- July 26 2024
Exclusive: Wasoko ex-employees discontinue wrongful termination suit
Nine ex-Wasoko employees will no longer pursue a wrongful termination lawsuit against the e-commerce company, one month after a Kenyan court overturned an existing order that ordered Wasoko to keep them on payroll. On June 11, the Employment and Labour Relations court gave the employees 21 days to prepare for a pre-trial hearing, but they failed to meet that deadline. The case will now be dismissed. The ex-employees will not file a fresh suit, citing financial and time concerns. “Most of us do not have jobs, so the cost is a hindrance,” one of the ex-employees told TechCabal. “Legal costs and the likelihood of a loss means we may end up paying Wasoko. The average period for a full suit is three years and more.” Had the case proceeded and the petitioners won, Wasoko could have been obligated to pay the employees the same exit packages. The petitioners argued it wasn’t fair that employees who worked for Wasoko for a longer time received more money than those who had left “stable” jobs to join the company. “We can confirm that we adhered to the judicial process, allowing it to take its course. As of June 11th, the court ruled in our favour and vacated all interim orders that had been issued against the company,” Wasoko told TechCabal. Another ex-employee claimed the court ignored most of their submissions. In their prayers submitted to Judge Nzioka wa Makau in January 2024, the employees argued that the matter was urgent as they faced irreparable harm if the court did not hear their case promptly. They also requested the court to compel Wasoko to address their complaints before replacing their roles. “The judge ignored most of our submissions and relied on one affidavit signed in duress by one of us who wanted to exit the suit,” one petitioner told TechCabal. “The main suit was to be with the same judge, so it was difficult to prosecute the matter well. This would involve costs if we lost.” The employees filed the lawsuit in January after Wasoko announced plans to merge its operations with Egypt’s MaxAB. Initially projected to conclude in April, the merger is still ongoing. The companies plan to rebrand the combined business, but neither party has confirmed a completion date. Wasoko told TechCabal that it cannot share specific details on the date “due to the sensitive nature of the merger.” Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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- July 26 2024
TechCabal Daily – Hitting Hope Hard
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF We’re ending the week with some good news as our reporter, Ephraim Modise, received the Best Newcomer Award at the Sanlam Group Awards for Excellence in Financial Journalism. Ephraim’s winning story examines how consumers use buy-now-pay-later services in SA, the challenges facing the industry, and the startups shaking things up. Dig deep into The State of BNPL in South Africa. In today’s edition Hope PSB hit by cyberattack, seeks to recover ₦6.5 billion lost funds Airtel Africa records $31 million profit Ticketmaster acquires Quicket to expand in Africa Funding Tracker The World Wide Web3 Events Cybersecurity Hope PSB hit by cyberattack, seeks to recover ₦6.5 billion lost funds Hope Payment Service Bank, a digital bank in Nigeria, is trying to recover ₦6.5 billion ($4.1 million) stolen in a recent cyberattack. The bank has gone to court to get the money back. On July 15, 2024, hackers broke into Hope PSB’s banking system and made unauthorised transfers to hundreds of bank accounts, including commercial and neobanks. To contain the cyber attack, , the bank temporarily shut down its banking service. “This is the first time we have suffered an attack in five years, as we have a robust risk and compliance framework. Customer deposits are safe, and there was no risk transference,” said a company insider that ask not to be named. At least 50% of all cyberattacks target banks and financial institutions. In the first three months of 2024, Nigerian financial institutions lost ₦3.007 billion ($1.88 million) to fraud in 20,638 cases. Read Moniepoint’s 2024 Informal Economy Report Did you know that only 2.8% of informal businesses are started out of passion? Click here to find out the motivation of businesses in Nigeria’s informal economy. Telecoms Airtel records $31 million profit 2023 was a tough year for Airtel Africa. The telecom company recorded $2 million in profit, a steep decline from the $523 million recorded in the 2022 calendar year. The telecom is now picking up