African startups and investors need better communication to stop funding drought
A new report from Wimbart shows that African startups and investors are misaligned on how to communicate startup progress, complicating further fundraising efforts for startups. While African startups have increased the frequency with which they report metrics to their investors, Wimbart’s Investor report shows that the information provided still lacks enough context for investors to understand their business. This needs to change if Africa’s funding drop is to be reversed, as 88% of investors said they rely on information from investor reports when making future investment decisions, emphasising that the quality of reporting plays a crucial role in their judgement of a startup. “It allows us to build enough data on the health of the company and enables us to cross-analyse with our own (due diligence) for follow-up investments,” an investor shared about startup reporting in the report. The findings come as investors ask questions about how African startups operate and their likely returns in light of tough economic conditions across the continent. Over two-thirds of investors said they intensified their focus on portfolio startups’ reporting in the last 18 months, with a third attributing this to concerns about financial stability and sustainability. According to the report—in its second year—founders and investors agree on the importance of reporting but differ on the type of information that should be shared, suggesting a need for clearer communication to align expectations. Startup founders, who often have multiple firms and angel investors on their cap tables, believe that a standardised approach to reporting should be introduced and argue that investors fail to ask for critical metrics like customer acquisition cost (CAC), lifetime value (LTV), customer retention rate, churn rate, and fraud mitigation, which are essential for understanding the business’s long-term viability. “I’d like them to ask for less—we send them plenty and they are just lazy, asking for it in different forms,” a founder said about investors. This communication gap can be traced to a lack of trust, with some founders fearing that investors might share confidential information about their startups as several venture capital firms have invested in competing startups. “Investors have to put together a list of requirements for startups straight away, but they should ideally have some standardisation because (founders) with eight or ten investors don’t want to do different reports,” Jessica Hope, the CEO of Wimbart, told TechCabal. Investors also agree that a standard approach to reporting will help solve the reporting problem. However, a standard approach to reporting could overlook the nuances within Africa’s diverse tech ecosystem. The challenges and opportunities for fintechs in Accra differ from those in Abidjan, showing the need for flexibility in reporting that accommodates local market dynamics. “I think there are certain standard metrics that are useful when capturing the health of company. It’s up to investors to collaborate to put together a standardised template that has nuance. It should be like an 80-20 rule, with 20% of the standard allowing for market peculiarities,” Hope said. Kola Aina, the general partner of Ventures Platform, which has more than fifty African portfolio startups, said that open and consistent communication is key to “building mutual understanding, aligning expectations, and driving effective collaboration.” Over 70% of the startups and investors surveyed were in the pre-seed and seed stages, highlighting the youth of Africa’s startup ecosystem. Notably, no investors were beyond Series B, and less than 5% of the startups surveyed have reached that stage. Wimbart, a 10-year-old public relations firm, has been a key player in Africa’s tech ecosystem, supporting startups like Moove and M-KOPA and investors like Ventures Platform to communicate effectively with journalists and the public.
Read More
👨🏿🚀TechCabal Daily – Nigeria’s AI dream gets $1.5 million richer
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Welcome to Moonshot week! Moonshot by TechCabal, the most important tech gathering in Africa, is now only 2 days away. Put it in your plans to be in Lagos, Nigeria this week to be a part of the important conversations about Africa’s tech ecosystem. Here’s the best part—attending with friends and colleagues makes the experience even more powerful. Share insights, build ideas together, and expand your network as a team! It’s an experience that’s even better enjoyed when shared. Get seated. Nigeria gets additional $1.5 million AI fund What does a digital nomad visa mean for Kenya? Fidelity Bank records ₦200.8 billion ($125.5 million) pre-tax profits The World Wide Web3 Opportunities AI Nigeria gets additional $1.5 million AI fund Bosun Tijani, Nigeria’s Minister of Communications, Innovation, and Digital Economy When Bosun Tijani, Nigeria’s tech minister launched the National AI strategy, people criticised it. They saw the strategy—which provided a framework for the development and implementation of AI systems in the country—as putting the cart before the horse. Critics highlighted the absence of crucial infrastructure—electricity and compute—needed to support the growth of AI. Given the country’s cost-of-living crisis, many Nigerians also found it difficult to justify pursuing any ambition beyond stabilising the country’s economy. Yet, the minister’s argument has been simple: there is no better time to ride on the wave of emerging technologies like AI to address the nation’s problem. “We know our limitations, but we have clarity in terms of what we can do with AI and how to go about it. We may not have the compute, but we have young people that can be trained to build global AI solutions,” Bosun Tijani told TechCabal in an interview last month. The Minister has gone on to launch Nigeria’s first Multilingual Large Language Model (LLM), alongside the National AI Strategy. In September, Bosun Tijani was once again criticised after he announced that the ministry had received its first tranche of investment for the AI research and development fund. It was a ₦100 million ($61,500) donation from Google. The money will just be enough to purchase two Nvidia GPUs which usually costs between $30,000 and $40,000. Bosun Tijani, at the time, said people failed to realise that the government was in talks for more funds. One of those funds is an additional $1.5 million from Luminate group. The funds which will be launched today is the latest move by the government to bolster AI development in the country. The government also plans to launch an AI collective this week as well as a National Artificial Intelligence Trust. