- July 3 2023
Zuvy raises $4.5 million to scale invoice financing in Nigeria
Zuvy, a Nigeria-based invoice financing company, is changing the vendor-buyer relationship by offering cash upfront to vendors to meet their business needs and invoice management software for buyers to eliminate inefficiencies tied to traditional pen-and-paper. Small businesses, particularly in the FMCGs who service large business chains are often strewn with a lack of capital to service their contract agreement as their capital is often tied up in receivables which are often paid back in a 30–60-day window. These small businesses often have to find an alternative to getting capital to service their agreement which can be an arduous task. However, Zuvy, a Nigeria-based invoice financing company, is changing that by giving cash upfront to retailers to meet their business needs. “Millions of small businesses on the African continent are hindered by their capital being tied up in receivables. Our primary goal is to empower these businesses with the liquidity that they get what they need when they need it. This flexibility ensures that these SMEs can better manage cash flow, expand their customer base, and take on new contracts,” Angel Onuoha, Zuvy’s CEO and co-founder, told TechCabal on a call. The invoicing company has raised $4.5 million in funding—a mix of $4 million in debt funding and $500,000 in equity funding—from TLG Capital and a host of other investors, including Dunbar Capital; David Mussafer, chairman of Advent International; Next Chymia Consulting HK; Khalil Osman from Vicus Ventures; and several others. Zuvy’s CEO has stated that the funds secured are to be used to expand Zuvy’s reach and meet up with the growing demand from Nigerian vendors. Founded in 2021 by Harvard College alumnus Angel Onuoha and Ahmad Shehu, who is CTO and a former senior engineer at Mono, Zuvy, in addition to financing, offers free invoice and purchase order management software that enables large businesses to streamline their procurement processes. Zuvy financing is different from the bank’s For a small business in Nigeria, getting a loan from the bank is like picking a needle from a haystack. While there are over 41.5 million SMEs in the country—95% of these do not have access to formal financing—less than 1% of the total banking credit is given to small businesses. Furthermore, Nigeria’s interest rate sits at 18.5%—which is too high for a vendor. Nigerian banks offer loans to small businesses after conducting their due diligence, which might take several days and is often riddled with collateral requirements, minimum operating balances and burdensome paperwork—a luxury which a vendor is not granted, given that they have to service their agreements with their clients in a shorter period of time. While these constraints might prevent vendors from obtaining loans from banks to cover their business needs, Zuvy offers more convenient access to funds by giving advance payments to vendors in a 24-48 hrs time frame with a 4% “transaction fee”—interest rate. “In Nigeria, small businesses receive only 0.3% of total commercial banking credit. This transmission failure is a key part of Africa’s $300 billion SME financing gap. Factoring invoices represents a massive opportunity to bring capital to these small businesses, but only if you can build the tech stack to make it scalable,” said Isaac Marshall, an investment professional at TLG Capital. Ease of access for loans For vendors who are typically slow to adopt new software, Zuvy’s user-friendly platform helps vendors and their buyers to formulate, administer, and settle their outstanding invoices. Through an integration with WhatsApp, vendors can generate and dispatch invoices directly to their buyers without the need to interface with any online application. For the buyers, this software eliminates the inefficiencies and expensive errors tied to traditional pen-and-paper invoice management, creating significant operational benefits. While Zuvy joins a growing queue of digital lenders across Africa, the startup’s CEO says they are working on expanding their reach in Nigeria first and will expand into other African countries in the near future.
