Nigeria’s Access Bank acquires National Bank of Kenya in its second Kenyan acquisition
Access Bank will acquire the National Bank of Kenya (NBK) from the KCB Group, its second acquisition of a Kenyan bank in under five years. The acquisition comes after a move to acquire Sidian Bank fell through in 2023. KCB Group’s CEO Paul Russo said Access Bank will buy out the entire stake in a deal he termed good for the future of NBK. “We kick off the hard work to make sure the transaction is successful. It will take 6 to 9 months to close it out and cross the line but we give a predictable future about the institution and particularly our staff,” Russo announced. In 2020, Access acquired Transnational Bank to grow its market share in the East Africa region but its ambitions continue to grow. “The transaction represents an important milestone for the bank as it moves us closer to the achievement of our five-year strategic plan through increased scale in the Kenyan market,” Access CEO Roosevelt Ogbonna said. The second-biggest lender in Kenya acquired the loss-making NBK in 2019 in a rescue deal brokered by the National Treasury and the Central Bank of Kenya (CBK) and has since heralded a major shakeup. Since the acquisition, KCB has worked to bring the bank’s capital strengths to the minimum levels approved by the regulator and keep it on track back to profitability. “In 2019, KCB made the bold decision to acquire the National Bank of Kenya. Unfortunately, some significant legacy claims have eroded all the gains we have made in National Bank,” KCB Group chairman Joseph Kinyua said.
Read More
Can anyone afford a ride? The great Nigerian car conundrum
Ngozi Eugene, a lawyer who lives in Lagos and earns ₦600,000, began saving for a Toyota Corolla in 2022. By 2024, she had saved N4.7 million and was confident it was sufficient, but when she visited a car dealership in late February, the best deal for a used 2005 Toyota Corolla was N7 million, while a 2008 Toyota Corolla was N8 million. Car dealers who spoke to TechCabal said her best bet, given her budget, was a Nigerian used Toyota Corolla. A combination of foreign exchange volatility, customs duty, and shipping costs are putting the prices of cars beyond the reach of many Nigerians. “I bought a car worth $600 and got it shipped for $1600. When it got to Nigeria, I had to pay about N3 million ($1,886) to clear the vehicle. This has never happened in the history of our business,” Kolawole, a car dealer, said. It now costs at least ₦5 million to buy a foreign-used sedan and ₦3 million for a Nigerian-used one. That is more than double the cost from 2023, according to data supplied by Pankaj Bohhra, co-founder of Fixit45. The rise in prices coincides with a decline in imports. The number of cars imported through the Tin-Can Island port, the entry point of choice for many Nigerian imports, dropped from 32,000 units in 2018 to 4008 in 2023, according to Dera Nnadi, the Customs Controller of the Command. Local assembly and production have also failed to grow. At a summit in 2020, Yemi Osinbajo, former Vice President, noted that available assembly plants delivered fewer than 14,000 cars. Prices are forcing many to compromise Those prices are forcing adjustments as some companies switch to Nigerian-used official cars or relatively new or unknown brands as cheaper alternatives to Japanese cars, which have always been the preferred option. Other companies lease cars or use flexible auto financing for purchases. For individual customers, auto loans are still largely unpopular. While many financial institutions offer auto loans, consumers are unaware of them or don’t understand how they work. Ngozi, for instance, believes vehicle financing options have high-interest rates. Ojurongbe Damilola, head of technical services at Cars45, believes customers are slowly warming up to car loans, citing an increase in financing requests compared to the past year. Ultimately, Nigeria’s car market is at a crossroads, and navigating the new normal will cause short-term pains. Local production is unlikely to increase, and as long as macroeconomic conditions remain the same, financing may still not be compelling enough for consumers.
Read MoreAcasia Ventures leads six-figure investment in Egypt-based health tech Pharmacy Marts
Pharmacy Marts, an Egypt-based startup that connects pharmacies and suppliers for medical supplies and cosmetics, has received a six-figure investment from early-stage venture capital firm Acasia Ventures. The exact funding amount was not disclosed. Pharmacy Marts raised $2 million in funding from investors since its launch. “We are excited about having Acasia Ventures on board, given its great presence in African markets that we are planning to enter, as well as their solid network of advisors and experts in the pharmaceutical industry,” CEO and Co-Founder of Pharmacy Marts Ahmed Kadous said. Founded in 2021, Pharmacy Marts allows pharmacists to access medical products and connect them with suppliers. It also provides access to working capital and long-term financing, including “Buy Now, Pay Later” options. Pharmacy Marts claims it currently services about 12,000 of Egypt’s pharmacies, equivalent to 20% of the total market, and boasts over 200 suppliers on its platform. The startup says it aims to digitize the pharmaceutical sector’s supply chain to improve patient access to medication. “In a short period, Pharmacy Marts has emerged as a category leader in this space and we are confident it will continue to go from strength to strength,” Managing Partner at Acasia Ventures Aly El Shalakany said.
