“We have a no regret policy”: Climate-focused VC firm Satgana shares investment thesis and big bets on Africa
Every climate-focused venture capital firm operates with the belief that “if climate change doesn’t get us, our lack of innovation will.” Africa is most vulnerable to climate change, facing heatwaves, heavy rains, floods, tropical cyclones, and prolonged droughts. For Satgana, a VC firm that has backed seven climate-tech startups across Africa, developing solutions to address the continent’s growing climate problems is existential. Founded in September 2020 by Romain Diaz, Satgana invests between €100k ($105,000) and €300k ($315,000) in early-stage, category-defining climate tech startups across sectors like agriculture, carbon removal, industry and building, and mobility in both Europe and Africa. The firm aims to accelerate climate goals on the continent while creating jobs. So far, Satgana has backed 17 companies, including Kubik, an Ethiopian cleantech startup, and Mazi Mobility, a Kenyan mobility startup. While Satgana invests in traditional climate tech sectors like energy, mobility, and waste management, the firm prioritises underserved areas. A recent report by Big Deal revealed that climate tech startups raised 35% of all funding in 2024 (approximately $500 million), with energy alone accounting for $300 million. Spiro, a leader in e-mobility, raised $50 million in the same period. Satgana believes that investing in underserved areas of climate tech will lead to both environmentally impactful and economically viable solutions. The firm is also championing the idea of “green discounts” to accelerate the adoption of climate tech by making sustainable solutions more affordable. In March 2024, Satgana closed its first fund ($8.6 million) to support at least 30 startups. Although this fell short of the firm’s target of €30 million ($32.4 million) set in 2022, CEO Romain Diaz attributed the shortfall to the challenging fundraising environment, particularly for first-time fund managers. Diaz acknowledges the challenge of balancing affordability with sustainability. He notes that climate-friendly solutions are sometimes more expensive than traditional alternatives. However, he believes climate tech founders should focus on opportunities that both reduce costs and create significant impact. In this interview with TechCabal, Diaz discusses the untapped opportunities in Africa’s climate tech sector, what excites Satgana, and the qualities the firm looks for in founders and businesses it backs. (This interview has been lightly edited for clarity) TC: What data inspired the decision to become a climate-focused VC fund? Africa has historically contributed just 2% to 3% of global greenhouse gas emissions, yet it remains the most vulnerable continent to climate change. From a business perspective, there is a significant opportunity to develop green technologies on the continent. Africa’s growing energy demand, combined with its entrepreneurial population, creates room for both social and environmental innovation. By channeling capital from the global North to the South, we aim to support Africa’s growth and challenge the narrative that the continent can only thrive through charity. TC: What sort of innovation in climate tech excites you the most right now? We’re particularly excited by innovations that tackle real-world problems in underserved areas, such as sustainable agriculture, energy, and construction. For example, in Kenya, climate change has disrupted farming due to erratic weather patterns, which is why we focus on solutions like resilient crops, precision agriculture, and farm management technologies that promote sustainability. TC: What are the other underserved areas that pose commercial scale? Other areas of interest include electric mobility and climate data systems. TC: So far, Satgana has invested in climate startups focused on data, upcycling, and mobility in Africa. Are there other sub-sectors that Satgana wants to explore next? Indeed, in terms of emerging trends, we are currently exploring opportunities in the biodiversity space. One area of particular interest is nature-based solutions. TC: Nature-based solutions (NBS) involve using natural processes to address societal challenges such as biodiversity loss and disaster risk through carbon capture, and green infrastructure among others. As a VC firm, what do you think of these solutions scaling? Africa’s rich biodiversity and natural resources offer immense potential, but there’s a gap between how nature grows and venture capital’s expectations. Nature-based solutions, like afforestation and reforestation, offer significant benefits, but nature’s incremental growth doesn’t align with the typical VC target of 25% IRR or a 10x return. This mismatch makes scaling nature-based solutions challenging. What excites me is exploring models that bridge this gap. For example, Carbo Culture, a Finnish startup producing biochar, has successfully raised over $27 million by structuring financing at both the holding company level and through project-specific funding. This dual approach could serve as a model for scaling nature-based solutions. TC: Given the unique challenges climate startups might face in Africa, what models do you think are most scalable? One key insight we have seen, often popularised by Bill Gates about green technologies, is that the green option tends to be more expensive than the traditional one. But when we look at opportunities in Africa, we look for what we call a “green discount”—where the green solution is cheaper than the incumbent. Let me give you a couple of examples. One of the companies we invested in is Revivo, which refurbishes electronic devices. These are more affordable because they reduce waste and avoid the production of new phones and laptops. It reduces environmental impact and offers a lower price than new devices. This “green discount” model makes a lot of sense. Similarly, we have invested in Kubik, a company in Ethiopia that makes circular construction materials. Their products are 20% cheaper than traditional cement. These types of businesses are built around the concept of offering a green solution that is more affordable, which is something we always look for. When it comes to scalable models, we typically favour modular and replicable solutions. Microgrids are an example of a scalable, decentralised solution. TC: Beyond the founder, how does Satgana evaluate a potential startup? When evaluating startups, we prioritize the strength of the founding team, ideally with two co-founders whose skills and experience complement each other. That said, we do invest in solo founders if they have complementary skills within their team. We look for a balance between visionary thinking and execution ability,