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- July 3 2023
The leading African tech moves from June 2023
1. Funding: West Africa retakes lead in June 2023 In June 2023, African tech startups raised $126.2 million from 25 fully disclosed* raises. The numbers show a 70% decrease compared to June 2023 where African startups raised $426.2 million. It’s also a 79% decrease from May 2023 when the total amount raised was $621.8 million. Per region, West African tech startups took the lead by a mile, accounting for 72%—$89.9 million—of the total disclosed funding. Year on year, raises by West African startups have increased by 13%. Image source: Timi Odueso/TechCabal Per sector, cleantech startups took the lead for the first time with 41% of the total amount raised—$52.3 million. Healthtech, logistics and fintech follow with $34.3 million, $11.5 million, and $10.6 million, respectively, in raises. Image source: Timi Odueso/TechCabal The top 5 disclosed deals of the month are: Senegalese cleantech Africa REN’s $35 million syndicated debt raise. Nigerian fintech Helium Health’s $30 million Series B raise. South African cleantech Yellow Africa’s $14 million Series B raise. Nigerian fintech Fairmoney’s $5.4 million raise. Kenyan logistics startup Peach Cars $5 million seed raise. *Note: This data is inclusive only of funding deals announced in June 2023. Raises are often announced later than when the deals are actually made. This data also excludes estimated grants from accelerators. This means that it also excludes a combined $4.3 million in grants received by 43 African startups: the 25 African startups who received the Google Black Founders Fund, the 12 edtech startups from the CcHub-Mastercard Edtech Fellowship, and the 6 African startups from Norrsken Accelerator Batch 2023. 2. Telecoms: Safaricom receives $257 million In big telecoms moves, the International Finance Corporation (IFC) announced in June that it would invest Ksh21.8 billion ($156.9 million) in Safaricom, in exchange for 7.25% of the company’s equity. IFC will also loan Safaricom a further Ksh13.9 billion ($100 million). In Ethiopia, where Safaricom has generated over $4 million since its October 2022 launch, CEO Anwar Soussa will be stepping down in July. He will be replaced by Wim Vanhelleputte who has served as CEO of MTN Uganda and MTN Côte d’Ivoire. 3. Fintech: Palmpay crosses 25 million users In June, superapp Palmpay reached its 25 million users milestone in Nigeria. The company announced the milestone at the end of the month, noting that it has an extensive network of 500,000 mobile money agents and 300,000 merchants in its payments ecosystem. 4. Legislation: Kenya passes Finance Bill Kenya’s Finance Bill is now law. June ended with President William Ruto signing in the new law which started taking effect from July 1. The bill has intense ramifications for Kenya’s tech ecosystem via taxation. Content creators, for example, will not have to pay a 1.5% tax for any form of payment they receive—including sponsorship, or earnings. There’s also a 3% tax on the transfer of any digital assets—crypto. Finally, digital lenders will remit a 20% excise duty on each loan interest that they charge. 5. Layoffs: Mara, Chipper Cash, Smile Identity, Eyowo and Twiga prune their staff It’s been a full year of layoffs in the African tech ecosystem. What started off with layoffs at Swvl in May 2022 has continued to sweep across the continent. In June, five African startups revealed that they had laid off over 238 employees. Twiga, a Kenyan agritech, laid off 211 employees—including its entire sales team—in a “cost-cutting” move in 2022. Fintech Eyowo, which announced a pivot to a D2C model, also laid off 13 employees, while Smile Identity, a KYC startup that raised $20 million in February 2023, laid off 8 employees for similar reasons: macroeconomic conditions. Fintech Chipper Cash executed its third round of layoffs, an undisclosed number which saw the exit of global chief operating officer Alicia Levine and Kenyan country director Leon Kiptum. Finally, sources at Web3 startup Mara, which raised $23 million in 2022, revealed that the startup laid off six people in May. 6. Big Deals: Flutterwave signs five-year deal with Microsoft Meanwhile, fintech unicorn Flutterwave experienced a month of ups and downs. On a good note, the fintech signed a five-year deal with Microsoft, which will see the company build a new generation of payment services on Microsoft Azure, powering payments infrastructure across the African continent. The company also confirmed, in June, that it’s looking to deepen its presence on the continent as it moves towards an IPO. On the downside, the fintech’s problems in Kenya resurfaced as a Kenyan court froze 45 of its bank accounts and 10 mobile money wallets. The freeze came after 2,468 Nigerians sued Flutterwave for allegedly being the medium through which they were defrauded of Ksh1.6 billion ($12.04 million). 7. Load-shedding: South African companies blame Eskom for profit drop As load-shedding in South Africa worsens, South African companies are blaming their profit declines on the electricity shortage. Earlier in June, streaming company MultiChoice recorded a 200% profit decline, going from a R2.8 billion ($150 million) profit in the last financial year to a R2.9 billion($155 million) loss. At the same time, telecom Telkom’s annual results showed a 76.6% profit loss which the company claims were due to load-shedding. Finally, retail giant Mr Price reportedly lost R1 billion ($54 million) in revenue which the company says is an indirect impact of load-shedding. These companies follow MTN and Vodacom, telecoms which earlier this year blamed their profit declines on South Africa’s electricity crisis. 8. Crime: Tingo Group accused of fraud June kicked off with a report from US-based investment research firm Hindenburg Research which accused Tingo Group, a Nigerian company, and its founder Dozy Mmuobuosi of fraud and misrepresentation. Per the report, Tingo’s claim that its telecoms arm generated $128 million in revenue in Q1 2023 is false. Hindenburg also debunked Tingo’s claim that its agricultural export business, Tingo DMCC, was on track to deliver over $1.34 billion in 9 months. The report also showed that photos of Tingo’s airline business, Tingo Airlines, were photoshopped. Days later, Tingo denied all accusations and announced that it