Read MoreNigeria, Egypt among world’s 10 fastest-growing countries for software developers in 2023
This article was contributed to TechCabal by Conrad Onyango via bird story agency. The latest data from GitHub, a global hub for software development, has listed the two African economies – Nigeria and Egypt – as among the world’s 10 fastest-growing countries for software development in 2023. It may come as no surprise that software development is on the rise in Africa. Vibrant startup hubs across the continent have become famous, with Silicon Cape, Silicon Savannah and Silicon Valley (South Africa, Kenya and Nigeria, respectively) all known across the tech ecosystem. Over the last five years, Nigeria has flexed its continental muscle in terms of tech startup funding and development, while Egypt has shown every sign of becoming Africa’s next biggest startup ecosystem, both in terms of deal count and deal value. What is surprising is the speed of growth, according to the report. Nigeria grew developer talent numbers by 45.6% between Q3 of 2022 and Q3 of 2023, to 872,162 – the fastest growth in Africa. “Nigeria has been ploughing ahead of other African geographies in recent years, firmly establishing itself as a – if not the – leading startup ecosystem on the continent,” said Disrupt Africa in a separate report. The West African country was the world’s second-fastest-growing country for developers after Bangladesh, whose developer count grew by 66.5% to 945,696. Egypt, placed second in Africa in terms of total developer numbers and growth rate, saw its developer count rise by 34.1% to 729,790. The North African country topped the growth rates of Argentina (33.2%), Hong Kong (32.1%) and Indonesia (32.1%) in terms of growth rates, to finish seventh in the global ranking. However, an article in non-profit publication, Rest of the World, warned that the fast-rising developer community could also reflect tech workers turning to unpaid work in the face of drying venture capital taps. “A surging number of GitHub accounts might suggest a rising tech sector — but it might also represent a decline in actual work, as developers turn to unpaid work on public repos after paid work disappears,” according to the publication. Disrupt Africa in its African Tech-Startups Funding Report 2023, reported that Egypt experienced a huge squeeze on startup jobs in 2023, with just 3,085 new jobs reported – an average of 67 per startup and substantially down from the 11,153 people employed by startups in 2022. This was fueled by the collapse of funding by more than 50% in the country, with figures almost entirely propped up by a single company – MNT-Halan’s single round of $510 million. Nigeria’s startup job market, however, recorded only a marginal drop, from 6,751 people in 2022 to 6,669 in 2023. The Disrupt report put the average number of employees at Nigerian startups in 2023 at 53 per startup, up from 38 in 2022. Other top developer markets in Africa, according to GitHub, include South Africa, which finished as the third-fastest-growing market on the continent. The country’s developer numbers grew from 412,731 in 2022 to 540,486. South Africa was followed by Morocco with a current total of 448,194 developers and Kenya with 297,581. In 2021 search engine Google recorded the continent’s total developer count at 716,000, according to its Africa Developer Ecosystem Report 2021, reflecting the phenomenal level of growth in recent years. African startups, according to the Google report, are responsible for hiring more than half of local developers, with foreign companies outside the continent hiring 38% of the remaining talent. Data from the layoff-tracking website, Layoffs.fyi shows a total of 1,191 tech companies – including giants like Microsoft, Google, TikTok and YouTube – retrenched 262,995 employees across the globe in 2023.
