Airtel Money eats into M-PESA’s dominance in Kenya, doubling market share to 7.6%
Airtel Kenya’s mobile money service, Airtel Money, grew its market share from 2.9% to 7.6% in the year to September 2024. The growth was fuelled by free Airtel-to-Airtel transfers, lower fees than Safaricom’s M-PESA for sending money across networks, and cheaper withdrawal charges. Over the same period, M-PESA’s market share declined from 97.0% to 92.3%, with Airtel Money steadily eating into its dominance, once reaching 98%, according to the data by industry regulator the Communications Authority of Kenya (CA). With over 40 million mobile money users in Kenya, affordability has become a key factor for Kenyans when choosing how to transact. “Subscriptions to mobile money services increased from 39.8 million to 40.6 million, translating to a penetration rate of 78.9% during the reference period,” the CA said in a statement. In 2020, Airtel Money eliminated charges for Airtel-to-Airtel transfers in an attempt to grow its market share. Sending KES 1,000 ($7.7) to other networks costs KES 11 on Airtel Money, compared to M-PESA’s KES 13 ($0.093), while withdrawing the same amount costs KES 29 ($0.22) on Airtel Money—KES 2 less than M-PESA. Airtel Money has also expanded access points to address past concerns about its limited agent network. In 2024, it partnered with supermarket chain Naivas to increase its agent network. The Central Bank of Kenya (CBK) has pushed for full mobile money interoperability for unrestricted transactions across networks. While progress has been made—customers can send money between networks and make interoperable utility and business payments—agent interoperability remains unrealised, despite CBK’s pledge to implement it by 2024. This missing element, which would allow users to access services at any agent regardless of their provider, keeps the ecosystem incomplete and sustains the dominance of larger players like M-PESA. By September 2024, the overall mobile money agency network had grown to over 365,000 agents, up from 347,700. Airtel Money’s adoption has also been supported by CBK’s 2024 decision to increase the transaction daily limit cap from KES 300,000 ($2322) to KES 500,000 ($3870) to attract high-value customers and businesses. Customers can keep funds received from other wallets for over a week, eliminating the previous requirement to withdraw or have the money sent back to the sender.
Read MoreNigeria’s Central Bank orders NIBSS to debit banks over fraudulent transactions, tightening accountability
To curb fraud in the financial services sector, Nigeria’s Central Bank has directed the Nigeria Inter-Bank Settlement System (NIBSS) to debit the settlement accounts of commercial banks that receive fraud proceeds. The directive, effective January 2025, signals a shift towards greater accountability for banks, compelling them to tighten their fraud detection measures. According to multiple sources familiar with the matter, the new rule is part of the CBN’s efforts to hold banks and fintechs accountable for lapses in their transactin monitoring systems. Banks that fail to vet incoming transactions or detect fraudulent activity adequately will face instant debits once that activity is reported. This move is designed to encourage financial institutions to improve their Know Your Customer (KYC) and due diligence—areas the CBN has repeatedly highlighted as critical to safeguarding Nigeria’s financial ecosystem. “What this means is that banks and fintechs are now responsible for the money that comes to them,” said Adedeji Olowe, founder of Lendsqr. “This has always been the foundation of KYC, not just in Nigeria, but in every financial jurisdiction in the world.” The new directive has unofficially been in effect since December 2024 when a major bank lost ₦7 billion to fraud. NIBSS reportedly debited the settlement accounts of the fintech that received some of the proceeds of the funds without explanation, according to two fintech executives familiar with the matter who asked not to be named discussing the regulator’s actions. This comes as the CBN increased its scrutiny of fintechs over compliance issues in early 2024. NIBSS did not respond to a request for comments. The CBN did not respond to a request for comments. “The CBN is holding them [banks and fintechs] accountable this time around. If a bank allows a fraudulent transaction to pass through its system, it has to bear the consequences,” said one banker who asked not to be named due to the sensitive nature of the matter. Nigerian banks lost ₦42.6 billion to fraud in Q2 2024, according to a report by the Financial Institutions Training Centre (FITC). However, most financial institutions avoid reporting fraud incidents for fear of suffering reputational harm in a low-trust market. Only 60 of 163 financial institutions in Nigeria reported fraud cases in 2023, according to a NIBSS report. The new CBN directive is expected to generate significant ripples within Nigeria’s financial sector, with commercial banks likely to respond by implementing more rigorous controls on transactions. At least two commercial banks have tightened their monitoring of large or unusual transactions, according to people familiar with the matter who asked not to be named to speak freely. As the directive takes effect, its impact on reducing fraud in Nigeria’s financial sector will serve as a critical test for the CBN.
