TechStars-backed GetEquity is raising $1 million to add stocks and bonds offerings
When GetEquity launched in 2021, months after Stripe’s $200 million acquisition of Paystack, it entered a market where retail investors dreamed of big returns from angel investing. GetEquity helped these hopeful investors find and fund startups. However, a pullback in venture funding on the continent and worsening macroeconomic conditions means retail investors are unlikely to invest in risky asset classes. As once well-funded startups struggle and shutter, it is becoming clear to retail investors how difficult venture investing is. GetEquity, whose primary offering has been a platform for retail investors to buy equity in startups, will now offer investors the opportunity to buy relatively safer asset classes like stocks, fixed-income funds and bonds. The startup says it is raising $1 million to make it happen. The startup’s cofounders, Jude Dike, Chigozirim Ugochukwu and Temitope Ekundayo are making this change after a clear-eyed look at the data on how customers have been investing. “Only 20% of investment portfolios are in high-risk investments like venture capital. 50% of these portfolios are low-risk investments, and the rest are in medium-risk investment vehicles,” said Jude Dike, the startup’s CEO. Specifically, only 12% of GetEquity’s 14,000 registered users actively invested in equity deals, Dike shared, pointing out the need to raise investment activity if the startup is to reach its revenue goals. The company claims it generated $320,000 in revenue in 2022 and planned to reach profitability by 2023. It didn’t hit that target despite facilitating 31 funding rounds and three exits. Uber leads $100 million round in African fintech startup Moove Avoiding the well-beaten path “We are ignoring the popular VC advice that you need to conquer your niche first before expanding and realigning the platform to operate the way traditional investment companies for high net-worth Investors do.” It will compete with wealth management platforms like Risevest, which recently acquired Chaka, Cowrywise, and Piggyvest. However, unlike these companies, GetEquity will not manage funds. Instead, it will pool users’ funds to meet minimum thresholds set by fund managers. “If you want to speak to invest in an ARM dollar fund, for instance, you need at least $100,000 as an individual. But if GetEquity was providing that access to you at $100, this means we are compiling at least $100 from 1000 People to meet that threshold. It’s a win-win situation for everybody.” [ad] In Nigeria, the startup’s home country, this method of fund aggregation elicited concerns and a viral WeeTracker article that questioned if the company had the requisite licence. “Nothing the company does is tied to crowdfunding,” Dike said, although the platform pools funds from retail investors to invest in startups. “The article got us face-to-face with one of our current largest investors.” This investor, according to Dike, “had been trying to also talk with the SEC about regulations for such a platform as they thought it was the new frontier.” [ad] “In Europe, there is just one license for it all, but in Africa, you have 54 distinct countries, where there’s not even a regulatory framework yet, in about 52 of those 54.” The company currently lists all its offerings through Regulation S offerings of the US Securities and Exchange Commission and says it expects to do a lot of handholding with the regulators as it threads this new path.
Read MoreUber leads $100 million round in African fintech startup Moove
Moove, a car-financing startup that allows anyone interested in ride-hailing to get a brand new car and pay in installments over four years, has raised $100 million in a Series B round reportedly led by Uber, according to reporting from TechCrunch. In February, Bloomberg reported that Uber was considering an equity investment in the company. The new funding round brings Moove’s total fund 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. Per TechCrunch, the move signals a push by Uber—which has partnered with several others, including SWVL and Kobo—to secure a reliable stream of drivers for its ride-hailing platform. Moove’s CEO, Ladi Delano, views the move as a validation of Moove’s business model. The mobility fintech leader, which offers vehicle financing to ride-hailing and delivery app drivers, has secured a staggering $460 million across equity and debt, bringing its valuation to $750 million. In February, the company raised $10 million to expand its presence in India after it launched in three cities in the country. In 2023, Moove partnered with Uber to deploy about 25,000 electric vehicles on its ride-sharing platform in India. Launched in 2020 by Ladi Delano and Jide Odunsi, Moove tackles low credit access in mobility markets by offering revenue-based car financing to ride-hailing drivers. Customers buy new vehicles with a share of their weekly earnings, and the startup boasts $90 million in annual recurring revenue. Per TechCrunch, Moove is also considering inking a deal with Bolt to expand its ride-hailing options in its key emerging markets.
