TechCabal’s best-read stories of Q1 2024
With the African tech ecosystem beset by a funding downturn, rising inflation, layoffs and startup shutdowns, the industry was off to a slow and uncertain start this year. Despite these challenges, some major highlights have kept us optimistic at TechCabal as we continue to report news about the ecosystem in the best way possible. Our work captures the players, human impact and business of tech in Africa, providing the content, reporting, data, events and context to help the world understand how tech is changing the continent. From acquisitions and strategic partnerships to company expansions in new markets to regulatory laws for digital nomads to startup pivots and tech ecosystems popping up in unexpected places, here are some of our best-loved stories from Q1 2024. How a clash of visions led to Olu Akanmu’s exit from Opay While Olu Akanmu was CEO at Opay, the fintech grew exponentially, reaching over 30 million users, 500,000 agents, and 100,000 merchants, according to publicly released figures. Unfortunately, due to idea and direction clashes with the company’s broader leadership, Akanmu stepped down as CEO. How Huawei became Nigeria’s biggest telecoms vendor and enterprise business Huawei launched in Nigeria in 1999, two years before Nigeria’s telecommunications revolution. The company has sold servers and storage solutions for top Nigerian banks like UBA, Zenith, Access, Fidelity, Keystone, First Bank, Unity Bank, UBA, and FCMB. In May 2023, a fire at Zenith Bank’s primary data centre caused a service downtime, and attempts to switch to its disaster recovery centre also failed. That incident is thought to have convinced Zenith—a tier-1 bank with a market capitalisation of ₦1.1 Trillion to sign a $10 million deal with Huawei for a storage solution. Patient capital, diverse exits: Verod-Kepple’s vision for the future of African startups Verod-Kepple Africa (VKAV) is 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. All three partners of Verod-Kepple—Ory Okolloh, Ryosuke Yamawaki, and Satoshi Shinada—shared with TechCabal their investment thesis and why they are backing African startups. Wasoko merger fallout Wasoko, a Kenyan e-commerce platform which was founded in 2013 and raised over $140 million from investors, entered into a merger with MaxAB, an Egyptian retail company, without informing their employees. The employees first heard about the merger on a video call attended by MaxAB executives in early December 2023, the same month the deal was announced. This event triggered many other happenings in the company, including the layoff of over 100 employees across departments in both Kenya and India. It also led to nine employees suing Wasoko, claiming they had been unfairly fired. The employees argued that the company did not give them sufficient time to prepare for their exit. Following this, the court barred Wasoko from firing the aggrieved employees, and the company promised to make provisions to aid the exit of said employees, including providing health insurance coverage until March 2024. How Eyowo’s bid to become a fintech giant hit the rocks In 2019, Softcom, a software development agency, shifted its focus from its client-side business to building consumer-facing products, and became Eyowo, one of Nigeria’s earliest digital banks. But, five years later, with three rounds of layoffs, persistent delays in salary payment, and a revocation of Eyowo’s banking licence in 2023, the company’s fortunes, unfortunately, turned. Sources who spoke to TechCabal claimed that Eyowo’s licence was revoked because it stopped offering loans to customers, contravening a regulatory requirement for microfinance banks. In March, the company insinuated it has regained its licence and that there are talks about a possible rebrand as “Entrepreneur Bank”. Fintech giant Flutterwave secures release of $3 million in Kenya In 2022, the Assets Recovery Agency (ARA) in Kenya froze $55 million, belonging to fintech giant Flutterwave, on fraud and money laundering charges. After the charges on the first case were withdrawn in March 2023, the court unfroze the majority of the funds amounting to $52.5 million. The rest of the funds were not immediately released, despite a court order to release them after the ARA sought court approval to withdraw money laundering charges against the fintech startup in July 2023, but the judge denied the request. Finally, in February 2024, over a year later, the court cleared the remaining funds: $3 million; and released it to Flutterwave. It was good news for the fintech giant. What is it like to build a tech ecosystem in Nigeria outside the country’s tech capital? Lagos is to the Nigerian tech ecosystem what Silicon Valley is to the North American ecosystem. Yet, unlike the US, where other states like New York, Seattle and Chicago still have thriving ecosystems that complement Silicon Valley, tech ecosystems outside Lagos struggle to build their identities or get significant attention from stakeholders. Sanusi Ismaila and Excel Ajah are some of the people working to beat the odds by creating co-learning labs and communities in other Nigerian cities like Kaduna and Owerri. These communities are taking shape and building promising tech talent outside Lagos in ways that will be beneficial to the country’s ecosystem as a whole. Bolt launches in Zimbabwe and waives driver commission for six months In January, Bolt, the popular ride-hailing company, expanded their African operations to Zimbabwe, particularly its capital city, Harare. As an incentive for drivers, the company waived its usual standard commission for six months. This move marked Zimbabwe as the third country in Bolt’s strategic move into the Southern African market; after the company launched in South Africa in 2016, and conducted pilot operations in Zambia in 2023. In a similar move, Bolt also launched operations in Botswana in February, about a month later. South Africa eyes Nomad gold rush, targets wealthy remote workers in new draft regulations South Africa is trying to become the fifth African country to start granting digital nomad visas. The
