Meta targets comms teams in layoffs
Meta’s director of communications in sub-Saharan Africa has reportedly been laid off. In the coming weeks, the corporation will reportedly target additional comms teams in Nigeria, Kenya, and South Africa. Meta’s latest round of layoffs was done last week after multiple former workers posted on LinkedIn that they had been let go. The firings were announced in March 2023, when Meta, the parent company for Facebook, Instagram, and WhatsApp, among others, announced plans to trim its workforce following mass hiring during the pandemic period that saw the corporation boost its workforce twofold. The round has reportedly affected Kezia Anim-Addo, Meta’s director of communications in Sub-Saharan Africa. Anim, who joined Facebook in 2017 as Africa Communications Manager, grew through the ranks and was promoted to her now-former role less than two years ago. However, our source tells us that she might not be the only person who will be shown the door by Meta, which is known for its popular social media platforms. Reportedly, Meta will likely cut numbers in communications across the African market, particularly in South Africa, Nigeria, and Kenya. According to sources, the adjustment will be made over the next month. The exact number of people affected is unknown, but they will be part of the 10,000 workers Meta had revealed it would let go. Kenya’s case is interesting because Meta has been battling a controversy with content moderation company Sama. Sama stopped working with Facebook due to the emotional toll and harmful effects of constantly reviewing disturbing content on the platform. Sama presented the challenges faced by content moderators, including the negative impact on mental health and the lack of adequate support from Facebook. Sama’s decision to leave highlighted the ongoing issues surrounding content moderation and raised concerns about the well-being of those responsible for moderating online content. Towards the end of 2022, Facebook joined the tech layoffs bandwagon, which saw the company fire 11,000 people. Once the current wave ends, it will have let go of more than 21,000 employees. Other companies which have since laid off workers by large numbers include Amazon at 18,000, Google at 12,000 and Microsoft at 10,000 employees.
Read MoreLoad shedding slowing down SA’s economic growth, according to reserve bank
According to the South African Reserve Bank’s (SARB) Financial Stability Review, load shedding is expected to detract two percentage points from the country’s overall economic growth this year. Furthermore, SARB also states that load-shedding may add 0.5 percentage points to headline inflation in 2023. This is because the high operating costs of running diesel generators are passed to consumers, and higher rates of wastage and spoilage, especially along food value chains, lead to possible goods shortages. The reserve bank also noted that load shedding will likely adversely impact other macroeconomic variables. These include causing a contractionary effect on growth that could hamper a sustained recovery in employment—causing unfriendly investor sentiment which would raise South Africa’s risk premium and pressure on the exchange rate. “The transition of households to alternative energy sources is likely to widen the already skewed income and development distribution in South Africa, as it is mainly middle- to high-income households that can invest in alternative energy sources, while poorer households are largely without recourse,” the bank said in the review report. A risk to financial stability SARB states that load shedding continues to act as a risk factor to the country’s financial stability. To start with, the prevalence of higher stages of load-shedding poses an immediate risk to the efficient functioning of infrastructure such as automated teller machines (ATMs) and cellular networks, which are crucial for the smooth functioning of the financial system. Load shedding also contributes directly to increased insurance claims and higher excess costs as outage-related claims from households and businesses mount. It has led to an increase in the number of insurers excluding load shedding-related claims from insurance policies. Despite the announcement of mitigation efforts for load shedding during the country’s budget review this year, SARB only expects the efforts to start bearing any fruit in the next 12 to 18 months. This means load-shedding will remain severe and impact economic activity negatively over at least the next 12 months. Getting ready for the worst-case scenario According to the governor of the central bank, Lesetja Kganyago, the bank’s Financial Sector Contingency Forum (FSCF) is working on a contingency plan for the ‘unlikely’ but not ‘impossible’ scenario of a national grid failure. “In line with the role and function of the FSCF, current efforts are centred on developing, coordinating and testing contingency plans to mitigate the impact of a national grid shutdown on the financial system and the economy,” said Kganyago. Earlier this month, Eskom warned that it might need to implement high stages of load shedding in order to meet surging demand during the winter months but refuted claims of a possible grid collapse.
