As cloud costs climb, can homegrown cloud providers save the day?
With the Naira in free fall, Nigerian startups face rising bills for cloud services, which they mostly use to store critical data. These cloud fees and staff salaries are typically the two biggest expenses for startups, and some founders have argued that Nigerian companies need to move to homegrown cloud providers. Cloud computing costs are charged on a pay-as-you-go basis, with startups paying monthly for the computing they use. Startups also pay for backend and mobile application computing costs. These costs can vary widely depending on the company. In late 2023, Incentro, a Google partner, sued Twiga, a Kenyan e-commerce startup, and asked a court for help in collecting a debt relating to a $2 million cloud services contract. According to the terms of that contract, Twiga could pay as much as $84,000 per month for cloud services. While that is already substantial, currency devaluation and FX volatility in Nigeria, where many startups earn revenue in Naira, make that fee even more expensive. In mid-2023, Nigeria removed all artificial controls on its FX market to unify its official and parallel market rates. While the CBN was hoping for stability, the value of the naira has continued to slide, reaching new lows this week. As a result, a $1000 cloud service that would have cost ₦458,000 in early 2023 is now about ₦1.52 million, a 107% increase. One Nigerian HR-tech startup that runs different servers for its client pays up to $80,000 in cloud costs monthly, according to a person familiar with the company’s operations. Another Nigerian financing startup pays around $2,000 monthly, an employee who asked not to be named told TechCabal. Nonso Eze, the CEO of Tradebuza, whose startup connects smallholder farmers to financing, said his company is exploring given the rising cost of their USD-denominated cloud fees. The big three cloud providers Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform are the three biggest cloud computing companies in the world. They remain the top choice for many companies and offer free cloud credits to early-stage and growth-stage startups. Google, for instance, gives startups up to $200,000 in Google Cloud credits to startups through its Black Founders Fund, while accelerators like Techstars and Y Combinator give their portfolio companies cloud credits. When the cloud credits eventually get exhausted, the startups will have already built some of their core infrastructure on the cloud and are locked in, making it difficult to switch. Abolore Salami, a founding partner of Business Lab Africa (BLA) and a long-time AWS customer, says there has never been a downtime in over five years of using the cloud provider, emphasising the stability expected from cloud providers. In January, Salami put out a poll on LinkedIn to find out how many founders were also affected by rising cloud costs. More than half of the people who participated in the poll said it was worrisome. Is “going local” viable? A seemingly obvious way out for startups is to transfer these costs to their customers, but the fear of churn in competitive markets makes this a challenging choice. Adedeji Olowe, CEO of Lendsqr, a lending-as-a-service company, told TechCabal that startups could seek out local alternatives that have built some resilience into their infrastructure. Some local players include Nobus Cloud Services, MainOne Cloud, Web4Africa, Galaxy Backbone, Layer3 Cloud, and many others. Indian-based Zoho Cloud is also positioned as a local alternative because it accepts naira payment. While local options exist, there are concerns about their ability to replicate the full feature range of big cloud providers because they don’t own their infrastructure and rely on open-source platforms like OpenStack, a cloud expert who asked not to be named told TechCabal. AWS, for example, offers microservices—which break down a large application into smaller independent parts. “When you don’t have complex infrastructure, providing cloud services won’t be as easy as people think it is,” he said.