Read MoreTechCabal Quarterly Impact Report – Q1 2024
An ecosystem’s year of grit and excellence In 2023, we began publishing impact reports to publicly track our coverage of the ecosystem and better understand how it is changing. As we roll out 2024’s first report, our objective remains the same: to furnish stakeholders—operators, innovators, entrepreneurs, investors, and policymakers—with insights that empower them to make informed decisions and effectively contribute to the continent’s technological and socio-economic development. For this edition of the report, we will fuss less about reader numbers, and instead share with you the ways we are rejigging the news for your pleasure. As always, this report and the milestones it describes represent TechCabal’s pledge to uphold the highest journalistic standards and to continuously evolve for the betterment of our publication and the community we serve. The start of the year is often slow, with businesses still planning their year, monitoring the economy closely, and reviewing their budgets. But, in the TechCabal newsroom, we got straight to business in January; the news waits for no one. We knew that this year would be critical for many startups in our space, and we had a responsibility to deliver accurate and balanced narratives as tech businesses navigated the tough year ahead; the world outside Africa was watching. In line with our parent company Big Cabal Media’s resolve this year to chase excellence, TechCabal is chasing the stories of excellence, grit and success at African startups. We insist that it’s not all gloomy news in the ecosystem. We are eager, desperate even, to champion the optimistic shifts coming out of the ecosystem, and there has been a lot of it lately. This past quarter, more than 120 startups in Africa raised a combined $466 million. It is a 45.62% reduction when compared to Q1 2023, but it is hopeful. Equity made up 71% of financing while debt made up 28%. In January, Swvl posted a net profit of $2.1 million; and the following month, Jumia reduced its operating losses in Q4 2023 to $4.5 million, its lowest in four years and a major step towards its profitability drive. South Africa granted licences to 59 crypto companies. Payroll and HR software provider, Payspace, was acquired by American payroll and compliance provider Deel—one of 12 acquisitions that have happened this year. What else does “chasing excellence” mean to us? This quarter was about listening to you about our work. We are always open to feedback from you because it means that you care. The lessons from your suggestions have been strong and will continue to serve as a catalyst for introspection and improvement of our editorial processes. Chasing stories of excellence in the ecosystem means striving to continually improve our editorial processes and committing firmly to only telling stories that are true, accurate, and balanced. Our credibility is our currency. We are not in a hurry to break a story before we have all the facts; we are not afraid to kill a story if its claims are suspect or unverifiable. What then is the scoop? In January, we launched a breaking-news newsletter, TC Scoop, to bring you the latest news as soon as it drops. If you are signed up to TC Scoop, it means you receive our biggest stories of the day before anybody else! This is all part of our agenda to curate a strong community of well informed readers. Over 7,000 of you have subscribed to TC Scoop. If you are not plugged in yet, click here to sign up! A key objective for us at TC is leveraging the news to connect with the businesses whose stories we tell. As a publication, we grew up with Africa’s tech ecosystem, beginning our story at about the same time many of the successful startups of today either started theirs or were nascent and ignored by Silicon Valley media. We are still committed to using our voice to amplify startups. And so, we have revamped the series, Who Calls The Shots?, to spotlight leadership-level tech professionals and the businesses they are building. Who are the names behind your most promising businesses—Bamboo, Sycamore, Get Equity and at Herconomy? How are their companies shaping the future of innovation on the continent? We have also expanded our storytelling formats to include a long-reads column on the weekend, The Algorithm; and video news. Every Saturday, The Algorithm will bring you in-depth analysis and perspective on a wide range of topics, from freelance writers’ earnings under an AI regime to stories of vendors grappling with the high cost of shipping deliveries to customers. On The Algorithm we are taking you to the backend of content creation, its many aspects, its many creators, and the many ways that they work and thrive. How are food creators defining their audience’s palates, you may have wondered? What does success look like for lifestyle creators, you ask? We will answer it all, unfurling the bits and details, one creator at a time. When we launched the video news format, we were thinking of convenience. Whether you are in traffic, doing chores or playing sports, you can receive the news without interrupting your daily life. We publish one video story a day. Subscribe to our YouTube channel to stay up to date with video news. Celebrating businesses by women If you missed our International Women’s Day video podcast with Yanmo Omoregbe (COO, Bamboo), Ifeoma Nwobu (COO, Sendstack) and Omowumi Omidiji (CEO at SHOP F.A.W.L.), click here to watch it. It was an insightful conversation that tackled the current temperature in Africa’s startup environment. With humour and admirable honesty, Omoregbe, Nwobu, and Omidiji discussed funding outlook this year, the challenges they face in building products for Africa, and what changes AI could bring to their businesses. Our East Africa and Southern Africa impact Kenya and South Africa are two of our biggest readership blocs (besides Nigeria). The tech ecosystems in the East and Southern African regions have been, for many years, vibrant and progressing innovation on the continent. Since last year, we have
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👨🏿🚀TechCabal Daily – 3BG!