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👨🏿🚀TechCabal Daily – The magic word is compliance
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Meta platforms—Facebook, Instagram, and WhatsApp—were down yesterday, with over 40,000 people reporting that they were unable to access the platforms globally. Meta has experienced at least two outages this year, with the most recent occurring in March. While Meta has not specified the cause of yesterday’s downtime, the last one was due to a technical glitch. We decided to do a little comparison. TC Daily downtime in 2024: zero. Why are Nigerian regulators after fintechs? Apple Pay launches in Egypt Starlink enters Cape Verde World Wide Web 3 Events Fintech Why are Nigerian regulators after fintechs? Image source: Google The saying, “Please hug any Nigerian founder you see outside,” rings especially true for fintech executives in 2024. Besides navigating inflation and a volatile dollar, they operate under regulators that have banned customer onboarding for six weeks and are constantly imposing heavy fines. The regulators have also ramped up the surprise inspections of fintech offices and increased KYC requirements to include address verification, doubling the cost of KYC processes. This increase in compliance pressures across the board comes as Nigeria is desperate to get off the FATF Greylist (a list of countries which could be blacklisted in international finance) by reducing fraud and improving anti-money laundering practices. Fintechs have faced heightened scrutiny after a 2023 report by Nigeria’s financial crime intelligence agency revealed that over 90% failed to report suspicious transactions. With most bank fraud occurring through digital channels, banks also blame the fintechs for fraud. The fintechs have responded by hiring more compliance staff (some have 20), placing internal controls for suspicious transactions and reporting them, and physically verifying the addresses of customers and POS agents. While the fintechs should have been doing this initially, they preferred operating in the regulatory grey zone due to a combination of lax KYC measures and weak oversight. But the events of 2024 ended that era, and now fintechs have to wear big pants. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Fintech Apple Pay launches in Egypt Image Source: Ahram Online Contactless payments are not yet ubiquitous in Africa. The reasons are threefold: in some countries, consumer education is lacking; others lack the necessary technology infrastructure; and some have no regulatory frameworks to support it. Egypt falls into the first category. The country has the tech infrastructure—NFC-enabled cards and POS systems—but adoption remains slow. Apple Pay, Apple’s contactless payment solution, has now launched in Egypt, marking its first expansion into Africa. Apple partnered with Egypt’s three largest banks by asset base: National Bank of Egypt, Banque Misr, and Commercial International Bank. These banks dominate Egypt’s banking sector and can potentially give Apple Pay access to nearly 40 million customers. These banks will issue cards that can integrate with Apple Pay to provide contactless payment solutions. The timing is right. Egypt has been working to encourage contactless payments, introducing tokenisation regulations in 2023 to allow smartphone-based card registrations. This framework creates a ready environment for Apple Pay’s entry. However, Apple Pay’s reach is limited—it’s exclusive to iPhone users. While smartphone penetration is high in Egypt, iOS devices make up just 14% of the market. This significantly narrows Apple Pay’s adoption potential. Still, this could also be a subtle Apple move to strengthen its presence in Egypt after the country announced new taxes on imported smartphones in November. Egypt, alongside South Africa and Nigeria, is a key market for imported smartphones in Africa, like Apple devices. The difficult task here for Apple is to encourage people to buy more iOS devices in Egypt, despite the phone taxes—which is no easy task given the high cost of iPhones, strong competition from cheaper Android alternatives, and limited purchasing power in a price-sensitive market. Despite its small market share, Apple is showing that it is keen on staying and participating in Africa. Apple Pay will enjoy a first-mover advantage in Egypt as other contactless payment solutions and competitors, Samsung Pay and Google Pay, are not yet available in the country. Get Fincra’s Embedded Finance and BaaS Report 2024 for FREE Fincra in collaboration with The Paypers have released the Embedded Finance and Banking-as-a-Service Report 2024. This report examines the key challenges and innovative solutions defining the future of seamless cross-border payments and remittances across the continent, among other topics, with key experts. Get this valuable, free resource today! Internet Starlink enters Cape Verde Image Source: TechCabalOn Tuesday, Cape Verde became the 17th African country to access Starlink services. Earlier in October, Cape Verde’s regulatory authority, Agência Reguladora Multissectorial da Economia (ARME), authorised Starlink to provide electronic communications services in the country. Since 2023, Starlink has been on a rapid expansion across Africa. However, it has had to battle regulatory roadblocks in its entry into some parts of Africa. Take Botswana for instance, where the satellite internet service provider (ISP) was first denied an operating licence, or Senegal where sellers of the products were arrested. Although the ISP has seen significant adoption in some countries—through hardware rentals and cheap subscription pricing—it has also had to fend off competition from local telecommunications companies and internet service providers. Safaricom, Kenya’s largest telco, called for stricter regulations on Starlink, arguing that the ISP should be required to pair up with local mobile operators and not be granted independent licences. Telcos in Nigeria, Zimbabwe and Cameroon, have also had similar complaints about lax regulatory requirements for the ISP and an inability to compete on pricing. While Starlink has introduced rental options for its users in Kenya and cheap subscription plans, It remains to be seen how the satellite ISP will fare in Cape Verde and what unique pricing policies it will employ to lure users from local competition. Introducing Paystack
