👨🏿🚀 TechCabal Daily – Wave Tuition problems away
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning We won an award! Last weekend, TechCabal walked away as the winner of the digital category of the maiden edition of the ReportHer Awards for gender-balanced reporting. Shoutout to Ngozi Chukwu and Hannatu Asheloge for their brilliant storytelling which won us this award. Don’t forget us when you win the Pulitzer. In today’s edition Flutterwave launches Tuition 10 startups get $5,000 from World Bank Equatorial Guinea introduces e-visa Threads to generate $8 billion in 2 years The World Wide Web3 Event: Angel Investor Meetup, Lagos Opportunities Innovation Flutterwave launches Tuition Image source: Olugbenga Agboola/LinkedIn Fintech unicorn Flutterwave wants to help students wave away tuition problems. Yesterday, the company announced the launch of Tuition, a new payment product that will allow African users pay school fees within Africa and overseas using local currencies. The best part? Tuition promises payments within 48 hours. A strenuous process: For African students studying abroad, paying tuition fees can be a hassle, with high exchange rates and limited banking services. In Nigeria, for example, students often have to wait months—up to 120 days—before monies paid for fees are processed by Nigerian banks. With Flutterwave’s Tuition though, many students can rest easy. “We are excited to launch Tuition to support the dreams of African students across all levels who want to study anywhere without worrying about how to meet the deadline for their school fees payment,” said CEO Olugbenga Agboola. “With Tuition, we are providing a safer, reliable, and affordable means for African students to pursue their dreams and seamlessly get financial support from parents, guardians, and sponsors.” The service is presently available in Nigeria where it can be used to pay fees of schools in the UK—where over 43,000 African students chose in 2022. The startup, however, mentioned that it’s rolling out in countries soon, and will add more schools across Africa, the US, and Canada to its roster. Secure payments with Monnify Monnify has simplified how businesses accept payments to enable growth. We are trusted by Piggyvest, Buypower, Wakanow, Fairmoney, Cowrywise, and over 10,000 Nigerian businesses. Get your Monnify account today here. Funding Ten southern African startups get $5,000 each from the World Bank Image source: YungNolly Ten Southern African fintech startups have received $5,000 each from the World Bank. The award was part of a Fintech Challenge aimed at helping underserved entrepreneurs in the region get their businesses investment-ready to boost their access to markets, improve business networks and open up new investment opportunities. The startups include Abela, Bento Technologies, Fintr, Moya Money, Sum1 Investments, and Thumeza from South Africa; Chaperonen and Prime Capital from Lesotho; FundRoof from Namibia; and Ipachi Capital from Botswana. More on the initiative: The Innovation Bridge Portal Entrepreneur Community is an initiative of the Department of Science and Innovation/Council for Scientific and Industrial Research (CSIR) in partnership with the Department of Small Business Development. The initiative is establishing a digital platform for innovation, collaboration, co-creation, knowledge sharing, and matchmaking amongst ecosystem actors in South Africa, Botswana, Namibia, eSwatini, and Lesotho. Zoom out: According to venture capital tracking platform Africa: The Big Deal, South African startups again dominated the venture capital funding scene in southern Africa in 2022, securing 95% of all the funding in the region. Tourism Equatorial Guinea introduces e-visa Image source: Zikoko Memes Equatorial Guinea is making life easier for visitors with an e-Visa. The country’s government has partnered with VFS Global to launch a new e-visa service that aims to attract more tourists and business travellers to the country. The e-visa can be applied online and offers quicker application submission, greater convenience, and faster processing time to obtain. About VFS Global: VFS Global is a leading provider of visa outsourcing and technology services to governments and diplomatic missions worldwide. They specialise in handling the administrative tasks associated with visas, passports, and consular services on behalf of their client governments. However, VFS Global does not play any part in the decision-making process behind visa applications being granted or denied. Visitors from all nationalities can apply. Starting from July 1, 2023, the e-visa service was made accessible to travellers from all nationalities. Conveniently, they can apply for and receive travel authorisation from the Ministry of Foreign Affairs from anywhere in the world without having to travel to an embassy or consulate, by simply visiting the designated website. This saves time and effort, as visitors can now apply for a visa from the comfort of their own homes. Zoom out: The submission of an online e-visa application does not guarantee the issuance of a visa. The decision to accept or reject the application lies solely with the relevant authority, and there will be no refund provided in case of rejection. GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving sustained business growth in Africa at GrowthCon 1.0. Experience curated masterclasses, case studies, a growth hackathon and more. Get your tickets now at 15% off. Use the discount code “TIX15”! Global News Threads could generate billions in 2 years Image source: TIME Threads may tread over Twitter in 2 years. In just a matter of days since its launch by Meta, Threads has already managed to attract 100 million users. Per Bloomberg, experts are already predicting that Threads will reach 200 million daily active users in two years. The financial forecasts for Threads are equally impressive. Analysts predict that the app will generate $8 billion in annual revenue over the next two years, positioning it as a major player in the social media landscape. While it falls slightly short of Twitter’s 237.8 million active daily users, That is a lot of money. Well, Bloomberg says this will outpace the $5.1 billion in sales and revenue Twitter earned in its last full year as a public company. Still, Threads projected revenue is only a fraction of the $156 billion average annual revenue analysts expect
