👨🏿🚀TechCabal Daily – How Eyowo’s pivot to fintech stumbled
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية TGIF Happy International Women’s Day! To celebrate #InternationalWomensDay, TechCabal brings you three female founders from Bamboo, SendStack, and SHOP F.A.W.L. They will be speaking on building startups in Africa, revenue being the cheapest form of funding, their thoughts on AI automation, and their hopes for the future. Catch them on our YouTube channel! In today’s edition How Eyowo’s pivot to fintech stumbled MTN recovers $7.8 million of stolen funds TowerCo secures new funds for Ugandan network expansion Nigeria releases guidelines for digital asset operators Funding tracker The World Wide Web3 Job openings Fintech How Eyowo’s pivot to fintech stumbled Depending on who you ask, Softcom was the dream place to work. The software agency had great perks for employees—including work retreats to Dubai and SA—and lucrative contracts from clients like Coca-Cola, MTN, and the Nigerian government. In 2021, the company stopped building software for its client and took an ambitious turn to produce a fintech giant in Eyowo. Everyone loved Eyowo. Early users also gushed about the product. Ex-employees believed they could change the world. However, five years down the road, salary delays, service outages, and ultimately, a revoked licence, meant that this bet failed. How did such a promising product with its sights on becoming a fintech giant run into problems? Dig Deeper here Access payments with Moniepoint You don’t have to take our word for it. Give it a shot like he did Click here to experience fast and reliable personal banking with Moniepoint. Telecom MTN Nigeria recovers $7.85 million of the $14 million lost to MoMo glitch In June 2022, MTN Nigeria, the Nigerian arm of one of Africa’s largest telecom companies, disclosed a ₦22.3 billion ($14 million) mobile money fraud that involved 18 Nigerian banks on its mobile money platform— MTN MoMo. The fraud happened due to a glitch on the platform, one week after its launch in May 2022. Despite MTN’s ₦16 billion ($10 million) investment in MoMo, its 2022 financial report revealed that MoMo incurred a loss of ₦10.5 billion ($6.5 million) due to the glitch. The news: MTN has successfully recovered ₦12.5 billion ( $7.85 million) of the funds lost during the glitch in its mobile money service. However, the remaining balance of ₦9.5 billion ($5.97 million) will be absorbed by MTN Nigeria under a shared services cost agreement between the telecom company and its MoMo service. How has this loss affected MoMo’s service? As at June 2023—one year after its launch— the service was reportedly still seeking adoption by Nigerians. MTN Nigeria’s CEO, Toriola, noted slower-than-anticipated business development. Regulatory approval delays and challenges with NIN requirements hindered MoMo’s growth. However, Toriola expressed satisfaction with MoMo PSB wallet base, which has increased from 3.3 million monthly active users to 5.3 million, supported by 326,000 MoMo agents and 324,000 merchants. Meanwhile, MTN Nigeria has also swallowed its first loss in three years. The telecom reported a loss after tax of ₦137.0 billion ($86 million) in 2023 compared to profits of ₦348.7 billion ($218.9 million) in 2022, after a naira devaluation and rising cost of doing business ate into its margins. Investments TowerCo Uganda secures $40 million to expand network coverage in Uganda In July 2023, Ubuntu Towers Uganda rebranded into TowerCo of Africa Uganda after TowerCo of Africa (TOA)—a tower infrastructure company—acquired a 90% stake in Ubuntu Towers. Already managing a network of towers spanning 360 locations, with most utilising hybrid energy solutions, TowerCo is keen on adding more sites in a few years. Fueled by a $40 million investment, TowerCo Uganda wants to expand its reach by constructing 506 new towers in underserved areas in Uganda. The project aims to expand mobile network coverage in Uganda from 65% to 95%, reaching remote areas currently lacking access, and will enable rural communities to access 4G and 5G data services. The investment: The European Investment Bank, in partnership with ACP Trust Fund, will provide $16 million, and $12 million each will come from the Development Bank of Austria (OeEB) and the Belgian Investment Company for Developing Countries (BIO) over the next 10 years. Multiple mobile operators will share the towers and a significant portion will be solar-powered for sustainable development. The tower construction is expected to create 2,000 jobs and be completed within the next two years. TOA also operates in Madagascar, the Democratic Republic of Congo (DRC) and Tanzania. Zoom out: In other African countries like Zambia, following their announcement of digital centres for free internet access, the Zambian government plans to construct 60 new 4G mobile towers specifically targeting remote areas. 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. Crypto Nigeria releases guidelines for Digital Asset Operators Last year, Nigeria’s Security Exchange Commission (SEC) began processing the application of digital exchanges on its capital market, a move to attract the country’s young digitally-savvy population. The commission’s head of securities and licence investment at the time said it was going to register tokenized assets backed by equity, debt, and real estate. Now, as the NGX inches closer to including digital assets in the capital markets, it has released new guardrails to mitigate risks associated with the asset class. The news: Yesterday, the commission released new regulations aimed at licensing and registering new digital and virtual asset service provider (VASPs) entrants to the capital market. The regulations, aimed at reducing the participation of bad actors from trading in the capital market, packs a punch with three separate guidelines, including Countering the Financing of Terrorism (CFT), Anti-Money Laundering (AML), and Countering Proliferation Financing (CPF) onboarding manual. The new regulation is another litmus test for Nigeria’s crypto landscape which has seen Binance discontinue providing naira services in the country after the government blamed it for currency speculation and remanded two of its