Read More“They just show up and look at our books,”fintech executives reveal stricter CBN compliance checks
In a January 2024 letter, the CEO of one of Nigeria’s most prominent fintech startups told employees the company’s focus for the year would be ‘growth and compliance.’ For an industry focused on hypergrowth in the last five years, it marked a major shift in response to regulatory scrutiny and rising fraud concerns. After an April ban on onboarding new customers, the central bank increased the frequency of impromptu inspections on the offices of fintech companies. “They just show up and go through our books looking for any anomaly,” one person familiar with the matter told TechCabal. “We know that they’ve increased the frequency [of the inspections] because [the greylist] is a clear and present danger for the financial space. The only way you get off the grey list is to ensure regulated entities fulfil their compliance obligations,” Tunde Ibidapo-Obe, the CEO of Regfyl, a Nigerian fraud detection company, told TechCabal. Those inspections led to the Central Bank fining at least six fintech startups in the second quarter of 2024 after audits revealed compliance issues, with Moniepoint and OPay being hit the hardest. The heightened focus on fintechs is partly due to Nigeria’s goal of getting delisted from the Financial Action Task Force (FATF) greylist—a list of countries with weak anti-money laundering and counter-terrorism financing measures—by January 2025. Being on the FATF greylist signals to global investors that a country’s financial systems are vulnerable to money laundering and terrorist financing, and can impair a country’s reputation, hinder access to international capital, and increase business costs. The regulators tightened their grip on fintechs after a 2023 report from Nigeria’s Financial Intelligence Unit (NFIU), the financial crime intelligence agency, showed that over 90% of fintechs failed to report suspicious transactions and were not compliant with anti-money laundering practices, making them likely conduits for money laundering. The regulators are also responding to the rise in fraud in the banking sector, with fraud via digital channels becoming a significant challenge. In the first half of 2024, 96% of bank fraud happened through web, mobile, and POS systems. As fintechs operate mostly through digital channels, they have found themselves in the thick of the fight against fraud, as banks often blame fintechs for these fraud attempts. It reached its tipping point in October 2023, when Fidelity Bank, a Nigerian commercial bank, blocked transfers to several fintechs over concerns that their weak KYC processes made them a conduit for fraudulently obtained funds. That block legitimised the perception that fintechs help bad actors get away with fraud and the criticism for the fintech’s lax KYC measures. It also put a spotlight on fintechs that regulators have followed as they try to reduce fraud in Nigeria and prevent fintechs from becoming a weak link exploited by bad actors. The evolution of KYC and Compliance in Nigeria’s fintech industry In 2013, Nigeria’s central bank introduced a three-tiered Know Your Customer (KYC) system, lowering the barriers to onboarding customers. Backed by this circular, fintechs helped cut financial exclusion by 20% and brought millions into the financial system. Despite the relaxed onboarding requirements, fintech startups are mandated by law to confirm customers’ identities, physical addresses, and risk profiles. They cannot onboard politically exposed persons, individuals on sanctions lists, or those under investigation for fraud or facing legal proceedings. However, as the fintechs scaled rapidly, many prioritised growth over compliance, making tradeoffs in areas like risk profiling, transaction monitoring, anti-money laundering, and KYC, leaving some restrictions unimplemented. In some extreme cases, Nigerians could open accounts with information about popular celebrities and random phone numbers. “Many fintechs did not have processes in place to do [the necessary checks]. If you’re onboarding tens of thousands of customers and you have a small compliance team, they can’t keep up,” Ibidapo-Obe said. The loopholes created safe havens for bad actors, and with little information on the bad actors, the fintechs quickly lost billions to fraud. Before the April 2024 ban was lifted, fintechs were asked to fulfill strict conditions, including restricting peer-to-peer crypto transactions and mandating ID verification and physical address verification for all account tiers. “Compliance is no longer just a backroom thing. A lot of fintechs are now taking compliance very seriously. Before now, big fintechs would have one young graduate out of school with just two years of experience heading their compliance team—but that is shifting. Now you’re having more senior people, and there’s a lot more scrutiny as well,” Oyindolapo Olusesi, a tech-focused lawyer, told TechCabal. The Central Bank did not immediately respond to a request for comments. The cost and challenges of compliance In response to the increased scrutiny, fintech companies have increased the hiring of compliance staff, conducted extensive KYC checks on customers, and blocked crypto transactions where possible. They have also created internal guardrails that flag and report large and suspicious transactions, but some have balked at the price of more stringent KYC requirements. Address verification for POS agents alone could cost the industry $1 million, while full KYC checks now range from ₦1500 to ₦2000 per customer—a steep increase from the ₦400 to ₦700 costs before the April ban. The