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Zenith Bank raises pay by 20% for nearly 10,000 employees to keep in step with tier-1 banks
Zenith Bank has raised the salaries of its nearly 10,000 staff by 20%, effective January 2025, as part of a wider industry trend to retain top talent amid Nigeria’s soaring inflation. The salary increase, confirmed by three employees who asked not to be named discussing a sensitive matter, follows similar moves by GTCO, Union Bank, First Bank, and Sterling Bank over the past six months. “In order to continue to motivate its staff and improve service delivery, Zenith Bank implemented a salary increment of between 20% – 30% involving all staff effective January 2025,” the bank told TechCabal via email. “The Bank also promoted well over 4000 staff on January 17, 2025. This exercise, which is still ongoing, has been described as one that involves the highest number of staff in one promotion in the industry.” With Nigeria’s high headline inflation, commercial banks are under pressure to keep their workforce motivated and prevent talent poaching. Though Nigerian banks employ around 94,000 people, retaining skilled professionals remains a challenge, as job-hopping is often seen as the quickest route to career advancement. Secrecy around salary structures is one way banks try to hold on to their employees, but salary increases by major players like Zenith often trigger a domino effect, forcing competitors to follow suit. The adjustments mean that executive trainees (ETs), previously earning ₦245,000 monthly, will now take home ₦294,000. Assistant banking officers (ABOs) on a ₦609,000 salary will see their pay rise to ₦730,800, and banking officers (BOs) on ₦800,000 will now earn ₦960,000. The 20% – 30% raise will mean a bigger wage bill for Zenith Bank. As of September 2024, the bank’s personnel expenses reached ₦97.496 billion, accounting for 22.86% of its overall expenses in the period under review. Zenith Bank has the second lowest wage bill among tier-1 commercial banks. GTBank, Nigeria’s cost-efficiency leader in commercial banking, spends the least on personnel expenses. It is an industry-wide response, prompting several tier-1 and tier-2 banks to review their compensation structures. In recent months, competitors Guaranty Trust Bank, Union Bank, and Sterling Bank have also announced salary adjustments, though percentages vary. It also suggests that these measures are not only a response to economic pressures but also a strategic effort to reduce the risk of employee attrition, particularly as skilled professionals seek better opportunities abroad.
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👨🏿🚀 TechCabal Daily – The zenith of raises
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning If you know a first-class or exceptional 2:1 graduate in Lagos, Nigeria looking to kickstart their journalism career, you should point them to The TechCabal Journalism Fellowship. Our promise to our fellows includes hands-on newsroom experience, mentorship from top journalists, a competitive stipend and full-time job opportunities. Sounds like you or someone you know? Then get started now. Zenith Bank raises $226 million from rights and public offer issuance UK’s Actis sells Java House to two Africa-focused private equity firms Meme Coins: Hype, Riches, or Risky Business? World Wide Web 3 Events Banking Zenith Bank raises $226 million from rights and public offer issuance Image Source: Stitch Ten months after Nigeria’s Central Bank raised minimum capital requirements, commercial banks are sprinting to meet the March 2026 deadline. A bank that will not be named told us about its slice of orange but still fell short of its capital needs, raising only ₦209 billion ($135 million) of its ₦369 billion ($238 million) target. But Zenith Bank, the tier-1 heavyweight with a market capitalisation of N1.56 Trillion, has no such worries. Per a Monday filing, it raised ₦350.46 billion ($226 million) from a rights issue and public offer that opened in August 2024. The rights issue and public offer were oversubscribed, helping the bank finish this big ask with time to spare. The bank plans to use all that cash to expand further into Africa and Europe because why dream small when you have all that money? Yet, it’s not the only bank swimming in cash. Access Bank was first to the recapitalisation finish line, raising ₦351 billion ($228 million) in December 2024. For other tier-1 banks, meeting the ₦500 billion ($321.5 million) target feels like a foregone conclusion, but smaller commercial banks, which need to raise ₦250 billion ($160.7 million) will face an uphill task. Will we see mergers and acquisitions just like in 2004? If your history is slightly rusty, capital requirements also saw Nigerian banks shrink from 89 to 25. The deadline might be one year away, but time flies when you’re trying to raise a boatload of money. So, expect to see some action in Nigeria’s banking sector this year. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. M&As UK’s Actis sells Java House to two Africa-focused private equity firms Image Source: Kenyan Wallstreet Java House, the largest coffee chain in East Africa, is again changing ownership. London-based private equity firm Actis is selling the business to two Africa-focused investment firms: Alterra Capital and Phatisa Group. This marks the fourth sale of the coffee chain in just 12 years, reflecting its enduring buy value that still appeals to investors. Since 2023, Actis has reportedly been looking for buyers for Java House and several suitors—like Mauritius PE firm Adenia Partners—have long circled around with offers. The sale finally went to Alterra and Phatisa for an undisclosed amount, with the deal expected to be finalised by the end of January 2025. Alterra will hold the majority stake, while Phatisa will take a smaller share but maintain control rights. Java House, which began as a single coffee shop in