Read MoreSouth Africa eyes Nomad goldrush, targets wealthy remote workers in new draft regulations
South Africa has published draft regulations for digital nomads visas, inviting the public to share feedback and comments that will shape the eventual outcome of the visa. If the regulations are eventually adopted and implemented, South Africa will become the fifth African country to offer digital nomad visas. For South Africa, the goal is to position itself as the global hub for digital nomads. According to data by Nomad Hive, nomads spend an average of $2,000 monthly on accommodation, food, local transportation, work-related expenses, and leisure activities. South Africa’s digital nomad VISA will target nomads earning at least R1 million (~$53,000) annually. “The inflow of digital nomads promotes sharing of ideas and experiences which can internationalise South Africa’s tech ecosystem,” said Will Green, founder and CEO of venture firm Co.lab. South Africa will be enticing to remote workers because of a relatively low cost of living, and a weak exchange rate, said Blake Blake Player, head of growth at crypto firm VALR. “Many tech companies may start to look at entering the SA market more formally,” he added. Despite the economic benefit of an influx of digital nomads in the country, South Africa’s current regulatory regime might prove difficult to overcome. South Africa’s current legislature has numerous laws that have to be amended if the digital nomad bill is to become law. For instance, the digital nomad bill proposes an income tax exemption for foreign employees working in South Africa for less than six months, and the income tax act would have to be amended to provide for the exemption to be legal. The proposed tax administration bill introduced by South Africa’s Revenue Service in 2023 is another potential obstacle. Under the proposed amendments, employers of South Africa-based remote workers must deduct pay-as-you-earn (PAYE) tax. Foreign companies would need to apply for and receive a SARS income tax number and register a branch company within South Africa. “The process of having to set up office here to access South African and digital nomad remote talent might prove too much for some companies,” said Ivan Breytenbach, income tax administrator at Raakvatters Accounting & Consulting. Another legislation that might put off digital nomads is a proposed amendment to the country’s Copyright Bill. For example, universities and other institutions will have the right to reproduce software products without having to pay producers of said products. “What the bill proposes [is] to water down copyright owners’ protection, and that [is] deeply concerning,” stated Sadullar Kajiker, professor of intellectual property at the University of Stellenbosch. This could prove to be a disincentive for nomads building proprietary software while in the country. Although the economic benefits of the digital visa are clear, the political will to overcome regulatory challenges will be crucial if South Africa’s nomad visa is to become a reality.
Read MoreEXCLUSIVE: Hohm Energy raises $8 million seed to tackle loadshedding in SA
South African solar energy startup Hohm Energy has raised an $8 million seed round to scale its rooftop solar installation product. The funding, the largest seed round ever raised by a South African tech startup, was led by E3 Capital and 4DX Ventures. Founded in 2021 by Tim Ohlsen and Emir Gluhbegovic Hohm Energy’s platform comprises two offerings; a way for customers to have their properties’ solar energy requirements determined digitally and a way to get access to credit financing for rooftop solar installation. The platform also allows solar installers to design, manage, finance and procure solar projects. Hohm Energy claims to have generated over 17,000 custom solar rooftop designs worth $190M and $90M in financing applications for the implementation of the designs. To facilitate financing for the designs, Hohm Energy has partnerships with several South African finance institutions for customers to secure structured financing. ad Through the partnerships, Hohm customers can use the platform’s finance and credit scoring to apply for financing. “We realised that although there is an appetite for solar energy in SA, sometimes financing is a hurdle,” Ohlsen told TechCabal. “The fintech aspect will help to drive even more rooftop solar installations.” The company will use the funding to scale its product offering across the board. This will include its tech, product innovation and solar installer skills development. Ohm Energy aims to facilitate rooftop solar installations for 7.7 million homes in South Africa and claims to be on track to reach profitability by the end of the year.
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👨🏿🚀TechCabal Daily – A d.lightful stake
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Heads up! Google has a new sign-in page. It’s pretty much the same as before but everything is better aligned across devices with large screens. Your passwords, passkeys, and info are all safe. That’s it for innovation today. In today’s edition How much did Cardinal Stone sell its iFitness stake for? Binance limits USDT/NGN trading South’s Africa’s new EV incentives South Africa is taxing light bulbs d.light raises $7.4 million The World Wide Web3 Opportunities M&As How much did Cardinal Stone sell its iFitness stake for? On Wednesday, Cardinal Stone Capital Advisers sold its 65% stake in i-Fitness to Verod Capital management, seemingly answering the question “where are the exits for Africa-focused VCs and PEs.” But the devil is often in the details. Per our initial report, Cardinal Stone Capital Advisers sold its