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March 13 2024

👨🏿‍🚀TechCabal Daily – An Unlimited expansion

In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Apple is loosening its grip around the iPhone in the European Union. First, the EU forced it to replace its lightning ports with the USB-C, and now, EU regulations are pushing the company to allow users download apps directly from websites. It’s not set in stone yet, but later this year, iPhone users will be able to download apps from sites other than just the Apple Store which has been the only legal way to download apps on the iPhone for over 15 years. In today’s edition Nigeria wants info on top 100 Binance users Interswitch expands into telecoms Stanbic IBTC pauses Kenyan subsidiary launch Unlimit expands to Tanzania The World Wide Web3 Opportunities Crypto Nigeria grills Binance for info on top 100 users On February 26, the Financial Times confirmed the arrest of two Binance executives in Nigeria who had flown into the country to resolve the ban on the company’s website. Latest reports indicate that Nigeria is now grilling the detainees for information on the top 100 Binance users in the country as well as other data including a six-month transaction history. The country also wants Binance to settle any tax liabilities which it has in Nigeria. While both executives were previously unidentified, a new Wired report has now identified the two arrested executives as Tigran Gambaryan, a former crypto-focused US federal agent, and Nadeem Anjarwalla, Binance’s Africa regional manager. Both executives have been held in Nigeria’s capital city Abuja by the office of the National Security Adviser (NSA) after moving into Nigeria two weeks ago to resolve a ban on their website. Gambaryan and Anjarwalla were stripped of their passports upon entry into the country and neither has been charged with any criminal offence. Nigerian authorities are yet to disclose new information about their arrest, but the duo’s relatives are now calling on the US government to negotiate their release. A crypto crackdown? While Nigeria has had a public lifting up of crypto since the resumption of crypto transactions in the country last December, other significant changes have hinted at a casting down. Regulators blocked access to the websites of several exchanges, aiming to curb speculation and prevent the unofficial exchange rates set on these platforms. These websites have become a popular alternative for trading the Nigerian naira and have unofficially established a market-driven exchange rate. Binance was accused of operating illegally and handling $26 billion in unidentified funds. With this latest report, the country might also be considering action against crypto users who have facilitated the transfer of these funds. While Binance’s executives remain in detention, the company has paused trading of the naira against bitcoin and tether digital coins on its exchange. The executives, per Nigerian law, were set for release yesterday, Tuesday, March 12, but a court order set for today, March 13, might see an extension. Launch your tech career with Moniepoint Launch your tech career with paid mentorship from fintech industry leaders and potential full-time employment. Apply now! Telecoms Interswitch acquires $1 million MVNO licence Interswitch is known for quite a few things. It was one of Africa’s earliest unicorns reaching the $1 billion valuation as early as 2019. It’s also one of the very few payments companies which processed over 1.2 billion transactions across Nigeria in March 2023. But like Oliver Twist’s hunger, these successes aren’t enough for the fintech giant. Now, it’s doubling down on telecoms. The Visa-backed company reportedly entered Nigeria’s telecom sector in May 2023, after it acquired a Tier 5 Mobile Virtual Network Operator (MVNO) license for $1 million from the Nigeria Communications Commission (NCC). Why diversify? Interswitch has a large customer base and has issued over 50 million debit cards through its payment services. It aims to leverage this customer base and utilise its MVNO licence to offer combined payment and telecom services to both business-to-business (B2B) customers and consumers. Their strategy focuses on a low-capital-expenditure virtual telecoms model. Interswitch holds the highest tier license—a unified virtual operator, which allows them to partner with existing telcos and leverage their infrastructure to offer cheaper mobile services—including 4G/5G—and expand reach to underserved areas, especially in rural regions. The big picture: Nigeria’s telecom regulator issued 25 MVNO licences in 2023 to boost competition. Despite the country’s large population—200 million—only 60% have access to mobile connectivity, less than 5% have access to 4G, and 0.8% have access to 5G. If Interswitch’s fintech ambition is any pointer, Nigerians will see stronger connections in the future. No hidden fees or charges with Fincra Collect payments via Bank Transfer, Cards, Virtual Account & Mobile Money with Fincra’s secure payment gateway. What’s more? You get to save money for your business when you use Fincra. Start now. Fintech Stanbic pauses launch of Kenyan fintech subsidiary In recent times, Nigerian commercial banks have been borrowing from the playbook of fintechs and establishing their fintech subsidiaries. GTCO launched Habari Pay in 2018. Access Bank Plc, Nigeria’s largest commercial bank by asset, launched Hydrogen in 2021. Stanbic IBTC Holdings, in 2022, launched Zest, its fintech arm. Other countries appear to be gleaning from this playbook. In its 2022 financial report, Stanbic Holdings disclosed it was looking to partner or acquire a fintech or mobile network operator to expand its business. The company also stated, the year before, that it was seeking partnerships with Chinese financial technology firms to boost trade between Kenyan traders and Chinese vendors. Stanbic Holdings believed Chinese fintech partnerships would enable Kenyan traders to source quality goods and settle transactions conveniently. Now, Stanbic Holding has hit a pause on its attempt to launch its fintech subsidiary in Kenya. The company had earlier obtained regulatory approval from the Capital Markets Authority (CMA) to begin operations in Q4 2023, but the bank’s board has decided to put a hold on operations. While the exact reason for stalling operations remains unclear, the latest disclosure means Stanbic might be reneging on its