Nairobi in 1999, has grown to over 80 branches across Kenya, Uganda, and Rwanda. The group also operates other well-known brands, including Planet Yogurt and 360 Degrees Pizza. Multiple ownership changes have shaped its journey. Emerging Capital Partners acquired the chain in 2012 and fueled its expansion: it expanded into Uganda in 2014. The following year, there were talks to expand the business to Nigeria, but this didn’t work out. In 2017, Dubai-based Abraaj Group acquired it in a deal reportedly worth over $100 million. After Abraaj’s financial collapse, Actis took over in 2019—at a time when Actis was actively buying African businesses in growth markets like retail, telecoms, education, and renewable energy. Actis has raised $25 billion since its inception. It raises money from family offices, development financial institutions (DFIs), sovereign wealth funds, endowments, and pension funds to invest in these growth markets. To date, Actis has invested in 40 ventures and exited 34. The Java House exit is another day in business for the PE firm. Yet, the sale to Alterra and Phatisa presents a new chapter for the coffee business. Both firms are committed to scaling African businesses, with Alterra focusing on sectors like food and hospitality and Phatisa specialising in the food value chain. Their partnership could breathe fresh life into Java House’s operations and expand its market presence. As Java House transitions to new hands, its legacy as a pioneer in East Africa’s coffee culture remains intact. The deal could pave the way for further growth, securing its status as a household name in the region. Cryptocurrency Meme Coins: Hype, Riches, or Risky Business? Image source: Wunmi Eunice/TechCabal Meme coins like $TRUMP are flooding social media, luring investors with promises of quick riches and skyrocketing gains. But are they worth the gamble, or just fleeting internet trends? Take $TRUMP, for instance. At its peak, this politically branded meme coin saw trading activity that pushed 20% of its value to $14 billion in a single day. But just a week later, its price plummeted from $75.35 to $42.80, leaving many late investors counting losses. Driven by internet culture and the fear of missing out (FOMO), meme coins often gain value through buzz rather than substance. One tweet from a celebrity can send prices soaring—or crashing just as fast. Yet the risks are real: some everyday users have watched their savings vanish, while seasoned traders admit to losing hundreds of dollars on coins like Saylor Coin. With regulatory scrutiny increasing and scams like “rug pulls” becoming more common, navigating the meme coin market requires more than luck. Should you take the plunge, or is
Read MoreMade a fortune from $TRUMP? Should you buy meme coins?
Meme coins like $TRUMP are dominating social media feeds, promising quick riches and skyrocketing gains. But are they worth the gamble, or are they just fleeting internet trends? Meme coins are a type of cryptocurrency driven largely by internet culture, memes, and social media hype. Unlike Bitcoin or Ethereum, which are built on robust technologies and have clear use cases, meme coins typically have little to no real-world utility. Their value comes from buzz, not substance. From Dogecoin to $TRUMP The story begins with Dogecoin, a cryptocurrency born as a joke in 2013. What started as a parody of Bitcoin gained serious traction when online communities and later high-profile figures like Elon Musk embraced its charm. Dogecoin’s success sparked many imitators, including Shiba Inu and Floki Inu, and set the stage for meme coins like $TRUMP, which lean on political branding and viral marketing. As former Coinbase CTO Belaji Srinivansan said on a thread on X (formerly Twitter), meme coins operate as ‘zero-sum lottery.’’ Early investors reap the benefits, while those that join late are left holding assets that rapidly lose value. The dynamic makes meme coins both exciting and risky. Why do people keep investing in meme coins? The rise of memecoins can be attributed to internet trends, the excitement of making quick money, and how people think and act. These coins are like inside jokes on the internet that everyone can join in on. People buy them not just to make money but also to feel they are a part of something fun and trendy. What makes memecoins popular also makes them risky. Their value often depends on social media buzz, with platforms like X (formerly Twitter) playing a big role. A single tweet from a celebrity and influencer can make the price skyrocket or crash just as quickly. Take the $TRUMP coin for example. This meme coin used Donald Trump’s political brand to get attention. It saw massive trading activity, and 20% of it was worth $14 billion in just one day. But its value, on Wednesday, has dropped to $42.80, from its all time high of $75.35 recorded on January 19, showing how unstable the market can be. Another big factor is FOMO, or ‘the fear of missing out.’’ When people see others making money, they rush to invest without fully understanding the risks. Sometimes, this gamble works, but many end up losing a lot of money. This was the case for 24-year-old Tosin, who got into meme coins in 2022 by trading a coin called Freecoin. “There was so much hype about it, and everyone around me was buying. I didn’t want to sit back while others were making generational wealth. So, I jumped in and bought a few units with my last cash,” he shared. Tosin invested about ₦5,000, but the value of Freecoin plummeted, leaving him with no profits. “Buying when a meme coin is trending is always a bad idea,” he said. Ater the launch of the $TRUMP coin, 25-year-old Sandra Ubochi, a crypto trader with five years of experience, decided to invest in another meme coin called Saylor Coin. “I put in $500, expecting to make at least $2,000, but things didn’t go as planned. The value dropped so much that it fell below $1,” she explained. Should you