the pace and its latest financial result paints that picture. Airtel Africa, which operates in 14 African countries, reported $31 million in profit after tax for the year ended June 2024. Airtel Africa’s customer base also grew by 8.6% to 155.4 million. The telecom recorded an increase in its voice, data, and mobile money revenue. Data revenue climbed to $409 million, voice revenue reached $476 million, and mobile money revenue hit $22 million, with strong performances in East Africa and Francophone Africa. Airtel recorded less voice, and data revenue in Nigeria when compared to the previous year. The telecom made $256 million in voice revenue this quarter, a sharp drop from the $528 million it earned in 2023. It also made about $112 million in data revenue for the quarter, a decrease from the $254 million it earned in 2023. While currency devaluation persists, Airtel Africa’s revenue grew 19% in constant currency terms with Nigeria and East Africa leading the way. However, its revenue nosedived by 16% to about $1.15 billion in reported currency terms. The difference between the constant currency and reported currency is primarily due to the devaluation of the Zambian kwacha, the Malawian kwacha, and the Tanzanian shilling, partially offset by the Kenyan shilling appreciation. While the telecom group suffers from the effects of currency devaluation in some of its key markets, the telecom is forging on with its growth plans. “A key priority for us is to look for new opportunities to further grow our business, especially in the enterprise, fibre and data centre businesses across our footprint in Africa,” said CEO Sunil Taldar, on the earnings call. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. M&As Ticketmaster acquires Quicket to expand in Africa Ticketmaster, an e-ticketing platform, has completed the acquisition of Quicket, a South African event self-service platform for an undisclosed fee. Following the acquisition, Quicket will continue to operate as a standalone business in South Africa. Founded in the United States, Ticketmaster processes around 500 million tickets a year and made an estimated net revenue of $12.3 billion in 2022. Despite the huge numbers, more than 80% of its business comes from the US alone. Though it already operates in 35+ countries globally, it now wants to strengthen its presence in Africa. Quicket offers a full event management platform that allows creators and artists sell tickets, create and manage merchandise sales and donations. More than 3,000 events—especially festivals, social events, and artist tours—are created on Quicket daily. The company raised $6.4 million series A capital in 2017, and has made $6.1 million in revenue so far in 2024. To put into perspective, the South African ticketing market size is estimated to reach $383.8 million by the end of the year. A quick back-of-the-napkin math would estimate Quicket’s revenue by year-end to be $12.2 million; that’s around 3.35% revenue capture of the ticketing market in 2024. Quite an insignificant amount but Ticketmaster won’t mind. Quicket has other perks like its international presence in Nigeria, Uganda, Kenya, Zambia, and Botswana. Ticketmaster wants to onboard creators to its ecosystem by creating a self-service platform for them to manage events. Acquiring Quicket will give Ticketmaster access to African creators and artists, giving it an advantage as it competes for market share against bigger players in South Africa. Shop, Party, and Play with Bumpa and Paystack Join us at the Bumpa Pop-up this Saturday, July 27th for a day of fun, food, and amazing deals Get a free ticket here → TC Insights Funding tracker This week, Egyptian fintech MNT-Halan raised $157.5 million in funding with $40 million coming from the International Finance Corporation (IFC). Other investors include Development Partners International, Lorax Capital
Read More- July 25 2024
The Future is Female Mentorship Programme announces applications to its fifth edition
