Bolt enters grocery delivery while others run for the door
Grocery delivery in Nairobi is a smaller market compared to food delivery. Few players, including supermarket chains like Naivas and Carrefour, have ventured into it with varying levels of success. The high cost of delivery — which can cost over KES 100 ($0.77) per delivery — makes it less appealing to most residents, who prefer buying affordable groceries from roadside stalls, popularly known as “vibandas.” However, residents in upscale neighbourhoods, where such stalls are scarce or unavailable, are the primary target customers for online grocery shopping. Bolt Kenya wants to tap into this business with Bolt Market. The product is integrated into its Bolt Food app. “The move is part of Bolt’s strategy to expand its services, grow its market share, and establish itself as a trusted platform for convenient, on-demand grocery delivery,” Bolt said in a statement in December 2024. Before COVID-19, in-person dining and in-store shopping were commonplace in Kenya, with online food and grocery purchases limited to early adopters in urban areas. The pandemic spurred a shift that forced retailers to adopt delivery models, partner with platforms, and innovate with options like same-day delivery, driven by consumer demand for convenience and safety. As of 2023, 9.3% of Kenyans shop for food and groceries online, projected to reach 16.7% or 10.5 million consumers by 2027 due to the demand for convenience and efficient delivery services. Bolt Market is a push to diversify Bolt’s services beyond ride-hailing and challenge established players in a market where speed and convenience are key. This tough market has forced out players such as Jumia Food, which ceased its food delivery business in Kenya and other African market due to unprofitability and stiff competition. Bolt Market believes it can do things differently but has adopted a cautious approach. Grocery delivery is a tough business with pain points such as high delivery costs that discourage price-sensitive customers and competition from rivals like supermarket chains (Naivas and Carrefour), Glovo, and Uber Eats. Bolt is currently offering Bolt Market in Nairobi’s upscale Kilimani area and targeting customers within a 10-kilometre radius of its store, including Upper Hill, South C and Riverside. Customers using the Bolt Food app can order groceries from 8:00 AM to 11:00 PM or schedule deliveries 24 hours in advance. Bolt is also offering free delivery within a 3-kilometre radius and discounts of up to 80% to attract customers. “The high demand for fast and convenient delivery services makes it an ideal location for a central delivery hub,” Edgar Kitur, Bolt Food’s General Manager told TechCabal. As part of the test, Bolt is offering free delivery within a 3-kilometre radius and discounts of up to 80% to navigate aggressive pricing and more affluent rivals. Bolt Market’s circumspect launch reflects the harsh realities of the logistics business in Kenya, where similar businesses have failed. With many consumers preferring affordable “vibandas,” the market is niche and relies on upscale areas where convenience and reliable service outweigh cost concerns. “Our average order value is between KES 300 ($2.32) and KES 38,000 ($293.78), varying by user to local pricing differences,” Kitur added, signifying an affinity for high-end customers. Thus, Bolt’s cautious launch in Kilimani is designed to gather data on service efficiency, customer satisfaction, and market viability before it can take the next step. “The Kilimani store will provide sufficient data to evaluate service efficiency, customer satisfaction, and market viability,” Kitur added. High delivery fees in Nairobi discourage many potential customers, especially outside high-end neighbourhoods, where a KES 100 ($0.77) delivery fee could buy a kilo of tomatoes. Joseph Makau, a frequent delivery app user, told TechCabal that customers who might consider grocery deliveries often prefer bundling groceries with other items from supermarkets. “I would rather do my monthly shopping with groceries on top from the supermarket instead of ordering groceries alone,” the same user said. “Carrefour doesn’t charge for deliveries for large orders. For small orders (capped at anything more than KES 1,000 ($7.73)), they charge KES 129 ($1) only,” Kariuki, another customer who uses rivals like Naivas and Carrefour interchangeably, told TechCabal. At least five customers who have used grocery delivery services once or twice told TechCabal that they liked ordering from home, comparing prices, and accessing personalised offers. However, some find delivery charges high, especially if they are far from stores. To address this, restaurants and retailers have since introduced same-day delivery, timed purchases, and buy-and-collect to expand choices and convenience. Bolt Market claims it has access to over 2,000 products, including fresh produce from local suppliers, household essentials, and beverages. While it did not specify partners, it sources groceries locally to ensure supply consistency, employs AI logistics for delivery optimisation, and enforces quality checks throughout. Bolt Market is also exploring new pricing strategies, such as discounts based on order size and distance, and hinted at future subscription plans to offer regular customers predictable pricing and cost savings. Subscription models benefit logistics firms by providing steady revenue and improving demand forecasting. “Indeed, while delivery costs are a major concern for customers, our platform addresses a wider array of operational challenges vital to the overall experience,” Kitur said. Expansion beyond Kilimani to estates like Parklands, Eastleigh, and Lavington is planned, with a later rollout outside Nairobi in the pipeline. However, there are no set timelines. For now, Bolt Market will use data from Kilimani to refine its service and determine customer response to pricing in a competitive and price-sensitive market. “As the service expands, we may also explore subscription plans for regular users,” Kitur hinted. Subscription models save customers money through discounts and predictable pricing. Logistics firms benefit from steady revenue and better demand forecasting. .