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Before we get to today’s edition, here’s a reminder that we launched The Big Daily last week, it’s TC Daily but for Nigerian news. If you’re looking for a daily newsletter that breaks down the most critical Nigerian news, sign up for The Big Daily and get updates by 7 AM every weekday. In today’s edition OPay’s nears $3 billion valuation Nigeria blocks four fintechs from opening new accounts Uganda requires verification for digital transactions exceeding $260 OpenAI licensed to use FT content in ChatGPT How much funding did African startups raise in Q1 2024? The World Wide Web3 Opportunities Fintech OPay nears $3 billion valuation Nigerian fintech behemoth, OPay, has scored big wins in Nigeria’s fintech space. The startup was one of the beneficiaries of Nigeria’s ill-timed currency redesign which led to cash scarcity for multiple weeks. In that time, the fintech witnessed increased cash transactions. According to its financials, the company “quadrupled its user base through 2023 and grew revenue by over 60% on a constant currency”. While OPay currently boasts over 30 million users and 500,000 agents, it had humble beginnings. The fintech—formerly Paycom, a mobile money operator—was acquired by Opera, an asset management company in 2018. Since the acquisition, the fintech has raised more than half a billion dollars. In its last $400 million fundraise in 2021 led by SoftBank, the company was valued at about $2 billion. But recent filing from Opera’s financial result shows that OPay’s valuation inches close to $3 billion. Want to find out more? Dig deeper. Read Moniepoint’s case study on family-owned businesses Family-owned businesses are everywhere, shaping our world in ways you might not expect. We’ve found some insights into how they work, and we’d love to share them with you. Dive in right away here. Fintech Nigeria blocks four fintechs from frontloading fresh faces If you’ve tried opening a new account with Kuda Bank, Moniepoint, Opay, or Palmpay, you likely received a message stating “Thank you for downloading this app. Sign-up is currently unavailable. Please check back later.” This isn’ta network issue though. At least four banks, including those mentioned above, are following a directive by the Central Bank of Nigeria (CBN) to temporarily halt opening new accounts. This won’t affect other deposits or existing banking activities. Why: Per reports by TechCabal, an unnamed fintech executive claims the pause is linked to an ongoing audit of the fintechs’ Know Your Customer (KYC) processes; the sources also describe the situation as temporary. This isn’t the first time fintechs have faced regulatory scrutiny in Nigeria. Concerns about Know Your Customer (KYC) processes led to Fidelity Bank and Standard Chartered Bank restricting transfers to Opay, Kuda, Moniepoint and Palmpay in October 2023. “The issues are due diligence and KYC, until they get their house in order, they will continue to experience issues like being blocked by banks,” a source said to TechCabal at the time. This shift is driven by a rise in fraud, prompting traditional banks to request verification of KYC procedures performed by neobanks. In some cases, traditional banks may even want to conduct their own KYC checks on neobank customers. This directive also comes days after the Nigerian Federal High Court granted the Economic and Financial Crimes Commission (EFCC), the authority to freeze over 1,146 bank accounts linked to illegal foreign exchange dealings, money laundering and terrorism financing. However, the National Security Agency (NSA) has denied a link between the restriction to opening new accounts and the bank accounts that were frozen. Enjoy hassle-free transactions with Fincra Collect payments without stress from your customers via bank transfer, cards, virtual accounts & mobile money. What’s more? You get to save money on fees when you use Fincra. Start now. Regulation Uganda requires verification for digital transactions exceeding $260 The Bank of Uganda has implemented a new directive requiring ID verification for digital transactions exceeding UGX 1 million ($260). Why? The directive was made to address the increase in fraudulent activities linked to mobile money systems, which have been susceptible to deceptive agents and criminals “Mobile money systems have occasionally been the target of cybercrime carried out by agents working with criminals,” the X post reads. The BoU stressed that these measures align with Section 55 (1)(b) of the National Payments Systems Act, 2020, and Regulation 7 (h) of the National Payment Systems (Agents) Regulations, 2021 which prohibit over-the-counter transactions without full identification of the consumer, and mandate compliance with all financial regulations. Ugandan citizens must use a valid national ID card or passport for this process, while foreign residents, including refugees and other aliens in Uganda, will need a refugee ID/attestation letter or an alien ID. Ugandans cry out: The implementation of this directive has not been without criticism. Stakeholders have particularly noted that this measure will slow down transactions for Ugandans who don’t have ID cards. Of its 19 million adult citizens, just 78%—about 15 million Ugandans—are estimated to have a valid means of ID per a 2021 report. Additionally, there were concerns over a possible rise in ID card forgeries spurred by the new requirements. This is a concern that aligns with the findings of a 2024Smile ID report, which indicates that fraudsters seeking access to financial services usually try to bypass onboarding protocols using compromised government-issued IDs which are the cornerstone of ID verification in most digital transactions. Uganda is planning to begin mass citizen enrollment for new-generation biometric national ID cards starting in June. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → AI OpenAI licensed to use FT content in ChatGPT OpenAI is finding love (and data) in the media. Since the inception of ChatGPT, OpenAI has explored different partnerships to source data to train its models. The company has recently been on a media
Read MoreInvestor confidence in Africa’s blockchain industry renewed
