling economic growth,” the company statement read. To counter the impact of loadshedding on its operations going forward, Mr. Price stated that it has accelerated its energy continuity roll-out plans and invested R220 million in back-up solutions including inverters and batteries, which will cover all its stores by the end of June. Mr. Price joins other publicly traded companies including Multichoice, Vodacom, Telkom, and MTN, who have blamed their suboptimal performances on loadshedding.
Read More