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Playing the long game: 6 lessons from Founders Connect Live
Founders Connect, a YouTube show showcasing the journeys of founders and operators in Nigeria’s tech ecosystem, hosted its first in-person event, Founders Connect Live, on Saturday, July 8, 2023. The event brought founders, operators and industry professions and brought founders, operators and industry professionals to share knowledge, inspiration and insights. to share knowledge, inspiration and insights. Be driven by a purpose Image source: Twitter During interviews and keynote addresses, the speakers shared their experiences as founders and operators at startups. Following the format of her YouTube show, Peace interviewed Funke Okpeke, the founder and CEO of MainOne. MainOne is the provider of the first privately owned, open-access 7,000-kilometer undersea high-capacity cable submarine connection in West Africa. Okpeke shared that she is driven by a desire to create a better digital outcome for Nigeria. She believes that “increased access to high-quality digital technology will empower young people.” The Greiner Curve framework Mitchell Elegbe, the founder of fintech company Interswitch, offered insightful advice to fellow founders on the importance of anticipating and preparing for setbacks and failures. Drawing from his own experiences, he shared how the Greiner Curve framework can provide a valuable perspective on the challenges organizations encounter during their growth journey. According to Elegbe, “Around three years into our venture at Interswitch, we found ourselves dedicating more time to discussing the problems we faced rather than implementing solutions. It was at this point that I recognized we had entered Stage 5 of the Greiner Curve.” Elegbe also stressed the vital role of building business resilience and employee satisfaction through appropriate compensation for staff members. These factors, he advised, are essential for sustainable growth and long-term success in the business landscape. You don’t have to be a founder Image source: Twitter In a spirited discussion, General Manager at M-KOPA, Babajide Duroshola, the Group CEO of Wakanow, and Bayo Adedeji shed light on the often underappreciated value of non-founders within startups., Bayo amusingly remarked, “Salary is not what they pay you to forget your dreams. Sometimes a salary can be worth more than your dreams.” He humorously alluded to the 2021 salary of Peter Kern, the CEO of Expedia, an American online travel company similar to Wakanow, which amounted to $296 million. During their session, both Babajide and Bayo underscored the significance of financial compensation for operators who are driven by results and deeply committed to fulfilling the vision of the founders who employ them. Babajide further advised the audience to take a step back, assess the reality of their situation, and focus on creating value. Grow your network Highlighting the importance of building a robust professional network, Maya Horgan-Famodu, the founder of Ingressive Capital, engaged in a brief conversation with Joyce Imiegha, a co-producer of Founder’s Connect. Maya candidly shared her personal journey, growing up in an underprivileged family and how she relentlessly pursued networking opportunities, reaching out door-to-door and sending cold direct messages to expand Ingressive Capital. However, Maya emphasized that the key to building a great professional network lies in connecting with like-minded individuals and consistently providing them with value. “Don’t approach a relationship with an ask; instead, focus on giving. Create valuable content that they will find useful and consistently share it with them,” she concluded. Following Maya Horgan-Famodu’s talk, a networking session followed, providing the audience with an opportunity to put into practice the lessons they had learned and connect with other attendees Tell your story and find a community In addition to traditional networking, there are other ways to grow your professional circle and even your businesses. Victor Fantami, the founder of FullgapCo, spoke about how telling stories about oneself or other people can help one form meaningful connections with peers and customers. Fola Olatunji David, a senior business development manager of AWS in Africa, gave a keynote speech on the significance of finding the right communities and how they can accelerate growth. The road is long Image source: Twitter Peace had another interview with Tayo Oviosu, the founder of Paga. Their conversation titled “Playing the Long Term Game” delved into lessons Tayo has learned in his entrepreneurial journey, He encouraged professionals and founders to seek mentors, align decisions with long-term goals, and find fulfillment in their work. As the learning sessions drew to a close, Odun Eweniyi, the founder of Piggy Bank, fielded questions from attendees about her fintech platform PiggyVest, her female-focused VC FirstCheck, and her experiences as a woman in the tech ecosystem. When asked about the best startup advice she had received, she responded simply, “Mind your business.” To conclude the event, the attendees enjoyed a raffle draw, live musical performances, engaging games, and opportunities to interact with their peers and the sponsors of Founders Connect.