At the CV Summit held in Cape Town on 25 April, investors expressed renewed confidence in the African blockchain startup ecosystem. In 2022, the global crypto and blockchain industry entered a crypto winter as investments in the sector slowed significantly. Africa was not spared. That slowdown caused several African blockchain and crypto startups to lay off staff, sell assets or shut down. However, a changing crypto landscape is restoring investor confidence in the African foray into blockchain innovation. Investors cited improving regulatory environments, innovative startups, and widespread blockchain adoption by consumers and enterprises as the reasons for optimism. One of the investors putting money where their mouth is Swirtzland-based Crypto Valley VC, which has raised the Africa Fund, focused on investing in African crypto and blockchain startups. The fund invests up to $135,000 for 7% on a convertible note. It also makes direct and follow-up investments in seed, pre-Series A, and Series A rounds; ticket sizes are between $200,000 and $500,000. According to Mathias Ruch, founder and CEO of CV VC, the evolving use cases of crypto and blockchain in Africa have warranted significant investor attention. “We have so far invested in 14 African startups building everything from wallets and developer tools to infrastructure,” Ruch told TechCabal. Addressing a panel discussion on how the gap between blockchain innovators and investors can be bridged, Rony Vogel, CEO of the Vogel Front Office, mentioned that innovators need to explain the industry to investors. “A lot of capital is waiting to first understand and then support Web3 innovation in Africa,” Vogel said. In the 250-people crowd at the Watershed Workshop 17 conference venue, the overarching feeling was relief and excitement for the industry’s future. Andrew Forson, head of ventures at the Hashgraph Foundation, cautioned startups to refrain from using vanity metrics to justify hefty valuations and go back to the basics of building businesses which solve relevant problems and have strong unit economics. “There has to be a rationalisation of valuations to justify investor confidence in what startups are building and asking investor funding for,” Forson said in a presentation. For startup founders, the fact that Africa’s blockchain ecosystem looks set to get a second chance at getting funding to drive innovation is a rare opportunity not to be wasted. In the current hazy funding environment, it is rare for any sector to get another opportunity to build products that change and improve the lives of consumers and the blockchain industry has exactly that. As one panellist said to startups in attendance, “The onus is on you to convince investors to put their hard-earned money into your business so go out there and build.”
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Exclusive: CBN directs four fintechs to stop onboarding new customers
Kuda Bank, Moniepoint, OPay and Palmpay have paused account opening for new customers following a directive from the Central Bank of Nigeria after the EFCC blocked 1,146 bank accounts involved in unauthorised forex dealings on Wednesday. “We’ve temporarily paused new signups on our platform. This means that you’ll be unable to open a new account at the moment. We apologise for any inconvenience this may cause,” read a notice on the website of a prominent fintech startup. At the time of this report, TechCabal could not open new accounts on the affected fintech apps. Customer deposits and banking activities are not affected. In recent months, fintechs have faced increased scrutiny over their account opening processes. In October, Fidelity Bank blocked transfers to OPay, Palmpay, Kuda, and Moniepoint over KYC processes led to increased fraud cases. One month after that incident, the Central Bank shared new KYC rules for all financial institutions that appeared targeted at fintech startups. Last week’s directive to pause account opening is linked to an ongoing audit of the KYC process of these fintechs, one executive at an affected fintech claimed. The same person described the pause as “temporary.” Central Bank’s new KYC rules may not curb fraud despite optimism On April 26, the Central Bank and the National Security Agency (NSA) held talks with representatives of the affected fintechs on Friday, a person with knowledge of the meeting told TechCabal. “The CBN feels like a lot of crypto traders were leveraging the fintech platforms to disrupt the FX market,” another person with knowledge of the conversations said. “The banks also have a better relationship with the regulator while fintechs are yet to build that type of relationship and help their perception with the CBN.” An executive at one of the affected fintechs told TechCabal that the directive is linked to the EFCC’s ongoing investigation into bank accounts involved in unauthorised FX dealings. An analysis of the 1,146 accounts blocked by the EFCC shows that only 10% are operated by fintechs, with the majority being commercial bank accounts. An NSA spokesperson denied any link with the directive to stop opening new accounts. The CBN did not immediately respond to a request for comment. Screenshots from some of the affected fintechs In March, the Central Bank argued that the naira, which experienced record lows in 2024, is being manipulated by speculators after Olayemi Cardoso, the Central Bank’s governor, claimed that $26 billion passed through Binance in a year from “sources and users who we cannot adequately identify.” It informed a crackdown on the global cryptocurrency exchange Binance. Since then, two Binance executives have also been charged with tax evasion and money laundering and Binance has placed a a restriction on peer-to-peer trading. In December, the CBN mandated all financial institutions to collect ID cards before creating financial accounts, which contradicts a 2013 central bank rule designed to support financial inclusion that allowed Nigerians to open accounts without identity cards. In the same month, the Nigeria Inter-Bank Settlement System (NIBSS) asked banks and mobile money operators to delist unlicenced fintechs from directly accepting consumer deposits.