Read MoreQuick Fire with Koffi Kelvin
Koffi Kelvin is a QA Engineer at GitHub and an Andela technologist. He is passionate about learning and recently graduated from an 11-month leadership course. Koffi is an Andela community champion, supporting and mentoring other community members across the globe, as well as organizing region-wide events for Andela. Outside of tech, Koffi is interested in music, art, and African culture. Explain your job to a five-year-old. Imagine you built the world’s most incredible treehouse ever! It has slides, secret tunnels, and a throne made from your softest teddy bear. But before you invite all your friends over, wouldn’t you want to ensure it’s perfect? That’s where a QA engineer comes in, like the ultimate fort inspector with a magnifying glass! We’re the ones who crawl through the tunnels, bounce on the pillows, and push all the buttons (carefully, of course!) to see if anything is wonky or doesn’t work quite right. We might find a slide that topples over too easily or a tunnel too small for even the tiniest teddy bear. We’ll then tell the treehouse builders (the programmers) about these funny mishaps so they can fix them and make the treehouse even more epic! Can you share a memorable experience where your attention to detail in QA uncovered a critical issue in a project? Off the top of my head, I discovered a critical OS issue when I was at Hewlett-Packard. I was analyzing data, and it revealed a bug; I would upload a particular file to an RGB keyboard app, which then caused the entire operating system to crash. This was precarious because, of course, apps require operating systems to run. We were building the operating system alongside the required apps; one needed the other to perform efficiently. It was a close shave! Your background also showcases a transition from hands-on QA engineering to customer support. What sparked this shift in focus, and what excites you most about the support role? QA is a very customer-centric role where, in some instances, during user acceptance testing (UAT), one works with the actual application users to address any issues they might have with the product, making customer support a function within QA. Hence, the transition was as seamless as running from walking. What skills would you say have been critical to your career growth and trajectory? Curiosity and tenacity. I remain curious and interested in all functions within and around my work. I’m constantly researching, reading, and learning. This exposes me to as many recent and emerging technologies as possible, which helps keep me sharp and up-to-date. I tend to seek out content from some notable thought leaders within QA like James Bach, who is christened “ The father of Agile testing” through his blog https://www.satisfice.com/blog, and a few others like Lisa Crispin and Janet Gregory ( https://agiletestingfellow.com/): Crispin and Gregory are the founders of the Ministry of Testing, a global community for testers, and co-authors of the book “Agile Testing: A Practical Guide for Testers and Agile Teams.” I gravitate towards the daunting and challenging tasks many people avoid, which has ensured I’ve learned the most within the team. I welcome a challenge, as it makes me learn the most or fail spectacularly. And when you fail, you learn; you never make the same mistake twice. You’ve been a digital business mentor for two years now. What would you say is the most rewarding thing about mentoring? At this point in my career, I would love to give back to the Andela community as much as possible because I realize how privileged I have been in my career journey. This is why I am drawn to mentoring and supporting other technologists. The Andela community is a network of global technologists, and I regularly speak to people worldwide. The most rewarding part is helping others be successful in specific fields using tools that improve the quality, efficiency, and even the quantity of their output. I guide new members through the Andela talent community landscape, offering support and advice on everything from how to navigate the job engagement process, to questions about tax and – of course – technology and skills guidance. What would you say are your proudest achievements? Leading my team through the COVID-19 pandemic, as they became entirely distributed, was immense. It was a traumatic experience, and I gained a lot of bumps and bruises along the way, but we made it through successfully. To help guide the team, I created a daily routine of morning and afternoon standups to ensure we were all on the same page and that we all had a forum to communicate openly with each other. I would also give team members the chance to peer review each other’s work, which led to a drastic improvement in the quality of work that would be sent to me for final review. In our hyper-connected world, what’s your strategy for maintaining a healthy digital detox? For starters, having a life beyond my laptop is extremely helpful. In my spare time, I race go-carts and am very interested in motorsports. I also belong to a second community of people not really in the tech space: my church! What are some of your hobbies or passions that fuel your creativity and energy outside of work? I always make time for physical activity, regularly playing at the local rugby club and swimming. Recently, I’ve embraced farming, starting with building two beehives, planting some fruit trees (mango and apple), and growing hot chilies. I love being outdoors as much as possible. Finally, what lessons have you learned from your experiences in QA that have had the most significant impact on your professional growth and development? Developing my teamwork and collaboration skills during our day-to-day QA operations has impacted my leadership. Most recently, I took an 11-month leadership development program led by renowned scholars including Dr Phidel Baraza (Ph.D.) and Professor Emmanuel Bellon, where I was recognized as one of the course’s top performers. When I first began