buy meme coins? The question of whether to invest in memecoins boils down to your risk tolerance and understanding of the crypto market. Experienced crypto traders can make quick profits from memecoins by riding short-term trends. But for most people they are a risky bet. Without proper research and a clear plan for when to buy or sell, the potential losses can outweigh the gains. Memecoins like $TRUMP show both the excitement and danger of the crypto world. Some people strike it rich quickly, while others lose big. If you are thinking about investing, remember that success in this space isn’t about luck. It requires careful research, a skeptical mindset, and an understanding that the difference between making money and losing it can be razor-thin. Sandra views trading meme coins as a fun activity, without expecting major profits. “Only trade money you can afford to lose, and make sure you understand how the market works before getting involved,” she advises. For potential investors, the takeaway is clear: approach memecoins with caution, knowledge and willingness to accept losses. Whether they are a fleeting trend or a lasting part of a crypto culture, memecoins like $TRUMP remind us of the thin line between opportunity and risk in the digital age. The celebrity effect Celebrity endorsements play a significant role in the rise of meme coins. Donald Trump’s $TRUMP coin is a prime example. Launched amid significant online buzz, it drew immediate attention and trading activity. Similarly, Afrobeat superstar Davido was tied to a hypothetical meme coin. In June 2024, TechCabal reported that the Nigerian Securities and Exchange Commission issued a disclaimer alert to investors regarding $DAVIDO coin backed and promoted by Davido. This was done after $Davido coin raced to a $10 million market capitalization just four hours after it launched. The celebrity effect cuts both ways. Public sentiment can shift rapidly if a celebrity distances themselves from a coin, its value can plummet, leaving investors at a loss. Celebrities like Kim Kardashian, who was fined in 2022 by the U.S. SEC for failing to disclose compensations for promoting cryptocurrencies. Regulatory and legal concerns Meme coins also present unique challenges for regulators. Unlike established cryptocurrencies, which are often designed with clear purposes, meme coins exist in an obscure legal space. The U.S. Securities and Exchange Commission (SEC) has indicated that some meme coins may qualify as securities under the Howey Test (a rule set by the U.S. Supreme Court to figure out if a deal is an investment contract. If it is, the deal is considered a security), subjecting issuers to potential lawsuits and penalties. Anti-money laundering (AML) compliance and Know Your Customer (KYC) requirements add another dimension to scrutiny, as meme coins often
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Cross-border payments: Building products and services with excellent customer experience
This article was contributed by Nimide Fala, Vice President of Client Experience at Zest, and Eytan Messika, Co-founder at Nilos as part of the Emerging Trends in Cross-Border Payments: A Growth Guide for Stakeholders report authored by Aroghene Favour Ndulu and Paschal Okeke. For African businesses and consumers, cross-border payment solutions must nail four critical things: speed, affordability, accessibility, and reliability. Small businesses need cash flow, so they want instant payments. Imagine an SME importing fabrics from China. If payments are delayed, goods get stuck, and cash flow suffers. Freelancers face the same issue when waiting on international payments. Affordability can’t be ignored. High fees are a dealbreaker for most. Businesses, especially SMEs, operate on tight margins, so every dollar counts. They want affordable solutions with clear, transparent fees and no hidden surprises. A couple of fintech platforms are solving this by reducing transaction costs and offering predictable exchange rates, which makes life easier for businesses. Accessibility is crucial. Not everyone has access to traditional banks; mobile money is often the go-to method in Africa. Solutions must work where businesses and consumers are, whether through mobile wallets, bank transfers, or local agents. M-Pesa is a great example. It’s made sending and receiving payments simple, even for micro-businesses in rural areas. Trust is everything. Businesses and consumers need to know their money is safe, the process is secure, and payments will arrive on time, with no errors and no headaches. Fintech platforms can tackle this by investing in fraud prevention and real-time tracking so users can confidently send payments. Solutions that get these basics enable growth, build trust, and make cross-border payments more seamless. Improving speed and transparency The solution is brutal simplicity. Most providers try to build complex systems, but the winners will be those who ruthlessly eliminate steps. Think early Amazon: one-click ordering worked because it removed friction. African payments need their “one-click” moment. Bring blockchain into the picture. Blockchain improves speed and solves the “black hole” problem, where businesses wonder, “Where’s my money?” It creates a transparent, shared ledger that shows every transfer step. Transparency also means communication. Real-time tracking, such as when monitoring a package, builds confidence. Send instant updates through email or an in-app so users know exactly where their payment is and when it will arrive. Providers must work with local banks, mobile money platforms, and regional systems to move payments quickly. A global network means nothing if it can’t reach the last mile. Onafriq is a great example; it has connected directly with mobile wallets across Africa, ensuring payments arrive even in remote areas. Pain points of SMES in cross-border payments The biggest pain isn’t technical – it’s uncertainty. SMEs