Read MoreWasoko denies Rwanda exit as it ramps up hiring across East Africa
Wasoko, a Kenyan e-commerce platform backed by Tiger Global and 4DX Venture, has refuted claims that it has closed its Rwandan operations weeks after exiting Zanzibar and pausing business in Uganda and Zambia. The e-commerce platform told TechCabal via email that it is ramping up its headcount in Rwanda, Tanzania and Kenya. In Rwanda, the company is searching for partnership and procurement associates. It has three open roles for its Kenyan business and four in Tanzania, including an opportunity for two procurement managers. “We recently opened a new warehouse in Rwanda in November 2023 and are actively hiring for new positions to further strengthen our commitment to the country,” Wasoko said in an email statement. Wasoko added that it has onboarded new suppliers, including Movit, a cosmetics manufacturer, and Oxi, a detergent distributor, for its Rwandan operations. The B2B platform, which is yet to finalise its merger with Egypt’s MaxAB, also revealed that it is awaiting the arrival of its first shipment of Egyptian products for distribution in Rwanda. The shipments will “mark the “launch of its new Pan-African sourcing strategy” as Wasoko seeks to tap MaxAB’s reach in Northern Africa. Wasoko exited two other markets – Senegal and Côte d’Ivoire – meaning its current operations are in Kenya, Tanzania, Rwanda and DRC Congo. Wasoko’s soon-to-be partner MaxAB, is available in Egypt and Morocco where its primary business is linking retailers to beverage suppliers. Wasoko and MaxAB have already started integrating their operations in Nairobi, with the full process expected to take a year and the organisations are “firmly on track within the timeframe.” One person with knowledge of the business told TechCabal that MaxAB is reversing some decisions made by Wasoko, including reopening some of the startup’s distribution centres in Kenya and catering to large-scale retailers. “Wasoko would not sell to businesses such as small supermarkets because they were not its target, instead choosing to focus on small retailers in its markets,” the person said. “MaxAB does not have these limitations, and they just want to serve their suppliers no matter their size.” Once valued at $260 million, Wasoko is facing a lawsuit from nine ex-employees over severance pay and stock options. The company settled for a month’s salary to avoid a court battle, but the ex-employees want severance pay for 12 months and redemption of shares at a fixed price. The ex-staff members also claim Wasoko for advertising the roles that had been declared redundant. “The respondent (Wasoko) did not give the claimants (the ex-employees) the opportunity to take up for those roles in the consultative meetings,” a court document seen by TechCabal said. The next hearing is scheduled for May 9.
Read MoreOPay’s valuation nears $3 billion as Nigeria’s digital payments adoption surges
The valuation of OPay, the Nigerian fintech startup backed by Sequoia Capital and Softbank, has risen by over 30% since its Series C funding round in 2021, according to recent corporate filings by Opera, an early OPay investor. The valuation growth underscores how Nigeria’s digital payments boom is fueling the rise of a new crop of financial technology companies. In 2018, Opera acquired Paycom, a Nigerian mobile money operator, and rebranded it as OPay. As a result, Opera had a stake in the company. However, Opera’s stake gradually reduced, eventually declining to 6.4% by 2021. In early 2023, its stake increased to 9.4% after it sold Nanobank, its Asian fintech subsidiary, to OPay in return for equity in the company. Following the transaction, Opera told investors its 9.4% stake in the fintech was valued at $253 million, according to an April 24 filing with the US Securities and Exchange Commission (SEC). It implies OPay has a valuation of $2.7 billion, compared to its previous funding round which valued the startup at $2 billion. Some of China’s Most Innovative Companies are now Backing Nigeria’s OPay Opera had earlier valued the stake at $269 million by December 2023 but adjusted its fair value in newer filings following “valuation implied in a smaller financing transaction that took place in late 2023,” the company said. OPay has made significant leaps in the past year, partly thanks to an ill-timed currency redesign that triggered cash scarcity for multiple weeks. The absence of cash led more people to rely on fintech apps like Moniepoint and OPay for transactions, pushing national payment volumes to record levels in early 2023. The momentum remained till the end of the year as the value of annual digital payments grew by more than 50% to N611 trillion, according to the Nigerian Inter-Bank Settlement Scheme (NIBSS). OPay was a major beneficiary. The company “quadrupled its user base through 2023 and grew revenue by over 60% on a constant currency” basis, Opera told shareholders. However, despite its growth, OPay, like other fintechs, continues to wrestle with fraud and customer safety concerns, which has caused regulatory bodies, including the Central Bank of Nigeria, to tighten rules on account safety.