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Regulation What does a digital nomad visa mean for Kenya? Image Source: News Central TV Kenya is having quite the year. Its drawn-out protests, debt defaults, and members of parliament railing into Deputy President Rigathi Gachagua as they call for his impeachment are some of the obvious highlights of the year. Yet, the country is finding ways to win. On Thursday, Kenya amended its citizenship and immigration regulations to introduce a Digital Nomad Visa. This visa targets individuals who work remotely for foreign employers while choosing their own work locations. According to the amended regulation, applicants to the visa program must be employed by a non-Kenyan company, be earning an annual base salary of $55,000, and have no criminal history. Kenya hopes the visa will bring more remote workers into the country, boosting its tourism sector, which grew by 21.3% in the first half of 2024, generating KES142.5 billion ($1.1 billion). In addition to tourism, the visa is expected to benefit other sectors like housing, transportation, and hospitality. However, details of the program, such as the visa’s processing time, the duration of stay, and the pathway to getting Kenyan citizenship remain unclear. More information is expected to be communicated soon as the program takes shape. Kenya will join other countries like Seychelles, Mauritius, Namibia, and Cape Verde which have successfully rolled out digital nomad visas, offering remote workers tax breaks and a chance to live and work from beautiful cities. Remote work is growing in popularity worldwide and countries want to capitalise on it. In Nigeria, Lagos State will tax remote workers. Kenya, needing a quick win, will also try and tap into this growing travel-work culture. It is unclear if, and how much tax digital nomads in Kenya will pay. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Banking Fidelity Bank records ₦200.8 billion ($125.5 million) pre-tax profits Image Source: Fidelity Bank Fidelity Bank, a Nigerian tier-2 bank with a market capitalisation of ₦323 billion, has reported a ₦200.8 billion ($125.5 million) pre-tax profit for the second quarter of 2024. The results were driven by a surge in net interest income and gains from financial assets. The bank’s net interest income soared by 202%, reaching ₦326.4 billion ($200 million) during the period. This significant increase was fueled by rising interest rates and a growing loan portfolio. Additionally, Fidelity Bank’s fees and commission income rose by 45%, reflecting strong growth in its non-interest income streams. To reward its shareholders, the bank has proposed an interim dividend of ₦0.85 per ordinary share. This dividend payout is expected to further enhance investor sentiment and attract additional capital inflows into the bank. The bank’s total assets grew by 27% year-on-year to ₦7.9 trillion ($4.9 billion) up from ₦6.2 trillion ($3.8 billion) in the same period last year.
Read More
Rethinking risk: How the financial sector can partake in the African Creative Industrial Revolution
This article was contributed to TechCabal by Tochi Louis. For decades, Africa’s creative economy has thrived in pockets, driven by the indomitable spirit of its creators and internal stakeholders. With Nigeria recently becoming the sixth-largest music-exporting country in the world—trailing behind creative economy juggernauts like the US, UK, Colombia, and South Korea—every melody, every frame, pulses with the potential to not only reshape our image and narrative on a global scale but also to evoke a promising economic future. However, one question persists: what’s the extent of the financial sector’s involvement in this renaissance? For too long, the financial sector has cursorily viewed the local creative economy through a lens of skepticism, largely stemming from a misunderstanding of its value chain and perceived volatility that is not always reflective of our reality. It’s time we start having honest conversations and map out strategies to bridge the divide. The creative ecosystem is not monolithic. It spans industries such as music, film, and fashion, and even intersects with sectors like real estate and tech. Yet, as Wakiuru Njuguna, Managing Director of HEVA Fund, a key player in creative financing, points out, “The creative sector has too often been seen as a charity case, when in fact it represents a powerful engine for economic growth if oiled properly.” This mindset has stifled the financial sector’s will to tap into the full potential of Africa’s creative ecosystem. A major part of this hurdle also stems from the misperception of creatives themselves. As Chin Okeke, Founder of Misan Partners, explains, “There’s a view of creatives as just creatives. People do not understand that creatives have business acumen.” This illusion has created a chasm between the financial sector and the creative economy, with the former seeing only surface-level creativity rather than the robust, multifaceted industry and infrastructure powering it. Chin insists, “To truly understand it and change that perception, they [financial sector] have to view it from an industrial perspective. The value chain, the assembly line, input-process-output—it’s no different in music and film than it is in oil and gas or real estate.” Banks and private investors routinely argue that the creative economy carries too much risk, largely because it is viewed solely as a collection of isolated