The Future is Female Mentorship Programme (FIF), organised by media communications company, Allison, has announced applications for the fifth edition of its flagship program. Applications to the FIF mentorship programme closes on July 31, 2024. Launched at the peak of COVID in 2020, FIF has trained over 100 African female tech founders in media, public relations, and communications. This year, it is supported by partners, Google For Startups Accelerator: Women Founders Africa Programme, Salesforce Ventures Impact Fund, and startups database company, F6S. Claudine Moore, Allison’s Africa managing director and FIF founder, expressed her excitement as the programme reached this milestone. “I am delighted to celebrate The Future is Female Mentorship Programme’s fifth anniversary and its incredible journey supporting African female tech founders. This milestone shows our dedication to empowering underserved African women in tech.” Female founders and all-female founding teams raised only 2.3% of the total funding in Africa last year. While discussions to improve female participation in tech entrepreneurship have been ongoing, the reality remains challenging. There’s hope this will change as more women join the tech startup scene and venture capitalists (VCs) actively create opportunities to invest in their businesses. However, a critical issue persists: the lack of storytelling skills among founders. For female founders, media, communications, and public relations training are crucial to pitching their startup’s brand stories to potential investors to secure funding and scaling their businesses. It is equally as important for founders, as the public face of their companies, to have the skills needed to make media appearances and handle media crises when they arise. This is where programmes like FIF make a significant impact. FIF is growing in popularity among African female tech founders. Applications have more than doubled, seeing a 253% increase from 2020 when it started. Last year, it received almost 500 applications, with 20 female founders emerging as finalists in the programme. Like the previous editions, the selected mentees on the fifth edition will participate in four private masterclasses. Claudine Moore will lead the first masterclass, joined by AfricaCommsWeek co-founders, Annie Mutumba and Eniola Harrison. TechCabal will host the second and third masterclass sessions. While Salesforce Ventures Impact Fund will teach about venture capital funding in the final masterclass. Female tech founders in Africa that show traction operating early-stage startups focusing on health, education, finance, agriculture, and sustainability are encouraged to apply. Salesforce Ventures Impact Fund has historically invested in female-led startups across its portfolio and was eager to support the program for the second consecutive year. Ahead of the launch, Lauryn Poyser, an investor at Salesforce Ventures Impact Fund said, “Salesforce Ventures Impact Fund remains committed to fostering a more inclusive venture capital ecosystem and supporting underrepresented founders.”
Read More- July 25 2024
Hope PSB hit by ₦6.5 billion cyberattack, seeks legal recourse for recovery
Hope PSB has begun recovering ₦6.5 billion fraudulently obtained from its banking platform in a cyber attack. Hope Payment Service Bank, the self-described “premier digital-first bank in Nigeria,” has begun a legal process to recover ₦6.5 billion fraudulently obtained from its banking platform by unknown persons. “On about July 15, 2024, there was unauthorised access to the Plaintiff’s banking platform, following which huge sums of money were transferred fraudulently from the plaintiff’s banking platform to certain beneficiaries’ accounts,” said an excerpt from a motion the company filed at a high court in Lagos and seen by TechCabal. The fraudulently obtained sum was transferred to hundreds of accounts in commercial banks and neobanks. One bank executive said a few of the banks involved had begun to recover some of the money but declined to share exact figures. Hope PSB declined to comment on any part of this story. ₦714 million glitch: fintech giant OPay gets court order to restrict customer accounts While Hope PSB reported the matter to the police on July 18, it did not disclose the mechanism of the fraud. However, one person with direct knowledge of the matter told TechCabal the fintech was the target of a cyberattack but did not provide specifics. The company responded to the cyberattack by shutting down its banking infrastructure. “It is better to have a downtime than to lose money,” that person said. “This is the first time we have suffered an attack in five years, as we have a robust risk and compliance framework. Customer deposits are safe, and there was no risk transference,” a person close to the company told TechCabal. As digital payments grow exponentially in Nigeria, bad actors target banks and fintech companies. While these companies invest in security, bad actors are becoming increasingly sophisticated. Financial institutions lost ₦3.007 billion to fraud in the first quarter of 2024 across 20,638 reported incidents, according to data from the NIBSS fraud industry report.