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- July 1 2023
Mobile data is literally money in Kenya
Lire en français Read this email in French. Editor’s Note Week 26, 2023 Read time: 5 minutes Hello Buckle up and dive into interesting African tech news, with a focus on the happenings in the vibrant East African country of Kenya. Plus, we need your genius insights to sprinkle some extra pizzazz on this newsletter, so please take our survey and help us unleash the full force of awesomeness upon you! Pamela Tetteh Editor, TechCabal. Editor’s Picks Kenyans can now pay with data Kenya’s biggest telecoms operator, Safaricom, has launched a new service that will allow customers to pay for products and services using their internet data balance. Read more CBN draws a line While Kenya pushes the boundaries with payments technology, the central bank of Nigeria (CBN) has imposed restrictions on the maximum transaction amounts permitted for residents using contactless payment technology. What are the limits? What’s the deal with South Africa’s new identification bill? South Africa’s identification bill has people losing sleep about the privacy risks of consolidating all citizens’ ID information into a single system. Learn more. Nigerian banks to do social media checks In more news about controversial rules, a wave of raised eyebrows swept across Nigeria when the CBN made it mandatory for banks to request customers’ social media IDs as part of the Know Your Customer (KYC) process. Is this a big deal? Kenya’s digital sex offenders registry Kenya has launched the first digital sex offenders registry in Africa. Now with a few simple clicks, you can find out if someone is a registered sex offender in Kenya. Learn more. Entering Tech Interested in getting tech career resources and insights?. Then sign up for Entering Tech to get started! Ethiopia’s Safaricom gets a new CEO Wim Vanhelleputte from MTN Group will assume the position of CEO at Safaricom Ethiopia, succeeding Anwar Soussa in the role. Learn more. Kenya to tax influencers and crypto bros Kenya’s Finance Bill 2023 mandates digital content creators, crypto traders, and digital lenders to pay taxes. How much? inDrive is licensed in Kenya inDrive, a ride-hailing platform, has obtained the necessary licences to operate within Kenya. Unlike Uber and Bolt, it allows customers and drivers to bargain the cost of trips. Learn more. Flutterwave enters 5-year deal with Microsoft Flutterwave has entered into a five-year technological agreement with technology giant, Microsoft. Now, the fintech company build a new generation of payment services on Microsoft Azure. Find out. Free data for Ugandan refugees The Ugandan government has partnered with the World Bank to provide Internet access to 1.5 million refugees living in Uganda’s refugee communities. Learn more. Who brought the money this week? Kenyan fashion e-commerce company, ShopZetu, raised $1 million in pre-seed funding. Chui Ventures led the round. Tappi, a Kenyan e-commerce company, secured a $180,000 grant from Orbit Startups. Ghana-based web3 startup, Mazzuma, raised an undisclosed amount of venture funding from Adaverse. Zoie, a South African-based health-tech company, also closed an undisclosed amount in funding from 4DX Ventures and E Squared Investments. What else to read this weekend? Nigeria’s Central Bank issues new rules for contactless payments Nigeria’s proposed electricity tariff hike means a fresh headache for small businesses Smile Identity lays off eight employees as it increases its ‘focus on profitability’ Following chargeback fraud fiasco, Union54 is back with a superapp Written by: Ngozi Chukwu & Hannatu Asheolge Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
Read More- July 1 2023
Despite pushback from Bolt and Uber, Nigeria’s ride-hailing union unites against unfavourable working terms
Ride-hailing giants Uber and Bolt are fighting their unionised drivers over how the latter have chosen to christen their union. In January, ride-hailing drivers applied to Nigeria’s Ministry of Labour to register the Amalgamated Union of App-Based Transport Workers Of Nigeria (AUATWON) as the official drivers union. Under existing rules, a trade union can only get its certificate of registration if there is no objection to its creation from any third party, within 90 days. But within weeks of AUATWON’s application, ride-hailing companies Bolt and Uber reportedly objected to the registration of the union. One of the grounds for their objection was the union’s name and how it designates the drivers as “workers” for the ride-hailing platforms. For years, ride-hailing companies have continued to insist that the drivers on their platforms are not their workers but independent contractors. A driver close to the situation told TechCabal, “The ride-hailing companies said they don’t want ‘workers’ in our name; they want ‘drivers’.” The distinction is important because if the drivers are acknowledged as workers, the ride-hailing companies could have obligations to them, such as providing health insurance, leave allowance, stipulation for time off, etc. In December 2018, some drivers filed a suit asking the industrial court to rule on the question of whether they are workers or independent contractors. A case at the appeal court is yet to be determined. Registrar of Trade Unions, Falonipe Amos, summoned the drivers to a closed-door meeting in Abuja on June 26, to resolve these objections, in a bid to move their application forward. A source told TechCabal that the drivers disagreed with the objections raised by Bolt and Uber in the closed-door meeting, stating that their names have been strategically picked to form a body fronting their interests. “The union has invested so much into building the name as a brand and we cannot, at this time, adopt any other after waiting for over seven years before this approval,” the source stated. Long ride to freedom The journey to recognition for AUATWON has been long and marked with pushback. In April, TechCabal reported that the union threatened a protest in response to Bolt and Uber’s move to revoke the licences of the drivers. In May, Technext reported that AUATWON had accused