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👨🏿🚀 TechCabal Daily – MultiChoice’s Moment
Lire en français Read this email in French. 30 MAY, 2023 IN PARTNERSHIP WITH Good morning WhatsApp is morphing into Zoom. It’s reportedly working on a feature that will allow users share their screens during video calls. WhatsApp is also testing out usernames for increased privacy, so users can share usernames instead of phone numbers. In today’s edition MultiChoice moves to fintech Nigeria’s new president wants a unified exchange rate Ghana launches new cybersecurity platform The World Wide Web3 Event: The Moonshot Conference Opportunities MULTICHOICE MOVES TO FINTECH The big screen isn’t enough for South Africa-based broadcasting company MultiChoice Group. Yesterday, the company announced its foray into fintech with the launch of Moment, an integrated payment platform for Africans. According to the company’s statement, “Moment offers expanded payment infrastructure for businesses across Africa to help them collect and make payments easier, quicker and more affordable in any manner that their buyers or suppliers prefer”. A joint venture: MultiChoice is not going for the moment alone, though. MultiChoice is sharing the spotlight with two other investors, London-based fintech Rapyd and California-based VC firm General Catalyst. While Moment’s short-term goal is to consolidate the $3.5 billion MultiChoice processes annually, the platform’s long-term goals are to provide payments infrastructure for millions of small businesses on the continent, and turn 90% of Africa’s cash transactions digital. “Investing in this venture is a logical progression for us, as we already process payments every month from 22 million households across 50 countries. Moment fulfils our strategy to expand our ecosystem by investing in adjacent businesses that provide scalable services, underpinned by technology,” said MultiChoice CEO Calvo Mawela. Zoom out: Since the proliferation of streaming services in South Africa, MultiChoice has struggled to retain relevance, losing thousands of subscribers to the likes of Netflix and Disney+. This has led to a revenue loss that has pushed the service to increase its subscription fees across several countries. A new fintech app could be what it needs to bounce back on its feet. MONIEPOINT RANKED 2ND FASTEST-GROWING AFRICAN COMPANY Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. This is partner content. NIGERIA’S NEW PRESIDENT WANTS A UNIFIED EXCHANGE RATE Nigeria, yesterday, swore in its sixth democratically-elected president, 70-year-old Bola Ahmed Tinubu. It’s only been a day but Tinubu, who entered into power amidst claims of rigging, already has huge plans. In his inaugural speech, the president announced that he would implement a unified exchange rate in the country. What does that mean? People buying forex in Nigeria have three exchange rates: the official exchange rate given by the Central Bank of Nigeria (CBN), a weaker one for investors and exporters known as the NAFEX window, and the black market rate at a 75% increase of the CBN rate. It means that while YouTube Premium supposedly costs ₦1,100—about $2.40 at the CBN rate of ₦460/$1—Nigerians pay about ₦1,800 at the black market rate because the country has a forex scarcity. While the president has not expanded on what he meant, we can infer that he wants to unify all these rates and ensure that all Nigerians have access to forex at the same rate. No more fuel subsidy: In his inaugural speech, the president also announced the end to the country’s fuel subsidy regime. Since 1970, Nigeria has subsidised the price of fuel for its citizens, costing the government millions yearly. Last year, the government spent around $10 billion subsidising petrol alone. This is not the first time a subsidy removal has been proposed with several attempts thwarted in the past. In April 2023, the federal government suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration. MORE FROM TECHCABAL The power of equity in incentivising African tech startup teams. Nigeria’s YouVerify is on a global expansion drive. But first, Kenya. GHANA LAUNCHES NEW CYBERSECURITY PLATFORM Ghana needs scammers to go. This week, the country’s central bank, the Bank of Ghana, announced the launch of a new cybersecurity platform: the Financial Industry Command Security Operations Centre (FISOC). How it works: Per the Bank, FISOC is now integrated with all 23 commercial banks which the Bank of Ghana regulates. The platform will be used to send these banks reports and alerts on cybersecurity threats, so they can act fast. So basically an alarm? More or less. The platform will help banks coordinate cybersecurity efforts within Ghana’s financial institutions. The platform was built by a Ghanaian company, Virtual Infosec Africa (VIA). Zoom out: While cybercrime is on the rise in several other African countries like Nigeria and South Africa, Ghana ranked as the eighth most cyber-secure country on the continent in 2022, an increase from 2021’s 10th position. EXPERIENCE VIVA TECHNOLOGY Book your pass to Europe’s biggest Startup and Business event here. This is partner content. THE WORLD WIDE WEB3 Bitcoin $27,699 + 0.47% Ether $1,891 + 2.32% BNB $312 + 0.95% Cardano $0.37 + 0.36% Name of the coin Price of the coin 24-hour percentage change Source: CoinMarketCap * Data as of 21:00 PM WAT, May 29, 2023. Yesterday, bitcoin rose by 3.2% and reached a two-week high at $28,000. Per Bloomberg, a deal raising the US debt ceiling has boosted investor sentiment in the cryptocurrency. Indian crypto exchanges are in survival mode as they try to extend their runways. CoinDesk reports that several Indian cryptocurrency startups like WazirX and CoinSwitch are in cash chokeholds that have them desperately cutting costs, conducting layoffs and rebranding themselves. EVENT: THE MOONSHOT CONFERENCE This is Moonshot by TechCabal. Moonshot is a conference that will bring together Africa’s tech ecosystem to network, collaborate, share insights and celebrate innovation on the continent. Click here to join the waiting list to get more news and updates about this conference. OPPORTUNITIES Applications are open for the L’Oreal-UNESCO Young Talents for Women in Science Program – Maghreb 2023. Awarded doctoral
Read MoreAs DStv continues to struggle, Multichoice enters payments foray
As its other businesses continue to struggle, Multichoice is making a play at payments. Multichoice Group has announced that it is launching a new integrated payments platform in a partnership with Rapyd, B2B payment processing platform, and General Catalyst, a venture capital firm that provides early-stage and growth equity investments. The platform, to be housed under an entity called “Moment”, will aim to offer payment infrastructure for businesses across Africa to help them collect and make payments easier, quicker, and more affordable in any manner that their buyers or suppliers prefer. Additionally, the platform will offer additional options for consumers to spend and save money more wisely with an aim to “transform the African payments landscape by making digital payments more accessible and reliable for domestic, cross-border and global payments.” Multichoice’s stock was down by almost 2% by market close from its opening price , perhaps pointing to the shareholders lack of faith in the company’s ability to make a mark in an already extremely competitive payments space. “We are excited about our venture with Rapyd and General Catalyst. It will address the need for an accessible and reliable payment platform for many small businesses and millions of consumers in Africa. Investing in this venture is a logical progression for us, as we already process payments every month from 22 million households across 50 countries in Africa. Moment fulfills our strategy to expand our ecosystem, by investing in adjacent businesses that provide scalable services, underpinned by technology”, said Calvo Mawela, MultiChoice Group CEO. A necessary pivot? Multichoice’s core business, DStv, has been struggling over the last few years. According to Daily Investor, between 2015 and 2018, DStv Premium subscriptions declined from 2.35 million to 1.92 million and currently stand at 1.4 million in 2022. MultiChoice’s latest annual financial results also show a 6% decline in Compact and commercial packages. The platform’s average revenue per user (ARPU) has also been on a downward spiral, declining from R317 per month in March 2018 to R269 in March 2022 for 90-day active subscribers. The company’s other bet, Showmax, reportedly grew 68% last year and 50% the year before but because the service’s numbers do not get reported on Multichoice’s financial results, they cannot be put into context with regard to their impact on its bottom line. According to Multichoice, the long-term plan for Moment is to provide the infrastructure for pan-African payments for the 44 million small businesses operating on the continent. It is also to turn the 90% of retail transactions that are currently taking place in cash, into digital payments. “Moment gives MultiChoice another opportunity to make a meaningful contribution to the economic development of the African continent. It will play a key role in accelerating cash-to-digital payments for all consumers and businesses and making the continent more investment ready for global players, by connecting payments from Africa to the world,” added Mawela. Through its 20 million subscribers on its pay-tv DStv, Multichoice already claims to process over $3.5 billion annually in payments. The Johannesburg Stock Exchange-listed entity also has majority shareholding in Showmax, a subscription video-on demand service, and a minority stake in Betking, an online betting service. Beyond just powering payments for its own services, according to Multichoice, Moment will in the long term also make a play in facilitating payments for small businesses, drive adoption of other real-time payment methods across all markets, and facilitate trade for importers and exporters using more than 40 currencies in over 130 countries. With entry into payments, Multichoice seems to be looking to divest away from its struggling cable television bets and streaming into an industry which is currently dominated by the likes of Flutterwave, Paystack, Chipper Cash and MFS Africa. Whether this will be the redemption of the company or prove to be the last kicks of a dying horse remains to be seen.