can’t predict when they’ll get paid or what it’ll cost. This unpredictability kills growth. It’s similar to what kills most startups: not running out of money, but running out of confidence about money. Payments that take days to clear disrupt cash flow, supplier relationships, and customer experience. SMEs don’t have the luxury of waiting. They need funds to move quickly and stay competitive and agile. Understanding customer preferences East Africa is the heartland of mobile money, led by pioneers like M-Pesa in Kenya and Tanzania. Mobile wallets are king for customers here because they’re fast, accessible, and don’t rely on traditional banks. Businesses and consumers often prioritise tools that integrate with these platforms seamlessly. For example, a Kenyan merchant receiving payments from Uganda will likely prefer M-Pesa-integrated solutions over bank transfers because they are quicker and more widely trusted. The mobile money infrastructure in East Africa is well established, and even small vendors in rural areas use it daily. Volume of mobile money transactions in Africa in 2020 to 2022 (in billions), by region Source: Statistica Bank transfers dominate in West Africa, particularly Nigeria. The region relies more on banks than East Africa, and fintech solutions are often designed to integrate with existing banking systems. However, cash remains significant for many informal businesses. Southern Africa, particularly South Africa, shows a mix of preferences. Businesses and consumers use digital wallets, bank transfers, and card payments. Platforms like Ozow and PayFast are popular for their focus on seamless digital payments, while traditional bank transfers remain relevant for larger transactions. Southern Africa has higher banking penetration and a tech-savvy population comfortable with digital wallets and online platforms. Francophone Africa leans heavily on regional solutions like GIM-UEMOA {the interbank payment network) and local digital platforms like Orange Money. Customers here prioritise solutions that work across the West African Economic and Monetary Union {WAEMU), where the CFA Franc is shared. A business in Senegal paying a supplier in Cote d’Ivoire will often prefer platforms like Wave or Orange Money for cross-border transfers because they’re fast, affordable, and tailored for the region. Regional integration and shared currency make it easier to adopt localised solutions. Meanwhile, North Africa, Egypt, and Morocco, particularly, rely heavily on bank transfers and the growing use of digital wallets. With strong trade ties to Europe, businesses prefer solutions that bridge local systems with international banking, while younger consumers are driving digital adoption forward. Product and service localisation in cross-border payments Product adoption happens faster when providers tailor their solutions to local realities like language, currency, and preferred payment methods. A platform might have great features, but if it’s not available in the local language, it becomes a barrier. Constant currency conversions and reliance on US dollars add friction and costs. When businesses can pay and get paid in their local currency, it simplifies operations, cuts costs, and builds confidence to transact globally. It is also crucial to integrate local payment options to ease customer adaptability. The best localisation is about fitting into existing behaviour patterns. M-PESA succeeded because it matched how Kenyans already handled money. That’s the key: build around existing behaviours, don’t try to change them. You can read the full report here. __________________ Nimide Fala is the Vice President of Client Experience at Zest, a fintech subsidiary of Stanbic IBTC Holdings. She is passionate
Read MoreGates Foundation-backed i3 to invest $1.6 million in 15 African healthtech startups
Investing in Innovation Africa (i3), a Gates Foundation-backed group of donors, pharmaceutical manufacturers and African government institutions will invest $1.6 million in 15 healthtech startups across the continent. The initiative will give $50,000 equity free grants to ten early stage startups and up to $225,000 each to five early stage startups who are solving problems in healthcare delivery, pharmacy services, and product distribution. Now in its third cohort, i3 will select early-stage startups that have a proven product-market fit and annual revenues exceeding $10,000, while growth-stage companies must demonstrate national-level operations and revenues of at least $500,000. This comes amid a decline in venture capital funding in Africa. Healthtech startups have received the smallest chunk of funding in the past year. They raised $42.2 million in the first half of 2024—-about 6.5% of the total fund raised. Funded by global healthcare heavyweights including the Gates Foundation and Sanofi’s Global Health Unit, i3 will provide 15 African startups with a mix of financial, market, and partnership support to improved access to healthcare. “With the right resources, African-led companies can scale commercially while reaching underserved communities,” said Dr. Uchenna Igbokwe, CEO of SCIDaR, which coordinates i3 alongside Salient Advisory. Since its launch in 2021, i3 has invested $3 million in 60 startups across 16 African countries. In its second cohort, i3 funded 29 startups, including Nigerian startups Wella Health, Famasi, and Healthtracka, with a $50,000 equity-free grant. Beyond funding, i3 will provide startups strategic customer introductions, bespoke deal facilitation, and tailored partnership readiness support. The program also seeks to drive impact through over 150 strategic connections with healthcare organizations, aiming for $30 million in contracts while creating local jobs across Africa. Applications close on February 28, 2025, with selected startups to be announced on April 30. A virtual Q&A session on February 21 will address potential applicants’ questions.