cost of compliance software, which charges per user and transaction, along with the expenses of hiring experienced compliance staff from banks, also increases operational costs for fintechs. For fintechs with millions of customers, these costs quickly increase and divert scarce resources. Some fintechs analysed the cost-benefit of full compliance and decided to operate in certain grey areas, but that decision negatively affected fintechs when they reached a certain scale, as they became targeted by bad actors. “Startups are aware when they are making infractions, but they make trade-offs when it doesn’t cost them too much,” Olusesi said. However, after the conditions of the April ban were met, the fintechs have improved their compliance processes, which has pleased regulators who are “happy” that fintechs are now “taking steps in the right direction,” a policy expert told TechCabal. It’s not been all gloom for Nigerian startups, as fintechs have turned to
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🚀Entering Tech #80: How Joshua Udonne switched from engineering to growth
How Joshua Udonne drives growth at Interswitch. 11 || December || 2024 View in Browser Brought to you by Issue #80 From engineeringto growth Share this newsletter Greetings ET people In an interview with Joshua Udonne, this week’s Entering Tech guest, we asked a simple icebreaker question, “If you got stranded on an island for one week, what three items would you bring along with you?” “A knife, something to purify water with, and a strong rope,” he responded. “Why do you need a strong rope, Joshua?” “I grew up on a farm. There’s this tent-like structure I learned to build as a kid using banana leaves. It would come in handy on the island when I need to build tents with whatever is available, or even make rafts, for example, so a search and rescue party can find me.” We won’t judge you if you’d have immediately screamed, “My phone and Starlink” in that situation. But Joshua’s answer showed his survival instincts—skills he describes as very useful in his role as a growth marketer at Interswitch. “As a growth marketer, much of your job is just adapting.” Here’s the story of Joshua and how he climbed the career ladder in tech. Emmanuel Nwosu & Timi Odueso Why Growth, anyway? There have been misconceptions about what “growth marketing” truly means for businesses. We are a little confused too by the different shades of marketing functions. Naturally, this was the first question we asked. “Explaining growth to a five-year-old, it’s like owning a zobo stand at Onike, Yaba. You are looking for ways to sell that zobo drink to Kamoru. And then Kamoru tells his friend, Basira, that you have the best zobo stand in Onike. That way, more kids begin to discover your zobo stand. You’ll sell more, make more money, and expand from Onike to Eko Hotel,” explained Joshua. “That’s what I do at Interswitch. I find ways to scale the business—everything about revenue and numbers that move the business forward.” Image source: Wunmi Eunice/TechCabalJoshua, with over eight years of experience in marketing, has worked across marketing agencies, social media, entertainment, and fintech industries. But he wasn’t always pro-marketing. Back in 2015, he embodied everything you’ve read about classic engineers—he wanted to get paid for practising a career he thought could make a difference in the world. At the time, Joshua had just graduated from the Federal University of Technology, Owerri (FUTO), where he studied Polymer and Textile Engineering. Joshua at his convocation in 2015. Image source: Joshua UdonneIn 2018, he got an opportunity to work on the Lagos State Employment Trust Fund (LSETF), a talent development programme initiated by former governor Akinwunmi Ambode. He calls it the opportunity that changed his life. “I was working with a senior marketing manager on the team and we’d been tasked to bring in 60 people, particularly artisans, to take the courses and improve their skills. We were running a lot of ads on a small budget, and I remember thinking, ‘these people we’re looking for are not on the internet—at least not in 2018.’” “So we went into the streets, sports-betting centres, the game houses, markets, and art exhibition centres. We filled the 60 seats in one day.” That experience strengthened Joshua’s resolve to pursue marketing fully. And today, he says combining traditional marketing and digital marketing methods is his idealistic approach to growth. *Newsletter continues after break Flipping the switch at Interswitch 2016–2018: Social media marketing at Decke Academy 2017–2018: Social media marketing & content marketing at Decke Integra Resources 2018: LSETF role 2021: Digital marketing at VoguePay 2022–2023: Digital marketing at Paga 2023–present: Growth marketing at Interswitch Group Joshua’s Employment History Before LSETF, Joshua’s first role was a social media specialist role for a vocational training school in 2016. He was later promoted within the company to manage social media and oversee all content for an interior design firm. It was a role he said frustrated him. “The company had like eight subsidiaries, with more products than customers. They’d just brought me in—somebody that just finished NYSC—as their social media manager to push all their brands. I had no training for it, and I remember I was learning on the job. It was just chaotic.” Working on the LSETF product provided Joshua with a pathway to pursue something in growth marketing. So, he quit his social media role at the interior design firm and went to learn digital marketing. Between 2020 and 2022, he worked for different marketing agencies, including Ads & Web, Piston and Fusion Limited, and Red Lantern, where he learnt more about digital marketing, strategy, and paid media. Image source: Yoruba TVBut Paga was the turning point in Joshua’s career. Though he had applied for a digital marketing role at Paga in late 2021, he didn’t get the job. “They stopped recruiting; that was the communication we got. But then they reached out to me. I think they saw the campaign I was doing with Red Lantern and liked that project. That was how I got into Paga.” Joshua juggled digital marketing and later, growth responsibilities, at Paga for over a year. This was a time he fondly remembers as the experience that helped him stand out to recruiters. His next role was Interswitch, where he is currently driving growth marketing initiatives. He’s been with the company since 2023. Adapt to survive As a growth marketer at Interswitch, Joshua says a typical busy day involves a lot of strategising, collaborating with cross-functional teams like marketing, product, and operations teams, and executing on those strategies. “The most challenging thing about my work is managing the constant need for experimenting. I’m a growth marketer, that’s all I do. [In experimenting], you’re trying to balance short-term results with long-term strategy.” “You’re trying different things, and you’re tracking every single thing. The tiring thing is the constant documentation process.” Image source: Joshua UdonneYet, Joshua says the work has its perks. He and his team at Quickteller—an Interswitch subsidiary where