Read MoreIn first act as president, Tinubu announces an end to fuel subsidy
Moments after he was sworn in, Nigeria’s new president Bola Tinubu said the fuel subsidy regime is gone and pledged to unify the country’s exchange rate. On Monday, Bola Tinubu was inaugurated as Nigeria’s 16th president amid questions over his electoral victory. In a bold start, Tinubu while delivering his inaugural speech announced the end to the fuel subsidy regime—a contentious issue in Nigeria. Last year, the government spent around $10 billion subsidising Premium Motor Spirit (PMS), popularly called petrol. In April 2023, the Federal Government suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration. A much-needed move Battling with a humongous debt profile and economic challenges, Nigeria obviously can’t afford to keep up with the payments. However, the ripple effect is the likely increase in fuel and subsequent hardship for Nigerians. In his speech, Tinubu said the outgoing administration made no provision for fuel subsidy in the 2023 budget. “Subsidy can no longer justify its ever-increasing costs in the wake of drying resources,” he said. Instead, his government will “re-channel the funds into better investment in public infrastructure, education, health care and jobs.” Unified monetary exchange rate at last In September 2022, the International Monetary Fund (IMF) recommended a unified exchange rate to strengthen Nigeria’s economy and external reserves, as the country grapples with a foreign exchange (FX) shortage. Nigeria runs a multiple exchange rate regime, with the Central Bank of Nigeria (CBN) at the forefront. However, the controlled nature of the exchange regime has now driven demand to the unofficial black market, leading to a wide discrepancy between the official and parallel markets. TechCabal recently reported the implications of a proposed 15% naira devaluation on Nigerians. For the new president, the monetary policy needs a thorough house cleaning, especially as the CBN recently raised the monetary policy rate (MPR) from 18% to 18.5 %. “The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment like plant, equipment and jobs that power the real economy,” Tinubu said. But everyone agrees with him, Kelvin Emmanuel, a financial expert tweeted, “Attempting to cap MPR as a monetary policy tool to slow down the acceleration of commercial lending rates, bond yields, is a bad idea. The thing to focus on is using the planned unification of exchange rate to bring back FX liquidity.”
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Intron Health is bringing AI superpowers to hospitals in Africa
In his final year as a medical student, Tobi convinced his university to create a learning management system for boring anatomy lectures. Now he is using artificial intelligence to help doctors in Africa process medical records faster. Africa does not have enough healthcare personnel. So healthcare workers are expected to take care of more patients per doctor than in more developed economies. Paperwork takes up a significant portion of time on the job. Healthcare workers need to take patients’ medical histories, fill forms and update these records with time. Modern hospitals are digitising how they take these records but a computer and some software do not necessarily make the job easier. Sometimes, it takes up too much time and doctors go back to writing their notes on paper. One Nigerian-trained doctor and AI specialist believes that artificial intelligence can help African hospitals digitise medical records faster and save time for doctors. Nigeria, Africa’s most populated country, needs 363,000 doctors to achieve universal healthcare coverage. But Nigeria only has 24,000 licensed medical doctors. In 2017 when Nigeria needed 237,000 doctors to meet the World Health Organization’s (WHO) recommended doctor-to-patient ratio, the country had even more— 35,000 doctors. The number of qualified medical doctors has fallen by 31.4% despite the population growing by 2.46% on average between 2017 and 2021. 140312. Patients wait patiently during Gauteng Premier Nomvula Mokonyane and Gauteng Health MEC Ntombi Mekgwe surprise visit at Chris Hani Baragwanath Hospital, Soweto. 156Picture: Dumisani Sibeko As a result, too few doctors see far too many patients. Doctors in Nigeria frequently complain of burnout and being “overused and underpaid”. The story is the same across much of Africa. With approximately 3.6 million health workers in the 47 countries, the WHO estimates that Africa has a ratio of 1.55 health workers (including physicians, nurses and midwives) per 1,000 people. The recommended threshold is 4.45 healthcare workers for every 1,000 patients. By 2018, only four countries (Mauritius, Namibia, Seychelles and South Africa) had surpassed the WHO health worker-to-population ratio. Digitising healthcare In the early 1960s, the Mayo Clinic in Rochester in the US state of Minnesota was one of the first major healthcare centres to adopt an electronic health record (EHR) system. It was expensive and basic and could only be used to manage patient appointments and billing. Since then, electronic health record software has become much more sophisticated, allowing for detailed information about the patient’s health to be collected and processed. EHRs are not widely used in African healthcare despite their much-talked-about benefits. Installing EHR systems and training healthcare workers to use them is expensive. It is also often blamed for the lack of adoption of EHR tools by hospitals. But there are subtler reasons. Tobi Olatunji, a University of Ibadan-trained doctor turned computer scientist, says even in hospitals where EHR systems are installed they are not always used because doctors find them cumbersome and time-consuming. Doctors may be computer literate, but “when you put a keyboard in front of people, then that’s a whole different problem that you are creating.” So Olatunji co-founded Intron Health, a startup that uses automatic speech recognition (ASR) technology to transcribe doctors’ notes while they speak. But Intron Health did not start out with speech-to-text software. Intron Health, which was founded in 2019, offered a regular EHR software solution to help hospitals digitise their processes. In 2020, as COVID-19 spread globally and healthcare workers worried that Africa’s frail healthcare system could easily be overwhelmed, Intron Health piloted its first software at a Nigerian hospital. “It was a busy hospital and they were all excited. They had electricity; we had installed a wireless network for them. Everything was great,” Olatunji recalls. “[But] the day we launched, the doctor spent 40 minutes just to type the notes for the first patient that came.” Seeing the next