stake for $12 million. That figure meant that CCA was breaking out the champagne to celebrate a 2-2.5x exit. Here’s what Muktar of TechCabal wrote: “Cardinal Stone, the first institutional investor in i-Fitness, typically invests between $5 million and $10 million in portfolio companies across various sectors in Ghana and Nigeria.” But what if that exit was a lot smaller than initially thought? Two people close to the deal insisted that the deal was much smaller than we initially reported. “Two authoritative sources shared that the deal size was less than $6 million.” It suggests that this was not a situation where the selling party was popping some bubbly. While the five-year time horizon of the deal is typical of PE firms, there may not have been any huge exit multiples here. Depending on what the final numbers were, this might have represented one PE handing the baton to another PE firm that may have a different thinking of how to extract juicy multiples in the next five years. 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. Crypto Binance limits USDT/NGN trading As of January 30, the Nigerian Naira depreciated 31% to reach ₦1,400/$1, as the country’s headline inflation rose every month in 2023, hitting 28.90%, an 18-year high, in December 2023. Amidst this economic instability, Binance, the world’s largest cryptocurrency exchange, has disabled Nigerian users from selling USDT, and limited the buying option to a set price of ₦1,802 ($1.12). The crypto exchange, which facilitates trading between the Naira and USDT (a stablecoin pegged to the US dollar), claims that these measures are to safeguard users from fraud and manipulation. For Nigerian users, Binance disabled the ability to sell USDT and limited the buying option to a set price of ₦1802 ($1.12). Desperate times call for desperate measures? Binance’s recent limitation on Nigerian users’ ability to sell USDT coincides with unverified claims that the Central Bank of Nigeria (CBN) and other government bodies allegedly ordered the exchange to limit Nigerian users’ ability to sell USDT. This marks the second time in six months that Binance has intervened in USDT/NGN pricing, following a similar action in December that briefly boosted the naira’s value by ₦300 ($0.19) against the dollar in one day of trading action. Traders are now exploring alternatives, with some migrating to other peer-to-peer platforms like Kucoin, where the Naira traded as low as ₦2000 ($1.25) to 1 USDT. Despite relaxing currency controls and implementing new policies since June 2023 to curb speculation and improve price discovery, the CBN’s efforts are hindered by persistent liquidity issues and potentially ineffective communication, affecting confidence in the apex bank. In response, the Debt Management Office has increased bond yields by 3% to address excess Naira liquidity and attract foreign investors. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Regulation South Africa unveils tax incentives for EV manufacturers A wave of electric vehicle (EV) support is sweeping across Africa, with governments and businesses alike taking action to promote cleaner transportation. In Ethiopia, the government, earlier this month, revealed plans to ban the import of gasoline and diesel cars. The country has also been offering tax breaks for electric vehicles since 2022. Kenya joined the movement by restricting the import of used EVs with less than 80% battery life on Tuesday. This decision comes alongside a recent $24 million investment secured by Kenyan EV company Roam, to expand its operations across the country. In North Africa, Egypt’s state-owned automaker El-Nasr has partnered with a Chinese company to roll out locally-produced EVs in the country by 2025. Now, South Africa is also joining the EV race. The country’s finance minister Enoch Godongwana, unveiled a series of tax hikes during the 2024 Budget Speech. Amidst these increases, there’s a silver lining for EV manufacturers. What silver lining? Starting March 1 2026, companies that make electric and hydrogen-powered vehicles can get back 150% of the money they spend on their investments. This is to boost local EV production. Additionally, the National Treasury has reallocated R964 million ($50.8 million) to the EV industry to support the transition to EVs. Zoom out: In more renewable energy news, Teraco, an African carrier-neutral colocation provider is investing over $100 million in building a 120MW solar power plant in South Africa, to add clean energy generation capacity to the national grid. This highlights the growing interest in renewable energy solutions across Africa, which aligns with the broader shift towards cleaner transportation and environmental sustainability. Accept fast in-person payments, at scale Delight your customers by allowing frontline staff and sales agents confirm bank transfers, instantly. Learn more → Regulation South Africa implements tax hikes on inefficient light bulbs Here’s some more news on SA. The government is taking steps to encourage citizens to
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How to print or reprint your 2024 JAMB exam slip