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Next Wave: Housing startups need to evolve
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 28 April, 2024 Proptech’s growth over the last seven years has slowed, as funding in the sector has sharply declined. Globally, VCs disbursed $1.8 billion among Europe’s proptech startups in 2022; the following year, that amount dropped to $478 million. In Africa, for the last two years, proptech has failed to attract up to one percent of VC funding. The most funded African proptech startups have raised over $40 million collectively. Chart by Stephen Agwaibor, TC Insights Unsurprisingly, startups in the sector have had to scale down operations or go quiet. In February, Spleet, a property tech startup that raised $2.6 million in 2022 laid off workers due to “macroeconomic conditions”. Fibre, a Nigerian proptech startup which raised $790,000 in funding, has since closed shop. MyPadi, an Echo Vc funded startup that helped students to get accommodation, also sunset its operations in 2018, two years after its founding. Other startups like Muster, HutBay and Kwaba have slowly faded to the background, failing to revolutionise Nigeria’s housing market and solve a worrying housing deficit. Audit firm PwC estimates that Nigeria holds at least $300 billion worth of dead capital in residential real estate and agricultural land alone. This continued decline in the proptech industry accounts for an estimated 28 million housing deficit in Nigeria. In Lagos, Nigeria’s commercial capital, the government has failed to meet 50% of the housing deficit. Despite claims by stakeholders of inflation and high interest rates affecting the growth potential of real estate, the fact is, generally, proptech has failed to evolve. Many Nigerian proptechs established more than seven years ago have been unable to transform real estate using technology. At best, what these startups offered were monthly rent payments and listing properties for sale or rent online. Next Wave continues after this ad. In Q1 2024, investment in African startups took a nosedive, plunging by approximately 45.6% compared to Q1 2023. On the flip side, debt financing emerged as a rising star among funding options for these startups. Additionally, this period witnessed a flurry of expansion and acquisition activities in the African tech scene. Dive deeper into the latest happenings with our freshly unveiled quarterly report. Download Now A genuine worry for proptech is pricing. Most of the properties available for rent are usually out of the reach of the younger working population (Gen Zs and millennials). The property market in some Nigerian states like Lagos and Abuja are littered with mansions and exorbitant prices that no average salary earner just starting out their career can afford. One real estate developer I spoke to has however maintained that the demand for affordable studio apartments and mini flats are on the rise. He also added that smaller apartments are easier to sell than luxury properties. Next Wave continues after this ad. On 16 and 17 May in Kigali, for its 11th annual summit, the Africa CEO Forum will call on its community of 2,000 business leaders, CEOs, investors, heads of state and ministers to seize this critical moment to shape a new future for Africa Click here for more infomation What then is the future of proptech? As a way to rethink the future of housing, we should see more of three possible solutions: crowdsourcing of real estate projects, the use of tech-driven advancements in construction, and rent-to-own schemes that make real estate attractive to the millennials and Gen Zs. Partner Content: Read: Africa’s youngest film distributor, Ugonna Nwabueze unveils African streaming platform here. Crowdfunding real estate projects involves the different models of attracting investments into the sector through venture capital, institutional investment, as well as the use of platforms for trading Real Estate Investment Trusts (REITs). REITs allow more investors to fund real estate projects and get equity off their investments. Construction, on its part, has evolved to include advanced materials, 3D printing, robotics, and digital tools for project management, design, and collaboration. Next Wave continues after this ad. GITEX Africa returns a second time on May 29–31, 2024 to Marrakech, Morocco, discussing ways to accelerate the continent’s digital health revolution. GITEX is the continent’s largest all-inclusive tech event renowned for uniting the brightest minds in the technology industry Grab your tickets here 3D printing in construction is the latest innovation that has swept through several parts of Europe. It is generally faster, eco-friendly and cost effective. The output of the designs are usually aesthetically pleasing, making use of layer-by-layer additive manufacturing processes that provide future-focused designs. Partner Content: Read: Do crypto with Quidax and earn money while at It here. Another innovative form of construction tech is the use of robots in automated bricklaying, dangerous or difficult tasks or in the inspection of hard-to-reach structures, reducing risks and improving efficiency. This research paper, credited to the School of Architecture and the Built Environment in Sweden, looks into how robots are navigating construction. In addition to this is the use of advanced building resources like self-healing concrete and energy-efficient materials that can help real estate develop structures that integrate solar panels, hence saving energy consumption. Exterior photo of the Milestone project | Source: Archilovers The coming together of crowdfunding and 3D printing in construction can drive down construction costs, presenting an opportunity for younger generations to adopt a rent-to-own model that is innovative, futuristic and that can tackle the housing deficit in some parts of Africa. The different waves of proptech rvolution | Source: Table credited to bas-ip.com The future of proptech must progress from the first wave’s solutions, which included online listings and search platforms. Now that we are well into the third wave, proptech in Nigeria, and Africa by extension, must
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👨🏿🚀TechCabal Daily – The ABCs of Alphabet’s first-ever dividends