patient took 50 minutes and by this time patients in the waiting room were getting visibly frustrated. If a doctor cannot see patients because they need to use clunky computer software to create or update medical records, waiting patients will be tempted to seek help elsewhere. The hospitals using Intron Health’s early software asked them if they could simplify it by replacing text boxes with checkboxes. But that was a crude solution and it meant you had to predict every possible medical situation to create a robust enough checkbox system. That was impossible. During his days as a medical student at University College Hospital (UCH) Ibadan, Olatunji had faced a similar frustration during an anatomy course where a lecturer struggled to explain how babies pass through the birth canal with only textbook pictures and hand gestures. He felt a video lesson would be better and students could repeat the lesson as much as they needed to. Somehow he was able to convince the university to build a rudimentary learning management system with hosted animated video lessons, with funding from the United States National Institutes of Health (NIH) and the World Bank. From then on, Olatunji’s path began to diverge from medical practice. His university asked him to help train staff from other universities, and when he graduated, he was employed by the university to build technology tools, including telesurgery tools, a patient navigation app and clinical simulation software. From UCH Ibadan, Olatunji made his way to the United States where he got a master’s degree in medical informatics from the University of San Francisco and another in computer science at Georgia Tech. He was employed by Enlitic, a San Francisco Bay Area company, as a machine learning scientist and researcher to help build natural language processing (NLP) and natural language understanding (NLU) AI models to help translate English text to other languages. After leaving Enlitic, he joined the Health AI team at Amazon Web Services as a machine learning scientist. On the side, he was already building software to digitise hospital records in Africa, which became Intron Health. But his first rodeo ran into a snag. Doctors in Africa who saw too many
Read MoreUnlocking potential: The power of equity in incentivising African tech startup teams
The African tech ecosystem has witnessed exponential growth over the past decade, with numerous venture-backed startups emerging across the continent. In my role as Investment Manager at Founders Factory Africa, I have witnessed firsthand the power of early-stage companies in driving innovation and economic transformation. One of the most critical factors for a startup’s success is its ability to attract, retain, and incentivise top talent. Below, we will explore the role of equity in incentivising employees at venture-backed startups in Africa, and delve into the best practices for equity discussions and agreements. The role of equity in incentivising early employees Equity represents ownership in a company, and it can be a powerful tool for attracting top talent to a startup. Early employees often take on significant risks when joining a young company, and offering equity is a way for founders to reward them for their dedication and commitment. By aligning employees’ interests with those of the company, equity grants can: a. Encourage long-term commitment b. Align incentives and drive performance c. Attract top talent who might otherwise opt for more established companies Best practices in allocating equity To ensure fair and effective equity distribution, startups should adhere to the following best practices: Establish an Employee Stock Ownership Plan (ESOP): an ESOP provides a legal framework for granting equity to employees. It should outline the total number of shares available for grant, the vesting schedule, and other terms and conditions. Determine an Equity Allocation Model (EAM): founders should determine an appropriate EAM, taking into account factors such as employee role, seniority, and contributions to the company’s success. Common models include the: Fixed Model: allocates equity based on predefined percentages or a fixed number of shares for each role or seniority level within the company Dynamic Model: allocates equity based on a formula that takes into account various factors, such as the employee’s role, seniority, and performance Milestone-based Model: allocates equity based on the achievement of specific milestones, such as product development, customer acquisition, or revenue targets Transparent Communication: open and honest communication is essential when discussing equity allocation with early employees. Founders should be transparent about the company’s valuation, the value of equity grants, and the potential dilution resulting from future funding rounds. Regular Reviews and Adjustments: as the company grows and evolves, it’s essential to review and adjust the equity allocation model to ensure it remains fair and motivating. Equity vesting and cliff provisions Equity vesting is the process by which employees gradually gain ownership of their equity grants over time. The most common vesting schedule is a 4-year period, with a 1-year cliff. The cliff provision ensures that employees must remain with the company for at least one year to receive any equity. This protects the company’s interests while also incentivising employees to commit to the long-term success of the startup. Dilution considerations At every funding round, the team’s stake is diluted on the cap table. This entropy is unavoidable. In our experience within the African ecosystem, a founder’s ownership stake usually dilutes by 15 to 25% per funding round with the average being around 20%. The goal is for founders and the team to be at 51% post-Series A. It is the founder’s duty therefore to carefully manage both their equity and that of the broader team to ensure that meaningful value can be created for the founders and team post a liquidity event. Balancing equity with cash compensation While equity can be a powerful motivator, it’s essential to strike a balance between equity grants and cash compensation. Offering competitive salaries, alongside a robust equity package, can help attract and retain top talent, particularly in the fast-growing African tech ecosystem. As the African startup ecosystem continues to thrive, understanding the role of equity in incentivising early employees is crucial. By adopting best practices and ensuring transparent discussions around equity allocation, venture-backed startups can attract and retain the talent needed to drive their success and contribute to the growth of the African tech landscape. Philani Mzila is an Investment Manager at Founders Factory Africa.