Read MoreRecord funding in women-led healthtech startups sets agenda for founders
Women-led healthtech companies in Africa saw a significant bump in funding from investors in 2023, according to a new report by Salient Advisory. Rwandan-based startup Kasha, Kenya’s Maisha Meds, and Egypt-based startups Dawi Clinics and Chefaa cumulatively raised $52 million across 33 deals, and were responsible for a 2,000% increase in funding to women-led companies in Africa’s healthtech industry. According to Jessica Vermon, CEO of Maisha Meds, her company’s funding came from solving problems with a business model that’s different from competitors. “We’re meeting people where they first go to get care: at private drug shops, pharmacies, and clinics. And we’re using technology to make those places more digital, efficient, and accessible,” Vermon told TechCabal. In 2022, women-led companies in healthcare were only able to raise $2 million across 26 deals representing 1.4% of all healthtech funding. The report from Salient Advisory noted that Kasha’s $21 million Series B funding was the largest investment ever made in a woman-led health tech company in Africa. Additionally, funding to mixed-gender founding teams rose to 21% in 2023 from 10% in 2022. The funding in these companies follows what the Salient Advisory report described as an impressive year for the general healthtech space, which received $167 million in 2023. While the general healthtech funding was 2% lower than what investors deployed in 2022, it was better than the broader African tech ecosystem, which saw a 39% funding decline. Women-led startups in Africa have, over the years, been largely overlooked by venture capital and private equity investors. But 2023 was a relatively good year for gender financing. Women-led startups raised just above $200 million, a +7% positive growth on a year-on-year basis, data from Africa: The Big Deal showed. The 2,000% funding growth is the first time the gender financing gap in health tech startups —and the ecosystem in general— is narrowing. The funding accounted for 31% of the total investment in health tech companies in 2023. Investors in Maisha Meds and most of the other women-led companies include global development institutions such as USAID and the Bill & Melinda Gates Foundation. Funding from these institutions is mostly grants. Maisha Meds raised $5.25 million in scale-up stage 3 funding from USAID Development Innovation Ventures (DIV). Stage 3 grants are DIV’s highest level of funding awarded to innovators who have demonstrated the ability to scale up their proven solutions to critical challenges. Grants from institutions like the Bill & Melinda Gates Foundation, MSD, Cencora, Microsoft, and Chemonics have contributed to setting up women-led companies in health tech and the space in general. The report noted that over half (52%) of the 145 deals for African healthtech innovators in 2023 were grants indicating the important role that grants play in bridging funding gaps for early-stage healthtech innovators. This stands out as the largest source of grant funding on the continent. However, the total ticket size of grants was only 7% of the funding raised, with the average being $168,000. Equity funding in comparison, accounted for 91% of funding raised, with an average ticket size of $3.2 million. Experts say there are still barriers women founders or CEOs face in accessing private equity or venture capital funding. These barriers are not necessarily from investors’ bias against female founders or CEOs, but they could stem from these women prioritising things like family over their business, hence they don’t show up enough for investors to see them, according to Ibijoke Faborode, founder of Africa Female Founders Collective (AFFC). AFFC which launched in February is planning a programme in 2024 that helps women founders or CEOs create more time for their startups and meet more investors who are interested in investing in their sectors. The goal is to help these startups focus on building the innovations that make them attractive to investors and also address problems in society. Vermon pointed out that the specific women-led startups that were funded in the DIV round are those that are innovating on unique models for healthcare delivery, including a major emphasis on the last mile and underserved populations. Amaan Khalfan, CEO of Goodlife Pharmacy, East Africa’s largest private retail pharmacy chain, said investors would largely fund a business that has good record keeping and can position itself in a way that identifies the opportunities in the health tech space. Jenne Nwoke, founder of Clafiya, a digital health platform that has raised $610,000 to date mainly from venture capital, said women-led startups are not raising much from VCs because there is little intentionality behind funding women-led businesses. According to Nwoke, it would help if more VC funds were run by women entrepreneurs. However, she notes that women need to be more open in sharing funding opportunities. “For the next funding cycle, I’m going to be more intentional with the investors I want, i.e. finding investors who understand health, consumerism, and finance in Africa or in general,” she said.