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👨🏿🚀TechCabal Daily – Bento boxed in
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning If you’re a venture capitalist investing in Africa, take our short survey to share your insights on investment priorities, challenges, and predictions for 2025. Your input will contribute to a comprehensive analysis of the trends shaping Africa’s venture capital landscape. Take the survey now. South Africa’s Stitch acquires ExiPay Bento Africa faces LIRS & EFCC scrutiny amid tax scandal Tanzania will roll out a new currency next month Kenya receives credit rating upgrade World Wide Web 3 Events Startups South Africa’s Stitch acquires ExiPay Image Source: Stitch Twenty-seven days into 2025, and the M&A market is off to a brisk start. South African fintech startup Stitch has acquired payments startup ExiPay, marking the first major deal of the year. The acquisition allows Stitch to offer online and in-person payment solutions for large enterprises, giving it a stronger foothold in the enterprise sector. For pace, 2025 is faster than 2024, when the first big deal didn’t come until February—Carbon’s acquisition of Vella Finance. 2025’s early momentum suggests we might see more deals lining up faster this year. M&A lawyers, you’ve been warned: your calendar is about to get packed. Startups are waking up earlier, looking to acquire rather than build from scratch. Stitch CEO Kiaan Pillay made that clear in a call with TechCabal, explaining that building ExiPay’s in-person payment tech internally would’ve taken 18–24 months—slowing down their strategy to fill a crucial gap. By acquiring ExiPay, Stitch got the solution it needed, fast. It’s a strategy we’re seeing elsewhere, too. SeamlessHR, for instance, considered acquiring PaidHR twice to bolster its HR-tech offerings. With consolidation becoming the name of the game, startups are increasingly looking to acquire businesses that complement their existing products, not just build new ones. M&A isn’t just about growth; it’s about gaining competitive advantage. Whether it’s access to new tech, licences, or market share, acquisitions are becoming a core strategy for African tech companies eager to solidify their positions in a cutthroat market. A promising start for 2025—let’s see if the rest of the year can keep up. Bonus: How much did Stitch pay to acquire ExiPay? That’s not been disclosed, following a trend of African startups being shy about sharing how much things cost. Read about Stitch’s acquisition of ExiPay here. Collect payments Fincra anytime anywhere Are you dealing with the complexities of collecting payments in NGN, GHS or KES? Fincra’s payment gateway makes it easy to accept payments via cards, bank transfers, virtual accounts and mobile money. Get started now. Startups Bento Africa faces LIRS & EFCC scrutiny amid tax scandal Image Source: Bento If you were anywhere near Nigerian Twitter last week, you probably saw the explosive tweet from Hack Sultan, co-founder of edtech AltSchool, accusing HR-tech startup Bento Africa of only remitting 100 naira in taxes for employees—while collecting millions. The tweet went viral. Suddenly, Bento wasn’t just another HR payroll service in a sea of options; it was the topic. Old accusations against Bento resurfaced, showing that the issues date back to 2023. Yet, there’s a lot that’s not been shared or reported. Here’s an excerpt from our exclusive report this morning that shows just how serious the allegations against Bento are: “Bento Africa, a Nigerian technology HR startup founded in 2019, is facing allegations of failing to remit tax and pension payments on behalf of clients. The allegations, which are now being investigated by the Lagos Inland Revenue Service (LIRS) and the Economic and Financial Crimes Commission (EFCC), triggered a client exodus.” Bento’s CEO, Ebun Okubanjo, confirmed the investigations but insists the company is addressing the issues. He points to Nigeria’s “manual” tax remittance process as the culprit, explaining the delays were unintentional—and that these issues only affect “a small, vocal” percentage of Bento’s clients. But here’s the question: How did these issues go unnoticed for months? We’ve unpacked the issues here. Economy Tanzania to change its currency in February Image source: Shutterstock In October, Tanzania’s apex bank, the Bank of Tanzania (BoT) announced plans to introduce new notes. The bank told financial institutions that it was phasing out bank notes created between 1985 and 2003. In its memo to those banks, BoT said, “The deposit or exchange of old banknotes shall last for three months from 06 January. 