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👨🏿🚀TechCabal Daily – Egypt’s billion-dollar bailout
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Later this year, you may get the chance to win $5 million. Mr Beast is at it again, and this time, he’s creating a game show that will have over 1,000 contestants competing for a grand prize of $5 million. There’s not a lot of info about the show just yet though. And if you think you don’t stand a chance, its worth noting that a similar event by Mr Beast in January 2024 saw a Nigerian and a Ghanaian win $25,000 each for simply tweeting. If they can do it, you can too, and we’ll bring you more info on how as soon as we have it. In today’s edition Egypt gets $8.1 billion bailout Kuda gets fintech licences in Canada and Tanzania Zone gets $8.5 million in funding Apple might integrate Google’s Gemini into its ecosystem The World Wide Web3: The Meme Token making millions Opportunities Economy Egypt receives $8.1 billion bailout from EU Like many other African countries, Egypt is presently suffering from one of its worst economic crises in a decade. Inflation currently stands above 35%, the country has devalued its currency thrice in three years to keep up with the pace of its weakening pound. The country was also on the brink of defaulting on a $165 million foreign debt before the United Arab Emirates swung in with a $35 billion cash injection. Now, more international communities are lending a helping hand to the embattled country. A big bailout: The European Union promised Egypt a $8.1 billion bailout fund to help salvage its ailing economy. The new capital injection—a mix of grants and loans—is the latest support the North African country has gotten from the international community to help support its economy. The EU aid package to Egypt consists of €5 billion loan, €1.8 billion investment in renewable energy and food security projects, €600 million worth of grants, and €200 million allocation for ‘migration management—as Egypt is a major route for migrants travelling to Europe. The EU favours priority areas including economic stability, investments and trade, migration, and security in its fund disbursement to the northern African country. Egypt, which has become a new alternative for natural gas exports to Europe, will continue its journey in navigating a way of its dwindling economy. The country is in agreement with the World Bank, the UK, and Japan for more capital injection. 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 Kuda Bank secures payment licences in Tanzania and Canada Since its launch in August 2019, Kuda, a Nigerian digital bank, has processed ₦55.8 trillion ($35.4 billion) in transactions, serving over five million customers. In August 2021, the neobank also closed a $55 million Series B round at a $500 million valuation. In 2022, Kuda made its first foray into the cross-border payment space, by securing a payment licence in the United Kingdom and rolled out a subscription-based remittance offering, which according to sources was reportedly discontinued. Even more licences: In another attempt, the Target Global-backed fintech has secured payment licences in both Canada and Tanzania, allowing it to offer remittance and multi-currency wallet services. Kuda’s current focus seems to be on catering to the financial needs of Africans living abroad, particularly in countries with large African populations like the UK and Canada. The company is now only present in two African countries—Nigeria and Tanzania. In January 2023, Kuda also acquired a digital banking licence to operate in Pakistan. What this means: Kuda will go head-to-head with other startups like LemFi and Nala, targeting the African diaspora with financial services. With a rising number of Nigerians migrating to countries like Canada—22,085 in 2022 alone—the demand for remittance services is high. This trend is mirrored across Africa, with remittance inflows reaching an estimated $100.1 billion in 2022. Funding Nigerian fintech startup Zone secures $8.5 million Founded in 2008, Appzone started by building custom software solutions specifically tailored for banks. In 2012, it became a pioneer in facilitating branchless banking for Diamond Bank, a revolutionary concept at the time. This success continued with internet and mobile banking services for Providus Bank and an instant card issuance system for Guaranty Trust Bank. But Appzone’s vision extended beyond traditional solutions. It decided, in 2022, to carve out a new subsidiary—Zone—a