Bolt and Uber of trying to “sponsor division within the union”. Some sources close to the union claimed this pushback derailed their goals to effectively register the union. The union’s general secretary, Ibrahim Ayoade, told TechCabal that the companies have to accept the union as permanent. “Our certificate (of registration) will come out soon and there is nothing they can do. They are afraid of the union. That is why they are taking those actions they took,” he said on a phone call. A source privy to the union’s discussions with the Ministry of Labour early this week said the recognition of the union will allow them cater to challenges peculiar to their industry. The feeling within the union is that ride-hailing companies have long scuttled their attempts at collective bargaining and are displeased with the decision of the drivers to unionise. The recognition of the union is important because, for years, the drivers have asked for a seat at the table during decision-making. There are several outstanding issues the drivers want a say on, like the commission the companies charge and clearer terms before drivers are kicked off platforms. In a statement, the country manager for Uber in Nigeria, Tope Akinwumi, told TechCabal that drivers are at the heart of everything they do, hence the increase of fares on June 3 and 9 on the app to reflect existing economic conditions. “We support the freedom of drivers in Nigeria and the rest of the world to organise, including by forming and joining unions and associations. As one of the largest sources of platform work in the world, Uber is committed to working with policymakers, social representatives and the industry to improve the quality of platform work. Uber remains ready and willing to engage with drivers towards improving the quality of independent work,” the statement read in part. A spokesperson for Bolt hasn’t responded to inquiries at the time of filing this report. Another source said that if their successful meeting at the labour ministry on June 26 doesn’t resolve the problem, then the court of law will decide for everyone in the sector. “We are still on top of the matter, and we are still looking at it. It could result in a court action,” the source said. Ayoade stated that more negotiations will follow after the Muslim festivities, which ended on Thursday.
Read More- June 30 2023
Nigeria’s Central Bank issues new rules for contactless payments
Contactless transactions will be capped at N15,000 per transaction, with a daily maximum of N50,000. Nigeria’s financial regulator on Tuesday announced new guidelines for digital payment providers who offer contactless payment solutions. Contactless payments broadly refer to transactions where users pay by simply tapping or waving their payment devices at point-of-sale terminals. It is also called proximity payments. Under the new rules, users can tap or wave their devices (including smartphones and cards) that are enabled with contactless technology to make payments without needing to input a PIN to confirm the transaction. But such transactions will be limited to ₦15,000 ($19.65) for a single payment or ₦50,000 ($65.5) daily. Contactless payments are powered by radio frequency identification (RFID) or near-field communication (NFC) technology both of which allow enabled devices to initiate and authorise payment transactions without additional authorisation confirmation from the user. EMVCo—named for the organizations (Europay, Mastercard and Visa) that established it— works with payment industry stakeholders globally to set technical standards for smart payment cards and the POS readers that accept them. The COVID-19 pandemic is credited for accelerating the use of contactless payments. In 2020, the WHO urged a switch to contactless as part of measures to help slow the spread of COVID-19. In response 30 European countries raised their limits on contactless payments in the same year. In 2021 the UK contactless payment limits again to £100 in October 2021, making UK consumers among the world’s biggest spenders without having to confirm their identity. Three-quarters of all Mastercard transactions in Europe are contactless. In the UK, Visa says the figure is as high as 80% of in-person payments. Nigeria’s contactless payments rules place the burden of fraud with acquirers (i.e. the bank of the payment recipient), issuers (i.e. the bank of the customers) and merchants (the business) who offer contactless payment channels. Per the guidelines, they will be liable for fraudulent transactions “arising from their negligence and/connivance.” In addition, the guideline specifies that contactless payment be only enabled for users who have Bank Verification Numbers (BVNs). Contactless transactions that are higher than the limit will require additional authorisation in the form of a PIN, mobile code or biometric identification. Regulators in the US and Ecuador do not place any limits on single contactless transactions. To combat fraud Nigerian fintechs have moved to include ID verification as part of the onboarding process instead of simply placing limits on transactions. Paga, founded in 2009 recently announced that it would require all customers to pass additional ID verification regardless of their KYC level. Nigeria’s central bank said it considered the risks associated with contactless payments before limiting how much users can make with contactless payment methods. Limiting transaction amounts on contactless payments is a standard fraud mitigation risk. There is evidence that it works. According to the data analytics company, FICO, “data from UK Finance revealed that in 2020 there was a total of £574 million lost through card fraud. Of this, only £16 million represented contactless payment fraud. Against a total of £9.46 billion worth of contactless transactions, that equates to 1.8p worth of fraud in every £100 spent using contactless technology.” South Africa leads the way in contactless payments in Africa. In January Tech Central reported that more than half the customers of First National Bank (FNB) use contactless payments. “Consumers have shown a strong preference for contactless payments using their contactless-enabled cards or smart devices,” said Ashley Saffy, head of business development at FNB South Africa.