March 12 2024

Flutterwave’s COO leaves fintech giant after several other high-profile exits

Flutterwave’s chief operating officer, Bode Abifarin, has left Africa’s largest startup after six years of leading the startup’s operations, in the latest high-profile exit from the payments giant. “It’s been a cocktail of highs, lows, victories and failures, hitting milestones, losing milestones, all wrapped up in a story of resilience with the ultimate satisfaction of solving payment problems for our customers,” Abifarin wrote in a LinkedIn post on Tuesday. Her resignation comes after other high-profile employees like Oneal Bhambani, the former chief financial officer, and Ted Oladele, a former vice president of design and innovation, left the company in recent months. Jimmy Ku, the company’s head of growth for the United States, also left the company in February. Abifarin joined Flutterwave after 15 years at KPMG Nigeria, where she was an associate director. With almost two decades of experience, she built Flutterwave’s operations, including internal processes, as it attained unicorn status and helped steady the ship through a series of allegations against its leadership in 2022. “Since our inception, Bode has been the heartbeat of our operations, infusing her passion and dedication into every aspect at Flutterwave,” Gbenga Agboola, Flutterwave’s CEO, said in a LinkedIn post. She will “continue to nurture new businesses” and “focus on building, teaching and education,” after leaving Flutterwave. Abifarin’s exit comes as the payment giant touts itself as an IPO candidate with a rumoured listing that has been in the works since 2022. Although the recent exit of high-profile employees raises questions about these stock listing plans, the startup has made progress on other fronts. After a tumultuous fraud allegation by Kenyan authorities, Flutterwave has been cleared of financial impropriety in the East African country, which threatened to dent its reputation. The startup also hired five new executives across its risk, compliance, and expansion departments one month after Bhambani left the company. Two weeks ago, Flutterwave also added a new board member, Nigerian architect Olajumoke Adenowo, as part of its efforts to drive its international expansion strategy. The startup is also reassessing its product strategy. Last year, it relaunched its international remittances product, Send App, and launched other offerings to help local businesses swap international currencies. Last week, the company shut down the struggling Barter, a virtual card and international payments service it launched in 2017, as it trimmed its focus on the more successful Send App, which has fueled growth.