Read MoreTechCabal wins ReportHer Award for promoting gender-balanced reporting
TechCabal’s success at the maiden edition of the ReportHer Award shines a spotlight on its commitment to gender-balanced reporting TechCabal walked away as the winner of the digital category of the maiden edition of the ReportHer Awards for gender-balanced reporting. At an event held in Lagos, Nigeria, Africa’s most important tech publication was cited for breaking barriers and making a resounding impact with influential articles and reports that have shaped industry conversations. TechCabal’s win Hannatu Asheolge and Ngozi Chukwu, two young journalists, were successful in their application for the ReportHer Award in the digital category for TechCabal. Asheolge said she hoped the award would propel the tech industry to pay greater attention to women and their noteworthy achievements as they are an integral part of the ecosystem. She credits TechCabal’s win to a dedicated team of brilliant, diligent editors and reporters willing to write impactful stories. In a similar vein, Chukwu described the win as “empowering”, inspiring TechCabal to authentically shed light on the frequently overlooked narratives of women as “creators and users of technology”. About ReportHer Award The ReportHer Awards is a gender-balanced reportage award that recognises media organisations and journalists who actively report on women and gender-related issues, give them prime time and strive for gender-balanced coverage. The award is an initiative of Women Radio 91.7FM in partnership with the Wole Soyinka Centre for Investigative Journalism (WSCIJ) and sponsored by UN Women and the Canadian government. With over 104 entries across five categories: television, radio, print, digital, and journalist, TechCabal emerged as the winner in the digital category while Ripples Nigeria emerged as the runner-up. One of the judges, Lanre Arogundade, executive director of the International Press Centre (IPC) highlighted that the judges evaluated various parameters, such as the inclusion of women as sources in the reports and the aim for equal representation of men and women in the stories. Arogundade also added that they looked at “the extent to which the story uses data, cite sources and looked at presentation and effectiveness and the extent to which media institutions that submitted their entries, and journalists, meet the professional standards portraying women.” For TechCabal’s editor in chief, Adrian Ephraim, “The awards may be new, but TechCabal’s reporting on women in tech is not. It’s good to see gender reporting acknowledged in this way, and we’re extremely proud of Ngozi and Hannatu who have spearheaded our coverage. Well-deserved.”
Read MoreAfrica VC funding dips by 54% in H1 2023, as accelerators lead the way in cheque-writing
VC funding of African tech startups dips by 54% in H1 2023 as funding crunch continues. According to data from research firm MAGNiTT, VC firms invested $951 million in the African tech ecosystem in H1 2023. It’s a 54% drop compared to H1 2022. VC firms also completed 214 deals, a 50% decline from the 2022 numbers. Exits continue to be few and far between in 2023 with only 15 exits so far. Fintech continues to be the VC darling even in a downturn, with fintech startups clocking 29% of the total funding. Ecommerce and transport and logistics startups complete the top three receiving 12% and 11% of the total funding respectively. By country, Nigeria lead the pack in terms of deal volume, followed by Kenya and South Africa. In terms of deal value, Egypt leads the continent, mainly driven by the $260 million MNT Halan deal in February, followed by South Africa which saw a 3% reduction in deal value and Nigeria. Interestingly, accelerators, and not VCs, led most of the cheque-writing by volume in this half of the year, accounting for five of the top 10 investments in the time period. Accelerators made up the top 4 of the most active investors, with ARM Labs Lagos, Catalyst fund, The Baobab Network, and Norrsken Global leading the way with 13, 19, 9, and 8 deals respectively. In terms of value, the entire top 10 comprise international investment, with Chimera Capital, Tencent, Blue Earth Capital, Sumitomo Corporation, and Apis Partners leading the way. Exits wise, 15 represents 25% of the entire 2022 total of 60 exits on the continent , with Kenya leading the way with four exits. As the VC funding crunch continues, investors seem to be focusing their attention on making early-stage bets, with 57% of all investment into the continent going to early-stage startups, a 5% increase compared to 2022 figures.