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- July 25 2024
Hit by steep operating costs, Nigerian internet service providers gasp for air
As of April 2023, Nigeria had 258 internet service providers (ISPs) and the industry’s regulator, the Nigerian Communications Commission (NCC), was looking to issue more licences to new operators to drive 70% internet penetration by 2025. One year later, the number of operators is shrinking; 12 companies have failed to renew their five-year licences on expiry in June, and more are likely to leave the market when their licence expires, as per four telecom experts. Among the 242 ISPs left in Nigeria, only 106 are operational, according to NCC data for the first quarter. These 106 active ISPs serve a total of 262,206 subscribers, less than 3% of the total internet market. The largest ISP, Spectranet, has over 43% of the total industry subscribers with 113,869 subscribers. TechCabal found that 22 ISPs have licences that will expire this year. A company like InterWeb Satcom Limited, founded by Nigerian senator Monday Okpebholo, is no longer active online; its licence will expire at the end of July “The smallholders are all likely to just fizzle out one by one. The mid-sized may try merger if there is a regulatory environment change to offer protection from the MNO‘s onslaught on predatory pricing. This may encourage investors to promote mergers and infuse more capital. Else, they may soon start to die off the way of the smallholders,” Biodun Omoniyi, CEO of VDT Communications, told TechCabal. ISPs which act as bridges between homes, businesses, institutions, and the internet, provide the infrastructure necessary for users to access websites, communicate, and consume media and entertainment, are grappling with multiple challenges including energy costs which shot up more than 250% in the past year. The energy cost affected facilities and colocation costs which grew to 200%, according to Omoniyi. The capital expenditure (equipment spending) of local ISPs went up more than 200% in the past year due to foreign exchange increases. The companies are also battling with increased staff costs as a result of a growing wave of workers relocating abroad and creating gaps that take ISP companies a longer time and more money to fill, according to Temitope Osunrinde, a telecom expert and vice president at Tizeti, an internet provider. Other challenges include inflation and a declining market value due to increased competition. The ISP market is divided into three broad segments, including the mobile network operators (MNOs) and multinationals; the mid-tier broadband companies that offer fixed broadband comprising wireless and fibre optics operators; and the small-holder operators. “ISPs need an ISP licence. If they have the equipment they are selling and installing, they also need a Sales and Installation licence,” an NCC spokesperson said. An ISP licence costs ₦500,000. The four MNOs MTN Nigeria, Airtel, Globacom, and 9mobile lead the internet market in Nigeria. However, because of their UASL licence which allows them to operate voice and other services, the MNOs are often not described as ISPs because they are mobile-dependent. “ISP”, the term, is loosely used for mid-tier fixed broadband companies and smaller operators whose internet service licence only permits them to provide internet services. The companies include Spectranet, FiberOne, Tizeti, MainOne, iPNX, VDT Communications, Starlink, and many others. Internet Service Providers earn income from the purchase of large and redundant internet connections. They resell these as smaller connections to consumers and businesses. ISPs usually have a fixed price for providing a certain speed and bandwidth amount. They can also offer multiple pricing tiers depending on how fast a connection you want and how much bandwidth you want to use over a month. The problem with this revenue model is the competitive advantage it gives the MNOs who make money off the ISPs from the sale of redundant internet connections as well as the income they make from selling the internet directly to consumers. Competition from telcos and new players like Starlink and the West Indian Ocean Cable Company (WIOCC) appear to have sealed the fate of many local internet providers. “The entry of major players like Starlink, WIOCC, Glo, and MTN introduces intense competition. These companies have significant resources, broader networks, and the ability to offer competitive pricing due to economies of scale,” Manish Kochhar, former head of fibre networks at Globacom, told TechCabal. Starlink, which began operations in 2023 in Nigeria, did not waste time to become the fourth-largest operator in the ISP market before the end of that year. It climbed to third-largest ISP with 23,897 subscribers in May 2024. Starlink could claim more market share by collaborating with telcos, Kochhar said. MTN Nigeria and Globacom have also been involved in the ISP market with the deployment of Fibre To The Home (FTTN both serving 7,641 and 2681 subscribers respectively. Biodun Omoniyi recommends protection of the mid-tier and smaller operators from “predatory” pricing. “Strict nationalisation of service pricing to consumers is another dynamic cost-reflective pricing that allows operators to adjust in weeks and not years, which would also help,” Omoniyi said.