March 12 2024

Fintech giant Interswitch eyes telecoms market with $1 million MNVO license

Interswitch, the Visa-backed Nigerian payments giant that reported $42 million in revenue for its financial year ended March 31, will enter into Nigeria’s telecommunications sector after acquiring a Tier 5 MVNO (Mobile Virtual Network Operators) license for ₦500 million ($1.08 million) from the Nigeria Communications Commission (NCC) in May 2023. “The company is investigating the launch of a low level of capital expenditure virtual telecoms model using the license, combining payments and telecoms services to B2B customers and consumers,” read the company’s financial report. Nigeria, Africa’s largest phone market, awards MVNOs on a tiered basis, specifying the services they can provide. Interswitch, which has the highest tier licence—the Tier 5 (unified virtual operator) license— can negotiate with one of Nigeria’s four telcos and provide asset-light telecom services in underserved areas. The five tiers under which MVNOs can operate Interswitch will ride on the infrastructure of these telcos to bring value-added services to consumer segments that have been ignored or underserved by the telcos. With this license, Interswitch can provide cheaper 4G or 5G services to Nigerians or provide telecommunication services to rural areas. Last year, the country’s telco sector witnessed a decline in growth—its first in 5 years— after foreign investment declined, which led to reduced capital expenditure from Nigeria’s existing telcos. The NCC issued 25 MNVO licenses in 2023 as it looked to increase competition in Nigeria’s telco sector. Nigeria is home to 200 million people, but only 60% of the population can access mobile connectivity, while less than 5% have access to 4G, and 0.8% have access to 5G. The payment startup would rely on its access to a large base of customers—Interswitch, through Verve, has issued more than 50 million debit cards—to offer an alternative to the entrenched options that Nigeria has in telecommunications. Interswitch would have to offer improved telecommunications services to its customers and carefully select a telco to partner with it to capture market share in Nigeria’s mobile sector, which is estimated to have more than 200 million subscribers. The payments startup would also have to introduce innovative ways of communicating and value-added services if it hopes to compete in Nigeria’s telco sector.

March 12 2024

Fintech giant Interswitch eyes telecoms market with $1 million MNVO license

March 12 2024

Former US agent identified as Binance executive detained in Nigeria

Tigran Gambrayan, an American citizen and former US federal agent, has been identified as one of two Binance executives detained by the Nigerian government since February 26, per a report from Wired. Gambrayan, who leads the Binance criminal investigations team, was arrested alongside a yet-to-identified colleague in Abuja, following a crypto crackdown by the Nigerian government. Gambrayan and his colleague arrived in Nigeria one week after telecom companies were told to block the websites of several crypto exchanges. According to several reports, they were arrested on their arrival in Abuja, with their passports seized. The government has shared very little about their arrests, and it is unclear if they have or will be charged in court. Their arrests are in connection with a push by the Nigerian government to halt speculation on forex trading, following volatility in the price of the naira. After a decision to remove artificial controls, the naira’s plunge only worsened. Regulators have historically blamed those plunges on speculators. At one point, it blamed Abokifx, a website that published FX rates. The Central Bank has also pointed fingers at Bureau de Change operators and the banks. Several policy changes by Olayemi Cardoso, the CBN chief appointed last year, have purportedly aimed to stop such speculation. Of these speculators, none has quite been treated like Binance. In a press briefing after a February monetary policy meeting, Cardoso claimed $26 billion of suspicious monies had passed through Binance. It provided a justification for the government to make the arrests. Several reports claimed the government asked for data on Binance users, while claims of a $10 billion fine were later denied. The global crypto exchange has responded by suspending all trades in naira but has not publicly responded to the arrests otherwise. “There’s no definite answer for anything: how’s he’s doing, what’s going to happen to him, when he’s coming back,” Wired quotes Gambaryan’s wife, Yuki Gambaryan, as saying.