Read MoreHow Eyowo’s bid to become a fintech giant hit the rocks
Eyowo had big dreams of becoming a fintech giant, and for a while, that dream was within reach. Softcom, a popular Nigerian startup founded in 2017, was once considered the dream workplace. The software development agency threw colourful end-of-year parties and flew employees to South Africa and Dubai on work retreats. It felt like the example of a modern Silicon Valley startup. Initially a B2B company, it had prominent clients like Coca-Cola, MTN, and the Nigerian government. However, in 2019, it shifted its focus from its client-side business to building consumer-facing products. That strategic shift resulted in Eyowo, one of Nigeria’s earliest digital banks. Hailed by many former employees as a game-changer, Eyowo scored an early win as the platform of choice for Tradermoni, a controversial collateral-free government loan to two million small business owners in 2019. Five years after that big win, Sofcom’s fortunes turned, with three rounds of layoffs, persistent delays in salary payment, and a revocation of Eyowo’s banking licence in 2023. Without a banking licence, Eyowo, with its promise of “making life better for everyone,” began scrambling to secure a banking partnership so its customers could get their deposits. While that involved many missed timelines, many customers began accessing their funds this week. Eyowo’s cofounders declined to comment on any part of this story. Four ex-Softcom employees blamed Eyowo’s troubles on a lack of experience in core banking and the company’s inability to change its strategic thinking to become consumer-facing. A glitchy goodbye for Eyowo “Eyowo’s licence revocation could have been avoided if the startup had hired professionals to handle regulatory compliance,” one person with knowledge of the business said. The same person claimed the CBN visited Eyowo to start a conversation and give recommendations months before the licence was withdrawn. TechCabal was unable to verify these claims independently. “It was a great product, but it was hard to keep up with the disappointments,” another ex-employee shared. One such disappointment was that the company’s founders, Yomi Adedeji and Omoseinde Olubayo, neglected payment discussions until the last minute. As a result, the startup was cut off from its cloud service provider four times for defaulting on payments, leading to service outages. These outages often sent the marketing team into overdrive. “The frequent disruptions eroded trust,” an ex-employee said. The company’s management and marketing team also had different growth and marketing strategies perspectives. While the founders preferred sponsoring events, the marketing team argued that these events added little value to the company and starved the team of funds for more effective campaigns. In 2021, Eyowo sponsored Marlian Fest, a concert by Nigerian artist Naira Marley and also sponsored Ake Festival, a book and arts festival, one year later. “They were waiting for virality, for that one big moment,” one person said of the management’s marketing approach. Softcom’s golden age “It was like a family, It was churchlike,” one former employee of Softcom’s work culture. Among former employees, the consensus was that the leadership team was supportive. One-on-one check-ins were the norm, and a flat organisational structure contributed to the sense that the company’s leadership was accessible. The company shared some of its yearly profits with employees and sponsored team bonding sessions to Dubai in 2017 and South Africa in 2018. In 2019, Softcom’s best-performing employees were treated to an all-expense-paid Dubai vacation. “We felt like we were going to change the world,” one former employee said. Softcom did change the world with its business solutions. Its enterprise business—which built bespoke websites and applications for top companies—was its cash cow. Through its Useforms app, a software with similar capabilities to Google Forms, the company carried out trade visibility research for MTN. Softcom also made learning management systems for Covenant University, National Open University, and Delta State University. The company also catered to FMCG companies, offering services like the “Eyowo rewards”—a raffle draw system that let customers win cash prizes by dialing customized USSD codes. One employee claims one of those contracts with Coca-Cola was worth ₦850 million *($578,584), and another with Honeywell was worth ₦65 million. TechCabal was unable to independently verify those figures. Softcom’s most lucrative deals were from government contracts, two former employees claimed. It built a website for the Consumer Protection Commission (CPC) and was involved with Npower, a government-backed empowerment scheme to solve youth unemployment. But things changed quickly when the startup lost N-power as a client. The loss of that contract may have convinced Softcom to focus on Eyowo as its next lucrative venture. In 2020 the company began a restructuring process that included a downsizing of its workforce in preparation for Eyowo X, the new and consumer-facing iteration of its fintech app. The