Read MoreWhy DRC will soon be a major player in global tech scene
Noel K. Tshiani, founder of Congo Business Network, shares his vision for tech startups in the Democratic Republic of Congo, based on his conviction that the country has the potential to emerge as a major tech hub in Central Africa. He is optimistic about the future of the DRC’s startup and tech ecosystem, believing that with improved policies and increased investments, Kinshasa can become a major player in the global tech scene. When we think of the world’s most prominent tech startup ecosystems, places like Silicon Valley, New York, Paris, Lagos, or Nairobi might come to mind. But what about the Democratic Republic of Congo in Central Africa? Despite some challenges, this country, with a vast reservoir of natural resources estimated at $24 trillion and a population of 100 million, has significant potential to build a vibrant startup and tech ecosystem. I want to share my vision – a future that requires the public and private sectors to be ambitious, innovative, and persistent. Startups are the engines of innovation, job creation and economic growth. They bring fresh ideas to market, disrupt established industries, and push the boundaries of what is possible. I came to the United States in 1996 and have since seen the American economy transformed by tech startups like Google, Amazon, LinkedIn, Twitter, and YouTube. In the DRC, we need this kind of dynamism now more than ever. The DRC’s young population is one of its greatest strengths. Nearly 60% of Congolese are under the age of 25. With the right support and opportunities, these young people can be the creators of startups and tech solutions that will drive the country’s economy forward. One key support mechanism that cannot be overlooked is the exposure and learning opportunities that come from attending international tech and business events such as the Consumer Electronics Show (CES) in Las Vegas, Viva Technology in Paris, or Ambition Africa in Paris. These major events allow entrepreneurs to interact with potential investors, business partners and journalists, expanding their professional networks and opening doors to growth opportunities. They also provide an opportunity to learn about the latest trends in the global technology landscape, an invaluable asset in an industry characterised by rapid change and innovation, such as the rise of artificial intelligence. Interestingly, a few countries in Africa have already passed startup laws, which are legal frameworks designed to support the growth and development of startups. These countries include Tunisia (2018), Senegal (2019), Nigeria (2022), Democratic Republic of Congo (2022), Côte d’Ivoire (2023), Ghana (2023), Kenya (2023), Rwanda (2023), Ethiopia (2023), and Uganda (2023). This is particularly noteworthy because very few of these countries-Tunisia, Senegal, and the Democratic Republic of Congo-are in French-speaking Africa. The law aims to promote entrepreneurship, facilitate the creation and growth of startups, and create an enabling environment for innovation. The DRC could take inspiration from these African countries, learn from their successes, and tailor its policies to the unique context of startups within its borders. Among French-speaking countries in Africa that have adopted similar legislation, the Democratic Republic of Congo, with a population of over 100 million, offers immense potential for international investors. The country boasts not only a dynamic and diversified domestic market but also creative, innovative and ambitious entrepreneurs. To compare, Tunisia has a population of 12 million, Senegal 18 million and Côte d’Ivoire 29 million. The DRC’s potential is therefore much greater for tech startups such as fintechs, and it can position itself as an essential destination for international investors, especially those from Canada, the United States, the United Kingdom, France and the Netherlands, where tech startup ecosystems are extremely dynamic. And to unlock this potential, we must first address some of the structural challenges that hinder the growth of startups in the DRC. We need to improve access to reliable internet and electricity, strengthen the country’s education system with a focus on science, technology, engineering, and math, and develop a financial system that supports venture capital and other forms of startup funding. The government plays a critical role in creating an enabling environment for startups. Clear, supportive laws and regulations can help foster innovation, while investments in infrastructure can help reduce the cost of doing business. The idea is to create an ecosystem in which entrepreneurs can thrive and be rewarded for their work. In addition, fostering partnerships between the public sector, private companies, and international organizations can support the growth of Kinshasa’s tech ecosystem in the coming years. For example, tech hubs and co-working spaces can act as springboards where ideas and talent come together, creating an environment conducive to the growth and success of startups. We also need to harness the power of the Congolese diaspora, particularly in Canada, the United States, France and Belgium. This diaspora is a huge reservoir of talent, experience and financial resources. Initiatives to connect diaspora professionals and entrepreneurs with their counterparts in the DRC could provide invaluable opportunities for mentorship, investment, and business partnerships. We must not forget how important it is to include women, people living in rural areas, and marginalised communities in our efforts to build a thriving startup and tech ecosystem. Programs that ensure access to digital skills training, startup funding, and investment guarantees for these groups can help ensure that the benefits of the digital revolution are widely shared in the country. I see a future where Congolese startups are not just players in the local market, but formidable competitors on the international stage. I see a future where the words “tech startup” evoke not only Silicon Valley, but also Kinshasa, Lubumbashi, Goma, Matadi, and Mbuji Mayi. I also see a future where Congolese startups are not just players in the local market, but formidable competitors on the international stage. I see a future where the words “tech startup” evoke not only Silicon Valley, but also Kinshasa, Lubumbashi, Goma, Matadi, and Mbuji Mayi. My vision for the DRC’s startup and tech ecosystem is ambitious but achievable. By tapping into our collective strengths, addressing our