artistic endeavors, rather than as an ecosystem ripe with opportunity that requires appropriate, tailor-made backing. There’s a valuable lesson to be learned from Africa’s agricultural sector, which has long benefited from tailored financial products like micro-loans and crop insurance. Wakiuru suggests that the same level of responsiveness be extended to the creative industries: “What we are seeing is a need for financing that’s as nuanced as the sector itself. It’s not about injecting money into the sector but about creating financial products that reflect the realities of each value chain within the industry.” When dealing with a sector like the creative economy, which primarily generates intellectual property, Wakiuru advises against using the same lens across board to evaluate risk. She cites the need for financial models that blend different forms of capital, from grants to venture capital. Chin also echoes the validity of a blended finance approach: “It allows us to stack different types of capital along the value chain, from grants to equity, to unlock opportunities at every stage.” In her decade-long run at HEVA Fund, Wakiuru has built financing facilities responsive to the creative sector, aligned with their respective markets. She highlights the importance of local context, noting that Africa comprises many countries, each with its own spending and consumption habits, as well as cultural influences. For instance, one of the largest video-on-demand platforms in Kenya has over five million Google Play downloads and has built, a strong business case around affordable, culturally relevant content delivered through a pay-per-view model, championed by local talent. Meanwhile, the Nigerian box office is increasingly recording more billion-naira blockbusters compared to the past decade. “Most of that revenue comes from local audiences, which is proof that local markets can drive substantial revenue when given the right infrastructure,” Chin says. “So, the game isn’t just to make more films; it’s also about expanding from 300 screens to 3,000 to make content more accessible for our people and meet local demand,” he adds. The same principle applies to audio. In Nigeria, the music consumed is overwhelmingly Nigerian, yet there are hardly any platforms that allow Nigerians or Africans to fully access and engage with their own music on a specialised scale. “The demand for local audio is huge,” Chin explains. “We have the market, we have the demand, but we need a solution tailored for Africa because streaming, as it stands, applies a Western solution to a market where it isn’t fully working.” Wakiuru complements Chin’s perspective, challenging the perception that ‘success in the creative economy should ultimately be tied to foreign demand’. “We could consider demand from the diaspora,” she asserts, “but that ultimately depends on the investor’s agenda and the kinds of opportunities they’re pursuing.” Chin explains that layers of opportunity in various creative industries can be viewed differently. “If we look at the Music industry, 98% of the revenue comes from outside Nigeria. Thus, you would focus on exports for short- and mid-term investments. On the other hand, Film presents a different picture. Here, the short- and mid-term opportunities for revenue lie within the local market.” Chin points to promising indicators such as a growing youth population, improved education, lower mortality rates, and rising disposable income to buttress this. “The demand is there. We want to consume our own products—our clothes, music, and films. The supply is also there. What we’re missing is the infrastructure to make it accessible. That’s where the local opportunity lies.” He adds, “If we can produce nearly a billion streams on Spotify in the first half of 2024 and rank in the Top 25 out of Spotify’s 184 markets by streaming appetite in just three years of Spotify launching in the market, the real question should be about scaling that number from one billion
Read MorePayment unicorn Zepz raises $267 million from World Bank, Accel and TCV
Zepz, the parent company of African cross-border payment companies World Remit and Sendwave, has raised $267 million. This comes two years after the fintech reported reaching profitability for the first time. The company did not disclose its valuation in this round, but it was valued at $5 billion when it previously raised $232 million in 2021. New and existing investors invested in the round led by venture capital firm Accel. Leapfrog, TCV, and Coller Capital also participated. The International Financial Corporation, a member of the World Bank Group has also pledged to invest up to $20 million. The fintech will use the funding to expand its reach in Africa. It currently operates in over 150 countries including South Africa, Uganda, Kenya, Rwanda, Tanzania, and South Africa. This new raise punctuates the long pause of Zepz’s IPO plans. In 2022, the London-based company paused plans to go public due to accounting issues. The unicorn’s investors are “in no rush” for a public listing, Harry Nelis, partner at Accel one of the lead investors in this fresh round told Bloomberg. It also follows the layoff of 26% of the workforce in May 2023 and 30 people in November 2023 citing redundancy and duplication of roles. Founded in 2010 by Ismail Ahmed, WorldRemit enables users to send money from various countries to different destinations globally, with options for bank deposits, mobile money, and cash pickups. WorldRemit became the UK’s first Black-founded fintech to achieve unicorn status with a valuation of $1 billion. It acquired Sendwave in February 2021 and now both operate as payment brands under the group, Zepz. Mark Lenhard, Zepz’s CEO, believes there is more growth on the horizon for the company especially due to the continuing unrest across the world. “We certainly saw it during Covid. We’ll see it when there’s an earthquake. We’ll see it when there’s geopolitical unrest in the country,” Lenhard said. “More money will flow in because people get concerned about their families, about their communities and that’s their time of need.”