March 12 2024

👨🏿‍🚀TechCabal Daily – Data breach rocks SA’s upcoming elections

In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Please move TC Daily to your main folder so you don’t miss any emails from us. That’s all the wit we can muster up in this heat, folks. Onto the meat of the matter. In today’s edition IEC breach rocks SA’s upcoming elections Can ex-Paystack employees conquer Nigeria’s delivery market? Uber denies breaching Lagos’ data laws NITDA warns Nigerians about new malware The World Wide Web3 Opportunities Cybersecurity IEC data breach rocks South Africa’s upcoming 2024 general elections South Africa will hold its seventh general election on May 29, 2024. To participate in the elections, many political parties and independent candidates have submitted nomination requirements in line with the amended Independent Electoral Commission (IEC) regulations on March 8. Last week, the Labour Party, a newly registered political party, took the IEC to Court to compel the agency to extend its March 8 deadline. The party argued that failing to extend the deadline would compromise the integrity of the election, rendering it neither free nor fair. However, the court dismissed the application because the Labour Party hadn’t contacted the IEC about the issue or filed a dispute, and the challenge came only at the deadline despite the electoral timetable being published on February 25. So all is well? Not quite. On March 9, the Information Regulator (IR) confirmed a data breach in the IEC that exposed candidate lists for the African National Congress (ANC) and Jacob Zuma’s MK Party. Unauthorised individuals gained access to the candidate lists before they were officially released and personal information like ID numbers of the candidates are now in the public domain. The IEC has since reported the incidents to the IR. What’s the IR saying? The IR informed the IEC that their reports violated POPIA (Protection of Personal Information Act) due to insufficient information. The IR has also mandated the IEC to provide details regarding the breaches, including evidence of notification to the ANC and MK Party about the leaks, the extent of individuals impacted by the leaks, and the methods through which unauthorised individuals gained access to the data. This is a developing story. Access payments with Moniepoint You don’t have to take our word for it. Give it a shot like he did Click here to experience fast and reliable personal banking with Moniepoint. Startups Can ex-Paystack employees conquer Nigeria’s delivery market? Three months after major players like Jumia and Bolt exited Nigeria’s food and grocery delivery segment, a new player—GoLemon— has emerged as a fresh contender to compete with YC-backed Chowdeck, and Glovo in the market. Despite market exits by Jumia and Bolt, former Paystack executives have confidently ventured into the delivery sector with GoLemon, a new startup delivering groceries and household items. The startup is led by Stripe-owned ex-Paystack employees: Yinka Adewuyi, Gbadegbo Gbade-Oyelakin, Abdulrahman Jogbojogbo, and Abiola Showemimo—all of whom were at Paystack for at least six years. According to Jogbojogbo, GoLemon was purposefully crafted to focus on customers who frequently make repeat purchases and have large orders. The team will lean on Showemimo’s background as a Lagos-based supermarket owner and Gbade-Oyelakin’s tenure as head of engineering at Supermart, an online grocery platform, to drive the business forward. Here’s why the ex-Paystack crew is betting on a grocery delivery business. No hidden fees or charges with Fincra Collect payments via Bank Transfer, Cards, Virtual Account & Mobile Money with Fincra’s secure payment gateway. What’s more? You get to save money for your business when you use Fincra. Start now. Regulation Uber denies breaching Lagos data laws Yesterday, we brought you news of the Lagos state government threatening to sanction Uber for failing to supply records of users’ and trip information The ride-hailing company has fired back, claiming that it is in full compliance with rules set by Nigeria’s largest city. “We have met Lagos State’s regulatory obligations, including an annual fee, per-trip levy, and data sharing requirements,” the company said in an email to TechCabal. Lagos, in 2020, signed an “essential data sharing agreement” with Uber, mandating the company to provide trackable information about its riders and drivers for the security and safety of its citizens. The regulations were not Uber’s first dance with the Lagos statement government. In 2016, Uber shared the information of 11.6 million passengers and 600,000 drivers with the government and claimed the data points were sufficient enough for regulators to carry out their duties. However, the Lagos state government was out for more blood, requesting the ride-hailing company for more data in 2020. While the regulation might have a security-facing motive, speculation persists that Lagos might also be interested in identifying potential tax sources within its population. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → Cybersecurity NITDA warns against new malware Keep your purses phones safe, there is a new thief in town. Yesterday, the National Information Technology Development Agency (NITDA) raised an alarm about a sneaky malware program stylised “Ov3r Stealer” that’s targeting Facebook accounts and extracting sensitive information. Think of it as a virtual pickpocket, snatching your data while you scroll through dream jobs that may not even exist. An overstealer: Disguised as a job advertisement link, the malware tricks users into clicking it. This click initiates data extraction, potentially exposing them to further attacks. Don’t click on suspicious links: One surefire tip the NITDA recommends in dodging this digital bandit is to be wary of suspicious ads. Before you click that job link, be sure that it is from the right source. NITDA also recommends updating your apps regularly. The agency also advises that you update the antivirus software of your personal computer to track every move of the malware and its other cousins. The recent discovery of “Ov3r Stealer” spreading through social media may seem like a fresh nightmare. But

March 11 2024

Uber denies breaching Lagos data sharing deal after government threatens sanctions