Read MoreFraud concerns may stall contactless payments implementation by banks
New guidelines from the Central Bank of Nigeria (CBN) place the burden of fraud on banks. This may stall contactless payment implementation by banks. On June 30, 2023, the Central Bank of Nigeria (CBN) introduced new guidelines for the operations of contactless payments in the country. Per the new rules, such transactions will be limited to ₦15,000 for a single payment or ₦50,000 daily. However, Several banks who spoke to TechCabal said they are unsure of how to implement the guidelines. “Yes, we are aware of the guidelines but we are yet to get direction on the implementation process,” an Access Bank personnel told TechCabal. A Fidelity Bank source said the bank is working on an in-house implementation plan. According to the CBN guidelines, users can tap or wave their devices—including smartphones and cards—that are enabled with contactless technology to make payments without inputting a PIN to confirm the transaction. Contactless payments are powered by radio frequency identification (RFID) or near-field communication (NFC) technology which allows enabled devices to initiate and authorise payment transactions without additional confirmation from the user. But the primary problem with the use of contactless payments is the risk of fraud arising from the absence of authorization, meaning a serious cause of concern for banks and financial institutions involved. This YouTube video tells how scammers used contactless payment to steal from a Denver woman’s bank account. However, the CBN is betting that its decision to cap the transaction amount on contactless payments will mitigate fraud risks. Why? It works. According to the data analytics company FICO, “data from UK Finance revealed that in 2020 there was a total of £574 million lost through card fraud. However, only £16 million of this figure represented contactless payment fraud. A MasterCard staff who declined to be named because they were not authorised to speak to the media explained that the use case for contactless payments was tied to the need to collect small payments en masse at tolls and queues quickly. Even though the central bank stipulates an upper limit of N15,000, card issuers can offer lower-limit contactless cards depending on their risk appetite. The big worry for banks is how to handle fraud The guidelines also place the burden of fraud on acquirers (the bank of the payment recipient), issuers (the bank of the customers), and merchants (the business) who offer contactless payment channels. Placing the burden of managing fraud on merchants and banks would make it difficult for banks to seek to implement the new provisions, said Adedeji Olowe, founder of Lendrsqr, a software firm that enables digital lending businesses. “Abroad, where there are consequences for bad behaviour if your card was stolen and used for contactless, the bank covers the fraud. We both know nobody dares do that in Nigeria,” he commented. While it remains to be seen how the banks will handle contactless payment implementation, they represent a new hurdle for their security architecture, especially in light of the recent reports of hacks targeted at traditional Nigerian banks and even fintechs. In 2019, Nigerian financial institutions spent a reported N200 billion on cybersecurity. Securing contactless payments is going to increase that budget. At the Digital PayExpo hosted by the Nigeria Deposit Insurance Corporation (NDIC) and the CBN in June 2023, Chinwe Uzoho, Regional Managing Director, West & Central Africa, of Network International, pointed out that it costs a lot to secure contact payment systems. “You have to choose between fraud and secure payments,” she said, In June, Globus Bank reportedly lost N1.7 billion to hackers. TechCabal also reported how Glade, a Techstars-backed fintech, suffered an internal breach that cost over $200,000. Considering that some of Nigeria’s worst cyberattacks are underreported, chances are more hacks have possibly happened in recent times without public knowledge. So one thing is clear: for these guidelines to work, banks must brace up their security architecture as cybersecurity becomes more problematic in Nigeria.
Read MoreFor francophone startups playing catch-up, imitation is the cheat code
The African francophone startup ecosystem has a lot of catching up to do when compared to English-speaking countries. Can a copycat approach help close this distance? The year is 2016, and the Nigerian fintech ecosystem is much smaller than the over 300 fintechs we have now. Few startups exist, and even fewer are prominent. But Paystack’s acceptance into Y Combinator changed everything. Pitching themselves as the “Stripe of Africa”, the startup promised that it would do what Stripe did for payments, but in Africa. While their acceptance into YC helped create validation for the ecosystem, their eventual acquisition by Stripe (for $200 million in 2020) solidified it. It is this approach that francophone startups are trying to bring to their shores by copying the business models of successful startups in English-speaking African countries. There are many opportunities for businesses to thrive in francophone African countries. For starters, the region’s currency, the CFA, is used in 14 countries and accounts for 12% of Africa’s GDP. It is also pegged to the Euro and does not fluctuate, providing the kind of FX stability that’s not available elsewhere on the continent. A corollary effect of this is that barring internal conflict, most economies are stable. Last year, Miishe Addy, the CEO of Jetstream, a Ghanaian logistics startup, told TechCabal that her startup was expanding into francophone Africa to mitigate the effects of Ghana’s turbulent inflation. The region is home to some of the fastest-growing cities and economies in Africa. According to the IMF, six out of the seven fastest-growing economies in sub-Saharan Africa are francophone countries. The stretch of West African coastline, which begins in Abidjan and runs through Lome, Accra, and Cotonou before ending in Lagos, would be home to 51 million people