Read More
👨🏿🚀TechCabal Daily – Visa makes a point
In partnership with Lire en Français اقرأ هذا باللغة العربية TGIF Help us shape the future of African venture capital. 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. How Marasoft’s CEO paid employees with suspected fraudulent funds Visa invests in Moniepoint Funding tracker World Wide Web 3 Events Startups How Marasoft’s CEO paid employees with suspected fraudulent funds Image Source: Wunmi Eunice/TechCabal Imagine working tirelessly for two months without pay, only to watch your colleagues lose patience and halt work due to delayed salaries. Then, just as you think the ordeal might end, your boss finally sends the owed salaries—but the funds appear to come from suspected fraudulent transactions. This chaotic scenario became a reality for over 40 employees of Marasoft Pay, a Nigerian fintech startup founded by Emmanuel Marakwe-Ogu. The company, which operated without institutional funding, processed payments online for businesses and individuals in Kenya and Nigeria. Since Marasoft does not hold local licenses in Kenya, it relied on a Flutterwave wallet to process transactions—a common workaround for smaller startups seeking access to new markets and regulatory protection. However, on October 16, a glitch allowed a Marasoft account linked to Marakwe-Ogu’s phone and bank verification numbers (BVN) to withdraw funds exceeding the wallet’s balance. In a WhatsApp group, Marakwe-Ogu acknowledged controlling the account after employees questioned why their salaries were paid from an unfamiliar source rather than the company’s human resources account. That payment became the catalyst for what several employees describe as one of the most turbulent periods of their lives. Within weeks, resignations poured in as staff abandoned their posts. Efforts to maintain a unified stance crumbled when Marakwe-Ogu removed them from the company’s WhatsApp group. Many former employees remain locked out of their accounts and continue to grapple with the fallout. Despite everything, some affected Marasoft employees have returned to work for the startup. Muktar Oladunmade dives deeper 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. Funding Visa invests in Moniepoint Image Source: Moniepoint What is better than funding? More funding. Three months after Moniepoint raised its $110 million Series C funding to become Africa’s latest unicorn, the Nigerian fintech has a new investor: Visa. The global payments giant made a “strategic investment” in Moniepoint, which has built a successful business offering banking services to SMEs and individuals. That investment is around $10 million, according to TechCrunch. For Visa, this investment continues its signature move of strategically investing in promising African startups to expand its payment footprint. It made similar bets on other home-grown fintechs including Interswitch, Flutterwave, and Paystack. With the new funding, Moniepoint plans to focus on advancing contactless payments, widely seen as the next golden egg in the payments ecosystem. Moniepoint’s entry would mean more competition in the contactless payments space. Offering solutions from smartphone-based systems to software POS offerings, startups like CashAfrica, Nearpays, and Touch and Pay have entered the market. However, infrastructural challenges and other factors are slowing adoption rates. Moniepoint’s advantage lies in owning its proprietary technology for both cards and POS machines. This vertically integrated approach, combined with Visa’s expertise, could enable the company to scale quickly in the contactless payments market. With its position as one of the top three POS providers in Nigeria, Moniepoint also has a strong customer base to drive adoption. Beyond Nigeria, Moniepoint may be preparing to build its own contactless payments infrastructure to fuel expansion into other markets. The company has been in discussions to acquire Kenyan fintech Kopo Kopo. Entering Kenya with a robust contactless payments infrastructure could position Moniepoint as a formidable competitor in the region, where the demand for advanced payment systems is growing faster than in Nigeria. As Moniepoint aggressively builds out its payments infrastructure, the fintech seems poised to establish itself as a leader in the contactless payments space. Still, it will face stiff competition from rival PalmPay, the fintech arm of popular OEM company Transsion, which also