complexities of a consumer-focused fintech This shift from being a software maker to a B2C fintech startup required a change in strategy. Softcom’s previous business model required less customer interaction and focus on scaling. But Eyowo operated in a different landscape that demanded frequent customer engagement. But both founders approached Eyowo with the Softcom mindset, leading to a chain of questionable decisions and unrealistic expectations, two persons familiar with the company said. “They should have treated Eyowo as a separate product without shuttering Softcom,” one former employee said. Alongside Eyowo X, it launched three other products: Kwik Sell, an inventory and stock management software, Usepass, an event management and ticketing system, and Useforms, a software with similar capabilities to Google Form. The company began conversations to raise $10 million for all four products in 2021, said sources directly involved. Ultimately, those fundraising conversations were unsuccessful. As Eyowo struggled to raise funds, it was burning through monies it had earned from the Softcom era and it soon ran into cash flow problems. “Former employees only began noticing when there were delays in salary payment in December 2021,” one person said. Towards the end of 2022, the company laid off about 20% of its 200 employees. “They didn’t cut costs early enough,”the same person said. Understanding the cash burn at Eyowo
Read MoreMTN Nigeria recoups ₦12.5 billion lost to mobile money glitch as monthly active users grow
MTN Nigeria, one of Nigeria’s largest telecom providers, has recovered over half of the ₦22 billion it lost when its Mobile Money service suffered a glitch in May 2022. The incident, which occurred one week after the launch of the mobile money service, highlights the scale of fraud in Nigeria’s financial services sector. While ₦12.5 billion ($7.85 million) has been recovered to date, the balance of ₦9.5 billion ($5.97 million) will be absorbed by MTN Nigeria due to a shared services cost agreement between the telco and MoMo service. “MTN Nigeria has fully provided for this amount,” a statement from its 2023 financials said . In Nigeria, MoMo is still gaining adoption, as TechCabal previously reported. “The development of the business has been slower than anticipated,” said Toriola, MTN Nigeria’s CEO, in the 2023 full-year report. Delays in regulatory approvals from the Central Bank and the inability of many prospective customers to meet the NIN requirement for Know Your Customer (KYC) were drawbacks to MoMo’s growth. However, Toriola expressed his satisfaction with the progress in building the MoMo PSB wallet base, and claimed monthly active users increased from 3.3 million in the year to 5.3 million. This growth was supported by 326,000 MoMo agents and 324,000 merchants in its ecosystem. MoMo PSB is optimistic about growing its reach via consumer education and leveraging its distribution network. The fintech hopes to include the provision of cross-border remittances to boost adoption and monetisation. “We will leverage the momentum from Q4 to accelerate the growth of wallets and adoption of services as we expand our merchant ecosystem,” Toriola added.
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Check your JAMB Mock Result for 2024
The anticipated 2024 Joint Admissions and Matriculation Board (JAMB) exams are approaching. Before then, many candidates who sit for the JAMB mock exams on March 7 would like to check their results to gauge their preparedness for the main JAMB exams. If you are one of them, here’s how to check your JAMB mock exam result for 2024 upon release: 1. Visit the JAMB Mock result portal Start by visiting the official JAMB Mock result portal at https://slipsprinting.jamb.gov.ng/CheckUTMEMockResults 2. Input your registration number Once on the portal, you’ll be prompted to input your JAMB registration number. Ensure that you have this number handy as it’s required for verification. 3. Check your JAMB Mock result After entering your registration number, click on the designated button to check your mock result. 4. Review Your UTME Mock result after check Your UTME Mock Result should now appear on the screen. Take note of your scores in each subject area to assess your performance. Final thoughts Remember, the UTME mock result serves as a valuable benchmark to guide your preparation for the main UTME scheduled to commence on April 19th, 2024. So it does not count if you pass or fail the mock exams. The examination that matters is the one starting on the 19th of April. Also, if you encounter a message stating, “You did not sit for Mock Examination” don’t fret. Simply wait for a while and recheck the portal later if you are sure you took the JAMB 2024 mock exams. That is it about how to check your 2024 JAMB mock exam results. On your main exam day in April, do not forget important materials including your JAMB registration/examination slip, a valid government-issued identification and writing materials. These variables will ensure you have no issues accessing the exam hall. Also it is strongly advised not to go to the exam hall with any electronic devices such as phones.