For every JAMB candidate, obtaining and printing the JAMB exam slip is a vital step towards preparing for the upcoming 2024 Unified Tertiary Matriculation Examination (UTME). This slip contains vital information such as your JAMB exam date, venue, time, and other essential details necessary for a smooth examination experience. Here’s a detailed guide on how to print or reprint your JAMB exam slip in simple steps: Understanding JAMB exam slip printing The Joint Admissions and Matriculations Board (JAMB) will allow the exam slip printing only for candidates who have registered for the 2024 JAMB UTME. This enables candidates to access and print their exam slips, ensuring they have all the necessary information well ahead of the examination date. Requirements to print or reprint your 2024 JAMB exam slip Before trying the JAMB exam slip printing/reprinting process, ensure you have the following requirements in place: JAMB Registration number, or email address, or phone number Desktop computers or Smart Phone with an Internet connection A printer or somewhere to print. How to download and print JAMB exam slip We have two methods to print or reprint your JAMB exam slip for you here today. See them below: First Method: JAMB Exam Slip Printing Portal 1. Visit the JAMB Exam Slip Printing Portal at https://slipsprinting.jamb.gov.ng/PrintExaminationSlip 2. Enter your JAMB Registration Number, Email address, or Phone Number. 3. Click on “Print Examination Slip” after entering your details correctly. 4. Your JAMB Examination Slip will display on the screen. You can print it out or save it on your device for future reference. Second Method: JAMB Profile Portal 1. Visit the JAMB efacility portal at https://efacility.jamb.gov.ng/Login 2. Enter your Email address and Password linked to your JAMB Profile. 3. Click on the “Login” button to proceed. 4. Locate and click on “Print Main UTME Exam Slip”. 5. Cross-check the details displayed to ensure accuracy before printing. 6. Print the slip and save it on your device for future reference. Final thoughts, additional tips and recommendations on JAMB slip printing If there are difficulties accessing the portals, keep trying, especially during off-peak hours. Also, consider making multiple photocopies of the printed slip for backup purposes. In case of any challenges, reach out to JAMB at enquiries@jamb.gov.ng.
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🚀Entering Tech #58: The path from law to tech
Here’s how to join the tech bandwagon with your law degree. 21 || February || 2024 View in Browser In partnership with #Issue 55 How to move into law through tech Share #EnteringTech Hi If you are looking to move from law into tech, we bring you good news. This week, we spoke to seasoned lawyers who offered insighton how to transition smoothly. As you read today’s edition, please share it with your network across social media and tell us what you think so we can improve. by Faith Omoniyi How Okechukwu Eke did it Right after law school, Okechukwu Eke, the general counsel at fintech Moniepoint, knew his core strength was in corporate law and not litigation. His love for finance drove him into his first role as a legal counsel at a Nigerian commercial bank, Fidelity Bank, in 2008. Okechukwu Eke, General Counsel at Moniepoint Eke, with a career now spanning 15 years, says starting at Fidelity Bank built the groundwork for his transition into tech. At Fidelity, alongside his work handling litigation management, dispute management, contract review, and drafting, Eke reviewed technology agreements and e-business agreements for the bank. He moved on to support the corporate banking and e-business team at First Bank. Eke also handled similar responsibilities when he joined Diamond Bank and Union Bank. His eventual switch to tech came in 2019 when he joined Interswitch, the payment giant. According to him, the move was a major shift from his banking experience as he was rocked by the fast-pacedness of startups. Now that you have a peek into Okechuckwu’s story, here’s how you can write yours. Paths to pursue in tech First, you’ll need to acquire the skills and choose a path to pursue. Like Eke, you’ll need the first identify where your passion lies and learn the core skills to help you thrive in that chosen path. Eke says contract drafting and negotiation skills are a must-have. Deepening your knowledge of tech law within both local and foreign jurisdictions alongside possessing excellent corporate and commercial knowledge is essential. Awuese Iorchor, Associate at Hamu Legal On the soft skill rung of the ladder, Awuese Iorchor, an Associate at Hamu Legal, says you must also have adaptability, collaboration, and problem-solving skills handy. When you have all this sorted out, here are a couple of open paths our experts recommended. Technology Transactions Attorney: This area focuses on legal aspects of technology deals, like software licenses, cloud computing agreements, data transfers, and mergers/acquisitions involving tech companies. Drafts, reviews, and negotiates contracts to ensure terms are clear and protect clients’ interests. Requires knowledge of intellectual property (IP), data privacy, and technology industry standards. Privacy and Data Protection Lawyer: This deals with legal compliance concerning data collection, storage, and usage, often involving regulations like GDPR and CCPA. A privacy and data protection lawyer advises companies on data privacy policies, breach response procedures, and regulatory compliance strategies. Being successful in this role requires an understanding of complex data privacy laws and evolving regulations across jurisdictions. Intellectual Property (IP) Attorney: Here you will be required to protect and utilize clients’ intellectual property assets like patents, trademarks, copyrights, and trade secrets. An intellectual property lawyer drafts patent applications, prosecutes patent claims, litigates IP disputes, and advises on the strategic use of IP assets. The skill set needed for this role includes expertise in specific IP laws, and litigation practices, and an understanding of various technological fields. In-House Counsel for Tech Companies: An In-house counsel provides legal advice and representation directly to a tech company, handling employment