Read More- June 30 2023
Following chargeback fraud fiasco, Union54 is back with a superapp
Union54, the Zambian fintech startup whose operations got halted as a result of a chargeback fraud debacle last year, is launching a superapp in partnership with Mastercard. Following the $1.2 billion chargeback fraud fiasco which saw the startup halting operations for eleven months, Zambian fintech Union54 is back with another product: a superapp called ChitChat. ChitChat is a collaborative effort between Union54 and global payments technology company Mastercard and will enable users across Africa to send messages over an encrypted platform. ChitChat will also double as a social commerce platform, enabling users to send each other money, access a USD debit card, and purchase from digital storefronts within the app. ChitChat’s card and payments features, supported by Mastercard integration, will roll out in a beta for Angola, Tanzania, and Ghana with more markets to be added this year. “We are excited to announce our ChitChat product and at the same time, announce our expanded partnership with Mastercard,” said Perseus Mlambo, CEO of Union54. “We believe that mobile payments and chat platforms can be a powerful force for increasing trade across Africa, and we are committed to building a platform that accelerates this. We’ve built payments into a chat platform, giving everyone a USD card on demand – on our terms.” Union54 and Mastercard claim to have issued over 2 million cards to Africans through their partnership. “We are delighted to deepen our partnership with Union54 as we work towards creating a world beyond cash. Our collaboration will not only enable us to expand our reach into new markets, but it will also provide consumers with a secure and convenient way to access financial services,” said Gabriel Swanepoel, country manager at Mastercard, southern Africa. In July 2022, Union54 halted its services following an attempted $1.2 billion chargeback fraud which saw many African startups that previously used its card-issuing services rush to find alternatives. In an interview with TechCrunch in March this year, Mlambo stated that Union54 intended to use lessons from the event and their subsequent hiatus to re-enter the African fintech market, a promise which has culminated in the launch of ChiChat.
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- June 30 2023
Nigeria has suffered several data breaches recently, and its data protection commissioner wants to change that
The just-appointed commissioner for Nigeria’s new data protection bureau, Vincent Olatunji, tells TechCabal how he plans to end data breaches in the country. Earlier this month, Nigeria’s president, Bola Tinubu, signed the Nigeria Data Protection Bill 2023 into law. The new law, which went into effect immediately, was proposed by the immediate-past government of Muhammadu Buhari, and provides a legal framework for the protection of personal information and the practice of data protection in Nigeria. The law also creates a new national body for the enforcement of the provisions contained in the act. The new body—the Nigeria Data Protection Commission (NDPC)—will be headed by Vincent Olatunji. A certified public-private partnership specialist (IP3 Specialist) and a PECB-certified data protection officer, Olatunji joined the National Information Technology Development Agency (NITDA) in 2002, rose to the position of director in 2014, and became acting director-general in 2016. In February 2022, he was appointed the NDPB’s first national commissioner, and he has been tasked with protecting Nigerians and their data. How the bureau was created On a call with TechCabal, Olatunji said that the immediate former minister of the digital economy, Isa Pantami, was responsible for the creation of the Nigeria Data Protection Bureau (NDPB). The NDPB was initially a body under the National Information Technology Development Agency (NITDA), but for Nigeria to be in line with the ECOWAS Act on Personal Data Protection [pdf], there needed to be an independent supervisory authority for data protection. “We explained to the minister that it would be difficult to get results if we did not have a body specifically in charge of implementing data protection laws. He then sent a memo to the president, which was approved,” Olatunji said. The creation of the law and bureau is also in line with the right to privacy enshrined in Section 37 of the Nigerian Constitution. According to Olatunji, part of the president’s approval mandates that the NDPC be funded by NITDA and the Nigerian Communications Commission (NCC) for three years. “After that period, the bureau should be self-sustaining. We should be able to generate money to fund our activities and even create revenue for the government,” he said. Image Source: Faith Omoniyi/TechCabal. The powers of the Nigeria Data Protection Commission When asked how the commission would be able to enforce fines against international companies, Olatunji referenced Nigeria’s large market. “They know the market is here; they cannot afford not to obey our laws. We have already fined some financial institutions that did not comply with the laws, and they paid. Between the time we started and now, we have generated over ₦200 million for the government. However, we use a balanced approach so businesses can grow in Nigeria.” In an interview with Arise TV, Olatunji said that the commission has the power to create regulations for emerging technology and impose fines on companies that have committed a breach of data protection. “Going to the legislature to amend our laws before we can regulate emerging technologies would be too cumbersome. That’s why we made our laws flexible. The law empowers the bureau to issue regulations, which would be as powerful as the act itself,” he explained to TechCabal. Data protection in Nigeria is still in a dire state. In the first quarter of this year, Nigeria was ranked as the 32nd most breached country in the world. This coincided with a 64% increase in breaches from the previous quarter. When asked if the commission will investigate breaches even without a public complaint, Olatunji said, “That is one of the principal functions of the bureau. We can independently conduct investigations in any sector that has to do with personal data protection. If there is a data breach anywhere, we have the power to investigate, and whatever decision we make is binding. However, companies have the right to appeal, and the Supreme Court has the final say.” A corollary effect of the dire state of Nigeria’s data protection has been the unethical use of Nigerians personal data by companies. Last month, TechCabal wrote about the unethical debt collection methods employed by some loan apps. Although several loan apps have denied using customer data unethically, it is something that is on Olatunji’s radar. “From my experience with Soko Loan, I know that a lot of Nigerians have been damaged psychologically by the messages they send out to people. We started investigating them [loan apps] under