blockchain-enabled payment infrastructure company dedicated to building a future-proof payment network, and made its original banking-as-a-service business into a separate standalone company, Qore. First funding milestone: After it spun off from its parent company, Zone has secured its first VC funding of $8.5 million. Its funding comes amidst a challenging fundraising environment for African startups, where funding in 2023 dropped by 36% compared to $5 billion in 2022. Investors like Flourish Ventures and TLcom led the seed round. With this funding, Zone plans to expand its network domestically, improve its technology—particularly instant settlements—and develop new use cases for its blockchain network beyond ATMs. Zone claims over 15 of Africa’s largest banks and fintech companies use its network to process payments including Access Bank Plc and United Bank of Africa. Zoom out: The company will spend part of the fresh funding to conduct a comprehensive pilot program to test its cross-border capabilities, as it plans to launch a remittance product in 2025. 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. AI Apple in talks to integrate Google Gemini AI to iPhones Apple is looking outward for AI solutions. Since the inception of ChatGPT and generative AI, the race for domination in AI and AI-enabled systems has been a rush. Tech startups have looked for smart ways to incorporate AI into their existing systems, while established tech
Read MoreBinance crackdown based on analysis of P2P trading in February
The Central Bank of Nigeria’s suspicion of manipulation of forex prices on Binance was confirmed by internal analyses of peer-to-peer trading on the exchange, TechCabal has learned. An analysis of trades between February 19 to February 21 identified a cluster of Nigerian retail traders making large buy orders for USDT they didn’t eventually buy. Authorities believe these traders manipulated prices to benefit from the resulting arbitrage opportunity. The analyses conducted by research teams are still ongoing, according to a person close to the matter. An internal report of the aforementioned three-day analysis linked what it said was an artificial demand for USDT with the naira’s quick drop from $1/₦1,500 to $1/₦1,950. The Central Bank did not respond to TechCabal’s request for comments. Hamma Bello, an operative of the Economic and Financial Crimes Commission, told a court on Monday that a special investigative team surveilled the Binance platform. “The team uncovered users who have been using the platform for price discovery, confirmation, and market manipulation, which has caused tremendous distortions in the market, resulting in the Naira losing its value against other currencies,” Bello said in an affidavit. It’s similar to a claim in the internal presentation seen by TechCabal. “The marketplace shows only people willing to buy USDT and an almost non-existent selling side. A $132 million worth of ads for buying USDT with less than $800,000 to match on the other side for 2/22/2024 is an example of this.” Binance did not immediately respond to TechCabal’s request for comments. The report claimed that more than 40% of the buy offers came from the same accounts. While some traders repeatedly were looking to buy as much as $1.9 million, others posted much smaller trades as low as $500 on a rolling basis. On March 12, the Financial Times reported that the federal government asked Binance for information on its top 100 users in the country and all transaction history for the past six months. This may be a bid to identify the traders listed in the internal report seen by TechCabal. Today, a court in Nigeria ruled that Binance must hand over the data. On Thursday, Binance released a statement signaling it would cooperate with the government. It claimed that since 2020, it has responded to over 626 information requests that have assisted the government’s investigations into financial crimes such as scams, fraud, and money laundering. Since Nigeria floated the naira in 2023, price discovery for the US dollar has increasingly happened through P2P trading on crypto exchanges like Binance and Bureau de Change operators. The apex bank shared amendments to its policy on BDC operators and revoked licences for over 4,000 operators as FX volatility worsened in February. Regulators believed that Binance, one of the most popular crypto exchanges in the country, played an outsized role in price discovery and attendant volatility. Olayemi Cardoso, the CBN governor, said “expediting genuine price discovery” would solve the problem. It prompted an investigation into Binance. The Binance website is no longer available to Nigerians, and the platform has also delisted its NGN/USDT trade option. Aside from Binance, other crypto platforms like Onboard Wallet also disabled the USDT/NGN pair on their platforms. The two Binance executives, Nadeem Anjarwalla, a UK citizen, and Tigran Gambaryan, a former US Internal Revenue Service special agent, who came to Nigeria when the government threatened to block access to the company’s website are still in the custody of the authorities. According to the Financial Times, the court order that permitted a 2-week detainment of both executives expired on Tuesday, but they have not been released.