Read More
Can 3MTT turn Nigeria into a global tech talent powerhouse?
Will Nigeria’s 3 Million Technical Talents Initiative bridge the growing tech talent gap while positioning its workforce for global opportunities? In November 2023, Maryam Shuaibu Aliyu was scrolling through Facebook on her phone at home in Kano when she stumbled on a post announcing Nigeria’s 3 Million Technical Talents (3MTT) programme. Despite not knowing how to use a laptop proficiently, Aliyu, a Bayero University graduate, volunteer teacher, and mother of two, felt a pull. “I would never have imagined learning a tech skill if I hadn’t come across the programme,” said Aliyu, who was selected as one of 31,270 fellows for the first cohort of the 3MTT. The four-year initiative, launched by the Federal Ministry of Communications, Innovation, and Digital Economy, wants to transform Nigeria into a hub for global tech talent. The minister, Bosun Tijani, calls it “the largest technology talent accelerator in the world.” President Bola Tinubu also referred to it during his October 2024 Independence Day speech, outlining it as one of his administration’s big plans. Over 1.7 million people applied to join one of the 12 technical skills offered through the programme: software development, UI/UX design, data analysis and visualisation, quality assurance, product management, data science, animation, AI/machine learning, cybersecurity, game development, cloud computing, and DevOps. 3MTT received applications from almost all of Nigeria’s 774 local governments, partnering with Prembly to ensure proper verification. Francis Sani is the Technical Adviser to the Minister on Innovation, Entrepreneurship, and Capital and is also in charge of the programme. According to him, the decision to focus on these skills came after stakeholder engagement, driven by the need to equip Nigerian youth with skills experiencing rapid growth in demand. The local talent, global opportunity vision Every year, thousands of Nigerians migrate to seek opportunities abroad. This Japa phenomenon often means that these talents, their taxes, and income are spent boosting other economies. While the global demand for technical talent intensifies, driven by sectors like AI, data science, and software, many more young Nigerians need help to compete and access these opportunities. Beyond Nigeria, this challenge is common to countries with large populations–like Brazil, India, and Kenya–where we’re beginning to see policies and initiatives aimed at upskilling their populations to remain competitive in the global economy. In Nigeria, several digital training and talent outsourcing companies have popped up in the last decade to train thousands of people in core technical skills and help them find placements. In 2014, Andela was founded with its “talent is evenly distributed, but opportunity is not” ethos, training software developers and placing them at jobs in US companies and elsewhere. Andela became renowned for its rigorous selection process, admitting only the top 1% of engineers trying to get into the programme. By 2019, Andela was pivoting from a junior-first model to senior talent sourcing, with its CEO Jeremy Johnson saying, “We haven’t been able to scale remote, junior placements, in part because boot camps and CS programs have grown rapidly over the past five years, and we’re no longer able to lead with a junior first strategy.” In 2016, Hotels.ng CEO Mark Essien, frustrated by his inability to find local technical talent, started the HNG Internship program with almost 200 design and software engineering interns. An average program runs for 3-6 months, with thousands of interns participating in a free high-intensity internship, powering through ten stages of challenges. The 2023 cohort started with over 22,000 people at the first stage and ended with less than 500 by the end of the tenth stage. More recently, companies such as Decagon, ALX, and AltSchool have built programmes to train technical talent and make them more competitive for global talent opportunities. These three companies have cumulatively trained over 146,00 people across varying levels of expertise in the past decade. Collectively, these initiatives and others like them operate on the belief that Nigeria, with its youthful population, can meet local and global demand for tech talent. According to a Statista forecast, by 2030, around 28 million jobs in Nigeria will require digital skills, positioning these programmes as essential for the country’s economic future. 