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Latest steps to apply for emergency KCB MPesa loans 2024
If you need quick financial assistance, accessing a loan through M-PESA, particularly the KCB M-PESA service, can be a convenient solution. Here’s a step-by-step guide on how to apply for emergency KCB MPESA loans: 1. Access M-PESA Menu Begin by accessing the M-PESA menu on your mobile phone. This is typically done through the M-PESA app or by dialling *234#. 2. Select Loans & Savings Once in the M-PESA menu, navigate to the “Loans & Savings” option. This will lead you to a list of available loan services. 3. Choose KCB M-PESA From the list of loan services, select “KCB M-PESA.” This will direct you to the KCB M-PESA platform where you can access loans and other financial services. 4. Select Loans on the MPESA Menu Within the KCB M-PESA platform, choose the “Loans” option. This will initiate the loan application process. 5. Request Loan Once you’ve selected the “Loans” option, proceed to request a loan. You may be prompted to input additional information such as loan terms and repayment options. 6. Enter Amount Specify the amount of money you wish to borrow. Ensure that it is within the allowable limit based on your eligibility and the terms of the loan service. 7. Enter M-PESA PIN & Submit After entering the loan amount, you will be required to enter your M-PESA PIN to authenticate the transaction. Once entered, submit the request. 8. Loans Deposit to MPESA account Upon successful submission, the loan amount will be deposited into your KCB M-PESA account. However, to access the funds, you’ll need to transfer the money from your KCB M-PESA account to your M-PESA wallet. 9. Transfer to M-PESA To access the loan funds, initiate a transfer from your KCB M-PESA account to your M-PESA wallet. This transfer is typically free of charge. Final thoughts on how to apply for emergency KCB MPesa loans 2024 These simple steps will help you easily apply for and access a loan through KCB M-PESA via the M-PESA platform, providing a convenient financial solution whenever you need it.
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New ways to link NIN with your major bank account 2024
In compliance with CBN regulatory directives, Nigerian banks have initiated comprehensive measures to facilitate the seamless linkage of customers’ National Identification Number (NIN) and Bank Verification Number (BVN) to their respective bank accounts. This process, essential for regulatory compliance and enhanced security, ensures a smoother banking experience. Here’s a concise guide on how to link your NIN to your bank account, simplifying the process across major Nigerian banks. 1. Link NIN to your GTB account Link your NIN swiftly by dialling *737*20*BVN# from your registered mobile number. Alternatively, access GTBank’s self-service portal on their official website, [www.gtbank.com), to link both your BVN and NIN seamlessly. If you prefer a hands-on approach, visit the nearest GTBank branch for assistance. 2. Link NIN to your United Bank for Africa (UBA) account Engage with Leo, UBA’s virtual assistant, by initiating a conversation with a simple “Hi” message. Follow the prompts to select NIN updates across various messaging platforms like Facebook, WhatsApp, Instagram, and Apple Messages. Alternatively, visit UBA’s official website, www.ubagroup.com and locate the self-service section for a guided process. 3. Link NIN to your Access Bank account Initiate the linkage process by dialling *901*11# from your registered phone number. Follow the on-screen instructions to input your NIN and BVN. Double-check your details and confirm to submit. Alternatively, navigate to Access Bank’s website, particularly the NIN/BVN Linkage section, to complete the process online. 4. Ecobank linkage to NIN Begin by visiting the designated Ecobank customer update portal at https://customerupdate.ecobank.com/ciu/login Provide your account details as prompted. Acknowledge the terms and conditions. Await an OTP, which will be sent to your registered email. Input the OTP and proceed. Select the option for statutory ID or identification update. Upload a scanned copy of your NIN document. Confirm your acceptance and submit the form. 5. Link your Zenith Bank account to NIN Swiftly link your NIN to your Zenith bank account by dialling *966*NIN# and following the prompts. Alternatively, access Zenith Bank’s internet banking platform and navigate to the “Account” section. Choose either “Update Account (NIN)” or “BVN Update” and fill out the required e-form for submission. Final thoughts on linking NIN with bank Diligently following these tailored instructions will help you link your NIN to your accounts across Ecobank, GTbank, Access Bank, Zenith Bank, and United Bank for Africa (UBA).