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👨🏿🚀TechCabal Daily – Billion naira fines hit Moniepoint, OPay
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy mid-week! South Africans spent 112% more this Black Friday than in 2023, according to Ecentric Payment Systems. At its peak, transactions hit 2,185 per minute, with shoppers buying big-ticket items online after checking them in-store. Despite macroeconomic challenges, the demand for Black Friday deals remains strong. For retailers, the takeaway is clear: discounts drive the holiday rush, and omnichannel strategies are paying off. CBN fines Moniepoint & OPay $634,000 each Bolt launches Bolt Market in Kenya Access Bank UK expands into Malta Nigeria’s biggest banks pay $92 million dividends in H1 2024 World Wide Web 3 Opportunities Fintech Nigeria CBN fines Opay, Moniepoint $634,000 each Image source: TechCabal When boys become men, they must shoulder the responsibility of men. Nigerian fintechs are growing fast, and the CBN is ensuring they’re ready to carry their weight. Until recently, Nigeria’s Central Bank—which has relied on fines to enforce regulatory compliance—has had minimal compliance interactions with fintechs. However, as these fintechs reach more Nigerians, their millions of customers must also be protected by regulators. In April, the CBN asked fintechs to tighten their Know Your Customer (KYC) processes, with fintechs temporarily stopped from onboarding users. On Tuesday, TechCabal reported that the CBN fined two of the country’s biggest fintechs, Moniepoint and OPay, ₦1 billion ($634,000) each in the second quarter of 2024 for compliance infractions. At least four other fintech companies were also fined, though the specific details of these penalties have not been disclosed. People familiar with the conversations claim that the infractions may be associated with the size and scope of the fintechs microfinance licenses which has limited covering for users. This latest fine marks the CBN’s first significant move to penalise fintechs. The bank has primarily used fines to enforce compliance among traditional banks, handing out ₦15 billion ($9.5 million) in fines in 2023. The new fine continues the compliance conversation in Nigeria’s fintech which has seen fintech companies ramp up compliance hires. These fintechs which previously skewed towards minimal compliance staffing have ramped up hires to help ease regulatory tensions and mitigate fraud in Nigeria’s fintech industry. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Startups Bolt launches Bolt Market, its grocery delivery product, in Kenya Image Source: Google Years after experimenting with food delivery in African markets and competing with the likes of Jumia Food and Uber Eats, Bolt, the uber-popular ride-hailing company, is now bringing its grocery delivery service to Africa. Specifically, Bolt Market, its grocery delivery service, will be exclusively available to Kenyans. Customers in Kenya can place their grocery orders online through the Bolt Food app at least 24 hours before the expected delivery time. A merchant processes the orders, and Bolt couriers pick them up and deliver them to customers. The ride-hailing company claims that grocery orders are taken from shelves directly to customers’ doorsteps within 30 minutes—which is half the time that other grocery delivery competitors, Glovo and large-chain supermarket Carrefour, say they deliver. Bolt will also offer an 80% discount and free delivery for customer deliveries within 3 kilometres (km) distance. Bolt Market’s expansion into grocery delivery in Africa comes after struggles with food delivery in other regional markets. In 2023, Bolt Food, its food delivery service, exited Nigeria due to macroeconomic challenges. However, Bolt Food has remained active in Kenya and Ghana, where user adoption and logistics efficiency have shown more promise. The Kenyan market, in particular, presents opportunities for Bolt Market. Online grocery delivery is growing rapidly, with the Competition Authority of Kenya (CAK) projecting that 16.7% of the population—10.5 million people—will shop for groceries online by 2027. Yet, Bolt will face stiff competition. Glovo, which dominates Kenya’s online grocery delivery market, already offers grocery services alongside other essentials, while retailers like Carrefour leverage their wide inventory. Bolt Market’s success will hinge on competitive pricing, delivery speed—which it is already optimising for—and customer experience. Its free delivery strategy gives it an edge, but sustaining this advantage against Glovo’s entrenched presence will be a challenge. Bolt may be a king in the ride-hailing market, but it is only an upstart in grocery delivery when compared to the likes of Glovo in the African context. Its first difficult task is to claw market share away from the big players. Get Fincra’s Embedded Finance and BaaS Report 2024 for FREE Fincra in collaboration with The Paypers have released the Embedded Finance and Banking-as-a-Service Report 2024. This report examines the key challenges and innovative solutions defining the future of seamless cross-border payments and remittances across the continent, among other topics, with key experts. Get this valuable, free resource today! Banking Access Bank UK expands into Malta Image Source: TechCabalAccess Bank UK, the subsidiary of Nigeria’s Access