NITDA, and now that we are independent, it’s one of the things we will focus on.” Olatunji added that because of the complexity of these loan applications, a multi-pronged approach by different regulators, such as the central bank, the Economic and Financial Crimes Commission (EFCC) and NITDA, would be employed to create regulations that would govern them. The Bureau can license, accredit, and register bodies to provide data protection compliance services. However, according to Olatunji, because the “expertise in data protection services in Nigeria is low”, the bureau has had to employ a public-private partnership model. “For instance, we have over 500,000 data controllers and processors, and each of these organisations should have a data protection officer, but there are not up to 10,000 certified data protection officers in the country.” To address this deficit, the bureau started licensing data protection compliance organisations. “They are companies that have expertise in data privacy and protection, who can go to companies, talk to them, create awareness, and assist with data privacy and protection policies. As of last count, these organisations are now offering about 17 different services that we did not even think about when we started this process. One good thing that has come out of this is that over 9,000 jobs were created within three years. We started by experimenting with about 17 [organisations], and now there are 168 [organisations],” he said. Olatunji also added that the bureau regularly conducts “quality checks” on the organisations and that 18 of these organisations have since had their licences revoked. Although there has been a clamour for data to be
Read More- June 30 2023
FNB and MTN sign MVNO partnership deal
South Africa’s second largest bank by customer base, First National Bank, has signed an agreement with MTN South Africa for the supply of network services for FNB Connect, the bank’s mobile virtual network operator (MVNO). In a statement, FNB and MTN stated that they have formed the collaboration to accelerate “access to reliable telecommunications and internet services for customers who use FNB Connect”. “Telecoms and ICT services are central to the integrated value propositions we offer our customers across financial and lifestyle services,” said FNB CEO Jacques Celliers in the statement. “In the months ahead, we will expand our range of services by introducing more cost-effective and tailored solutions for both individual and business customers. This includes internet-of-things solutions that empower businesses to improve efficiency and productivity.” FNB Connect already has an MVNO partnership with Cell C, which was the first mobile network operator in South Africa to introduce MVNO services. According to FNB, the Cell C partnership will run concurrently with the new MTN partnership to “[allow] customers to enjoy the best of both worlds in network quality”. South Africa’s fledgeling MVNO landscape Commenting on the FNB and MTN deal, Cell C’s chief officer for wholesale business, Stephen Morony, told local publication TechCentral, that they welcome the new competition in the MVNO space. “We look forward to our continued relationship with the FNB Connect team while welcoming competition in the MVNO space. Cell C is confident that our technology platform, our extensive MVNO partner experience, range of service offerings and value propositions are competitive and will serve our varied customer segments well, enabling ever more choice for the South African consumer,” he said. The South African MVNO industry has seen its value increase over the last few years, causing mobile network operators’ interest in offering the services to surge. FNB stated that its MVNO sold about R400-million in smartphones and other digital devices in the first half of the year. In September 2022, MTN announced its push into the business, stating that it would offer services to the likes of MTN Mobile and Mr. Price Mobile. “We are growing that part of the business quite significantly. We are building an MVNO platform as a service[…]we have a huge pipeline of MVNOs who want to come on board. We are open for business when it comes to MVNO. We will add far more than three,” said MTN South Africa CEO Charles Molapisi at the time. Also in September 2022, Cell C partnered with the country’s largest retail bank Capitec to launch an MVNO for the latter. Capitec is marketing the MVNO as a virtual mobile network that offers customers less expensive and perpetual data. Shoprite also launched its K’nectmobile MVNO in March 2021, supported by Cell C’s infrastructure via a roaming partnership with MTN. In January this year, Telkom also entered the scene, announcing that it would “leverage its extensive network footprint across South Africa to offer MVNOs the opportunity to provide quality services over its network – thereby enhancing the much-needed competition in the telecoms space”. The MVNO partnerships are in line with spectrum-licence requirements set by industry regulator ICASA for mobile network operators to benefit historically disadvantaged groups. But what exactly is an MVNO? An MVNO is a reseller of wireless communications services. It leases wireless capacity from a third-party mobile network operator (MNO) at wholesale prices and resells it to consumers at reduced retail prices under its business brand. Mobile network operators benefit from leasing this capacity because it would otherwise be unused, so they gain a profit by leasing it in bulk at wholesale prices. MVNOs benefit from being able to mark down their retail prices to a certain extent because they do not have to pay radio frequency spectrum licences and have no infrastructure to build or maintain. As a result of the low overhead, they can spend aggressively on marketing to increase their chances of selling capacity to consumers. A big market opportunity with its challenges According to a report by Mordor Intelligence on the South African MNO – MVNO Market – Growth, Trends, COVID-19 Impact, and Forecasts (2023 – 2028), the market is expected to register a CAGR of about 7.8% during the forecast period. The growth will be mainly driven by increasing demand in a wide range of applications including retail, cellular M2M, and media and entertainment. However, most MVNO players in South Africa, according to the report, function as wholesalers that purchase bandwidth in chunks from big carrier networks and sell at a discount to consumers. As a result, this market has a low-profit margin because the vendors offer cheaper rates to consumers by renting spectrum from major carriers which is costly. Despite much potential, the MVNO segment has faced slow growth in recent years due to unfair pricing for network access from large network operators. This will likely be remedied by the regulator Independent Communications Authority of South Africa (ICASA)’s order to mobile network operators to reduce roaming fees, including those of MVNOs, a solution which is likely to accelerate the growth of the segment.