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👨🏿🚀TechCabal Daily – OpenAI fires back at Elon Musk
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday The argument that Internships are just about fetching coffee or running errands are no longer valid. Today’s internships, especially in tech, have become valuable learning experiences that offer real work value and contribute to career development. Entering Tech,—TechCabal’s newsletter for aspiring tech professionals—dives into using tech internships as a launchpad to success. In today’s edition Inside Verod-Kepple’s vision for African startups CBK licences 19 more digital lenders OpenAI fires back at Musk Ring Capital launches Africa-focused fund The World Wide Web3 Events Funding Inside Verod-Kepple’s vision for African startups As funding levels across the continent return to pre-pandemic levels, growth-stage startups are finding it increasingly difficult to raise funding. Verod-Kepple hopes to change that. The venture capital firm that has backed 11 growth-stage startups in two years with ticket sizes ranging between $1 million and $3 million, The $45 million fund is a successor to Kepple Africa Ventures, the early-stage investment firm that backed over 100 pre-seed and seed startups in three years with cheques worth between $50,000 and $150,000. Now, it has shed the seed-stage investing and speed that Kepple Africa was known for as it looks to increase its portfolio. The fund’s leadership team—Ory Okolloh, Ryosuke Yamawaki, and Satoshi Shinada—are looking to back “market-creating startups”. They also invest in startups that solve friction for businesses and the general public. In an interview with TechCabal, they shared their investment thesis and what they have learned from investing in more than 100 African startups across multiple sectors and countries. Here’s how Verod-Kepple is thinking about investments on the continent. Access payments with Moniepoint You don’t have to take our word for it. Give it a shot like he did Click here to experience fast and reliable personal banking with Moniepoint. Regulation CBK grants licences to 19 digital lenders Before 2021, operating a digital lending business in Kenya was easy. Registration was all it took, leaving customer data protection and lending practices largely unchecked. This lack of oversight led to a chaotic market with predatory lenders. After defining new regulations in October 2021, the Central Bank of Kenya (CBK) decided to tighten its grip on the digital lending industry in September 2022, and issued a strict 3-day ultimatum to digital lenders to either comply with the new standards or face closure. Digital lenders were required to re-register with the CBK and submit to their oversight. By March 2023, a total of 32 licences had been granted from a pool of over 400 applications. One year later: The CBK has granted licence to 19 more digital lenders, bringing the total number of licenced Digital Credit Providers (DCPs) to 51. The new regulations aim to bring order, in response to issues such as high costs, unethical debt collection practices, and misuse of personal information by unregulated providers. Since March 2022, CBK has received 480 applications from entities seeking licensing as digital credit providers. However, many applicants are still in the process, awaiting the submission of required documentation. Zoom out: Another country taking its digital lending seriously is Nigeria. In August 2022, the Federal Competition and Consumer Protection Commission (FCCPC) implemented a new regulatory framework that requires all digital lenders to obtain a licence and register with the FCCPC before operating within the country. As of April 2023, Nigeria had approved 173 loan companies. AI OpenAI fires back at Elon Musk Last week, we brought you news of Elon Musk suing OpenAI, makers of ChatGPT for towing a for-profit route for the company. Now the fight seems to be heating up. Round two, fight: Musk who invested more than $44 million in OpenAI between 2016 and 2020, claimed the ChatGPT maker had derailed from its founding objectives of making AI free for the use of all. However, new email evidence from OpenAI shows that Musk was in on the for-profit mission. A hypocrite? Yesterday, OpenAI released a blog post detailing an email correspondence in which Musk had agreed with other chief executives at the company to go a for-profit route in 2017. That’s not all. The blog post also claimed that Musk proposed a merger with his startup, Tesla. Before the release of the blog post, Jason Kwon, an executive at OpenAI, sent out a memo that contained a rebuttal to one of Musk’s claims that the company was acting as a subsidiary of Microsoft. “We decide what to research and build, how to run the company, who our products serve, and how to live out our mission,” Jason Kwon, wrote in the Memo. Open AI’s revealing blog post puts Musk as a subject of scrutiny in the legal battle. It remains to be seen whose version of events holds water. 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. Investment Ring Capital launches Africa-focused fund In June 2023, French VC firm, Ring Capital successfully closed its Ring Mission impact fund—a fund that focuses on early-stage tech ventures in Europe—at €66 million ($71.9 million), exceeding their initial target of €50 million ($54.4 million). Following this achievement, Ring Capital has unveiled its latest venture—Ring Africa, another impact investment fund targeted at French-speaking West Africa. In addition to launching Ring Africa, Ring Capital has bolstered its leadership team with the appointment of Elisabeth Moreno as President of the Board. Moreno previously served as the French Delegate Minister for Gender Equality, Diversity, and Equal Opportunities. Investing in Sustainable Solutions: Ring Africa seeks to address pressing issues like climate change, transition to a formal economy, and improving agricultural productivity. They’ll partner with Mstudio, a startup studio based in Abidjan, to identify and support impactful ventures, with plans to establish a local investment team in the city. Mstudio, a firm with the ambition to build multiple sustainable companies across the francophone region launched
Read MoreNavigating the African tech media landscape for startups