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- July 25 2024
Nigerian AI startup Intron Health raises $1.6 million to improve cloud infrastructure
Intron Health, a Nigeria AI company that provides speech-to-text transcription tools for healthcare workers, has raised $1.6 million in a pre-seed funding round. The startup will use the capital injection to hire more employees, deepen its research efforts, and strengthen its cloud-native and on-prem capabilities. Launched in 2020 by Dr Tobi Olatunji, Intron Health helps healthcare professionals enter medical records by converting speech into text. This solution is important because doctors in many African countries attend to hundreds of patients daily and have a lot of paperwork to deal with. Intron Health cuts the time doctors cut time spend on writing a patient’s prescription through its product. Doctors can enter patients’ medical records, give prescriptions, and generate patient reports by voice commands. Intron Health claims it has helped reduce the turnaround time for radiology reporting at the University of College Hospital, Ibadan, from 48 hours to 20 minutes. “We are improving efficiency and health outcomes and positively impacting hospital finances,” Olatunji told TechCabal. While AI’s application on the continent has been affected by inadequate data, Intron Health’s speech-to-text AI transcription tool accounts for many African accents. Olatunji, who has over a decade of deep learning experience, says the datasets are trained on over 3.5 million audio clips across African languages (288 accents). “We made algorithms that train how the model responds to dominant and minority accents.” Through Inton Health web app, doctors can enter patients’ medical records, give prescriptions, and generate patient reports by voice commands Intron Health is working on a multilingual speech-to-text product to help doctors communicate with patients who don’t understand English. “We’ll be deploying the English to Hausa model first in the coming months,” Olatunji said. Intron Health competes with Helium Health (Nigeria) and Terragon Health (Kenya), which provide Electronic Medical Records and Hospital Management Information System (EMR/HMIS) solutions. “We are not trying to differentiate ourselves, we are only trying to partner with our competition,” Olatunji said. Intron Health offers its speech-to-text recognition software to other electronic medical record businesses. The company cares for more than 56,000 patients currently across its partners with over 30 public and private hospitals across Nigeria and Kenya—including the University of College Hospital, Ibadan, Aminu Kano Teaching Hospital (AKTH) Kano, Babcock Teaching Hospital Ogun, and Meridian Health Group Nairobi. Its seed round was led by Microtraction, with participation from Plug and Play Ventures, Jaza Rift Ventures, Octopus Ventures, Africa Health Ventures, OpenseedVC, Pi Campus, Alumni Angel, and Baker Bridge Capital. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read More- July 25 2024
Airtel Africa reports $31 million in Q1 2024 profit, but macroeconomic headwinds persist in key market
After a difficult 2023 in which losses mounted after currency devaluation in some of its key markets, Airtel Africa returned to the blue in the first quarter of 2024. The telecoms firm, which operates in 14 African countries, reported $31 million in profit after tax, compared to a loss of $151 million in Q1 2023. Still, macroeconomic headwinds persist. The company’s revenue declined 16.1% to $1.15 billion due to currency devaluation and rising fuel costs in Nigeria. The telco will work on cost reduction and energy-saving initiatives to reduce network costs. Key takeaways: Airtel Africa reported revenue of $1.15 billion for the quarter ended 30 June 2024 It gained $31 million in profits, up 120% Mobile money customers grew 14.9% to 39.5 million Its strong bottom line was driven by data and mobile money services revenue, which increased Average Revenue per User (ARPU). Data customers grew 13.4% to 64.4 million, while mobile money users in the telco’s East, Central, and West Africa segments increased to 39 million. Data revenue grew to $409 million, and voice revenue to $476 million. Mobile money revenue grew to $22 million, with a continued strong performance in East Africa of 31.7% and Francophone Africa of 18.4%. Airtel’s customer base grew to 155.4 million as the company continued its investment in data by laying over 5,600 km of fibre cables. The company’s share price is down 10% in pre-market trading, hours ahead of its Q1 earnings call on Thursday. “A key priority for us is to look for new opportunities to further grow our business, especially in the enterprise, fibre and data centre businesses across our footprint in Africa,” said new CEO Sunil Taldar, who succeeded Olusegun Ogunsanya in June 2024.” In March 2024, the telco began began work on a data center that will be live by Q1 2026.