has ambitions in this fast-evolving market. What’s it like to work as an engineer at Paystack? Paystack’s engineering team builds simple, powerful tools to connect African businesses to customers. Learn more → TC Insights Funding Tracker Image source: Stephen Agwaibor/TechCabal This week, South African insurtech startup Naked secured $38 million in a Series B extension funding round, marking the largest investment in Africa’s insurtech sector. The round was led by global impact investor BlueOrchard, with participation from existing backers Hollard, Yellowwoods, the IFC, and DEG. (January 22) Here are other deals for the week: Nigerian fintech company Moniepoint secured $10 million from Visa, bringing its Series C raise to more than $120 million. (January 23) Egyptian fintech MoneyHash raised $5.2 million in a pre-Series A funding round. Flourish Ventures led the round, with participation fromSaudi Vision Ventures, Arab Bank’s Xelerate Fund, and Emurgo Kepple Ventures. Angel investor Jason Gardner, founder and former CEO of Marqeta, also joined the round alongside existing investors such as COTU, RZM Investment, and Tom Preston-Werner. (January 21) MazaoHub Agclimate Ltd, a Tanzanian agri-tech startup, secured undisclosed funding from the Livelihood Impact Fund. (January 21) CommunityWolf, a South African AI startup, received undisclosed early-stage funding from The Baobab Network. (January 22) Ugandan fintech Flow Global secured an undisclosed equity investment from Inua Capital (January 22) Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. Before you go, read our predictions on what to expect in African tech in 2025. Click this link to read it. CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $103,920 + 2.20% + 5.91% Ether $3,301 + 2.83% – 5.30% XRP $3.12 – 0.12%
Read MoreHow Nigerian fintech Marasoft paid salaries with suspected fraudulent funds, trigerring account freezes and employee anguish
In October 2024, employees at Marasoft Pay, a Nigerian fintech founded by Emmanuel Marakwe-Ogu, experienced what seemed like a long-awaited resolution: payment of two months of overdue salaries. But their relief was short-lived. Within days of receiving their payments, employees were stunned to discover that their accounts—along with the accounts of those they had sent money to—were frozen. The funds, they learned, had been traced to a suspected fraudulent source, according to six former employees who spoke with TechCabal on condition of anonymity for fear of retaliation. Marasoft Pay, which operates in Kenya and Nigeria, allows businesses and individuals to collect payments via its platform. However, because it does not hold local licenses in Kenya, it processes transactions through a Flutterwave wallet which it has used since 2022. Kenyan court documents showed that Marasoft was one of the fintechs that deposited over $55 million into Flutterwave in 2022. “Marasoft Pay is not a partner of Flutterwave but a customer. It was a business that processed payments through Flutterwave,” Flutterwave told TechCabal. Smaller fintechs typically process payments through licensed fintechs, as banks do not onboard unlicensed fintechs. The series of unfortunate events began on October 16, 2024, when a glitch allowed Marasoft access to more funds than it had in the wallet, enabling the company to withdraw over ₦84 million ($54,000). According to transaction records seen by TechCabal, CEO Marakwe-Ogu initiated 102 withdrawals from the account within 12 hours, each linked to his phone number and bank verification number (BVN). The timing of the glitch could not have been more fortuitous: it came a week after employees stopped working due to growing frustration over unpaid salaries. While the company paused operations on October 10, it continued to process transactions. Between October 16 and 17, Marakwe-Ogu paid ₦35 million in overdue salaries directly from the Flutterwave wallet. In a WhatsApp chat with employees seen by TechCabal, Marakwe-Ogu admitted to using his company account to pay salaries after employees noticed that the payments did not come from the human resources account. Employees were right to be worried. Days after receiving salary payments, their accounts were frozen, and over 40 workers began a legal battle to unfreeze their funds. “Unfortunately, we are unable to lift the PND (post no debit) on the account at this time. The funds deposited into your account have been traced to a fraudulent