Read More
👨🏿🚀TechCabal Daily – A sUber Moove
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Here’s your reminder to move TC Daily to your Primary or Main folder so you don’t miss any edition of the newsletter. In today’s edition Uber leads $100 million Series B round in Moove Brass secures new funding Vodacom announces layoffs in South Africa TikTok has new rewards The World Wide Web3 Opportunities Funding Uber leads $100 million Series B round in Moove Moove is on a fundraising spree. Last month, whispers of a potential $100 million equity investment in Moove from Uber made it into the media. The report by Bloomberg comes after the vehicle financing company raised about $10 million to expand into new Indian markets. Yesterday, the speculation came to a head as Uber confirmed its investment in Moove. The news: Moove has raised $100 million in a Series B round led by Uber, according to reporting from TechCrunch. The new funding round brings Moove’s total fund raised to date to about $460 million—$250 million in equity and $210 million in debt. Mubadala Investment Company, a sovereign wealth fund that also invested in Moove’s Series A round, also participated in the Series B round. Other investors in the round include The Latest Ventures, AfricInvest, Palm Drive Capital, Triatlum Advisors, and Future Africa. Moove, which operates in six countries, will use the new funding to expand to 16 more markets by the end of 2025. Why the Uber Moove? Uber’s investment in Moove might be a plot to secure a reliable stream of drivers for its ride-hailing platform. Ladi Delano, Moove’s CEO, thinks of the investment as a validation of the car financing startup’s business model. Moove, which operates in six countries, says it will use the new funding to expand to 16 more markets by the end of 2025. Experience fast and reliable personal banking with Moniepoint Give it a shot like she did . Click here to experience fast and reliable personal banking with Moniepoint. Fintech Brass secures funding after facing withdrawal delays Brass, a Nigerian business banking startup, had its customers face delayed withdrawals starting in October 2023, which caused frustration and prompted questions about its financial health. In early March, Brass attributed the withdrawal delays to an increase in its number of customers and the challenging funding environment for fintech startups—having only raised $2 million in 2021. In mid-2023, the company lost a key source of funding when a major liquidity partner pulled out. This could be another factor contributing to the delays. The startup explored various solutions. On March 4th, for example, Akindolu announced the layoff of an undisclosed number of employees, aiming to weather the storm until they can be reintegrated. According to sources, Brass also allegedly approached Flutterwave for a potential acquisition, but the deal did not succeed. The startup also sought capital injections from larger startups like Moniepoint but was unsuccessful. Helping hands save Brass: After navigating a rocky few months, Brass has received a lifeline in the form of a new funding round. Four sources familiar with the situation revealed that the funding, comprising both debt and equity, was concluded last week, but the precise amount remains undisclosed. Notably, several Nigerian fintech leaders collaborated to support Brass over the last few weeks. With the new funding secured, Brass claims to have resolved the withdrawal issues, and customer reports confirm successful transactions. Whether this financial injection marks a complete turnaround or just a reprieve remains to be seen. Telecom Vodacom lays off 80 employees in South Africa Despite recent successes like achieving significant revenue and operating income—35% and 32%, respectively, as per its latest financial report— Vodacom, a South African telecoms giant, is also grappling with several challenges. One notable challenge is its high-profile legal battle with a former employee regarding compensation for the popular “Please Call Me” service, which could potentially cost the company 10% of its market capitalisation—R20 billion (~$1 billion). Now, the company plans to trim its South African workforce. Layoffs: Vodacom has announced plans to cut 80 jobs across various departments to ensure “sustainable operations and maintain financial resilience.” In essence, to cut costs. The telecom company justifies the job cuts as a necessary step in its transition from a traditional telecom company to a leading technology player. A company spokesperson emphasised their commitment to “ensuring business operations are fit for purpose.” Vodacom, which employs roughly 5,400 people, has seen its stock price dip 2% following the news. Zoom out: Now branding itself as an African-focused connectivity, digital and financial services firm, Vodacom Group Limited has a presence in seven African countries including Tanzania, the Democratic Republic of the Congo, Mozambique, Lesotho, Kenya, Ethiopia and Egypt. 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. Social media TikTok introduces new rewards A year ago, TikTok moved beyond its signature short video format to allow longer videos. The play was to allow creators on the platform to make more money. TikTok ran the invite-only programme in beta, requiring creators to videos exceeding one minute to qualify for monetization. TikTok has now officially launched the feature and renamed it the Creators Reward Programme. How do I qualify? To qualify for the Creator Rewards Programme, creators must be at least 18 years old, have at least 10,000 followers with a minimum of 100,000 views in the last 30 days, and have a personal account in good standing where the programme is available. TikTok says it will reward creators based on four core metrics: originality, play duration, search value, and audience engagement. Since its debut last year, TikTok claims some creators have maxed out their earnings, pulling in $14,000 per effect and $50,000 monthly. TikTok also claims creators’ earnings have increased by 250% in the past six with a double increase in the number
Read Moretappi partners MTN to help Ivorian businesses create online presence