3MTT is the government’s approach to creating a technical talent pipeline: mass inclusion, targeting Nigerians in urban and rural areas and communities traditionally left behind. Sani explains that this is a unique situation where Nigeria’s population supply meets global demand. “We know there is a demand for tech jobs, and the demand isn’t small. It is why we can’t do a small number,” This ministry is betting on 3MTT as a crucial lever for Nigeria’s growing digital economy. The ICT sector went from contributing 14.07% in the Q2 GDP of 2020 to 19.78% Q2 GDP in 2024. The ministry aims to increase this contribution to 22% of the GDP by 2027. “If we say that there is an opportunity for us to make our digital economy a lot larger, the ingredients are the people,” Sani says. The structure of 3MTT After she was selected, Aliyu underwent a three-month learning journey on the cybersecurity track. The process began with self-paced online courses on Edtech platforms like Coursera, AltSchool, ProductDive, and IHS Academy, where she and fellow participants were introduced to foundational concepts in their chosen fields. The 3MTT programme uses a tiered 1-10-100 structure, starting with a small cohort and scaling efficiently while learning from each phase. The first phase (1%) surpassed the 30,000 goal, onboarding 31,270 fellows, with each cohort lasting three months. The next phase (10%), which began in August 2024, will ramp up the number of fellows to 300,000, while the last phase, which will end in 2027, will hit the 3 million target (100%). “3MTT isn’t just a training program,” Sani explained. “We want to build an ecosystem for technical talent development.” Aliyu also participated in physical learning sessions with other fellows at Aisha Kwaku and Associates, a Cisco Networking Academy based in Kano. This facility is one of the 120 applied learning clusters (ALCs) that make up the in-person, hands-on component of
Read More
👨🏿🚀TechCabal Daily – Was the naira redesign politically motivated?
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Flash ticket sales for Moonshot ends today. If you haven’t snagged one yet at 30% off, this is the last reminder you’ll see. Moonshot by TechCabal, the most important tech gathering in Africa, is now only 5 days away. Put it in your plans to be in Lagos, Nigeria next week. Here’s the best part—attending with friends and colleagues makes the experience even more powerful. You get to share insights, build ideas together, and expand your network as a team! It’s an experience that’s even better enjoyed when shared. Get seated! Snag your tickets. Former acting CBN governor confirms naira redesign was politically motivated Fincra acquires payment licence in South Africa President Suluhu tightens grip on media ban The World Wide Web3 Opportunities Banking Former acting CBN governor confirms naira redesign was politically motivated Former CBN Governor Godwin Emefiele For months, Nigeria’s apex bank, the CBN, and its past governor, Godwin Emefiele, told Nigerians that the hardship they endured during the hasty and ill-timed Naira redesign was worth it and that the redesign would “increase financial inclusion, control inflation and assist in the fight against corruption”. But it did the opposite. Nigerians were financially excluded as a cash scarcity developed and banks struggled to accommodate the surge in digital payments; inflation rose to 21.82% in January 2023 and 21.9% in February; and vote buying was rampant during the elections. Many Nigerians thought that the timing of the redesign—near the elections—showed that the redesign was politically motivated. Now, Folashodun Shonubi, the former acting CBN governor, has confirmed those thoughts. Emefiele is currently facing four charges brought against him by Nigeria’s financial crimes unit for causing injury to the public and acting illegally during the naira redesign. On Thursday, Shonubi testified in court that Emefiele admitted the naira redesign was politically motivated and that what the CBN produced after the redesign was different from what former President Buhari approved. He also testified that the CBN, under Emefiele, went against its standard protocol for currency redesign by allowing the former governor to unilaterally create the document that Buhari approved for the redesign. Under CBN law, the Currency Management Department, not the governor, is responsible for initiating currency redesign, followed by the CBN’s board approval before presidential assent. Shonubi’s testimony, combined with Emefiele’s failed presidential bid, complicates the former CBN governor’s defence, making a conviction seem increasingly likely. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Fintech Fincra acquires payment licence in South Africa Image Source: Fincra When we spoke to Wole Ayodele, the CEO of Fincra, a Nigerian payment infrastructure provider, in September, one thing stood out: his firm belief that the prosperity of Africa lies in the easy flow of money on the continent. At the moment, transferring money within Africa is anything but easy. Regulatory bottlenecks and the absence of a unified payment system have made cross-border transactions costly. Startups like Ayodele’s Fincra—which provides businesses with payment rails to facilitate cross-border transactions—are stepping up to solve this pressing issue. Fincra serves a growing list of fintechs, including Raenest, LemFi, and NALA, which rely on its payment rails to facilitate cross-border payments. These companies use Fincra’s infrastructure to help individuals send money to and from Africa efficiently. While Fincra currently operates across six countries (Ghana, Kenya, South Africa, Uganda, the United Kingdom, Europe, and North America), Ayodele believes there are more markets that are extremely sought after by Fincra’s customers. One of those markets is Africa’s largest economy, South Africa, where the startup has acquired a Third Party Payment Provider (TPPP) licence. The licence will allow Fincra to offer pay-in and pay-out services to registered and pre-approved South African businesses. The TPPP licence comes after the startup acquired an International Money Transfer Operator (IMTO) licence from the Central Bank of Nigeria (CBN) in September. “Ultimately, we want to be in all 54 African countries,” Ayodele said during our chat. The company has Egypt and Ethiopia lined up as its next destinations. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Regulation President Suluhu tightens grip on media ban Image Source: Zikoko Memes Tanzanian President Samia Suluhu is on a warpath with independent institutions like the media and rights groups. Her administration has stepped up efforts to suppress dissenting voices, including opposition politicians. On Thursday, Tanzania’s communications regulator suspended Mwananchi Communications’ online publications for 30 days, citing the publication of “prohibited content.” This move comes despite President Samia Suluhu’s initial stance as a progressive leader following the repressive rule of her predecessor, John Magufuli, who stifled dissent. Suluhu also warned the opposition not to copy Kenya’s protests after angry Kenyans stormed the country’s parliaments in June following weeks of street protests. Mwananchi Communications operates several news outlets, including The Citizen, an English news outlet; Mwananchi, a Swahili site; and Mwanaspoti, a sports news publication. Mwananchi Communications is no stranger to sanctions, having previously been suspended for six months in 2020 after The Citizen posted a leaked video of former President John Magufuli at a crowded fish market during the COVID-19 pandemic. The latest suspension is part of a broader government crackdown on dissent, with authorities recently arresting three opposition leaders and banning local news outlets from covering anti-government activities. Chadema, a prominent opposition party, has warned that this crackdown on independent institutions could signal a return to the repressive rule seen under Magufuli. Introducing Pay with Pocket on Paystack Checkout Paystack merchants in
Read More
South-African startup Scale raises $700,000 to help fintechs issue customisable cards
Scale, a South African startup that provides brand and project management services for fintechs that want to enter new markets or build new product verticals, has raised $700,000 in pre-seed funding. 54 Collective, a sector-agnostic venture capital firm, and fintech-focused First Circle Capital, led the pre-seed round. Sunny Side Venture Partners and some angel investors also participated. The one-year-old startup founded by Barbara Woollams and Miranda Perumal, a former director at Visa, also provides partnerships with payment infrastructure providers to fintechs. The company will use this funding to expand operations to Kenya, Zambia, and Cote d’Ivoire. Particularly, it hopes to deepen the reach of Scale Execute, its customisable card-issuing product developed in partnership with Visa and Mastercard. This comes during a period when African fintechs are second-guessing card services as the cost of processing payments through multi-layered partnerships eat into margins for them. Chargeback fraud is another headache in the card payments industry. In 2022, African fintechs like Eversend and Busha briefly scaled back their card operations and had to change providers after Union54, a Zambian fintech that provided a virtual card-issuing API, discontinued its card services as attempted chargeback fraud cases on its platform rose by 600%. However, expanding into a market like Cote d’Ivoire makes sense for Scale, as the country ranked first in West Africa in card issuance. Ivorian banks issued about 2.4 million cards to customers in 2022. “With the backing of our esteemed investors and partners, we are well-positioned to expedite our ecosystem engagement, build trust with African businesses and continue to strongly focus on solving major pain points when enabling card rails by delivering unrivalled, world-class service,” CEO Perumal said in a statement. Though cash remains a dominant payment method in some African markets, Scale is betting its card issuance service on the continent’s growing fintech market, projected to reach $230 billion by 2025. By 2029, card issuance platforms are also expected to issue about 35% of all cards used in payments. Scale will compete with players like Onafriq in the B2B card issuance sector. “The Scale team, led by a rockstar female founder [with] deep sector expertise and proven bias toward action truly excites us, and we look forward to seeing Scale become a critical enabler for fintechs,” said Hetal Patel, chief investment officer at 54 Collective. African tech leaders and global players will be at Moonshot by TechCabal. You can get tickets here.