merchant, and investigations are currently ongoing,” read an email from a senior customer experience associate at Flutterwave to a former Marasoft employee. After paying employees from the Flutterwave wallet, Marakwe-Ogu transferred ₦49 million to various accounts through payment processors like Transact Pay, a European fintech that generates virtual accounts, to a VFD Bank account he controlled, complicating retrieval efforts, according to account statements seen by TechCabal. A week later, on October 24, TransactPay sent a recall request for ten transactions worth ₦19.3 million, copying former Marasoft employees. By then, several Marasoft employees’ accounts were frozen, and many were left scrambling for answers. While Marakwe-Ogu continued to tell employees that the restrictions were a mistake and would be lifted, he agreed to a five-month repayment plan with Flutterwave expiring in February 2025, a former employee with direct knowledge of the matter said. Flutterwave declined to comment on the repayment plan, citing confidentiality. “It went from a situation where we thought the salary payment was a temporary issue to one where it was clear this was deliberate,” said one former senior employee who asked not to be named discussing an ongoing issue. Marakwe-Ogu also requested a recall of the salaries through the Nigerian Inter-Bank Settlement Scheme (NIBSS) using Marasoft, an email seen by TechCabal showed. By November, it became clear that the situation was worsening, and employees began resigning. As the employees pushed for answers, he removed them from the company’s WhatsApp group and stopped taking their calls, complicating their efforts to get the restrictions lifted. “People believed in the company’s mission and endured two months of delayed payments. But this time, it became clear that it wasn’t just a minor issue—it was deliberate,” a former senior employee who asked not to be named for fear of reprisals told TechCabal. The fallout from the incident has been painful. One employee, whose account was blocked, was forced to borrow money from her father to refund her co-contributors in an esusu after her funds were frozen. “I was left in a very difficult situation. It was stressful for both my father and me,” she told TechCabal, asking not to be named so she could speak freely. Marasoft resumed operations in January and at least eight employees have returned to the fintech despite the frozen accounts and owed salaries. Marakwe-Ogu did not respond to requests for comments.
Read More
GITEX Global to hold 2025 Ai Everything event in February
GITEX Global, one of the world’s largest tech expo, will hold Ai Everything GLOBAL, its flagship event dedicated to discussing artificial intelligence and other emerging technologies, for the first time in two cities. The event will run from February 4–6, 2025 in Abu Dhabi and Dubai, attracting founders, investors, corporate innovators, and thought leaders. Over the past three years, AI has cemented itself as one of the most important emerging technologies globally, with nations and industries racing to lead the revolution. Now valued at $184 billion, the sector is experiencing explosive growth, driven by its applicability in finance, mobility, and e-commerce industries. Themed “Powering Global Collaborations in the New AI Economy,” the Ai Everything GLOBAL event will be a key platform for advancing conversations around AI’s growth and challenges. “The event promises the perfect setting to shape the future, hosting the most thought-provoking discussions around elite AI case studies, applied research use cases, policy debate, partnership creation, and acceleration of commercial application,” the organisers said in a statement. Participants at GITEX Global 2024. Image Source: GITEX Global. The Ai Everything GLOBAL event comes at a pivotal moment for AI as the sector is projected to nearly quintuple its market value by 2030, according to Statista. AI’s rapid growth is transforming industries worldwide, but it also brings critical challenges, including ethical use, fairness, and societal impact. This event serves as a platform for experts to address these pressing issues, share insights, and collaborate on innovative solutions. The event will also showcase real-world examples of AI at work. Ai Everything GLOBAL will highlight projects shaping the future. These examples will show how AI is helping industries solve problems and work more efficiently.