Read MoreNigerian neobank Kuda eyes global reach with new licenses
Kuda Microfinance Bank, the Target Global-backed neobank, has secured payment licences in Tanzania and Canada as part of an expansion drive across Africa and the global market. One of those licences will allow it to offer remittance and multi-currency wallet services to Africans living in Canada. The second, a Tanzanian Payment Service Provider (PSSP) licence will offer similar services to Kuda’s Tanzanian customers. The new licences will put Kuda in direct competition with startups like LemFi and Nala, which style themselves as global neobanks for Africans in the diaspora. This is not Kuda’s first crack at the remittance market. In 2022, it secured a payment licence in the United Kingdom and rolled out a subscription remittance offering with a flat fee of £3 and a transfer limit of £10,000. One person with knowledge of the company’s business told TechCabal that the product has now been discontinued, theorising that the market was not ready for a subscription-based remittance offering. It makes it likely that when the neobank rolls out its offerings in Canada and Tanzania, it will not go the way of subscriptions. The remittance market has become more attractive to investors as more Nigerians and Africans seek greener pastures abroad. In 2022, Nigeria was Canada’s fourth largest immigration source country, welcoming 22,085 Nigerian immigrants, making 5.06% of Canada’s total number of permanent residents. At the same time, over 100,000 Canadians of Nigerian descent call Canada home. In 2022, remittance inflows into Africa totaled an estimated $100.1 billion, accounting for 3.4% of Africa’s GDP. By focusing on markets like Canada and the UK where the number of Nigerian migrants continues to grow, Kuda has an opportunity to grow its foreign exchange revenue at a time when the FX rates are decimating the profits of startups.
Read MoreOurPass will acquire MFB licence to offer more banking services to customers
OurPass, the e-commerce one-click checkout company that pivoted to business banking in June 2022, will acquire a microfinance banking (MFB) licence from the Central Bank of Nigeria in the coming weeks, allowing the startup to offer a broader range of financial services instead of relying on third-party partnerships. “It is one thing to be a financial services provider, and it is another thing to be a banking service provider. OurPass will start providing those banking services in weeks,” said Samuel Eze, the company’s CEO. The company secured approval in principle (AIP) for a new MFB—OurPass MFB—in January 2024. It also undertook a recapitalisation and assumed the liabilities and assets of Fasildapo MFB, an existing microfinance banking entity, and submitted its new name to the Central Bank of Nigeria (CBN). OurPass provides free business bank accounts, loans, and tools, including free invoice generators and team management tools, to help them manage their businesses. An MFB licence will mean the startup has to ramp up its loan offering, which is currently restricted to invoice financing. The company said it would monitor those loans closely, acknowledging the difficulty of lending in the Nigerian market. And while it’s still early days, the company has already set its sights on becoming profitable quickly. “When we ventured into business banking in June/July 2022, we entered the field with zero funds. But before the end of the year, all things being equal, we should become profitable,” Eze shared.