The global ride-hailing company Uber has pushed back against a suggestion that it failed to honour a 2020 agreement to share data with the Lagos state government. That agreement mandates ride-hailing companies to share users’ trip information by giving the government backend access to real-time data. “Immediate corrective action is imperative to rectify Uber’s non-compliance with the Data Sharing Agreement and API integration of the state,” said Oluwaseun Osiyemi, the Lagos state commissioner of transportation. Citing security concerns, Osiyemi argued that having access to trip information was for the “well-being of all Lagos State residents.” “In all markets that we operate in, and Nigeria is no exception, we are committed to being compliant with regulatory requirements,” an Uber spokesperson told TechCabal via email. “We have met Lagos State’s regulatory obligations, including an annual fee, per-trip levy and data sharing requirements,” the same person said. The 2020 agreement followed months of conversation between ride-hailing companies and the Lagos state government on the need for regulation. These regulations are not unique to Nigeria; in 2016, Uber disclosed that it shared the data of 11.6 million passengers and 600,000 drivers with state and local regulatory authorities. The company has previously argued that some of those data points were more than regulators needed to do their jobs. But it often has little leeway when it comes up against governments. In 2020, it agreed, alongside other operators in Nigeria, to pay ₦25 million in annual license fees and ₦20 on each trip as a road improvement levy. It was a better outcome than motorcycle-hailing startups like Gokada and ORide got, with new regulations banning commercial motorcycles under 200cc on highways, essentially wiping out an entire business segment. For now, Uber will need to engage the Lagos state government, something it has adequate experience in. “We have been a committed ride-hailing player in Nigeria for the past 8 years and are keen to continue raising the industry bar on mobility.”

March 11 2024

Chams believes mobile money and cross-border payments will fuel growth after government fiasco

When Mayowa Olaniyan was appointed GMD/CEO of Chams Holding Company Plc in December 2022, she believed the company’s shares were undervalued. Fourteen months on, Chams’ share price is ₦2.50kobo, up from 50 Kobo in 2022. The company’s share price is up 6.9% year-to-date. “The share price has begun to reflect the proper value of the organisation,” Olaniyan told TechCabal on a call. Investors are rewarding Chams for a decision to move on from government clients after it lost $100 million executing a contentious National identity project. “We no longer deal with the government. We only deal with consumer projects; that means serving you,” said Demola Aladekomo, the company’s chairman. One important part of that shift is a holding company structure for Chams. Its subsidiaries will now compete across various spaces in financial services: mobile money, cross-border payments and education financing. Its switching subsidiary, ChamsSwitch, will focus on cross-border transactions and provide gateway payments. The subsidiary believes there’s a profitable business solving payment bottlenecks for traders buying goods from international partners. “The volume of business transactions in Computer Village at Ikeja that come from China is huge, and there is no means of payment.” Chams honours directors at a meeting last year ChamsSwitch partnered with UnionPay in July 2023, a Chinese financial services corporation that provides bank card services within China. That partnership, along with an integration with Nigerian banks, will allow the subsidiary to issue UnionPay cards that support international payments. “Providus Bank should go live by the end of Q1 2024.” Wema Bank and Heritage Bank are also among the financial institutions being onboarded. CardCentre is taking a slice, but now it wants the whole pie If you own a debit or SIM card, the odds are that CardCenter, a Chams subsidiary, produced it. An August 2022 ban on SIM card importation means only local players can manufacture these cards. The subsidiary produces five million cards weekly (SIM and debit cards) and plans to expand its production lines. In July 2023, CardCentre added a second line for card production. CardCentre already produces SIM cards for MTN Nigeria and expects to produce cards for Airtel Nigeria too. It also plans to expand to other African countries and look to its foreign partners to help achieve its ambitions. In addition to its ambitious expansion plan, CardCentre wants to undergo a backward integration to fully produce cards in Nigeria. It does import a few components to help personalize these cards, but Nigeria’s foreign exchange volatility is forcing the firm to embrace local production to save costs. Chams’ bet on the NGX As Chams’ share price continues to stabilise the NGX, boosting investors’ confidence, Olaniyan says listing on the NGX is “best for sustainability, continuity, and accountability.” This is despite the scrutiny that comes with being listed which many tech startups may be avoiding. While it remains a leader across different tech sectors, Chams, through its subsidiaries—ChamsSwitch, ChamsMobile, CardCentre, and ChamsAccess—is building investor confidence that could see further growth on the NGX by the end of the year.