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👨🏿🚀TechCabal Daily – SA approves $86 million for e-policing
Lire en français Read this email in French. 29 MAY, 2023 IN PARTNERSHIP WITH Good morning And happy Inauguration Day to our Nigerian readers. Today, president-elect Bola Ahmed Tinubu, who won amidst electoral rigging claims, will lead Nigeria into an era that could make or break the country. Here’s what the Nigerian tech ecosystem expects from its new president. In today’s edition SA approves $86 million for e-policing Patricia’s hack cost it $2 million Nigeria approves 10-year tax break for EV manufacturers TC Insights: Funding freefall in African tech The World Wide Web3 Event: The Moonshot Conference Opportunities SA APPROVES $86 MILLION FOR E-POLICING South Africa wants to use tech to drive down its crime rates. Last week, the Gauteng Department of e-Government announced that it had approved R1.7 billion ($86 million) for e-policing in the Gauteng province of South Africa. Financing extra surveillance: Per executive council member Mzi Khumalo, the money will be used to procure crime-fighting tech such as drones. The department is also planning to have CCTV across every major road, business centre and crime hotspots in Gauteng. Gauteng’s high-crime rates: One of the nine provinces of South Africa, Gauteng’s crime rate has spiralled in the past year. Per the South African police, crimes in the province increased by 7.1% in the third quarter of 2022. In the last quarter of the year, the province also accounted for 27.3% of the total crimes reported in South Africa, with a 9% YoY increase in sexual assault cases. While Gauteng does not top any list of the most dangerous provinces in South Africa, its increasing crime rate is causing its residents concern. Panic buttons for residents: As part of its mandate to use innovative technology to combat crimes, the department is also toying with the idea of providing residents with electronic panic buttons which could bring emergency services running. The funds will also be used to acquire tracking devices for vehicles, firearms and a new state-of-the-art integrated command centre. MONIEPOINT RANKED 2ND FASTEST-GROWING AFRICAN COMPANY Moniepoint is Africa’s second-fastest growing company, as shown in FTs latest report. We also processed 1 billion transactions worth $43 billion in Q1 alone. Read all about it here. This is partner content. PATRICIA’S HACK COST IT $2 MILLION Less than two months after fintech Flutterwave was hacked by culprits who allegedly stole over $7 million, another fintech company has reported a breach. Earlier this month, trading platform Patricia announced to its users that it had suffered a hack on its application, Patricia Personal, where the company’s BTC and naira assets were compromised. In the email sent to users, the company also announced that it would freeze all withdrawals. The delayed effect: While Patricia might just be announcing the hack in May 2023, sources close to the case report to TechCabal that the breach occurred more than a year ago in January 2022, with the culprits stealing $2 million. Per the sources, Patricia partially froze withdrawals after the 2022 breach, allowing customers to deposit funds but not move them from wallet to wallet. Instead, Patricia offered to buy those coins from customers and pay them cash to manage the situation. This workaround continued until March 2023. By April 2023, the company launched a new app that had no withdrawal restrictions, which triggered a bank run and led to a deficit of 75 bitcoins. The company was then forced to reinstate the freeze. A culprit and a restructuring: While Patricia declined to comment on these claims, it announced last week that it had “identified an individual” from the group responsible for the hack. The company also confirmed to customers that it was undergoing internal restructuring. Since 2022, the company has laid off some of its employees, with its leadership stating that more layoffs—as high as 80% on all teams—will occur in the future. MORE FROM TECHCABAL Nigeria’s Startup Consultative Forum challenges Pantami as he moves to amend Nigeria Startup Act. Are digital-era celebrities and influencers covertly aiding criminal enterprises? NIGERIA APPROVES 10-YEAR TAX BREAK FOR EV MANUFACTURERS It’s a good time to bring Tesla assembly lines to Nigeria. Last week, the country announced that it would offer all electric vehicle manufacturers a 10-year tax break. The announcement was made by the director general of the National Automotive Design and Development Council (NADDC), Jelani Aliyu, during the recently-concluded West Africa Automotive Show (WAAS). A new policy: Per the DG, the tax break is part of Nigeria’s new Auto policy 2023 to 2033 which is set to help develop a competitive and sustainable automotive industry in Nigeria. “The policy also promotes investment in the auto sector and fiscal incentives which includes additional tax relief for 5 years for assemblers or manufacturers of automotive components and products, and 10 years for assemblers/manufacturers of electric vehicles and components used in electric vehicles and many other incentives provided,” the DG said. Active EV players in Nigeria: In an interview with Nigerian business publication Nairametrics, the council revealed that Hyundai