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- July 25 2024
TechCabal Daily – Netflix’s Nigerian Money Hoist
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday Looks like the binge-watching days of “Netflix and chill” in Nigeria are getting more expensive. The streaming giant has increased subscription fees for the second time this year. Nigerian subscribers are facing another price jump, with tariffs rising by 20% to 40%. From the pocket-friendly mobile plan now at ₦2,200 ($1.38) to the premium package at a hefty ₦7,000 ($4.40), it’s clear that Netflix is taking Nigerians on a Money Heist. With rising inflation and food costs, this price hike is the last thing many Nigerians need. In today’s edition Facebook deletes 63,000 accounts belonging to alleged fraudulent Nigerians Risevest in talks to acquire Kenya’s Hisa ChopNowNow eyes grocery delivery comeback Neta Auto zooms into Kenya The World Wide Web3 Events Social media Facebook deletes 63,000 accounts belonging to alleged fraudulent Nigerians Facebook has removed 63,000 Instagram accounts allegedly connected to sextortion activities. The company said these accounts belonged to internet fraudsters who blackmailed victims to get money. Meta goes hard: In April, the social media company said it would not tolerate sextortion and introduced new measures to its app, like asking users for double confirmation to send or open messages that contain obscene photos, and banning accounts that shared these images. Stricter approval measures were even given to those under the age of 18 as teens in the United States have previously been targeted in these scams. While conducting an audit, Facebook discovered a smaller coordinated network of 7,200 accounts linked to suspicious activities, including using fake photos, providing tips for “conducting scams”, or seeming like bots or fake accounts. Facebook’s move is not without reason as the US Federal Bureau of Investigation (FBI) warned that sextortion is one of the growing cybercrime threats. In these cases, offenders would pressure minors to send explicit images or videos. They then threaten to release the compromising material unless the victim produces more. Two blackmailers from Nigeria pleaded guilty in April to sextortion allegations that led to the death of 17-year-old Jordan DeMay. Following another ugly situation that painted a bleak image for the country, director of Nigeria’s National Cybercrime Centre (NCCC), Uche Ifeanyi Henry, said his officers are hounding these criminals. According to him, many of them are “moving to neighbouring countries because of their activity” against cybercrime. Read Moniepoint’s 2024 Informal Economy Report Did you know that only 2.8% of informal businesses are started out of passion? Click here to find out the motivation of businesses in Nigeria’s informal economy. M&As Risevest in talks to acquire Kenya’s Hisa Acquisitions are often used as an expansion strategy. As businesses like Canal+ and Access Holding have mastered the ropes, RiseVest, a Nigerian fintech startup that lets users access global investments and Nigerian stocks, is following in the footsteps of the great. In 2023, Risevest acquired digital trading startup, Chaka. The fintech is now in talks to acquire Hisa, a Kenyan startup that allows users access to US stocks. Why does the acquisition make sense? Hisa is one of the most popular digital trading startups in Kenya’s nascent digital trading space. The startup is licensed by the Capital Markets Authority of Kenya (CMA) and the Nairobi Securities Exchange (NSE). If successful RiseVest will gain Hisa’s market share in Kenya without the need to register a new entity and obtain new licenses. The acquisition talks are still in the early stages, according to people close to the matter. Erik Suma, founder and CEO of Hisa will step down from his position. Collect payments anytime anywhere with Fincra Are you dealing with the complexities of collecting payments from your customers? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. What’s more? You get to save money on fees when you use Fincra. Get started now. Startups Shuttered food delivery company, ChopNowNow eyes grocery delivery comeback Olamide Olaleye, founder of now-shuttered food delivery service, ChopNowNow, recently opened up about the challenges that led to his company’s closure in February 2024. How it started: ChopNowNow started in 2018 as a retail restaurant outlet that catered to Nigerians living in the affluent parts of Lagos. Then one day, Olaleye had an idea to expand into the food delivery market, offering last-mile delivery to customers at no charge. This was a great idea at first, as the company quickly grew in the three years that followed. Its logistics infrastructure went from three bikes to thirty, and customer orders kept pouring in. A free fall: But in a low-trust market like Nigeria, even perks like free delivery don’t ensure customer loyalty. In e-commerce, companies have tried to crack it with payment-on-delivery, but like free delivery, it is unsustainable. As competitors entered the space with similar offerings, customers swiftly switched allegiances, leaving ChopNowNow struggling to maintain market share. Its average order value reduced to ₦1,000 ($0.63) and the razor-thin margin dealt heavy blows to ChopNowNow’s bottom-line numbers. Add the rising inflation, this also meant that consumers had to tone down their spending, making ordering food online a luxury. In an honest admission, Olaleye said, “thin margins worsened by intense competition” were reasons for the decline. Running a food delivery service targeting the mass market is a difficult beast to tame globally, and Nigeria is no exception. Even well-funded companies like Bolt Food and Jumia Food have exited the sector. Olaleye has learnt his lesson as he is now raising funds to rebrand his business as ShopNowNow, a grocery delivery business targeting only high-value orders above ₦25,000 ($15.78). Shop, Party, and Play with Bumpa and Paystack Join us at the Bumpa Pop-up this Saturday, July 27th for a day of fun, food, and amazing deals Get a free ticket here → Mobility Neta Auto zooms into Kenya Chinese electric vehicle (EV) maker NETA Auto is revving up its African ambitions with plans to open an assembly plant in Kenya. The company has already planted its flag in
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- July 24 2024
“Free delivery brings disloyal customers,” ChopNowNow founder muses as he pivots to grocery delivery
About seven out of ten new businesses fail in the first five years, but ChowNowNow, a food delivery service in Lagos, made it to year six before it threw in the towel. When Olamide Olaleye, the founder and CEO, posted on Instagram announcing the closure in February 2024, he received many messages. “Share your ewa agoyin recipe,” one customer asked. While Olaleye had offers from friends to put in money to keep the business going, he turned them down; he was spent. “I have lost faith in the food delivery business,” he shared. Yet he has not lost his entrepreneurial drive and is raising money to fund ShopNowNow, a new grocery delivery business. The new direction will put him in competition with well-funded competitors like GoLemon, PricePally, and Chowdeck. “The grocery delivery will focus on large orders, with a minimum threshold of ₦25,000,” he said. It’s a different sort of beast from ChopNowNow, where the average order value was ₦1,000. The new grocery business will schedule deliveries in batches and will not be pressed for time like a food delivery service. Olamide Olaleye, ChopNowNow founder. Hard lessons from food delivery ChopNowNow began as a traditional dark kitchen with one primary location to deliver affordable food quickly in the business districts of Lekki and Victoria Island. A dark kitchen meant it made food and could control inputs and quality. But it later included a dine-in option as it had space to spare. With free delivery as one of its value propositions, this was the standard low-margin play that needed volume to break even. “The typical margin for restaurants like ours that sell meals at a low price was 30%.” The promise of free delivery was the charm. “It worked like magic,” Olaleye recalls. ChopNowNow also used influencer marketing to reach its target audience, and at one point, the comedian, Mr Macaroni, was one of its influencers. The company grew from three delivery motorbikes to thirty within three years and expanded its distribution channels to other food delivery platforms that used an aggregation model. Glovo presenting “Customer favourite food brand” award to a ChopNowNow executive in 2022 The restaurant was listed on Jumia Foods, a food delivery platform that shuttered in December 2023, citing thin margins worsened by intense competition. ChopNowNow was also listed on OFood—an Opay-operated food delivery service that was once part of a super-app play by the fintech giant—and Glovo where it was a customer favourite. Business was good, and Olaleye who had recouped his initial investment in the bootstrapped business with some profit was optimistic about the future. Inflation pulls a fast one on ChopNowNow The