Read MoreBreaking: Tanzania suspends Kenya’s NMG websites for 30 days
Tanzania Communications Regulatory Authority (TCRA) has suspended Mwananchi Communication’s websites, a subsidiary of Kenya’s Nation Media Group (NMG), the largest independent media house in East Africa, citing the publication of “prohibited content.” Mwananchi Communications operates several news outlets, including The Citizen, an English news outlet; Mwananchi, a Swahili site; and Mwanaspoti, a sports news publication. TCRA previously suspended its license for six months in 2020 after The Citizen posted a leaked video of former President John Magufuli in a crowded fish market during the COVID-19 pandemic. “We regret to inform our esteemed audiences that we shall be ceasing publication across all our online media platforms with immediate effect due to the Tanzania Communications Regulatory Authority (TCRA) suspending all our online media services licenses for 30 days,” Mwananchi Communications said. Since September, authorities have arrested three opposition leaders and banned local news outlets from covering anti-government activities as part of a government crackdown on dissent. Chadema, an opposition party, warned that the crackdown on independent institutions signals a potential return to the repressive rule seen under Magufuli. There have been fears that opposition parties and rights groups in Tanzania could mobilise anti-government protests similar to the one in Kenya against the 2024 Finance Bill. Tanzania’s president, Samia Suluhu, has warned that her government would not tolerate actions that would disrupt the country’s law and order. Nonetheless, the media house said its print publications and broadcast will continue serving their audiences. It was not immediately clear whether the suspension affects NMG’s Kenyan publications that cover regional news like The East African and Nation Africa. “MCL remains committed to delivering exceptional journalism that empowers the nation. We will continue to serve you through our daily print editions, and other non-online products and offerings as we engage the regulators on the way forward,” the company said.
Read More
👨🏿🚀TechCabal Daily – Play stupid games, win stupid prizes
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! ChatGPT maker OpenAI has raised $6.6 billion, valuing the company at $157 billion in the largest VC round ever. It will use the funds to advance its AI research. With only 6 days left and a few tickets remaining, the Moonshot flash sale is closing soon. Grab tickets at 30% off and secure your seat at Africa’s biggest gathering of digital innovators and tech experts. And here’s the best part—attending with friends and colleagues makes the experience even more powerful. You get to share insights, build ideas together, and expand your network as a team! It’s an experience that’s even better enjoyed when shared. Get tickets here. Nigerian gig drivers are gaming the system for more money Lesaka completes Adumo acquisition for $96 million Fibre cuts disrupt service for 9Mobile subscribers The World Wide Web3 Opportunities Ride-hailing For gig drivers, bonuses are a lifeline Image Source: Imgflip/TechCabal In the cutthroat world of ride-hailing, where gig drivers are constantly hustling to make ends meet, bonuses have become a crucial additional source of income. But these bonuses aren’t without strings attached. Drivers must complete 30–50 weekly trips to earn between ₦30,000 ($20) to ₦63,000 ($40) in bonuses. They must also have a minimum quality score of 70 to qualify for the bonuses even when they meet the weekly trip targets. These bonuses have become a lifeline for many drivers in the face of rising fuel costs and inflationary pressures. Desperate situations require desperate moves. These drivers now adopt creative measures to meet the targets including accepting fake short trips. Yet, as drivers are learning to fly without perching, ride-hailing companies are learning to shoot without missing. They look out for fradulent trips to stay one step ahead. While ride-hailing companies constantly update their algorithms to detect and prevent such fraudulent activities, in the end, it’s a stark reminder that the gig economy is a tough, unforgiving place. Survival may sometimes mean bending the rules. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. M&A Lesaka completes Adumo acquisition for $96 million Image Source: Imgflip/TechCabal In 2023, Africa recorded over 387 mergers and acquisitions (M&A) deals worth $11.2 billion, with East Africa leading the way for the most deals. Yet, it was a slow year for M&A with a 38% value decline compared to 2022. However, 2024 is already bucking that trend. The value of African M&A deals was $26.9 billion in H1 2024, doubling what was recorded in the whole previous year. Some notable deals have come from South Africa. The latest is Lesaka Technologies, the NASDAQ-listed South Africa-based fintech company acquiring another fintech, Adumo in a cash and stock deal that stands at $96 million. Lesaka paid $10 million in cash, and bought the remaining in stocks, providing stakeholders with an exit. First announced in May, the deal was supposed to finalise for $85 million. However, a 27% increase in Lesaka’s share price since that agreed-upon $85 million took the deal to $96 million. This was because part of the value of the deal was paid in stock. But Lesaka won’t mind this. Adumo is a strategic acquisition that will help Lesaka reach 1.7 million active consumers and 120,000 merchants in Africa. While both companies didn’t disclose leadership changes, the new entity will hire 3,300 employees across South Africa, Namibia, Botswana, Zambia, and Kenya. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Telco 9Mobile’s network problems were due to fibre cuts Image Source: Zikoko Memes Why would you leave a SIM card in your mobile phone that provided poor network service for nine months, instead of simply switching to another network? For 9Mobile subscribers, it is a sentimental attachment to a network they once cared about. It is like continuing to love your football club when they don’t win trophies. Subscribers of 9Mobile, dubbed the sickman of the telecom industry, have seen many months of below-par services. While they held on faithfully, they were not told the telco suffered fibre cuts—until now. The telco recently changed ownership, from Emerging Markets Telecommunications Services Limited (EMTS) to Light House Telecoms. Apart from the ownership switch, little has changed in terms of capital investment. The number of fibre optic cables it has since its previous owner and UAE-based Etisalat left the company in 2018 is still the same as of 2022—4,650 km. Thomas Etuh, founder of LightHouse Capital, parent company of LightHouse Telecoms, is raising money to fund the telcos’s infrastructure needs. Pending when he gets the money, 9Mobile subscribers would need more patience. Introducing Pay with Pocket on Paystack Checkout Paystack merchants in Nigeria can now accept payments from PocketApp’s 2 million+ customers. Learn more → CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $61,188 – 0.56% + 3.29% Ether $2,393 – 3.73% – 5.21% Hamster Kombat $0.004754 + 0.56% – 51.28% Solana $142 – 3.28% + 5.05% * Data as of 06:20 AM WAT, October 3, 2024. Opportunities Here’s an exciting opportunity for crypto innovators! Quidax in partnership with TC Battlefield has launched an exclusive award category to celebrate the most promising and innovative crypto startup in Africa. If you’re solving big problems with cryptocurrency, you stand a chance to win the $15,000 grand prize and other exciting rewards. Applications close next week so apply quickly! Introducing Krent, a property tech platform providing Nigerian renters and buyers with a transparent, stress-free, and cost-efficient solution. krent.space addresses
Read MoreGig drivers game the system as bonuses become an essential source of income
In December 2023, ride-hailing platforms introduced bonuses for driver-partners after the removal of fuel subsidies. Those bonuses are supposed to incentivise drivers disillusioned with gig driving on the back of complaints that the model no longer works for them. To earn between ₦30,000 to ₦63,000 in bonuses, drivers must complete 30-50 weekly trips. One gig driver estimates that drivers earn about ₦30,000 daily, but a surge in fuel prices and quickening inflation mean net earnings are considerably lower. The weekly bonuses that boost their income have become so vital that some drivers are cutting corners to meet the targets required to earn them. “Sometimes after taking a few trips, a driver could ask a fellow driver who is nearby or a friend to book short trips which typically cost ₦800-₦1,500 to get them to the daily target,” one gig worker who has now taken a break from driving told TechCabal. All the drivers lose is a fraction of the fee which the platform takes as commission—a reasonable opportunity cost compared to missing out on the bonus. Time pressures in Lagos, notorious for its traffic jams, have made drivers creative. ”Drivers can get about 15 trip requests in a day. Some quickly hit the targets and use the rest of the day to run offline trips where they can avoid paying commissions. Some use the time to attend to their personal needs, fix their car, [or work their other jobs if they only drive part-time.]” Four suspects in Equity Group card fraud scheme wired $2.4 million to Abu Dhabi The bonuses aren’t tied to quantity alone. Ride-hailing companies say drivers must have a minimum quality score of 70 to qualify for the bonuses even when they meet the weekly trip targets. Rejecting trips can lower drivers’ quality scores. One workaround is accepting fake short trips. “The [dummy] trip can be as long as 3km, but the driver can stop driving after 1km and end the trip,” another gig driver said. Because the dummy trip is paid for, the app assumes it is legitimate and updates the driver’s progress on the daily target. Ride-hailing companies know gig drivers’ antics because of their extensive experience with incentive systems. Companies are always on the lookout for fraudulent trips and devise ways to stay one step ahead. “Just last month, after paying me my money including my fuel bonus, Uber blocked my account asking me to pay about ₦80,000 to restore it,” a gig driver who had used one or more of these tricks to reach his target told TechCabal. “They must have realised I tricked them after paying me.” Platforms continually raise the bar for drivers to qualify for bonuses. For the October challenge on Bolt, which began on Tuesday, drivers must complete 12 trips to qualify. “It used to be eight, then it was nine, and now it has gone up again,” the one Bolt driver said. These underhanded tactics to earn extra money highlight how gig driving has become extremely challenging. For years, drivers have been asked for higher base fares and lower commissions. Offline trips sidelining the ride-hailing platforms have become more common. Drivers ask riders to pay more than the app charges or cancel trips. While drivers continue the push for higher base fares, they’ll take the next best thing: back-breaking bonuses.
Read More