in a decade. By the end of the century, it would be home to 500 million people. Another opportunity that francophone startups have is that, due to their similar currencies, language, and cultures, regional expansion is an easy path. Ivorian Mstudio wants to build a strong francophone ecosystem, one venture at a time Copying is a shortcut for francophone startups The opportunity is clear, so governments, startups, and venture firms are trying to advance the ecosystem by copying what has already proven successful in the Big 4 (Nigeria, South Africa, Egypt, and Kenya). By copying what has already worked, there is an assurance that there is market validation for the product and that Africans are willing to pay. Leslie Ossete, the co-founder of Mstudio, an Ivorian venture studio, told me in Abdijan that her studio chose this copycat approach because it “gives us a higher chance of success”. “We look at countries that have similar markets, economies, industries, ways of doing things, and an informal market as well because that is our focus. We try to see which startups and trends do not exist in francophone Africa and can be replicated here,” she added. When asked if this copycat approach could work, Mathias Léopoldie, the co-founder of Juluya, an Ivorian fintech, told me that it is “a proven strategy because the markets are very similar in terms of demographics (low-income, young population) and economies (20-25% primary sector, 25% secondary sector, and 45%-50% tertiary sector).” However, a copycat approach does bring some problems. Jumia has always been paraded as the “Amazon of Africa”, but it has struggled to attain profitability. What works in one market might not translate into another. Anglophone countries have common law, while francophone countries have mostly civil law. Then there’s the language barrier (I could only communicate in Abidjan with the help of AI). Copying blindly will not work for francophone startups English-speaking startups that have expanded into francophone Africa have found it difficult to find success. When Wasoko raised $125 million last year, its CEO told TechCrunch that it was expanding into Senegal and Cote d’Ivoire because of their “solid year-on-year GDP growth.” The startup is now closing its offices. Sendy, a Kenyan logistics startup, has placed its Ivorian subsidiary in liquidation. But Wave, a Senegalese fintech, is currently making a killing in Cote d’Ivoire. There are “some deep cultural differences in terms of doing business,” according to Léopoldie. “Francophone Africa is not the same as Nigeria or Kenya; you’re going to have specificities; the persona might be different; they do not purchase the product in the same way, or they did not experience the problem in the same way,” Ossete added. “From my experience in mentoring, investing, and building startups in sub-Saharan Africa, it’s easier for francophone startups to expand east (to English-speaking countries) than the other way around. ” Axel Peyriere, the CEO of Auto24 and an angel investor, told TechCabal. If what works in Anglophone countries struggles to be replicated successfully by the same people that built it, how can a copycat approach work? By innovating and applying home-ground advantage to create tailor-made solutions. Some English-speaking startups have taken the route of acquisition instead of expansion. Autochek (Nigeria) and Chari (Morocco) are recent examples. Léopoldie told TechCabal that he believes a “francophonized” approach to bringing innovation from anglophone markets to francophone markets could work. “It is interesting that many anglophone late-stage startups are actually struggling to enter francophone markets,” he added. Innovation is not always about creating something new; it can also mean bringing something that did not exist before to the market. By copying what has proven successful in neighbouring countries and applying home-ground advantage, the francophone tech ecosystem has a cheat code and blueprint for success. As Ossete told me, “We do not lose a lot of time in execution because we already know at least how to structure the business model and the structure of the business itself.”
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👨🏿🚀TechCabal Daily – Kenya’s Finance Act’s final act?
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning If you’ve been missing TC Daily in your inboxes, it’s because we’re landing your Promotions or Social folders. To make sure you never miss an edition, please move us to your Primary or Main folders. In today’s edition Kenya’s Finance Act has been halted SA nabs another cybercriminal for $8000,000 fraud Emojis can be used to sign contracts Propel raises $2.7 million The World Wide Web3 Event: Angel Investor Meetup, Lagos Opportunities Legislation High Court maintains suspension of Kenya’s Finance Act 2023 Kenya’s Finance Act is acting up. Yesterday, Justice Mugure Thande, extended an earlier order halting the implementation of the country’s recently-approved Finance Act 2023. Image source: YungNolly Why was the Act suspended? Busia senator Okiya Omtatah, Eliud Matindi, Michael Otieno, and four others filed a petition challenging the constitutionality of the Finance Act 2023. They argue that the Act was passed without the concurrence of both Speakers of the National Assembly and Senate, as required by the Constitution. They also argue that the tabling of the Finance Bill was done without following due procedure. Additionally, they argue that the housing levy, which compels employers and employees to pay 1.5% each, is unconstitutional because the Constitution limits the national government’s role in housing to developing a housing policy. However, Cabinet Secretary Njuguna Ndung’u argued that the conservatory order could halt government operations by suspending budgetary steps. The ruling: Per Justice Mugure Thande, the cabinet secretary did not make a convincing case for the suspension of the order. She granted the petitioners’ request to have the case classified as a matter of significant constitutional importance and ordered that the case file be sent to Chief Justice Martha Koome for the appointment of a panel of judges to hear the case. Zoom out: The Finance Act 2023 introduces several new taxes, including a 1.5% tax on content creators and a 3% tax on crypto traders. These taxes are designed to generate revenue for the government to support its development agenda. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Click here to open a business account today. Cybersecurity South Africa nabs another cybercriminal Every day for the thief, one day for the law. Martins Egenamba, a South African who claimed to be a technology entrepreneur, has been sentenced to a 15-year jail time for defrauding victims in the United States and South Africa of millions of dollars. Martins Egenamba How did he do it? Per MyBroadband, Egenamba’s scheme was a case of business e-mail compromise fraud. This crafty individual managed to get away with about R16 million ($851,075) by swooping in on invoices, and tweaking the bank account details to divert the money to his own pockets instead of the rightful recipients. And that’s not all! For businesses in the US, he forwarded the funds straight to his South African company’s FNB account, Barlon d’Or Group. While he may be behind bars now, investigations are still underway regarding his involvement in another R6 million ($319,153) fraud scheme. Zoom out: SouthAfrica sees a lot of cybercrimes. One popular fraud scheme is the pyramid scheme and cryptocurrency scam, Mirror Trading International (MTI). MTI stole billions of rand from South Africans and victims in other countries including America. In fact, INERPOL’s Cybercrime Assessment report lists the country as the cybercrime hub of Africa. Consumer tech Judge rules that emojis can be used to sign contracts Image source: GIPHY A picture is worth a thousand words. How much is an emoji worth? Per MyBroadband, a Canada-based court is forcing a grain buyer to honour a sales contract because he responded to a message of the contract sent to him with a thumbs-up emoji. Yes, you heard that right. How did this happen? The grain farmer, Kent Mickelborough, signed a contract to sell 87 metric tons of flax and sent it for the grain buyer Chris Atcher to sign. Atcher claims he responded with a thumbs-up emoji to acknowledge receipt of the contract. Mickelborough, however, took the emoji as confirmation that he was entering the agreement as the buyer. But is it really valid? Justice TJ Keene, the judge who presided over the case says it is. He said that the thumbs-up emoji is an “action in an electronic form” that could be acknowledged as a “non-traditional means to sign a document.” This is also deemed acceptable because the buyer used his personal phone number to send it. GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving sustained business growth in Africa at GrowthCon 1.0. Experience curated masterclasses, case studies, a growth hackathon and more. Get your tickets now at 15% off. Use the discount code “TIX15”! Funding Nigerian startup, Propel, raises $2.74 million in seed funding Founders of Propel: Sunkanmi Ola, Seun Owolabi, and Abel Agoi Propel, a Nigerian HR tech startup, is setting sail with a $2.74 million seed funding to help scale its community-as-a-service platform. The company was founded in 2020 with the aim of helping multinational corporations reduce the risk of hiring remote workers from emerging markets. Lead investors: Amsterdam-based No Such Ventures led the funding round, joined by APX (an accelerator by Axel Springer Digital Ventures and Porsche Digital), Golden Egg Check, and Future of Learning Fund. Propel connects talented individuals in emerging tech communities with global companies that are committed to diversity, equity, and inclusion (DEI). The company uses a “community-as-a-service” business model, which means that it provides a platform that allows companies to access vetted talent pools in emerging markets. Future plans: The company aims to broaden its community ecosystem, expand its community platform, and introduce additional client services. Moreover, it intends to leverage the funding to achieve €1 million ($1.1 million) in community-generated revenue by Q4 2024. Zoom out: Propel operates in multiple global
Read MoreNigerian stock market rally continues driven by sector-wide gains
A majority of Nigeria’s stocks across all sectors have pushed the NGX to positive results last week, yet again. Experts believe the recent economic policies of President Bola Tinubu could be responsible. Driven by stocks across all sectors of the economy, Nigeria’s NGX continued its bullish run last week, delivering a strong close for the exchange. The NGX All Share index was up 3.40% at close of the week. Despite overall growth, the banking sector remained the best performer, gaining 9.82% at the close of the week. Financial markets experts told TechCabal that investors are reacting positively to some of the economic policies of the Tinubu administration. Last week, President Tinubu signed an executive order deferring the implementation of two key taxes until September 2023. The Tinubu admin also formed a committee on fiscal policy and tax reforms headed by Taiwo Oyedele, signalling the possibility of critical tax reforms. Onome Ohwovoriole, an analyst with Money Africa, told TechCabal that last week’s market rally was a case of a rising tide lifting all boats. Oise Ajayi, the head of investment research at Achoria asset management, also said, “Investors are seeing a step in the right direction and that is what they have been reacting to. Prices are rising now and they are not moving in one direction. Banking and oil gas stocks have been very strong drivers of market performance. Oil and Gas stocks have been on the rise since they took out fuel subsidy from the sector. Added with banking, they are the top two sectors.” Foreign investors remain cautiously optimistic Several analysts say that foreign investors are still on the sidelines. According to the NGX, foreign-investor participation has increased to 12% of transactions from 4% before the devaluation. While it’s an increase, many are still waiting on deeper reforms. With H1 financial results on the way, there’s a sense that the NGX’s good run will continue if companies report strong numbers. “We are not expecting any significant downturn yet. For now, the sentiment feels positive and we believe it will remain that way in the next trading sessions. Also, we are going to be seeing H1 results and the ones that will declare dividends. Investors would make decisions based on the outcome of that,” Ajayi added.