Read MoreVisa makes strategic investment in Nigerian unicorn Moniepoint
Moniepoint, the Nigerian fintech unicorn, has secured a strategic investment from the global payments giant Visa. This comes three months after Moniepoint raised $110 million in a Series C funding round that tripled the company’s valuation to hit the billion-dollar mark. This signals increasing interest in Moniepoint which many investors consider a solid company with bright prospects. Visa’s investment will help Moniepoint expand its services for African businesses. Founded in 2015, Moniepoint provides banking and payment services to small and medium businesses and retail banking. It is one of the market leaders in Nigeria’s agent banking space, with over 300,000 POS agents. The company processed 5.2 billion transactions in 2023. This partnership combines Moniepoint’s local expertise and innovative business model with Visa’s global resources and capabilities. “Visa’s backing is a strong endorsement of our vision to digitize and support African businesses at scale,” said Tosin Eniolorunda, Founder and Group CEO of Moniepoint. “We aim to deepen financial inclusion, enabling SMEs to access the tools and resources they need to thrive in an increasingly digital economy.” Visa joins other Moniepoint’s investors including Development Partners International, Google’s Africa Investment Fund, Verod Capital, Lightrock, QED Investors, Novastar Ventures, British International Investment (BII), FMO (the Dutch entrepreneurial development bank), Global Ventures and Endeavor Catalyst. “Moniepoint has built an impressive platform that directly addresses the needs of Africa’s SMEs, a critical segment in enabling economic development,” Andrew Torre, Regional President, Central and Eastern Europe, Middle East and Africa at Visa, added.”By making financial services and digital payments more accessible and efficient, Moniepoint is helping transform how businesses operate in Nigeria and beyond. We are excited to support their next phase of growth and innovation.”
Read More
👨🏿🚀TechCabal Daily – Kenya newest Act
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. NCC’s 50% tariff increase sparks mixed reactions SeamlessHR explored a PaidHR acquisition Is Kenya’s Startup Bill fit to regulate the nascent startup ecosystem? World Wide Web 3 Events Telecoms NCC’s 50% tariff increase sparks mixed reactions Image Source: TechCabal After 11 years of back-and-forth debates, Nigeria’s telecom regulator, the Nigerian Communications Commission (NCC), finally gave telecom operators a 50% tariff hike—about half of what they’d been dreaming of. It’s like asking for a full buffet and being handed a sandwich. Calls, SMS, and internet bundles are about to get pricier, but not so much that you’ll need a loan to stay connected (yet). Operators can tweak prices within the ₦6.40 ($0.0041) to ₦50 ($0.032) range set way back in 2013 when the naira still had some dignity. The new rates roll out next week, so if you’re due for a recharge, now’s your chance to save a bit. Industry bigwigs like Tony Izuagbe Emoekpere (ATCON) and Gbenga Adebayo (ALTON) welcomed the move but politely reminded everyone that higher tariffs won’t magically fix multiple taxation, neglected infrastructure, or the maze that is right-of-way approvals. With inflation zooming past 33% and operational costs up 120%, operators like MTN and Airtel are just trying to keep their heads above water. The NCC hopes this hike will help them invest in better services, but industry players are already eyeing full deregulation. “Let the market decide!” they cry, likely while clutching their spreadsheets. Meanwhile, the NCC promises to keep an eye on service quality because nothing says “progress” like paying more for a slightly improved internet speed. Welcome to the future of telecom—where survival meets comedy. 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 SeamlessHR explored a PaidHR acquisition Image Source: SeamlessHR Mergers and acquisitions are as old as commerce itself and have been used in business to consolidate market positions, drive growth, and eliminate competition. A case in point is Nigeria’s HR tech space, which has become ultra-competitive with new players entering the market. In 2022, SeamlessHR, a Nigerian leading HR tech software company, tried to acquire PaidHR, a competitor in the space. At the time PaidHR barely made the news and was only processing ₦2.7 billion ($18.5 million) in salaries. The acquisitions talk stalled at the time. Fast forward to late 2024 after SeamlessHR had raised a $9 million Series A extension, the startup again explored acquiring PaidHR. This time PaidHR had grown rapidly and had processed ₦11 billion ($77 million) in the past year. PaidHR was also heavily investing in its cross border technology, which allowed its clients to pay their staff in several