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Next Wave: The future of fintech regulations
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First Published 17 March, 2024 Policy and regulation have the potential to significantly impact the operations and growth of innovative businesses, if applied wrongly. Technological advancements do not have to suffer clampdowns at every turn; a collaborative approach to regulation is what’s needed. The biggest crackdowns on tech by most African governments tend to happen with fintech. In 2021, the Central Bank of Nigeria (CBN) secured a court order to freeze the bank accounts of stock trading platforms Risevest, Bamboo, Trove and Chaka for six months. According to the CBN, the firms were responsible for the weakness of the nation’s currency and operated without licences. One of the affected companies lost users and deposits after the announcement. Next Wave continues after this ad. The Algorithm is a TechCabal vertical that focuses on the backend of the creator economy. We’ll bring you stories that delve into the creation process, the business of being a content creator, interviews with creators, and everything else about online creators! Read our latest story here. In 2022, Flutterwave had its assets frozen in Kenya, which put a pause to its expansion plans and dragged its reputation in the mud. Last year, the Central Bank of Kenya cautioned residents against dealing with individuals and entities offering payment services without licence. It warned that these services were unregulated and a criminal offence. As at 2023, a total of 23 African countries have banned or restricted the use of cryptocurrencies within their economies, stifling innovation in the area. Number of African countries that placed restrictions on crypto. Chart by Stephen Agwaibor, TC Insights The major problem governments face when it comes to regulating tech is striking the right balance between safeguarding their economy from the consequences of badly-adopted technology and resisting the urge to over-regulate or under-regulate. Before fintech can be effectively regulated, we need to understand its peculiarities, as distinct from those of traditional finance institutions. Regulators must understand the infrastructure fintechs operate on. One CEO said that more knowledge sharing between fintechs and governments could be the difference between profiling, poor regulation and high licensing fees. Partner Content: Read: All the things we like about the TECNO Spark 20 Pro Plus here. In a fintech company, innovation moves faster than regulations can keep up with, so it’s important that regulation is flexible enough to accommodate, or even preempt, these changes. A middle-ground approach to regulation can be considered instead of issuing outright bans or restrictions that hurt the fintech sector. Partner Content: Read: How Flashchange is empowering digital transactions through gift cards here. Regulators in Africa could have applied the sandbox model to cryptocurrencies, before taking any big decisions. Sandboxes can serve as a safe space to test innovative services, products and models without immediately applying all the normal regulatory consequences of engaging in the activity in question. This is particularly helpful for regulators who are seeking to understand new technologies and collaborate with industry players to establish rules for managing services, products, and business models that stem from emerging technologies. It also helps to lower the costs and regulatory barriers for testing disruptive, innovative technologies without negatively affecting consumers. Next Wave continues after this ad. Talent PEO Africa launches in Kenya, offering comprehensive HR solutions for businesses. From EOR services to recruitment and HR consulting, we simplify operations for seamless growth. Partner with us to tap into Kenya’s talent, navigate regulations, and achieve success. Contact us at www.talentpeo.com or kenya@talentpeo.com. Another model governments should consider is the segregation model. This model regulates fintech companies by introducing a specific regulator for the industry, instead of using central banks who are more attuned to traditional banking methods. The United Kingdom has a body, the Financial Conduct Authority (FCA), which regulates all financial markets and services in the UK. There is also a Payment System Regulator (PSR) that regulates payments in the UK. All that said, the future of fintech regulation is collaboration and information sharing. Regulators must remember that they have a duty to create an enabling environment for innovation to thrive. Joseph Olaoluwa Senior Reporter, TechCabal Thank you for reading this far. Feel free to email joseph.olaoluwa[at]bigcabal.com, with your thoughts about this edition of NextWave. Or just click reply to share your thoughts and feedback. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri) brief of all the technology and business stories you need to know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa. If you liked this edition of Next Wave, please share with your friends. And feel free to reply with thoughts and feedback. We welcome those. 18, Nnobi Street, Surulere, Lagos, Nigeria View in Map You received this email because you signed up on our website or made purchase from us.If you know longer wish to recieve these emails, please unsubscribe