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning We’re trying something new in TC Daily. We’re introducing a new column called Techxperts Talk where bi-weekly—every other Monday—we’ll share insights from stakeholders across the ecosystem on trending issues. You can look forward to fresh insights in these editions. If there’s a critical question you’d like the leaders of Africa’s tech ecosystem to answer—or you want to share feedback about this edition—shoot me an email at timi@bigcabal.com and I’ll hunt down some answers for you. In today’s edition Techxperts Talk: How to solve fraud on the continent Nigeria freezes 1,146 bank accounts linked to illegal FX trading Alphabet is ready to pay its first-ever dividends South Africa wants to know the parties to every crypto transaction Ghana plans to license Starlink The World Wide Web3 Jobs Techxperts Talk How to solve fraud on the continent In the very first edition of this column, the CEOs of Kenya’s Peleza, Marita Mutemi, and Nigeria’s Prembly, Lanre Ogungbe, share their thoughts on how startups and companies can tackle rising fraud on the continent. Marita Mutemi and Lanre Ogungbe for TC Daily In the past two weeks, two major banks across Nigeria and Kenya have revealed how they lost funds to fraud. Kenya’s Equity Bank lost $2.1 million to a debit card fraud, while Nigeria’s Wema Bank lost $600,000 to fraud and forgery. Here’s what these CEOs think. TC: What do you think about the current state of fraud detection and prevention in the financial sector? Marita: The surge in fraud incidents in Kenya highlights critical vulnerabilities in the current state of fraud detection and prevention within our financial sector. While traditional methods have had their place in safeguarding against fraudulent activities, they now face the challenge of keeping up with the evolving tactics employed by sophisticated fraudsters. We have to appreciate that the advancements in technology and rise in online transactions have significantly changed the nature of fraud we face now. In Hong Kong, for example, fraudsters used deepfake technology to convincingly impersonate a company’s CFO during a video conference call, resulting in a $25 million loss. In light of these developments, there is an urgent and compelling need for the financial sector to transition towards more advanced, adaptive, and real-time fraud detection systems. Lanre: We need synergy to curtail fraud in the sector. We need advancing local technologies, and direct investment in education to have the right talents and knowledge banks. I must also state there needs to be clear and rapid consequences for companies that do not have minimum fraud large-scale prevention requirements and greater consequences for perpetrators. Let me state that fraud cannot be eliminated completely in the financial space. It will always happen as we will continue having bad actors always trying to circumvent the financial companies, but we can make it harder and tougher for it to happen. TC: Are there any emerging technologies or trends that hold promise for enhancing fraud detection capabilities? Marita: Unfortunately, many consumers do not recognise fraudulent activity until it’s too late. Increasing financial literacy would go a long way to help consumers identify and report potential fraud. Financial institutions play an important role by implementing comprehensive consumer education programmes and campaigns. These initiatives should prioritise educating consumers on how to spot common and emerging fraud patterns, understand their responsibilities, and emphasise adoption of strong security practices. This can be delivered as online content such as webinars, press releases, social media posts, blogs and articles tailored to different demographics. These educational materials can include topics such as recognising phishing emails, insecure websites & WiFi networks, protecting personal and financial information, use of strong passwords and two-factor authentication, and understanding the importance of regularly monitoring account activity. Lanre: The best I have seen around is “profiling technologies”. It’s difficult to create technologies around prevention when financial businesses aren’t always willing to expose incidences, and data OR replace existing technologies. There is a school of thought around creating islands/silos of infrastructure within the sector as it claims that if no eternal peripheral is interfacing with those silos, it reduces the chances of fraud. over time, we see that this theory is outdated as financial players play in a field that requires continuous technology upgrades as they determine a lot of technology advancements for the country. TC: In your opinion, what role should startups play in innovating new solutions to combat fraud, and how can they collaborate effectively with traditional financial institutions? Marita: Startups have the agility, creativity and often a good understanding of emerging technologies, so they are well-positioned to experiment and develop innovative solutions to address the evolving challenges of fraud. Their nimbleness allows them to experiment quickly and iterate, keeping them ahead of emerging threats. Startups can partner with traditional financial institutions and promote collaboration. Startups will have access to the vast resources and industry expertise of established financial institutions, while these institutions will be able to take advantage of fresh perspectives and innovative solutions offered by startups. TC: From a regulatory perspective, what measures do you believe are necessary to strengthen fraud prevention frameworks? Lanre: From a regulatory perspective, strengthening fraud prevention frameworks requires a multi-faceted approach. This starts with imposing stringent requirements for financial institutions to implement robust anti-fraud policies and procedures, including regular risk assessments, employee training, and the use of advanced technologies for fraud detection. There should be increased collaboration among industries to share information and best practices, helping to identify emerging fraud trends and curb them at their inception to mitigate risks. Regulations should be updated to keep pace with evolving fraud tactics and technologies. This includes implementing measures such as biometric KYC checks, transaction monitoring, and data encryption to ensure the integrity of the financial system. Peleza is a pioneering East African company dedicated to providing comprehensive background checks, extensive KYC, KYB, and AML checks, and powering businesses of all sizes. Prembly is one of the most comprehensive digital security providers on