2025 to 05 of April 2025 from which they shall cease to be a legal tender.” Last week, the bank announced that its new currency is now ready for circulation. The newly minted paper bills—TZS 1000 ($0.4) blueish bills, 2000 ($0.8) brown bills, 5000 ($2) violet bills, and 10000 ($4) red bills—will enter into circulation from February 1, according to BoT governor Emanuel Tutuba. The new currency comes with minimal design changes but improved security features and new appended signatories. The move comes as Tanzania seeks to combat counterfeit currency. This is not Tanzania’s first time is modernising its currency. In 2023, the BoT said it was working on a digital currency. At the time, the bank gave no time frame for when it would launch the digital currency but said it was exploring the issuance of different forms of CBDCs, including tokenised and account-based digital currency. Tanzania’s currency change follows Sudan’s recent currency change. In December 2025, the Sudanese government introduced new 500 ($0.20) and 1,000 ($0.50) banknotes as part of efforts to stabilize its war-torn economy. The move aimed to demonetise the old notes, rendering banknotes looted during the ongoing civil war worthless. Never miss an update from Paystack Subscribe to Paystack for a curated dose of product updates, insights, event invites and more. Subscribe here → Economy Kenya gets a positive credit rating from Moody’s Image source: Shutterstock Kenya has received a credit rating upgrade from Moody’s Investors Service, changing its outlook from negative to positive, signalling renewed confidence in Kenya’s ability to manage its debt and lower financial risks. Moody’s highlighted better debt affordability and reduced borrowing costs, which could help the government access funds
Read MoreBento Africa under investigation by LIRS and EFCC; CEO Okubanjo denies allegations
Bento Africa, a Nigerian technology HR startup founded in 2019, is facing allegations of failing to remit tax and pension payments on behalf of clients. The allegations, which are now being investigated by the Lagos Inland Revenue Service (LIRS) and the Economic and Financial Crimes Commission (EFCC), triggered a client exodus. High-profile clients like Moniepoint, Paystack, Kobo360, and Bamboo ditched Bento in 2024, according to multiple sources with direct knowledge of the matter. Two former clients who asked not to be named confirmed TechCabal that Bento is under investigation for allegedly forging tax receipts, delaying pension contributions, and other financial discrepancies. A former client also reported the company to the Economic and Financial Crimes Commission (EFCC) raising questions about Bento’s practices and the regulatory gaps in Nigeria’s growing HR-tech sector. Fuelmetrics, a digital inventory management company for petrol stations that used Bento, claims it incurred ₦50 million ($108,000) in unpaid taxes and pension contributions between 2023 and 2024. “[LIRS] made us understand that there is an ongoing investigation on Bento and that we are not the only company affected in this scam, dating from 2023 till date,” read an internal memo seen by TechCabal. On Friday, Akintunde Sultan, co-founder of edtech AltSchool, also publicly accused Bento of forging tax receipts and remitting ₦100 monthly after “collecting millions of naira in payments from startups.” Sultan’s allegation has added further pressure on Bento, suggesting the startup mismanaged pension and tax payments. Bento’s CEO and co-founder, Ebun Okubanjo, acknowledged that the company had received complaints from the LIRS regarding unpaid taxes and confirmed the company is working on a plan to settle outstanding tax obligations for affected clients. However, Okunbanjo insists that these discrepancies affect “a very small percentage of Bento users, who happen to be very vocal in the tech ecosystem.” While he declined to disclose the number of businesses Bento serves, the company reported over 900 enterprise users in 2021. He attributed the payment delays and discrepancies to the inherent limitations of Nigeria’s complex and outdated tax and pension systems. “A zero percent error rate is hard, maybe impossible,” Okubanjo wrote on LinkedIn. [Such discrepancies represent] “less than 1% of the taxes or pensions or remittances or salaries we have processed.” Nigeria’s HR-tech sector is largely unregulated, leaving significant gaps in oversight and accountability. As a result, underpayments or failed remittances can be attributed to systemic inefficiencies rather than deliberate malfeasance, allowing companies to sidestep liability by blaming technical or operational challenges. A former Bento employee, who asked not to be named for fear of retaliation, claimed CEO Okubanjo intentionally delayed pension and tax payments despite client funds being available. Internal documents reviewed by TechCabal showed instances where payments were delayed for up to ten months. Okunbanjo attributed payment delays to the manual nature of the process and insisted that missed payments are made immediately they’re brought to the company’s attention. Despite his rebuttals, there are significant concerns about Bento’s internal processes and its ability to manage client funds in a timely and transparent manner. As part of plans to solve the reconciliation errors, Okubanjo claimed Bento and other HR tech players unsuccessfully lobbied for a direct API integration with Nigeria’s tax and pension systems. Despite Bento and Okubanjo’s stringent denials, industry experts and former clients remain skeptical. “It is uncommon to hear of payment glitches that last a calendar year,” said a HR-SaaS expert, who asked to not be named so they could speak freely. Okubanjo’s past fuels some of the scepticism. In 2023, he was accused