The fact that you exist is not news… Occasionally, a crisis or controversy in the African tech ecosystem ignites debates among founders and influencers about the merits of local versus international media coverage. While it’s undeniable that sensational headlines can spread like wildfire, accusing the local tech media of a sole focus on the negative is neither fair nor accurate. At Wimbart, after eight years in the industry, I’ve come to understand a fundamental truth that also happens to be Wimbart CEO’s Twitter cover story: The fact that you exist is not news. Whilst raising over a million seed in funds could guarantee you coverage, whether you’ve launched a new product or expanded, journalists will always ask, “So what?” What’s the impact, the innovation, the human story? The African tech market is brimming with startups eager to share their narrative. At Wimbart alone, where we represent a modest fraction of African-focused companies, we often find ourselves amongst at least three different teams pitching to the same journalist in any given week. It’s important to recognise that journalists’ inboxes are inundated with up to 50, sometimes hundreds of pitches, on any given day. Recognising their hard work is crucial—they are the storytellers who have elevated our narratives, making international media platforms not only notice but also hire local teams to push the narrative further. When I began working in PR for African tech, capturing the attention of international media was a formidable challenge—it was H-A-R-D. We owe much to local publications that have tirelessly championed our stories; they deserve our gratitude, or “flowers,” if you will. Pitching a story that will resonate and secure media coverage is an intricate art. For those with in-house communications teams or a PR agency like Wimbart, there’s support to sculpt the narrative. Yet, we are aware that not all, especially early-stage startups, have these resources. If your pitches happen to be met with a rate card, it‘s an indicator that what is being pitched is perceived more as promotional than editorial content. There lies the distinction between what is known as “earned media” and “paid media”. In layman’s terms, earned media is akin to a badge of honour, granted for its intrinsic worthiness, whereas paid media is a lot more straightforward; it’s coverage that you pay to secure—zero thought required. Each serves a purpose but they are not interchangeable. So, you’re set on securing earned media coverage without resorting to financial outlay? Excellent decision. Below are some actionable steps that can elevate your story from just another pitch that ends up unread to headline-worthy news: Research publications and journalists Finding the right journalist for a media outlet to share your startup’s story should mirror the process of choosing the perfect business partner or founding team. It involves aligning your startup’s mission with the outlet’s editorial focus where possible, ensuring there is mutual interest and goals. This due diligence involves thorough research into their past work and identifying the journalists within a specific publication who champion themes that resonate with your venture. Whether it’s your company’s innovative approach to sustainability, significant funding achievements, or the founder’s unique profile, finding that match means you’re ready to pitch. Pitching to the right person transcends mere coverage; it becomes an opportunity to weave your story into their ongoing narrative. It’s about creating a partnership where your startup’s achievement and aspirations complement their storytelling, ensuring that your narrative gets shared and truly resonates with their audience, creating a meaningful impact. Attention-Grabbing Subject Email Your email’s subject line is the gateway to capturing a journalist’s attention, so make every word count. Imagine you’re crafting the editorial for tomorrow’s newspaper, it should be compelling enough to make anyone pause and take notice. Take inspiration from the impactful stories you see on major platforms titles like “How [innovation/company] is changing [industry]” are not just headlines, they are calls to curiosity. Use this approach to mirror each publication’s storytelling style in your email subjects. This not only piques interest but also shows you’ve done your homework and understand what resonates with their readership. Keep it punchy and to the point Keep your pitch concise and riveting. As highlighted above, journalists sift through a mountain of pitches daily, so you need to make yours stand out by hitting the key point right from the start, much like you’d share a piece of irresistible gossip with a friend. Highlight the most compelling aspect of your story immediately to grab their attention otherwise you risk losing it before the second paragraph—this could include striking data, a customer story, etc. If there’s depth to add, consider bullet points or a summary after your email signature. Alternatively, you could keep it in reserve for a follow-up, which is often required. Reading lengthy pitches can be daunting, but this strategy respects journalists’ time and piques their curiosity, significantly enhancing the chances of your story being featured. It’s about striking the perfect balance: being informative yet engaging, ensuring your message is not just another in the huge pile but a must-read. Build a relationship before pitching Fun fact: My path to landing my first big feature was paved not just by an intriguing story, but more so by the relationship I had nurtured with the journalist well ahead of the time I needed to pitch my client’s news. It’s crucial to start building these connections early, long before the urgency to disseminate your news arises. This can be done by demonstrating a sincere interest in their work, engaging in meaningful conversations, and extending your assistance, such as connecting them with a speaker, without immediately anticipating a return; it can remarkably shift your stance from that of an outsider to a respected collaborator. I’ve found that the most fruitful relationships are those where communication can be as simple as sending bullet points over WhatsApp. Yet, reaching this level of informality and trust with journalists requires an investment of time and genuine interaction, moving you from just another contact in their inbox
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Patient capital, diverse exits: Verod-Kepple’s vision for the future of African startups