Bank Group which operates in 22 countries, has expanded into Malta through a fully-owned establishment. The bank’s licence application was approved on Tuesday by both the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA). This is Access Bank UK’s third market expansion in the last two months, following Hong Kong and Mauritius, but only its second presence in Europe. In November, the UK bank acquired majority shares in Afrasia Bank, the fourth-largest bank in Mauritius with $5.7 billion in total assets. Access Bank UK holds a commercial banking licence but focuses on providing corporate, commercial, and private banking services. Its operations focus on trade finance, business banking, treasury services, and private wealth management, catering to individuals involved in international trade, especially between Africa and the UK. While it does not operate a high-street retail bank like other UK-based commercial banks—like Barclays and HSBC—it plays a role in facilitating cross-border banking. This is why the expansion into Malta makes sense. Access Bank wants
Read MoreNigerian fintech Billboxx raises $1.6 million in pre-seed from Norrsken, 54 Collective
Billboxx, a Nigerian fintech offering invoicing and cash flow solutions to Small and Medium businesses (SMEs) has raised a $1.6 million pre-seed funding round. The company plans to use the capital to scale its operations, hire new talent and expand product features. The $1.6 million, a mix of debt and equity, was raised from Norrsken Accelerator, Kaleo Ventures, 54 Collective, P2Vest, and Afrinovation Ventures. Founded in 2023 by Justus Obaoye and Abdulazeez Ogunjobi, Billboxx aims to solve cash flow issues faced by SMEs that often struggle with long or delayed payment cycles from their larger enterprise partners. Billboxx invoice financing means SMEs can receive those advance payments before the clients pay, a crucial cashflow solution for any business. However, customers must first receive approval from their enterprise customers before payment is approved. BillBoxx charges up to 5% for invoice financing and 1.5% transaction fees for payments done on its platform. The company, which claims to which process ₦1 billion monthly also says it has no defaults. “We realised that every business we have interacted with had a lot of billing inefficiencies and cash flow problems. Some of them still do invoices manually or with Excel sheets,” said Obaoye. The startup, which primarily serves small to mid-sized businesses (SMEs), also offers other business banking services to help SMEs manage their finances more effectively. Billboxx claims its unique distribution model allows it to acquire SMEs through partnerships with larger enterprises on its roster. Billboxx serves businesses like Monument distillers, British America tobacco. Obaoye emphasises that the business differentiates itself by providing a solution tailored to small and medium-sized businesses, unlike competitors who focus more on mid-market to enterprise businesses. “We plan to become an operating system for SMEs in Africa,” Obaoye said. Billboxx plans to expand across Africa and will launch a new feature that will allow SMEs access new market opportunities within corporate ecosystems. Obaoye didn’t share further information about the feature.
Read MoreCBN fines Moniepoint and OPay ₦1 Billion each as Nigeria tightens fintech regulation
In a continuation of the Central Bank of Nigeria’s (CBN) increased scrutiny of fintech startups, two of the country’s most prominent unicorns, Moniepoint and OPay, were fined ₦1 billion each in the second quarter of 2024, sources with direct knowledge of the matter told TechCabal. While several other fintech companies were also penalized, the two firms were the largest hit. The penalties followed a routine CBN audit of the fintech sector, which revealed compliance issues. According to two sources familiar with the process, these regulatory checks are a standard procedure for banks and financial institutions under CBN oversight. At least four other fintech companies were similarly penalized, though the details of these fines remain unknown. OPay and Moniepoint issue 17 million Verve cards as Nigerian fintechs switch from Visa and Mastercard The CBN has increasingly relied on fines to enforce regulatory compliance. In 2023, Nigerian banks paid a combined ₦678 million in penalties. In October 2024, the central bank and the Securities and Exchange Commission (SEC) imposed a ₦1.5 billion fine on ten commercial banks, including Zenith and GTBank, for various infractions in the first half of the year. Until recently, Nigeria’s rapidly growing fintech sector largely operated with CBN interference. However, the rapid expansion of fintechs like OPay and Moniepoint, which now serve millions of users, has brought them under greater scrutiny. OPay, for instance, claims a customer base of around 40 million, while Moniepoint, which processed 5.2 billion transactions in 2023, does not disclose specific customer numbers but is similarly large. As these fintech giants have grown in influence, so too have concerns over their regulatory frameworks. A significant issue is that many fintechs, including OPay and Moniepoint, still operate under microfinance bank licenses. Originally intended to support micro, small, and medium enterprises, these licenses have allowed the companies to expand rapidly and service millions of customers. However, with that expansion has come heightened concern that the current licensing framework is inadequate to safeguard customers effectively, according to one source. Beyond licensing concerns, the CBN has also expressed concerns about the fintechs’ compliance with Know Your Customer (KYC) processes. In April 2024, the central bank imposed a two-month ban on customer onboarding for several fintech companies, including Kuda Bank and Palmpay, citing non-compliance with KYC standards. The ban forced fintechs to overhaul their onboarding procedures and commit to improving their compliance measures. Moniepoint declined to comment on any part of this story. “We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions,” OPay said in a statement to TechCabal. “These claims are entirely false.” The Central Bank of Nigeria did not immediately respond to a request for comments.