tappi, the end-to-end digital commerce startup backed by Mercy Corps Ventures, has expanded its services to Côte d’Ivoire, its third African country after Kenya and Nigeria. The expansion was made through an existing partnership with telco giant MTN, the company said in a statement. tappi helps small businesses create and manage an online business profile, bringing improved visibility to showcase their products and services, engage with customers, and accept payments. “With a strong GDP growth rate of 6.9%, Côte d’Ivoire not only represents the ideal market to empower MSMEs primed to digitise and significantly expand their customer base but will act as a critical gateway to access Francophone Africa,” said Kenfield Griffith, tappi’s CEO and co-founder. Small businesses in Côte d’Ivoire will now gain access to tappi’s software-as-a-service solution and enterprise-grade tools. This will enable businesses to generate SEO-optimised websites in less than two minutes, distribute online ads, and access a range of additional digital services for an $8 monthly subscription fee. Through tappi’s existing partnership with MTN Côte d’Ivoire, the telecom’s customer base of 17 million subscribers will have access to Tappi’s services through integrated data bundles, enhancing their online presence and customer reach. According to UNECA, SMEs form over 98% of total businesses in Côte d’Ivoire but despite their importance to the economy, many businesses still face major difficulties building a trusted online presence. This is primarily due to current tools being too complex, the requirements for an international credit card or the listing of websites in places where trust is difficult to gauge, making it harder to access and convert new customers. The expansion comes three months after TechCabal exclusively reported that tappi raised a $1.5 million pre-seed in December 2023, which was led by Mercy Corps Ventures and Chui Ventures. Founded in 2022, the Kenyan digital commerce platform helps to digitise these small businesses by creating an online business profile or websites for them. Once a business owner creates a profile on the tappi app and supplies their business information, tappi creates a website that is SEO-optimised and indexed on Google. Tappi claims to have engaged with over 150,000 consumers who used its platform to complete transactions totalling $3 million.
Read MoreExclusive: Brass secures new funding as customers confirm an end to withdrawal delays
Brass, the Nigerian business banking startup that has been receiving criticism from customers for failing to process withdrawals on time, has received a capital injection from a group of investors, four people with knowledge of the deal told TechCabal. The deal, a mix of debt and equity, was concluded last week, those people said, while declining to share the exact funding amount. Over the last few weeks, some Nigerian fintech leaders began working together to keep Brass going, said one person with knowledge of the initial talks. “Brass is a great product that is valuable to customers,” that person said. “The ultimate goal of this investment is service delivery,” said an investor who asked not to be named to speak freely. The new capital injection will provide much-needed working capital for the startup after it furloughed employees on March 4. “I’m happy to share that we’ve resolved these issues, and transactions are working seamlessly once again,” Brass said in an email to customers on Tuesday. On Tuesday afternoon, several Brass customers shared on X that they had begun receiving pending withdrawals. Brass did not respond to a request for comments. Struggles at Brass Users began noticing withdrawal delays in October 2023, and Sola Akindolu, the company’s CEO, told TechCabal that a major liquidity partner pulled out of a partnership, leaving the startup under significant strain. That partner was a major Nigerian fintech, said two people familiar with the matter. Until the middle of 2023, that fintech offered uncollateralised loans to several startups but eventually discontinued this service. After it began experiencing liquidity problems, the startup approached Flutterwave for an acquisition, but that deal ultimately did not materialise, sources familiar with those talks said. A spokesperson for Flutterwave told TechCabal there were no acquisition plans between the two startups. “It is not in any way new for fintechs to approach and support one another behind the scenes,” Brass told TechCabal via mail in March. The startup also approached larger startups like Moniepoint for a capital injection. Moniepoint declined to provide funding to Brass, according to a source familiar with those proceedings.
Read MoreDOB Equity shakeup: Co-CEOs step down in leadership overhaul
Reporting by Adonijah Ndege Saskia Van Der Mast and Hayo Afman, the co-CEOs of the Dutch family fund DOB Equity, have stepped down, throwing open the leadership of one of the largest private equity funds in East Africa. Der Mast and Afman led the fund for 19 and 9 years. Coen Boevé, the fund’s chief finance officer, will take over the day-to-day running of the firm while DOB Equity begins the search for a replacement for the two. “During their tenure, Saskia and Hayo have been instrumental in driving the growth and success of DOB Equity and shaping the landscape of impact investment in East Africa,” the fund said on Monday. Under Saskia and Hayo, the family-owned fund doubled its Kenyan portfolio with investments in local startups and acquiring mid-sized agribusiness, retail, energy, and education companies. It has invested in Twiga Foods, M-Kopa, and low-cost private school Bridge International Academies. Others include Kenya-based health tech Ilara Health, which recently secured $4.2 million in a funding round led by DOB Equity, and tilapia producer Victory Farms, which raised $35 million last year. “They have grown the portfolio from the first investment in 2007 to over 30 impactful companies to date, winning multiple awards, amongst others, for best Impact Investment Firm by the East Africa Venture Capital and Private Equity Association,” DOB Equity said. Recently, the firm has featured in several high-profile fundraising for mid-sized firms and local startups as a funding winter hit the ecosystems on the back of mass exits of other investors for greater gains on investments in advanced economies.