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- June 30 2023
TechCabal Daily – Pay with data
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Heads up Delivery times will vary for TC Daily over the next couple of weeks. Over the next couple of weeks, a small percentage of readers will get TC Daily at the usual time—7 AM WAT—while the majority of our readers may receive it 3 hours later, around 10 AM WAT. We apologise in advance, and we’ll work on getting back to a regular schedule soon In today’s edition Kenyans can now pay with data CBN sets limit on contactless payments Safaricom Ethiopia selects a new CEO Funding tracker The World Wide Web3 Event: The Moonshot Conference Job openings Telecoms Safaricom enables payments with internet bundles Safaricom CEO Peter Ndegwa Safaricom customers can now use internet bundles for payments. With this new development, millions of customers can use their internet data balance to pay for goods and services. This means customers can incur lesser charges with data payments, than traditional payment methods. The new payment option: Introducing “Lipa na Data”, users with a data balance of 5GB and above can conveniently make payments at shopping outlets by dialling *544*34# and using Paybill or till numbers. If a user’s data balance is below 5GB, they will be notified that they are not eligible for the service. Both Safaricom post-pay customers having a data balance of 5GB and above, and prepaid customers with no expiry bundles exceeding 5GB can access this service provision. For pricing, Ksh500 ($3.57) is equivalent to 7.7GB. This could mean that customers could pay more as 8GB of data on Safaricom presently costs Ksh1,000—although this option also includes 400 minutes of talk time or 1,000 SMSes. Zoom out: The introduction of this service complements Safaricom’s existing range of payment plans within the M-Pesa e-wallet. These include direct payments from user deposits and the Fuliza overdraft service, used by customers facing insufficient deposits to cover their purchase costs. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today on moniepoint.com/ng. Economy CBN sets transaction limit on contactless payment Image source: Zikoko Memes On Tuesday, the Central Bank of Nigeria set a transaction limit for contactless payments made through bank accounts and digital wallets. In a circular, the apex bank also issued a guideline for contactless payments to banks, other financial institutions, and payment service providers. Side bar: Contactlesspayments are exactly what they sound like. It’s using debit or credit cards to pay for stuff by simply swiping said cards next to the payment points. With contactless payments, you don’t need to use PINs or tokens, just swipe and go. The transaction limits: The daily cumulative transaction limit is set at ₦50,000 ($65.08), with a single transaction limit of ₦15,000 ($19.56). Transactions surpassing these limits are classified as higher-value transactions and will require verification and authorisation, accordingly. Furthermore, existing know-your-customer (KYC) requirements and limits on electronic payment channels will be applicable for such transactions. Any transaction that surpasses the designated daily cumulative limits must be conducted using contact-based technology. Zoom out: By issuing the guidelines, the CBN looks to fulfil its mandate of ensuring the safety and stability of the Nigerian financial system, and fostering a robust and secure payment system. Telecoms Safaricom Ethiopia appoints new CEO In more news about Safaricom, things are changing at Safaricom Ethiopia. Anwar Soussa, the CEO of Safaricom Ethiopia, is leaving the company in July, after a two-year stint at the helm. Wim Vanhelleputte, from MTN Group, will take over his role in September, the company has announced. Wim Vanhelleputte, CEO of Safaricom Ethiopia Before his role at MTN Group, Vanhelleputte was CEO of MTN Uganda, from 2016. And before that, from 2009 to 2015, Vanhelleputte served as the CEO of MTN Côte d’Ivoire. He briefly joined Airtel Africa between 2015 and 2016, first as the regional director for francophone Africa, and later as the cluster CEO for Airtel DRC and Congo. A necessary change? According to the company’s annual results, Safaricom’s Ethiopia expansion seems to be coming at the expense of the mobile network operator’s profitability. While its revenue saw an increase of 4.3%, its Ethiopian operations affected profitability, thanks to the costs associated with the market expansion. The company’s Ethiopian operating costs stood at almost Ksh20 billion ($146 million), which represents over 27% of the group’s overall operating costs. While Safaricom’s Kenyan operations reported over Ksh110 billion ($804 million) in profits, Safaricom Ethiopia incurred over Ksh21 billion ($154 million) in losses. Zoom out: Safaricom Ethiopia, which generated Ksh562.4 million (over $4 million) in revenue in the last financial year, started commercial operations in October 2022, after months of tests and customer onboarding. It has since grown its user base to over 4 million customers. TC Insights Funding Tracker Image source: TC Insights This week, Kenyan fashion e-commerce company, ShopZetu, raised $1 million in pre-seed funding. Chui Ventures led the round. Other participating investors included Launch Africa, Roselake Ventures, and Logos Ventures. Here are the other deals this week: Tappi, a Kenyan e-commerce company, secured a $180,000 grant from Orbit Startups. Ghana-based web3 startup, Mazzuma, raised an undisclosed amount of venture funding from Adaverse. Zoie, a South African-based health-tech company, also closed an undisclosed amount in funding from 4DX Ventures and E Squared Investments. That’s it for this week! Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. Refer TC Daily and win great prizes Refer TC Daily and win great prizes. Not only do you get rewarded for your referrals, but you also automatically earn an entry into the grand prize draw at the end of the month. And what’s the grand prize, you ask? A blissful massage session that will melt away all your stress and leave you feeling rejuvenated! Scroll to the end and start sharing your unique referral link today. Crypto Tracker The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $30,950 + 2.49% +
Read More- June 29 2023
Increased electricity tariff will not impact startups as hard as it will their employees, experts say
From July 1, 2023, electricity distribution companies (DisCos) in Nigeria will increase electricity tariffs by over 40%, due to high exchange rates and inflation. Tech startups in Nigeria are expected to be affected less due to their remote work setting. However, remote workers will bear the brunt. Electricity distribution companies (DisCos) in Nigeria will increase electricity tariffs by over 40% from July 1, 2023. The surging inflation and recent unification of the country’s foreign exchange rate has been cited for this surge in pricing. The impact of the new electricity tariff will be felt across multiple verticals in Africa’s largest economy, and tech startups are not left out of this. “From an operational point of view, startups will do better than small businesses, but from a staff point of view, they are going to do worse because staff will spend more on electricity,” said Deji Olowe, CEO of Lendsqr. Olowe believes that the tariff increase might be an advantage to tech startups that work remotely, but said that their staff will bear the brunt as they would have to spend more on electricity. Babatunde Akin Moses, CEO of Sycamore, shares Olowe’s opinion. “Startups, their founders and employees will definitely face inflation, like every other Nigerian. Perhaps companies that are remote would feel it less if they do not operate an active office, but they will still feel it nonetheless because the cost of power [for employees] working from home will increase too,” he said. Remote workers employees will be hit the most Ngozi Chukwu, a writer with this publication, works mostly remotely from a shared apartment in the suburbs of Lagos. With an average of 15 hours of daily electricity supply—a luxury given Nigeria’s erratic power supply—Ngozi spends an average of ₦25,000 on electricity monthly. However, with the expected increase in electricity tariff, Ngozi might end up spending up to ₦35,000 monthly on electricity. Creo, a brand designer, is not given the luxury of 15 hours of daily electricity supply; he depends heavily on his generator and solar-powered generators. According to him, he spends an average of ₦23,000 to ₦30,000 monthly fuelling his generator. He also owns solar-powered generators, to augment the erratic power supply in his neighbourhood. “I spend a lot on generators. Now, I have to spend more on buying units of electricity. It’s not sustainable, because electricity could be cheaper,” Creo said. While remote workers already shuffle between alternatives to curtail erratic power supply, expensive and faulty internet networks pose another barrier to their work. Nigeria has one of the most expensive mobile data subscription packages in the world. The proposed electricity tariff increase means that these remote workers now have to spend more to power their devices, thereby reducing a portion of their income. How will startups rise to the occasion? While startup employees will be disproportionately affected by the increase in electricity tariffs, Olowe suggests that startups could potentially offer incentives to their employees to help them cope with the rising costs. However, he emphasises that this solution comes with a caveat. “Are startups going to increase or give extra bonus or cost of living adjustments to their staff? That’s a possibility. But remember that even the revenue for startups is also being impacted because their customers are impacted by the economy,“ he told TechCabal. “It’s going to be a tough time for everybody.” On the other hand, Akin Moses believes the increase in electricity tariff poses a dilemma for startups, forcing them to choose between raising prices or experiencing diminished profits. “When this [electricity tariff increase] is considered along with the recent subsidy removal, many startups may have no choice but to raise the prices of their products to customers. The alternative is to face increased cost and reduced profits,” he said.
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