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Next Wave: How East Africa’s regulatory environment is suffocating startups
Next Wave: How East Africa’s regulatory environment is suffocating startups Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner First published 08 Dec 2024 From Nairobi’s Silicon Savannah to Kampala’s burgeoning tech startup scene, the East African region has become a hub of innovation, attracting VC investors and creating solutions that address local challenges. For instance, Kenyan startups, in 2024, secured over $1 billion in venture funding, outpacing other countries on the continent. These investments, however, are being hindered by a stifling regulatory environment. Local founders have often found themselves crushed under the weight of unpredictable regulatory agencies and excessive bureaucratic red tape. In 2023, a barrage of regulatory challenges including high taxes and licensing issues led to the collapse of Kenyan logistics startup Sendy. Over in Tanzania, e-commerce giant Jumia was forced to shut down in 2022 after it struggled to comply with tax regulations. For every successful startup story, other ventures have collapsed—not due to a lack of talent or ideas, but because of barriers imposed by existing laws. And things don’t look like they’re speeding up anytime soon. Next Wave continues after this ad. PalmPay is a leading fintech platform focused on driving economic empowerment across Africa. Trusted by over 35 million Nigerians and 1.1 million businesses. Start enjoying a 99.9% transaction success rate with Palmpay. Sign up here. In June 2024, the Central Bank of Kenya promised to change local laws to allow the licensing of fintechs, but little has been done, condemning startups to uncertainty with no sight to an end. The existence of multiple regulatory bodies, each with its own licensing requirements is a pervasive challenge. Take Kenya as an example: founders may need to get clearance from the Communications Authority of Kenya (CA), the Central Bank of Kenya (CBK), the Capital Markets Authority (CMA), and the Kenya Revenue Authority (KRA), among others—all of which can take years. The overlapping—and often conflicting—requirements create confusion and additional costs for startups. Even with a war chest and the right talent, navigating the legal environment in East Africa is no walk in the park. The time it takes to obtain a license for a startup is prohibitively long. In some countries like Kenya and Tanzania, acquiring all necessary permits can take more than a year. Chipper Cash, Flutterwave and other fintechs have been trying to get licenses from CBK for close to five years. In Uganda, acquiring a financial service provider license can take up to six months, during which time startups cannot operate legally. The delays in licensing lead to lost revenue and missed opportunities. Next Wave continues after this ad. FANDF Consultancy hosts a FREE webinar to help immigrants and Africans, “Land Six-Figure Tech Careers in 2025.” Led by Dr Fin. Dittimi (Experienced trainer, PhD in AI/ML), the 60-min event will equip you with secure lucrative tech roles to earn more! No coding skills required! SECURE YOUR SPOT Local startups lack the financial muscle to meet the high compliance costs in East Africa. For example, the new data protection laws in Kenya require companies to hire a data protection officer, a requirement that most startups cannot afford. The strict compliance audits and the high legal fees add to the companies’ financial burden. The pervasive culture of corruption among government officials worsens these challenges faced by entrepreneurs, forcing VCs to seek other markets. East African governments are notorious for abrupt policy changes, proving difficult for most tech startups. Unpredictability in tax laws and licensing in Kenya, Uganda and Tanzania has created an unstable business environment, discouraging both local and foreign investors. Investors are often wary of regulatory uncertainty. Sudden policy shifts and inconsistent enforcement of laws erode investor confidence, diverting funding to other countries perceived as more business-friendly. East African governments must adopt policies that support the thriving startup ecosystem. East African countries should prioritise harmonizing regulations across member states to foster innovation. Despite the slow progress in the region, Rwanda has consistently ranked high on the World Bank’s ease of doing business index, helped by streamlined regulations and ease in starting and operating a business. It has also offered tax incentives and reduced corporate taxes to attract investors. Adonijah Ndege Senior Reporter, TechCabal. We’d love to hear from you Psst! Down here! Thanks for reading today’s Next Wave. Please share. Or subscribe if someone shared it to you here for free to get fresh perspectives on the progress of digital innovation in Africa every Sunday. As always feel free to email a reply or response to this essay. I enjoy reading those emails a lot. TC Daily newsletter is out daily (Mon – Fri): Brief of all the technology and business stories you need to know. Get it in your inbox each weekday at 7 AM (WAT). Follow TechCabal on Twitter, Instagram, Facebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa. If you liked this edition of Next Wave, please share with your friends. And feel free to reply with thoughts and feedback. We welcome those. 18, Nnobi Street, Surulere, Lagos, Nigeria View in Map You received this email because you signed up on our website or made purchase from us.If you know longer wish to recieve these emails, please unsubscribe
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👨🏿🚀TechCabal Daily – Kenyan banks to lower lending rates
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! OpenAI has had a busy year shipping generative AI products faster than we can keep count. It has finally released Sora, its AI video generation tool which launched internally in February, to the public. Sora is OpenAI’s promise to generate hyper-realistic short videos with simple prompts. The tool is now available to ChatGPT Pro subscribers—which costs $200. But European countries will have to wait a little longer to get access to Sora. Kenyan banks to lower lending rates NITDA warns against phishing malware Pan African Towers appoints Oladipo Badru as acting CEO World Wide Web 3 Opportunities Banking Kenyan banks agree to lower commercial lending rates Image source: TechCabal On December 5, the Central Bank of Kenya (CBK) lowered its benchmark interest rate by 75 basis points from 12% to 11.25%—a decision that the CBK governor Kamau Thugge attributed to the inflation rate slowdown in Kenya. This was the third successive time that the apex bank had lowered rates after cuts