Kona Electric, Jet Systems Motors, GIG Logistics, Max.ng, and Phoenix are the active electric vehicle players in Nigeria. Last year, the Nigerian government also signed a Memorandum of Understanding (MoU) with Israeli and Japanese companies to commence assembling and manufacturing of electric vehicles in Nigeria by 2023. The auto policy, and all its benefits, should see to implementing this MoU. TC INSIGHTS: FUNDING TRACKER In the first quarter of 2023, African tech startups faced a significant funding decline, raising only $857 million—a 42.8% drop compared to the Q1 2022’s venture funding, according to TechCabal Insights’ State of Tech in Africa report. This downward trend demonstrated a broader decrease in funds raised, accompanied by a narrower range of deals being made and a surge in venture funding through debt financing. The data paints a worrying picture of the ecosystem, highlighting the heavy reliance of African tech startups on foreign venture capital funding and raising concerns about a significant shift in investor behaviour. Investors now demand extensive information on business models and
Read MoreExclusive: Patricia’s newly reported hack happened in 2022 and cost the company $2 million
Despite only telling users about a breach on its retail trading app this week, several sources with knowledge of the matter say that the incident happened in 2022 and cost the company $2 million. The retail trading app, Patricia, froze withdrawals for users of its platform this week. In an email to customers explaining the decision, the company said it suffered a breach. Part of the email read, “Not long ago, we were victims of a hack. Patricia, the retail trading application, was solely affected by the breach. BTC and Naira assets were compromised.” The company claims that it has identified the source of the breach and is now taking legal action against the “syndicated group.” Based on conversations with three sources with direct knowledge of the situation, TechCabal can exclusively report that the breach on the Patricia app happened in January 2022 and that the company reportedly lost $2 million in the incident. When TechCabal contacted Patricia to understand the extent and timeline of the breach, the company’s CEO, Hanu Fejio, declined to comment. Three sources who asked to remain anonymous and have first-hand knowledge of the matter told TechCabal that Patricia partially froze withdrawals when the breach happened in January. While customers could still deposit money into the app, they couldn’t move their crypto coins to other wallets. Instead, Patricia offered to buy those coins from customers and pay them cash to manage the situation. This workaround continued until March 2023. A self-inflicted bank run? Sources say that Patricia launched a new version of its app in April and opened it to users. On Instagram, the company said the new app, Patricia Plus, was necessary “due to a global congestion on the Bitcoin blockchain.” The new app had no withdrawal restrictions, and within a few minutes, users started to move their coins to other wallets, forcing the company to reinstate a freeze. The situation they described closely resembled a bank run, and with liquidity concerns, sources said that the company’s custodial wallet had a deficit of 75 BTC. Patricia declined to comment on those claims. Instead, Patricia told customers in an email that it is now undergoing internal restructuring. While it did not share any restructuring details, several company sources said management called a meeting last week and explained the liquidity situation. The company’s leadership also shared that it would begin another round of layoffs. Salary delays, frustrated users and licence revocation: A picture of Eyowo’s stormy year More layoffs at Patricia While Patricia’s retail trading app has an estimated 160 employees, sources say the company laid off staff separately in 2022. At the time, the company did not share the reasons for the layoffs with employees. In a company-wide meeting last week, Patricia’s leadership said it would begin another round of layoffs. Sources say that team leads were told to reduce their team sizes by as much as 80%. While Patricia did not respond to questions about layoffs at the time of this report, sources said those affected by the latest layoffs would receive emails between Friday and Monday. It has created a situation where there’s some uncertainty about the people who will still have their jobs at the company next week. *This is a developing story
Read MoreStartup Consultative Forum challenge Pantami, as he amends Nigeria’s Startup Act