Armed with a $45 million war chest, the Verod-Kepple Africa Ventures (VKAV) leadership team—Ory Okolloh, Ryosuke Yamawaki, and Satoshi Shinada—have decades of experience operating and investing in Africa between them. Yamawaki founded Japan’s embassy in Botswana in 2008 but left after two years because “there’s no equity upside to being the founder of an embassy.” He then moved to Mitsui, one of the largest investment houses in Japan, just as the company was expanding into Africa. After an MBA from Berkeley, he launched Kepple Africa Ventures with Shinada, who joined after investing in energy and infrastructure projects in West Africa for seven years. Over the next three years, they invested in over 100 African startups. “We are not afraid of making mistakes, but we fear not learning anything due to lack of execution and speed,” was Kepple’s mantra as it invested between $50,000 and $150,000 in each pre-seed and seed-stage startup it backed. Following the full deployment of its $20 million fund in 2021, Kepple Africa, which deliberately structured itself as a “hands-off” fund from a portfolio support perspective, was effectively shut down to align with a new focus on growth-stage startups. (Yamawaki and Shinada still monitor, track and report on Kepple Africa portfolio companies.) The pair then partnered with Ory Okolloh, a tech and investment professional in Africa with experience at Google and Safaricom, to start Verod-Kepple Africa (VKAV), a venture capital fund that is partnered with Verod Capital, a Lagos-based private equity firm. The firm’s average ticket size is between $1 million and $3 million and it has invested in 11 growth-stage startups, like Moove (a Kepple Africa portfolio company), Shuttlers, Chari, and Julaya. While Verod-Kepple has shed the seed-stage investing and speed that Kepple Africa was known for, it still retains the Japanese connection of its predecessor as it invests in growth-stage startups at the Series A and B stages. The venture capital firm typically brings on its limited partners, mostly Japanese companies, as co-investors in deals and, in some cases, eventually sets up an acquisition event for its portfolio startups for its investors. TechCabal spoke to all three partners for this interview as they shared their investment thesis and why they are backing African startups. Venture capital firms and private equity firms differ in their approaches to investment. Why did you partner with Verod Capital? Shinada: As the ecosystem matures, more startups are in the growth phase. They’re facing many issues, like governance, operation, hiring, finance, financial reporting, etc. These things are managed much better by Private Equity funds. They have significant stakes in their portfolio companies and try to make a turnaround quickly. They are very hands-on and focused on improving the performance of their portfolio companies. We thought we [could] institutionalise that kind of experience and knowledge in the VC context if we kept investing in the growth phase of the startups. [Our partnership] also coincided with when we decided to move up from seed investments to Series A and Series B investments. From Verod’s perspective, I think they wanted to diversify their asset class. Also, as part of their value add to their portfolio companies, they were looking for more tech solutions to improve the efficiency and productivity of their portfolio companies. Read also: Verod Capital buys out Cardinal Stone’s stake in iFitness Kepple invested in many early-stage startups in just three years. Now Verod-Kepple has backed 11 growth-stage startups in two years. What are some of the challenges faced by early-stage startups and late-stage companies? Shinada: For early-stage startups, the biggest hardship is adapting the reality of the African market to investors’ expectations as a tech company. Startups need to focus on African problems if they want to monetise. But on the other hand, many investor perspectives are shaped by global trends. I think that’s why, between 2020 and 2021, lots of money flew into African copies of global business models that were assumed to be asset-light and tech-driven. It didn’t work because, in Africa, it’s more important to create transactions than to get revenue share by tapping into existing transaction flows with tech solutions. For later-stage companies, exits are a big headache. To exit, they need to understand what attracts global investors and also, from the perspective of public stock market investors, make an IPO happen. There has been a lot of misalignment between what investors are looking for and what African businesses are doing. No global investor is looking for a single business model with a single market exposure because Africa is risky. Investors are looking for a pan-African, broader, and more convenient index to diversify their exposure to emerging markets. You have a diverse range of companies in your current portfolio. How do you assess which companies get to be in the Verod-Kepple portfolio? What’s your investment strategy? Yamawaki: We always look for scalable and untapped opportunities that address some of the biggest frictions in Africa. We have three pillars on our website that represent the lens through which we see those opportunities, to make sure these opportunities are large enough and scalable. Firstly, infrastructure. We want to back businesses that try to solve friction for the general public that should have been provided by the government. Shuttlers is one: public transportation is perhaps a human right, but there is no reliable and affordable solution for it [in Nigeria]. Secondly, inefficiency solvers. This is solving friction for businesses. For this, we have Julaya. The last pillar is homegrown solutions. But we have revised that to market creators. Market creators refer to those creating economic opportunities for people based on the changing dynamics of the overall African economy, for instance, increasing GDP. When it comes to assessment, we look at the deal to see whether the opportunity falls under these pillars very well. We don’t want to invest in models replicated from other parts of the world or businesses that just have a tech layer. We want to back businesses and founders that tackle deep issues and problems in
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