in August and October. Despite these cuts, commercial banks have been slow to lower their lending rate, which is still high at an average 17.15%. This has frustrated the Central Bank’s efforts to stimulate borrowing activities in the country to encourage economic growth. “All we are asking is for banks to be fair and to act in the same way that they were quick to raise lending rates when the policy rate was increasing and the treasury rates were increasing,” Thugge said. Over the last few months, the prices of goods and services have dropped in Kenya—which has prompted a stable inflation rate. When prices drop, people and businesses can spend less on goods and have more confidence to borrow money for other needs like investment. While the high rates of these commercial banks have discouraged consumer borrowing, commercial banks also have a cogent reason for their hike. Non-performing loans (NPLs), which is a metric that measures how much of the loans lenders are able to recover, hit a multi-decade high of 15.5% in April 2024. As of October 2024, the rate has accelerated to 16.5%. To compare the rallying rates, the CBK reported in Q4 2023 that the industry’s gross NPL ratio was 14.8%. NPL ratio quickens when borrowers struggle to repay their loans—which brings the situation full circle to the state of the economy. As a result of all these compounding issues, private sector lending in Kenya has since slowed. The good news is that banks, through the Kenya Bankers Association (KBA) which has 43 member banks, have now responded to CBK’s directive to lower lending rates. Kenyan banks will start easing their lending rates in December 2024 to mirror the Central Bank’s rates. However, they will only do so “progressively” to cushion themselves from the financial shock that will likely arise from dropping rates and dealing with the loan losses. Read About Moniepoint’s Impact on Pharmacies Do you remember what you bought the last time you visited a pharmacy? Data from Moniepoint’s pharmacy case study reveals it was likely a painkiller. Click here to discover how Moniepoint is enabling access to healthcare through payments and funding for community pharmacies. Cybersecurity NITDA warns against phishing malware Image Source: News Central TV Cyber fraud and identity theft are usually rampant in December. This is when retail customers, who are the targets of identity theft, are most vulnerable. During the December holidays, people shop more, spend more, and are often in a hurry. This makes it easier for scammers to trick them. Many people buy things online, where fake websites and deals are common. People are also distracted and may not notice something wrong with phishing links. All of this gives fraudsters a better chance to steal money or personal information which they can use to commit fraudulent acts with the identities they obtain. It is common to see a lot of warnings urging people to be careful during this period. Blowing the first whistle, the National Information Technology Development Agency (NITDA) has warned retail banking customers to be careful of a malware called Grandoreiro, which targets unsuspecting victims through phishing links. Grandoreiro is a Brazilian banking trojan which allows threat actors to steal your personal information by bypassing the security measures of your banking apps, once they gain access to your phone. It has been active since 2016 and has now spread globally, with Africa recently joining the list. Fraudsters who use Grandoreiro typically send an email to banking customers that resembles the ones they typically receive from their banks. The email contains a PDF file, which when opened, redirects you to the malicious webpage. Once the victim downloads the malware, the trojan instantly locks itself into the user’s banking apps and payload, and steals their personal information. Babatunde Olofin, the Managing Director of Moniepoint, a Nigerian fintech, has also warned users against sharing their bank accounts publicly, citing that their information can be stolen. As cyber activities peak this period, it is important for users to protect their identities and banking information to avoid falling victims to cyber fraud. Get Fincra’s Embedded Finance and BaaS Report 2024 for FREE Fincra in collaboration with The Paypers have released the Embedded Finance and Banking-as-a-Service Report 2024. This report examines the key challenges and innovative solutions defining the future of seamless cross-border payments and remittances across the continent, among other topics, with key experts. Get this valuable, free resource today! Telco Pan African Towers picks Oladipo Badru for acting CEO Oladipo Badru, Pan African Towers Acting CEO/Image Source: TechCabalPan African Towers (PAT) has switched things up at the top, appointing Oladipo Badru as its new acting CEO after Azeez Amida, former CEO, decided to pursue “other opportunities.” Badru, who traded his chief financial officer (CFO) position for the CEO hot seat in November 2024, now has the task of ensuring PAT remains upright—like its 764 telecom towers. The company is looking to expand its assets as well.
Read MorePan African Towers appoints Oladipo Badru as acting CEO
Pan African Towers, a Nigerian telecommunications infrastructure provider serving 9mobile and Spectranet, has appointed Oladipo Badru as the acting chief executive officer. He resumed in November 2024. Badru, who was previously the company’s Chief Financial Officer, succeeds Azeez Amida, who resigned after two and a half years as managing director and CEO to pursue other opportunities, the company said in a statement. Adefolarin Ogunsanya, chairman of Pan African Towers, acknowledged Amida’s contributions to the company’s growth, stating, ‘We wish him well in his future endeavors. Badru will work closely with the executive management team to ensure continuity, and we are confident in his leadership and commitment to our mission.’ With a new leadership in place, Pan African Towers aims to strengthen its position in the competitive telecom tower infrastructure market, which is currently dominated by IHS Towers, American Tower Corporation (ATC), and Helios Towers. PAT currently owns 764 active towers across Nigeria, serving more than 1,200 tenants, including mobile network operators (MNOs) and internet service providers (ISPs) like 9mobile, ntel, Bitflux, Spectranet, and Smile Communications. On November 27, PAT secured undisclosed funding from Development Partners International (DPI) and Verod Capital to accelerate its growth. The fund will help the company address Nigeria’s infrastructure gap, with plans to triple its tower footprint in the coming years. The company will also explore acquisitions and partnerships.
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