law, contracts, data privacy, IP, and regulatory matters. They manage legal risks, support business operations, and advise on strategic decisions from a legal perspective. This role requires broad legal knowledge and understanding of the specific company’s industry and business goals. Company secretaries: This role consolidates a company’s compliance arm. Company secretaries are primarily responsible for ensuring a company’s compliance with corporate governance regulations and best practices. They also oversee board meetings, manage shareholder interactions, maintain company records, and facilitate compliance with legal requirements. Strong organizational skills, knowledge of corporate governance rules, and attention to detail are essential skills needed to thrive in this role. P.S Every company in Nigeria needs a secretary and only lawyers, chartered accountants or chartered secretaries can be secretaries for public companies! General counsel role: Just like Okechukwu Eke of Moniepoint, Adedolapo Adesina of Kuda, and Gbolahan Olayemi of OPay, the general counsel acts as the chief legal officer for a company, leading a team of lawyers and managing all legal matters. They provide strategic legal advice to the CEO and executives, oversee litigation, and represent the company in legal matters. This role requires extensive legal experience, leadership skills, and a deep understanding of the company’s industry and business. Emerging tech attorney: As new technology—AI, blockchain, fintech, and cybersecurity—emerge so is the need for lawyers to focus on legal issues surrounding them. Emerging tech lawyers advise startups on how to navigate the legal landscape of these emerging areas, often involving uncharted territory. Your willingness to learn, adapt, and keep up with the rapidly changing legal and technological landscape are essential ingredients for succeeding in this role. Simplify with Rowvar Simplify property investment with Rowvar. Start here. How to get your first role Now that we have talked about the core skills and different career paths that exist within tech law, it’s time to learn how to land your first tech role. If you have zero experience with working with startups, Eke says applying for internships in smaller tech startups is a good place to start. This allows you to learn the ropes in a dynamic environment and build relevant skill sets. As you grow in the field, Iorchor offers reassurance, reminding you that countless others have paved the way before you. Both Iorchor and Eke emphasise the importance of continuous learning. They suggest reaching out to mentors in the field, taking online courses and boot camps, and attending Legaltech events. Eke says
Read MoreYC-backed Miden has big ambitions in challenging virtual card space
Dom Okiemute and Ini Udoh started Miden to increase the speed of card issuance in Nigerian financial institutions. For a fintech startup, cards are essential to drive payment volume and grow customer base. However, issuing these cards can be complex and time-consuming because fintechs do not have the size and resources to join major card schemes like Mastercard, Visa, and Verve directly. To work around this, Fintechs partner with established banks that act as issuing partners. The average time to build a card integration system within a bank was about 6-12 months,say Okiemute and Udoh, who have a combined 13 years of experience building financial systems across Nigerian banks. Miden’s solution, which moves the wait time for cards from months to weeks, earned them a place in YC’s winter 2024 batch. Miden lets businesses issue virtual cards in USD and Naira through customizable and easy-to-use API—a drag-and-drop interface—and pre-built integrations with flexible customization options. According to its website, Miden has issued over 100,000 cards and operates in four countries. “Card penetration is directly proportional to financial inclusion in Africa,” Okiemute told TechCabal, emphasizing the link between card penetration and financial inclusion in Sub-Saharan Africa. The impressive financial growth in Latin America, partly driven by the success of Pismo and Pomelo, which focus on card payments, drives home his point. “We decided to go into the space and solve the problems,” he said. Getting into YC’s latest batch was the icing on the cake and validated their decision to build in stealth for six months. Now approaching its first year, it claims to serve 25 businesses while processing ₦3.5 billion ($3.2 million) monthly. The business also recently said it has $100,000 monthly recurring revenue (MRR). “We’ve been able to acquire not just users of other platforms, competitors now leverage our platform,” he said. Miden makes money by charging transaction fees on the cards they issue. It also charges subscription or usage-based fees for businesses accessing their platform and issuing cards. The business claims to have a 99% uptime. Miden’s speedy entry into the $134.4 billion card market has not been without its challenges. According to Okiemute, Miden has struggled to find talent to build its solution. “People with localized domain knowledge are scarce,” he said. While Miden’s plans are ambitious, the startup is playing in a field rocked by chargeback fraud, costing businesses hefty fees and potential shutdowns. In November 2023, Union54, a Zambian fintech shut down after an attempted $1.2 billion chargeback fraud. Additionally, fluctuations in the Nigerian currency pose risks for USD-based virtual cards. Looking ahead, Miden says it will expand its ambitions beyond virtual cards, aiming to become a full-fledged core banking provider offering physical USD cards and potentially other functionalities.