Nigeria’s minister of communications and digital economy Prof Isa Ali Ibrahim Pantami has succeeded in amending the NSA act. What does it imply? Nigeria’s minister of communications and digital economy Prof Isa Ali Ibrahim Pantami has successfully instituted a new board to drive the Nigerian Startup Act (NSA). TechCabal exclusively learnt that despite questions about its legality, the minister has succeeded in this move, two days to the official end of President Muhammadu Buhari tenure. Prior to now, TechCabal exclusively reported that Prof Pantami asked President Buhari to not only absorb the 27-member Nigerian Startup Implementation Committee into the Nigeria Startup Act council meetings but also give these members a four year tenure — something that council members on the NSA council don’t have. A source close to the matter told TechCabal, “The 27-member Startup Implementation Committee was set up to come up with a framework for implementation of the startup act. Their role is an adhoc committee. They are a think-tank on how the act will be implemented. They are not to be confused with the members of the Nigeria Startup Act council.” The source explained that the minister also wanted the chairman of the committee to sit in the council, thereby creating a new role that wasn’t in the startup act when it was signed into law. In a new memo regarding that same meeting, TechCabal observed that the approval for creating the new board has already been obtained by the minister. “The approvals were sought and obtained by virtue of the Section 4 that gives the President powers to issue directives of a general or specific nature/character relating to the Act,” the comment under the overview in the minutes of meeting read. Following up on that approval, the memo revealed that the council is seeking to appoint a Start-up Portal Coordinator and commence bidding process for a Council Agent. Reacting to the development, Representatives of the Startup Consultative Forum, consisting of Davidson Oturu, Mohammed Jega, Amal Hassan and Eloho Omame have frowned at the developments regarding the minister’s desperation to adjust the composition NSA council. In a letter addressed to the Chairman of the council, they stated that they were invited to the 2nd meeting of the Council scheduled for 4:30pm on Tuesday, May 23rd, 2023 and they joined in virtually. But as at 6:30pm, the meeting was yet to commence as the Honourable Minister for Communications and Digital Economy was said to have been attending the Federal Executive Council (FEC) meeting. They accused the minister of conducting a hurried meeting with only four members of the council as against the stipulated quorum of eight people alongside the chairman and two members of the private sector. “Having waited in some cases for up to two hours, our members, who had other pressing engagements, had to leave the meeting. It is noteworthy that the meeting was not called to a formal start in the Honourable Minister’s absence and further, that for those who joined via video conference, the microphone at the meeting venue was kept on mute throughout so they were not party to any conversations that may have occurred while waiting for the meeting to commence formally. “It has since come to our attention that following the departure of all of our members from the meeting, online and in person, the Honourable Minister subsequently arrived and proceeded to hold a meeting with only four other Council members present. We are constrained to refer to Section 4 of the Nigeria Startup Act (NSA), which provides the 14 members of the Council, and Section 3 of the Schedule to the NSA, which states that the quorum for the meeting shall comprise eight members, with at least two members chosen from the private sector in attendance. We are the Council’s members from the private sector, and none of us were in attendance. Thus, in the absence of a quorum, the meeting could not have proceeded,” the letter read in part. The representatives of the Startup Consultative Forum said they were shocked to have received a document from the secretariat of the National Information Technology Development Agency (NITDA), showing that the meeting held with certain decisions ratified at the purported meeting. “Of grave concern among the items for consideration is the approval being sought for the Chairman of the Startup Implementation Committee (NSIAC), who leads an ad hoc body that is not statutorily appointed under the NSA, to be elevated to a Council member and attend meetings of the Council; thereby increasing the statutory number of members of the Council from 14 to 15 without an amendment of the law by the National Assembly. “As members of the Council, we are surprised to have only been notified by the aforementioned report shared following the purported meeting, that this matter has already been approved by Mr President. In our view, this action is highly irregular. Such an approval should not have been sought in the first place as it is a contravention of an existing law. Furthermore, it is our humble submission that any attempt to imply that the 2nd meeting of the Council held on Tuesday, 23rd May 2023 will be firmly resisted. In the absence of the statutory quorum, such a meeting is illegal, null and void ab initio,” the letter stated. The group urged the council to direct the secretariat to thoroughly review theirregularities that occurred during the recent meeting and take appropriate actions to rectify the situation. They also pressed for the importance of the appointment of a Council Agent in accordance with Section 8 of the Nigeria Startup Act, who would be tasked with monitoring and implementation of the provisions of the law rather than relying on ad hoc arrangements. A startup lawyer Oyindolapo Olusesi explained that no member can be added into the NSA council under that those provided for under the act. “As far as the constitution of the council is concerned, the law is clear. No other person can be a member except
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