Read MoreBlockchain payments startup Zone raises $8.5m in first funding as a standalone business
Zone, a Nigerian blockchain startup that helps banks and fintechs process payments, has raised $8.5 million, its first VC funding since it became a standalone business in 2022. Until 2022, Zone was part of its parent company Appzone. Flourish Ventures and UK-based TLcom Capital led the seed round, according to a statement on Monday. Other investors include international blockchain-focused VC firms Digital Currency Group, Verod-Kepple Africa Ventures, and Alter Global. “The startup was funded initially by the parent company. When you separate the traditional business, the natural thing to do is to raise money to continue growth,” Obi Emetarom, CEO and co-founder of Zone, told TechCabal over a call. With the new funding, Zone—Africa’s first regulated blockchain network for payments—will expand the coverage of its network domestically and connect more banks and financial services companies. The company runs a blockchain network that enables direct transaction flow between financial service providers without an intermediary. It automates settlement, reconciliation, and dispute management. Zone claims over 15 of Africa’s largest banks and fintech companies use its network to process payments. Access Bank Plc, Guaranty Trust Bank Plc, and United Bank of Africa—three of Nigeria’s biggest banks with a market capitalisation of at least ₦1 trillion—are among its clients. “We are excited by the potential for Zone’s technology to be replicated across borders to advance payment innovation globally,” Ameya Upadhyay, Partner at Flourish Ventures said. Zone will improve its technology, especially in terms of instant settlements. The company will also roll out more use cases for its blockchain network beyond ATMs to reach more users. “We aren’t building the interface for the end users, we are building the API that banks, fintechs, and other financial service providers can integrate their payment applications to,” Emeratom said. Zone’s fresh funding comes in a difficult fundraising market. African startups raised $3.2 billion in 2023—the lowest figure in three years, according to TechCabal’s funding tracker. “The participation of high-quality investors despite the funding drought and the fact that we had more interested investors than we needed, is a sign of trust in the Zone brand,” Emetarom said. He noted that Zone’s selling point to investors is the uniqueness of its product and the experience of the founders who are veterans in the banking industry. “We have seen a lot of customer-facing payment startups in the last five years. But you don’t have startups raising money to build payment infrastructure. That makes us unique.” Zone has ambitions to extend its blockchain network across Africa. The company will spend part of the fresh funding to conduct a comprehensive pilot program to test its cross-border capabilities, as it plans to launch a remittance product in 2025. However, Zone isn’t in a rush to expand into new markets. “Right now, the focus is to build out the capabilities domestically on the technology side and use cases.”
Read MoreSEC proposes ₦1 billion capital requirement for virtual asset companies
Nigeria’s Securities and Exchange Commission has proposed raising the minimum paid-up capital for virtual asset service providers (VASPs) to ₦1 billion, two times the previous proposed requirement of ₦500 million. The paid-up capital requirement consists of bank balances, fixed assets or investments in quoted securities. Virtual asset service providers include cryptocurrency exchanges, peer-to-peer platforms and OTC desks. One cryptocurrency exchange told TechCabal that operators received the draft proposal on Friday. The SEC first shared the draft on virtual asset providers in 2022 and, at the time, proposed N500 million in minimum paid-up capital. “Our SEC has indirectly told the community that this game is for the big boys,” said Rume Ophi, a crypto expert. A crypto exchange operator who asked not to be named told TechCabal believes local operators should unanimously reject the proposal. “This proposal locks out a lot of local players. I suspect at the end of the day that the foreign-owned companies will dominate the crypto space in Nigeria,” said Tim Akimbo, a Bitcoin expert. Apart from the N1 billion minimum paid-up capital, virtual asset companies must also provide current Fidelity Bond covering at least 25% of the minimum paid-up capital. A fidelity bond is a type of insurance that offers business protection against losses caused by employees who commit fraud, theft, and forgery. The rules also allow the SEC to, at any time, impose additional financial requirements on the digital asset operator commensurate with the nature, operations, and risks posed by the company. The commission also increased the number of additional documents required for registration. The new rules require “a sworn undertaking that the applicant will be able to operate an orderly, fair, and transparent market in relation to the securities including derivatives that are offered or traded, on or through its platform.”
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