economy was about to pull a fast one on business. Food inflation, which began to rise during the COVID-19 pandemic, had worsened to 19.5% by mid-2022. As consumer purchasing power came under pressure, more people began classifying food delivery as a luxury. “Whenever we called customers, many said they had begun cooking at home.” The first thing to go was free delivery. ChopNowNow limited free delivery with its in-house fleet to areas within Victoria Island, where it had the most customers. As it withdrew the free delivery it had always promised, customers moved to newer discounted competitors. “There’s no loyalty in this market. You expect that after spending years acquiring users, the customers would stick around.” “They always run to the food delivery platform that can outspend others [in discounts and food delivery.]” Like many restaurants that compete on price, ChopNowNow struggled to adapt to rising input costs. No matter how sharply the cost of ingredients rose, the restaurant was reluctant to pass on those costs to price-sensitive customers. Cost-cutting was the company’s only option. Olaleye believes the circumstances would have been different if he had started targeting high-end customers or had a warehouse to store produce and absorb the shock of price fluctuations. The arrival of food delivery apps intensified competition, with more restaurants coming online. The company remained at its current location and began selling off assets. Today, Olaleye rejects the unique proposition that once helped him attract thousands of customers. He tells anyone willing to listen that free delivery is not the way to find loyal customers. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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- July 24 2024
JAMB new information on part time ND/HND for NYSC 2024
The Joint Admissions and Matriculation Board (JAMB) held a space via the JAMB official handle on X (Twitter) on the 23rd of July 2024. During the space, JAMB released important information regarding the mobilisation of part time ND/HND students for the National Youth Service Corps (NYSC). This announcement has significant implications for part time ND/HND candidates hoping for NYSC mobilisation 2024 and beyond. Key announcements on part time ND/HND for NYSC 2024 1. Clarification on NYSC eligibility JAMB now makes it clear that the NYSC programme is not a design for part time students. Dr Fabian, JAMB’s Public Communications Advisor made submissions pertaining to this issue. He stated that part time programmes are for individuals who possibly miss chances for full-time education and are now active in their careers or businesses. 2. Purpose of part time programmes According to Dr Fabian, part time programmes cater to those seeking formal education later in life. However, many candidates have begun opting for these programmes with the intention of receiving full-time benefits, which contradicts their original purpose. Regularisation and mobilisation of part time ND/HND for NYSC 2024 JAMB regulirisation: JAMB regularises the admissions of part time students to have their educational pursuits verified in their database. This regularisation does not imply eligibility for NYSC mobilisation. No NYSC mobilisation for part time students: Despite regularising admissions, JAMB made it clear that part time ND/HND NYSC mobilisation 2024 is not a JAMB function. The regularisation serves solely for record-keeping and verification purposes. Addressing past mobilisations Past mobilisation instances: There have been instances where part time students somehow got mobilised for NYSC. Dr Fabian emphasised that these cases were illegal and outside JAMB’s mandate. Future considerations: JAMB acknowledged the ongoing discussions and protests from part time students regarding their NYSC eligibility. Dr Fabian indicated that the issue will be reviewed, and a possible law could be enacted to officially include part time ND/HND students in NYSC mobilisation going forward. Summary notes on JAMB new information on part time ND/HND for NYSC 2024 Verification purpose: JAMB’s regularisation of part time students is for verification only and does not guarantee NYSC mobilisation. Potential legal changes: Discussions are underway to potentially allow part time NDHND students to be eligible for NYSC. JAMB’s recent announcements provide clarity on the issue of part time NYSC mobilisation 2024. Students must understand the current limitations and await any legal changes that may affect their eligibility for NYSC.
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