of creating a toxic workplace and briefly stepped aside as CEO. In a 2020 viral video, he berated a customer who complained of poor services at his gym. The payment delays and ensuing legal issues have cost Bento some business, with prominent clients like Paystack and Helium Health ditching the company in 2024. Okunbanjo downplayed these departures, suggesting Bento’s strategic shift towards traditional businesses is a deliberate move to reduce reliance on venture-backed startups, which are vulnerable to funding downturns. He also claimed that small and medium enterprises (SMEs) are better clients, as they typically require fewer new features and are less expensive to retain. Despite the challenges, Okunbanjo claims Bento is profitable, processing about ₦4-5 billion ($2.6 million) in monthly salaries with around ₦24 million ($15,871) in monthly revenue. How late payments go undetected Several cultural and systemic factors allow these issues to go undetected for months. The design of payroll applications makes users assume taxes and pensions are remitted digitally. But on the backend, Bento manually initiates these payments through a bank. This process can result in delays of weeks or even months. Because employees receive timely salary payments and corresponding bank alerts, neither they nor their employers typically notice the discrepancies in tax and pension remittances. This can persist as long as salary payments continue uninterrupted. Additionally, employees often show little interest in actively monitoring their pensions, assuming the funds would be eroded by inflation. A lax tax culture and distrust in government institutions also contributed to a lack of scrutiny in the tax remittance process. Okubanjo claimed that only a handful of clients request regular short-term records for reconciliation. Conversely, some companies only requested audits and records when regulatory issues arose, often requiring years of data that were difficult and costly to compile. Okubanjo described these requests as close to impossible for Bento’s lean team to fulfill, citing the extensive manual effort required to gather receipts from Pension Fund Administrators (PFAs) across different states. This lack of long-term documentation triggered Kobo360, one of Bento’s prominent startup clients, to lodge a complaint with the Economic and Financial Crimes Commission (EFCC). A former HR manager at Kobo360 who asked not to be named as they were not authorised to speak on the matter, recounted discovering missing pension payment receipts only after an employee requested pension documents in September 2023. The former HR manager claimed Bento obstructed the EFCC investigation by refusing to provide records of the company’s pension throughout the five
Read MoreSouth African fintech Stitch acquires ExiPay to expand into in-person payments
Stitch, a South African fintech startup that provides online payments infrastructure for large enterprises, has acquired ExiPay, a startup that offers in-person payment solutions for retail businesses. The acquisition, for an undisclosed amount, will allow Stitch to integrate online and in-person payments into one platform, making it easier for businesses to track payments across different channels. This move expands Stitch’s product offerings, allowing it to provide an omnichannel payment solution that combines online and in-person payment capabilities for its enterprise customers. The acquisition is a direct response to the growing demand for integrated payment solutions in South Africa’s retail market, where the gap between online and in-person payment systems remains significant. Stitch has integrated ExiPay’s six-person team into its operations, rebranding the service as “Stitch In-person payments.” Stitch will sell this new service to existing clients, including major corporations like Bash, MTN, Cell C, and MultiChoice. “The in-person payments space has not been disrupted for enterprises,” said Stitch CEO Kiaan Pillay. ”Many players are doing this for smaller businesses in the market, but no one is tackling this for enterprises; it was the big reason we wanted to do this.” Stitch’s decision to acquire ExiPay rather than partner with larger in-person payment providers reflects the company’s desire to retain control over its technology stack. According to Pillay, building a similar solution in-house would have taken 18 to 24 months, delaying the company’s strategy to offer a unified payment platform. Founded in 2022 by Derek Keats and Willem Büchner, ExiPay allows physical stores to accept in-person payments through point-of-sale (POS) terminals. The company claimed it was processing R2 million ($106,000) in daily transactions in 2023. In 2024, it received €5.4 million ($5.6 million) in private cash-to-equity funding from Izwe Africa, a fintech group that provides credit to small businesses in Ghana, Kenya, and Zambia. “This deal is attractive for both ExiPay and Stitch investors. We are sitting under one roof,” Pillay added. Founded in 2019, Stitch has raised $52 million in funding, expanded into Nigeria, and has previously spoken of plans to expand into Kenya, Ghana, and Egypt.
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