Read MoreVodacom to cut jobs in South Africa at all levels
Vodacom, South Africa’s largest mobile network operator by subscriber base, will cut 80 jobs to reduce costs, according to reporting by Bloomberg. The job cuts will impact all levels of the telco’s operations. Vodacom currently employs 5,400 people. The company’s stock price is down by 2% following the news of the retrenchment. “We routinely ensure that our business operations are fit for purpose as we transition from a telco to a leading technology company,” said a spokesman for Vodacom. “Additionally, Vodacom South Africa continues to proactively implement various cost reduction measures to ensure sustainable operations and maintain financial resilience.” Per Vodacom’s latest financial report released in September 2023, the company’s revenue and operating income increased by 35% and 32%, respectively. However, the company’s profit margin and cash in hand were also down 20% and 57%, respectively, with the company citing investment into alternative power sources because of load-shedding as a contributing factor. Vodacom’s next financial results are set to be released in May for the financial year ended March 31, 2024. With the news of the retrenchments, Vodacom continues to face a flurry of issues in recent times. The company is currently involved in a protracted legal battle with a former employee about remuneration for the invention of the “Please Call Me” service. According to a court ruling, the ex-employee is eligible for a percentage of revenue from the service which might go as high as R63 billion. This would be equal to about 10% of Vodacom’s market capitalisation.
Read MoreNigeria’s 8 subsea cables spur new investment in hyperscale data centres
Investors are committing more funds to building larger data centres across the country in view of the increased data storage demand that will follow the existence of eight subsea fibre optic cables in Nigeria. Ayotunde Coker, CEO of Open Data Access Centre (OADC), told TechCabal that the increasing number of submarine cables means that a lot of big data will be captured and require massive storage capacity. This is responsible for the renewed deployment of capital into hyperscale mega data centres in the country. The companies currently building hyperscale data centres in Nigeria include Kasi, Rack Centre, and OADC. Kasi Cloud Limited began construction of its hyperscale or Tier IV data centre, modelled after the Silicon Valley technology parks, in 2022. The facility, worth $250 million, will be located in Lekki, Lagos, and is expected to go live in 2024. Rack Centre, a Tier III data centre company, started building a 12-megawatt IT data centre at Ikeja, Lagos in 2023. The data centre is situated on a 20,000 square metre green field site and sits at over 30 metres above sea level. Construction of OADC’s hyperscale data centre began in 2022. The company is building a data centre with a capacity of 24 megawatts of power. “You will see that from the end of this year, the facilities with hyperscale spec will become available, almost like every quarter into the year after. It is like the tipping point is happening,” Coker said. Before now, most investors have built Tier III data centres, the second-highest certification in the Uptime Institute’s system of classifying data centre performance into four tiers. Tier III data centres such as MainOne Data Centre and Rack Centre offer additional reliability over Tier II in the form of N+1 redundancy and multiple power and cooling distribution paths. Hyperscale data centres have much larger capacities and infrastructure. These facilities are massive business-critical facilities designed to efficiently support robust, scalable applications and are often associated with big data-producing companies such as Google, Amazon, Facebook, IBM, and Microsoft. Hyperscale data centres usually exceed 5,000 servers and 10,000 square metre. South Africa built the first hyperscale data centre in sub-Saharan Africa seven years ago. In Nigeria, companies like Google, Microsoft, and Facebook stored some of their data with data centres like MainOne, but the majority of their data storage needs have come from outside the country. A MainOne spokesperson told TechCabal that it had been providing storage for companies like Google and Microsoft. There is also an increase in the construction of other tiers of data centres. In March, Airtel broke ground on Nxtra, a data centre with a total capacity of 180 megawatts distributed across 13 major data centres and over 48 Edge data centres. Medallion also recently expanded its data centre facility to add a three-floor building with 1 megawatt of IT capacity and 232 racks. So far, the eight subsea cables that have landed in Nigeria include MainOne cable with a capacity of 10tbits; ntel’s SAT-3 with 800gbits; Globacom’s GLO-2 12Tbits); Africa Coast to Europe Cable System with a capacity of 5.5tbps; WACS (14.5tbits);, Equiano (144tbits); the Nigeria Cameroon Submarine Cable System (NCSCS) with capacity of 12.8tbps; and 2Africa (180tbits).
Read More