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🚀Entering Tech #63: Data science isn’t for everyone
Plus: Five data science courses you can take to prove yourself! 27 || April || 2024 View in Browser In partnership with #Issue 63 Is data science the choice for you? Share this newsletter Hello ET people Welcome to the second edition of our three-part series on entering tech as a data professional. In the first edition, Mariam Adeoti and Adekoya Teleola shared tips on becoming a data analyst. If you missed out on the episode, please read here. Today, we’re discussing Data science—”the sexiest job of the 21st Century” as if the Harvard Business Review is to be reviewed. Let’s dig in! by Faith Omoniyi & Timi Odueso How data science works As you probably know given Meta’s updates to WhatsApp, Facebook and Instagram, AI is here to stay. Powering AI is underlying skills such as data science. AI systems are powered by data and data scientists play a vital role in collecting, cleaning, and preparing this data. And without data science, AI systems would be unable to learn, improve, or generate valuable results. However, there exists a shortage of data science talents globally. But experts say not everybody can fill the boots of a data scientist. Last year, we attended Blue Chip’s Data and AI summit, one of the talking points was how not everyone can pursue a career in data science. Why? Well, panelists at the event acknowledged that data science requires a combination of rare technical and non-technical skills. Adewale Salami, the CTO of First Bank argued that a combination of having the conviction to solve human-related problems and a hold of mathematics, algebra and statistics skills is the right mix to becoming a data scientist. Tough requirements, you might say. Olanrewaju Oyinbooke But you don’t have to be deterred by any of those requirements. Take Olarewaju Oyinbooke, who didn’t have a background in statistics and went on to achieve senior roles in data science at Microsoft and is now a top data management voice on LinkedIn. Who is a data scientist: According to Simpi Learn, a data scientist combines expertise in data analysis, machine learning, statistical modeling, and domain knowledge to extract insights and knowledge from complex data. *Newsletter continues after break. How do you become a data scientist? To become a badass data scientist, strong programming knowledge—of either Python or R—is important. However, that’s not all. Olarewaju emphasises curiosity as an important skill for budding data scientists. Without it, it will be difficult to deliver great business value. You need curiosity to start with data in different forms, “torture” it until a pattern solid enough for business value emerges. Curiosity also helps you clarify several assumptions that could impact the quality of your work. If you are not naturally curious, you can learn it by applying “the first principle of thinking”, which demands that you ask “why” five times when faced with a problem. Meme Source: Reddit A proper mix of other soft skills like communication (as you will need to keep stakeholders informed through the different phases of your work), stakeholder management, teamwork, and time management are essential for your career as a data scientist. While R and Python are essential programming languages for learning data science, don’t break a sweat on deciding what programming language to stick with. Olarewaju says what matters is what you can do with them. Instead of debating on which of these tools to use, Olarewaju says you should consider: Knowing about how to use the data to gather insights about the business Knowing how to generate new variables not captured in your data Optimising your machine-learning model for accuracy, fairness, and transparency Knowing how to explain your solution in a clear manner Knowing how to deploy your model for use by learning deployment frameworks like mlflow, and Python frameworks like flastk, fastapi, streamlit, etc. *Newsletter continues after break. The Africa CEO Forum is here On May 16 and 17 in Kigali, for its 11th annual summit, the Africa CEO Forum will call on its community of 2,000 business leaders, CEOs, investors, heads of state and ministers to seize this critical moment to shape a new future for Africa. Click here for more information. You can learn data science too When choosing a free data analytics course, Olarewaju suggests you consider three things: whether the course covers the topics you want to learn, if the course combines theory with practice, and lastly, if the course is simple enough for beginners. Olarewaju also recommends taking courses on Kaggle. Microsoft Data Science Beginner Curriculum Learn the basics of Data Science in the crash course. You will learn about the theory and code behind the most common algorithms used in data science Price: Free Duration: 10-week, 20-lesson curriculum Tools Needed: Laptop + internet access Level: Beginner Get course Data Science Crash Course on YouTube Learn the basics of data science in the crash course. You will learn about the theory and code behind the most common algorithms used in data science. Price: Free Duration: 2 hours Tools Needed: Laptop + internet access Level: Beginner Get Course The Data Science Course: Complete Data Science Bootcamp 2024 Complete data science training: math, statistics, python, advanced statistics in python, machine and deep learning. Price: ₦7,400 ($6.43) Duration: 5 hours on-demand video Tools Needed: Laptop+ internet access Level: Beginner Get Course Intro to Data Science: QuickStart Guide + AI & ChatGPT Prize Complete data science training: math, statistics, python, advanced statistics in python, machine and deep learning. Price: ₦6,400 ($5.43) Duration: 5 hours on-demand video Tools Needed: Laptop+ internet access Level: Beginner Get Course Data Science by Moringa School Price: $1,740 *payable in instalments Duration: 20 weeks Tools Needed: Laptop+ internet access Level: Beginner Get Course How to land your first role Here’s what the typical career path of a data scientist looks like: Data Scientist Senior Data Scientist Data Science Manager VP/Head of Data Science Now that you have learned the basic skills to become a data scientist, it’s time to land your
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