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Next Wave: Can’t leapfrog trust
Cet article est aussi disponible en français <!– In partnership with –> <!— –> First published 9 July 2023. Credere (from Proto-Indo-European – ḱreddeh- i.e to trust) is the heart of lending. In far too many African markets credere is local, very local and we can’t technology our way out of this “tribal” variety credere. The entire financial system is constructed on the premise that if you have too much money than you could spend in the short term, you would look for somewhere to stash it. And if I knew how to spend money in the short term to generate even more money, you would stash it with me. You trust me with your money and I trust that between keeping watch over it and giving it back to you, I can make enough to justify the effort by making more money from it. To quote Matt Levin.The bank is a magic trick that allows risk-averse savers to fund risky projects. Let us call this system of brokerage between risk-averse depositors and risk-loaded entrepreneurs, Trust Transactions. Another point to note about this system is that was not legislated into being. It has had centuries to develop and be finetuned. Even so, it does not work the same everywhere. For Africa in particular, alongside versions of the Trust Transactions described earlier (mostly large for cross-border trade routes), local groups developed their unique Trust Transaction systems for depositing and managing wealth. Despite this happening in populations separated by thousands of miles, the results were often similar. Whether they are called tontines, chamas, esusu or stokvels, these small group credit systems essentially functioned as deposit money banks, and insurance systems for their communities across Africa. Partner Message GrowthCon 1.0: Learn how to unlock 10X Growth Connect with growth leaders, operators, and enablers to explore proven tactics for driving sustained business growth in Africa at GrowthCon 1.0. Experience curated masterclasses, case studies, a growth hackathon and more. . Get your tickets now These communities were more social than commercial A close parallel to how these systems operated are the credit union and Main Street bank ecosystem that blossomed as frontier towns grew in young America. These small-town banks served as engines for America’s explosive growth in the 19th and 20th centuries. Whether in 20th-century America or Africa, the key to the success of these banks was that they were more social than commercial in their daily operations. They had a friendly human face whom participants knew and trusted. And trust was often the only asset entrepreneurs who borrowed from the pooled fund could boast of. As the United States grew into a modern economy, these small family-friendly banks, credit unions and the entrepreneurs they backed also blossomed alongside the. Sam Walton of Walmart fame for example built his straggling small-town business into a national chain off the back of credit from small-town banks. As business grew, several small-town banks lost their small-town background, grew and became indistinguishable from the big banks. By contrast, Africa’s credit unions—the chamas, tontines and esusu groups—remained local. Contained in small towns, neighbourhoods or villages participation was limited to only a few people at a time. By this time, the modern financial system was pretty much established. Still, even though the newly created African banks received the bulk of their deposits from ordinary income earners, they preferred to operate models based on lending to the government or a handful of big businesses. Remember, successful banking depends on a trick. I convince you that your money is safe with me and I convince myself that someone else needs that money enough to promise to pay me for taking a risk that you would not have chosen to take. Usually, this desperate someone is a business person. From micro-finance to digital banking and lending While esusu-type groups grew with the increasing population, African banks mostly chased safe investments in government bonds. So if you had enough money, you kept some of it at the bank, but if you needed a loan or money to finance a big project you turned to your closest esusu group. Fast forward this by a few years and suddenly there are more options to pick from. High-interest loans from micro-finance banks + paperwork. And high-interest loans from a smartphone. Most people will pick the smartphone option. But there are three problems with this. The first is that the smartphone option is usually not a business loan. The second is that the lender and the borrower do not know each other. The last problem is that trust is highly localised. Once “out of bounds,” commercial trust breaks down. Partner Content: Will Africa’s B2B e-commerce industry survive another decade? The result is predictable. High default rates. Lenders try to fight with higher interest rates and naming-and-shaming schemes. Eventually, it devolves into a cat-and-mouse game between lenders and borrowers. If you were a digital lender what would you do in response? A lot of digital lending firms seem to think the answer is writing more algorithms to help them predict what a prospective borrower would do. It’s a good idea and it probably helps a lot. While I’m not a banker or an underwriting expert, I’ve given this some thought and the underlying problem with getting digital lending to work seems to be more of a social problem than a problem software can solve. To put it another way, trust relationships in many parts of Africa do not extend more than a few degrees of personal contact. We are stuck in the local esusu trust level of trusted transactions. It is a malaise that affects everyone. Banks and depositors alike. In many cases, there is good reason for that. Partner Content: Tracc Systems partners with Eonsfleet to revolutionise the supply chain and transportation management landscape in Africa The lack of and abuse of broad consequences for misusing trusted transactions encourages everyone to just stay away and stick to the devil that is known. One former neighbour started a
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