Read MoreDesperate measures? Binance limits USDT/NGN trading as Naira slide worsens
Binance, the world’s largest cryptocurrency exchange, placed limits on peer-to-peer transactions trading the USDT/NGN pair as the naira fell to record lows on Tuesday afternoon. The exchange, which acts as an escrow and allows Nigerians to trade the naira for USDT, a stablecoin pegged against the US dollar, claims the move protects users from fraud and manipulation. For its Nigerian users, the cryptocurrency exchange disabled the ‘sell’ feature, preventing them from selling USDT on its platform. Binance also limited Nigerian users’ buy option to a price of ₦1802. It is the second time in six months that the exchange is pegging USDT/NGN prices, following a similar move in December that saw the naira gain ₦300 against the dollar in one day of trading action. That momentum was short-lived. All eyes on CBN: Will Cardoso dare a mega rate hike to curb galloping inflation? “As industry leaders, we are working hand in hand with local authorities, lawmakers, and regulators to ensure we act on non-compliance,” the exchange said in a blog post. In recent years, Nigerians have taken to Binance to buy cryptocurrency as a hedge against inflation and currency devaluation. Binance has also become crucial to price discovery in a country with “official” and “parallel” market rates. Pegging prices on Binance is linked to a belief that speculators on the exchange may be manipulating prices. “The only problem with [Binance] is the ability of users to quote rates very high above the market rate,” a crypto trader told TechCabal. With the ban on Binance, traders are exploring other options. At least three crypto traders told TechCabal they are moving to other peer-to-peer platforms to trade stablecoins. On Tuesday, the naira traded for as low as ₦2000 to 1 USDT on Kucoin, a Binance competitor. Two crypto traders who spoke to TechCabal said the volume of USDT transactions is not significant enough to affect prices. “We believe that if proper steps are put in place, we will worry less about crypto being the issue but focus on other relevant sectors that will increase our USD inflows,” one person said. Since June 2023, the CBN has relaxed currency controls and released a raft of new policies intended to reduce speculation and aid efficient price discovery. However, a persistent liquidity problem and arguably poor communication continue to hamper the bank’s efforts. It has translated broadly to a lack of confidence in the apex bank as it scrambles for solutions that can provide stability. This week, the Debt Management Office increased the yield for Nigerian bonds by as much as 3% in the past month to mop up excess Naira liquidity and attract foreign investors. *This is a developing story
Read MoreDeFi adoption surges in Africa as Opera’s MiniPay surpasses 1 million users
This article was contributed to TechCabal by Conrad Onyango via bird story agency. The recent announcement by Opera MiniPay that it had signed up over one million users in Kenya, Nigeria, and Ghana just five months after its launch is the clearest indication yet of the rising popularity of decentralised finance, or DeFi tools, across the continent. “MiniPay makes it easier and more affordable for individuals across Africa to acquire, send and receive Mento cUSD stablecoins – simply by using mobile phone numbers,” said MiniPay’s product director, Charles Hamel. MiniPay is a self-custodial wallet for dollar stablecoins that offers cUSD, a stablecoin built on the Celo blockchain, and touted as “decentralised” so that its value is linked to a variety of currencies, which makes it more stable. Hamel explained recently at the Africa Tech Summit 2024 that the payment platform was integrated into the Opera Mini browser to provide African users with a more stable way to store and send money using digital assets. The move to decentralised finance in Africa is being driven by the double-whammy of high inflation rates and battered currencies. According to MiniPay, the cUSD offers multiple advantages, including mitigating currency volatility and providing a reliable store of value. “This is especially crucial in regions affected by hyperinflation and economic uncertainty, where stablecoins present a decentralised and accessible alternative to traditional financial services,” the