March 11 2024

Four ex-Paystack senior managers launch grocery delivery startup, GoLemon

Four former senior managers at Paystack are leaving the payment company to launch GoLemon, a food and grocery delivery startup. Yinka Adewuyi, Gbadegbo Gbade-Oyelakin, Abdulrahman Jogbojogbo and Abiola Showemimo, all early employees, were at Paystack for at least six years. Adewuyi, a former product lead at Paystack, is GoLemon’s CEO, while Gbade-Oyelakin, who led Paystack’s core platforms team is the CTO. Jogbojogbo, a marketing lead at Paystack, will lead growth for the startup, while Showemimo, one of the first ten employees at Paystack, will lead operations. The startup delivers foodstuffs and groceries to homes and businesses and will compete with other deep-pocketed companies like Glovo and Chowdeck, a YC-backed company. This is also a difficult time to launch a grocery delivery startup in Nigeria, as international giants like Jumia and Bolt exited the food delivery segment last year. Francis Dufay, Jumia’s CEO, blamed challenging unit economics, big losses (Jumia Food never turned a profit in any of the 11 countries it operated in), and increasing competition for the decision to shut down Jumia Food. And while some big players are beating a retreat, Jogbojogbo believes this is the best time to start a grocery delivery business. “It’s difficult to get started right now and get traction but if we can weather the storm right now, I think we would have been able to build a formidable business,” Jogbojogbo told TechCabal on a call. He added that the team will rely on Showemimo’s experience as a supermarket owner in Lagos and Gbade-Oyelakin’s experience as head of engineering at Supermart, an online supermarket, to build the business. GoLemon’s unique proposition GoLemon manages its inventory and fulfillment centres, directly sourcing its bulk products from farmers and FMCGs. Jogbojogbo told TechCabal that while GoLemon might have competition in aspects of its product offerings, it does not have an “end-to-end competitor.” The startup has built a sourcing network connected directly to farmers and manufacturers and optimises for the lowest costs possible to attract a wide customer base. The startup mostly caters to large orders and was “intentionally designed around people who make repeat orders, repeat purchases and large basket size orders,” Jogbojogbo said. The launch comes weeks after a former Flutterwave vice-president launched Mira, a foodtech startup. YC has also increasingly backed foodtech startups, even as it scales back its presence on the continent.

March 11 2024

Crackdown on unlicensed companies cuts digital creditors in Kenya to 51

Before consumer protection laws were passed, any lender could run a digital credit business. Kenya has approved the operation of 17 new digital credit providers (DCPs), including Autochek – a car loan facility startup – one year after it licensed 32 digital credit providers. In a move signaling a crackdown on predatory practices, the Central Bank of Kenya (CBK) continues to scrutinise applications from digital lenders, issuing licenses to just 51 lenders so far. This stringent vetting process follows the need to address borrower concerns, such as unethical loan collection techniques. In 2022, through the CBK, Kenya purged all digital lending companies for operating without licences. The directive implied that these companies, which had grown to hundreds, had to cease operations immediately and apply for a permit from the CBK. The licences were structured around a new law, the CBK (Digital Credit Providers) Regulations, 2022, which introduced data protection laws to safeguard borrowers from illegally using their personal information. Before these changes, Kenya had hundreds of unlicensed digital lending platforms. However, concerns about high interest rates, personal data abuses, and unethical debt collection practices compelled the government to act. “The licensing and oversight of digital credit providers (DCPs) was precipitated by concerns raised by the public about the predatory practices of the unregulated DCPs,” the CBK said in a statement. After the law was passed, only a few digital lenders could provide their services to Kenyans, including Branch, which operates in other markets such as Nigeria and Tanzania, and Tala. Then, over 480 digital lenders applied for the license, indicating the lucrative nature of the online lending business in the country. The regulatory change was a response to public outcry over the unchecked practices of digital lenders. These companies operated charged excessive interest rates, sometimes up to 400% per year, among other unethical business practices. Under the new law, the CBK (Digital Credit Providers) Regulations, 2022, all digital credit must register as data controllers and processors with the Office of Data Protection (ODPC). Credit providers must also provide evidence of their source of funds as an anti-money laundering directive.