payment platform said in a statement. Severe currency volatility across Africa has disrupted some of the continent’s strongest currencies including the Nigerian Naira and Kenya Shilling – both now considered among the world’s most undervalued currencies. According to Bloomberg data, the two currencies featured in a list of 10 that experienced the most devaluation in 2023, globally. The Naira was ranked the third most devalued currency in the world after losing 55% of its value against the dollar, while the Kenya shilling lost over 20% against the greenback in 2023. The Angolan Kwanza (-39%), Malawian Kwacha (-39%), Zambian Kwacha (-29%), Burundi franc (-27%), Congolese franc (-24%) also featured among the world’s 10 worst-performing currencies. Several other DeFi-backed startups in Nigeria and Kenya are getting noticed by investors. Canza Finance, a Nigerian Web3 Neobank that helps African startups with cross-border payments raised $2.3 million in January 2024 to expand Baki – its African DeFi platform. “With the help of Baki and stablecoins, Canza Finance aims to assist businesses in achieving dollar stability and overcoming traditional forex challenges. This will ultimately result in reducing transaction costs to just 1%, making it easier and more affordable for businesses to conduct cross-border transactions in Africa,” said Canza Finance in a statement. Canza has ambitions of Baki building the world’s largest non-institutional financial system. “Baki provides the ability to offer infinite liquidity at the official conversion rate, and natively quote assets in local currencies on chain,” Baki’s website states. Another DeFi startup, Jia, in May 2023 secured $4.3 million in seed funding. Jia, which is also looking at expanding the company’s operations in West Africa and Kenya, specialises in offering loans of up to $5,000 to small businesses to fill the gap left by other digital lenders and loan apps that usually do not offer credit exceeding $1,000. A group of affiliated DeFi organisations, the Africa DeFi Alliance, aims to deploy $100 billion in working capital to help close the African MSME Funding Gap. Their goal is to provide MSMEs with capital that is ten times cheaper than today’s commercial rates. “We believe that by uniting the many stakeholders in Africa and beyond who can unlock working capital to African MSMEs, we will actualise a future where an open infrastructure drives growth for vendors and more businesses at scale,” the alliance says on X. According to the World Bank, SMEs which account for 60% of jobs in Africa face a huge finance gap of $330 billion.
Read MoreBreaking: Y Combinator’s third African pick is Ocular AI, a Zimbabwean startup
Ocular AI, a Zimbabwean AI startup that lets teams within organizations search, visualize, and automate workflows on a single platform, has been selected for Y Combinator’s winter 2024 batch. Ocular AI is the third African startup in this year’s winter batch after Cleva, the cross-border payment service, and Miden, the API-fintech provider. Founded in 2024 by Microsoft and Google ex-employees Michael Moyo and Louis Murerwa, Ocular AI was born from their firsthand experience after struggling with information scattered across many SaaS tools. The AI startup connects a company’s data from many apps, making finding and using information quickly easy. African PE dealmaker scores: Cardinal Stone sells i-Fitness stake for $12 million It is the first Zimbabwean startup to be admitted into Y Combinator. “We are very excited to be walking in the footsteps of giants like Stripe, Airbnb, DoorDash, OpenAI, to mention a few,” Murerwa said in a LinkedIn post. YC’s selection of Ocular AI is its first Artificial intelligence investment on the continent and signifies an important moment for AI in Africa. While YC has invested in AI startups globally this batch, Ocular AI is an opportunity to unlock the potential of AI in Africa. The startup serves organizations across various sectors, addressing a universal challenge of information accessibility and streamlining workflows. The AI startup joins a prestigious alumni network, gaining access to Y Combinator’s renowned mentorship, funding, and global network. YC’s selection will enable the startup to scale its innovative solution and empower teams across Africa.
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