countries. The cross-border payroll feature was seen as a key reason why SeamlessHR wanted to acquire PaidHR. However, the talks didn’t progress into a formal acquisition. Typically, a formal acquisition offer involves sendingan indication of interest (IOI), while informal talks often occur without paperwork. No formal IOI was ever presented in this case. While SeamlessHR acquisition talks may not have progressed into an acquisition, industry stakeholders claim that Nigeria’s HR tech space is ripe for consolidation. According to one HR tech salesman, only about 2000 Nigerian businesses can afford HR tech software. Investors argue that the HR tech opportunities in sub-Saharan Africa are not as significant compared to sectors like fintech or e-commerce. They believe the ecosystem would benefit more from a few larger companies capable of delivering high-quality services, rather than numerous smaller ones that might struggle to scale. What’s it like to work as an engineer at Paystack? Paystack’s engineering team builds simple, powerful tools to connect African businesses to customers. Learn more → Regulation Is Kenya’s Startup Bill fit to regulate the nascent startup ecosystem? A general view shows the Senate chambers. IMAGE | REUTERS/Monicah Mwangi Kenya has passed its Startup Bill, which mandates startups to allocate 15% of their expenses to research and development (R&D), and maintain 100% Kenyan ownership to qualify for government support. The bill could become law if President Ruto signs it. While the intent to promote local ownership and innovation is clear, critics argue the execution may stifle the very growth it seeks to achieve. Though Kenya is a leading African tech hub, its ecosystem is still maturing, with fewer big names and a majority of growth-stage startups struggling to scale. Globally, startups typically allocate 10–15% of their budgets to R&D, but early-stage firms often spend less, prioritising survival over research. For many Kenyan startups operating on limited resources, the mandated 15% could stretch budgets too thin, forcing cutbacks in other crucial areas like hiring or marketing. The 100% Kenyan ownership requirement is even more contentious. Kenya’s tech ecosystem owes much of its success to the blend of local expertise and foreign partnerships. Most of Kenya’s thriving startups have flourished by combining local insights with international capital and networks. Restricting foreign ownership could deter investment, limit collaboration, and slow the cross-pollination of ideas that have driven Kenya’s reputation as an innovation hub. Kenya could consider a flexible approach that offers tiered R&D investment targets based on companies’ sizes or stages, and allow for partial foreign ownership. Regulating an evolving sector is a tough balancing act. It requires care; otherwise, you could risk losing long years’ worth of work in a moment. CRYPTO TRACKER The World Wide Web3 Source: Coin Name Current Value Day Month Bitcoin $101,945 – 3.52% + 7.95% Ether $3,204 – 3.85% – 6.20%
Read MoreNavigating the evolving regulatory landscape of cross-border payments in Africa
This article was contributed by Robert Sargsian, Co-founder/CEO at Due, and Omotesele Esekhaigbe, Compliance and Risk Manager (MLRO) at Zone as part of the Emerging Trends in Cross-Border Payments: A Growth Guide for Stakeholders report authored by Aroghene Favour Ndulu and Paschal Okeke. The regulatory ecosystem in Africa has many challenges, especially for cross-border payments. While the continent is experiencing rapid growth in digital financial solutions, the regulatory environment remains challenging for businesses and payment service providers. One apparent barrier is that Africa’s regulatory environment is highly fragmented, with each country enforcing its unique compliance requirements. This fragmentation cuts across policies, licences, and anti-money laundering (AML) regulations. This lack of harmonisation complicates efforts to create unified cross-border payment solutions. For instance, what qualifies as compliant in one nation or state might fail to meet the standards of another, forcing payment providers to adapt their operations country by country, multiplying their compliance costs. Another barrier in Africa today is a lack of a clear regulatory framework for stablecoins/digital assets. Regulatory clarity creates a much more streamlined and transparent ecosystem. We see some progress in South Africa in that direction, where the regulator and banks are open to digital assets/stablecoins use cases. Capital controls and restrictive foreign exchange policies- Many African countries impose strict capital controls and FX regulations to manage currency volatility and protect local economies. However, these restrictions make it difficult to transfer funds across borders, particularly in hard currencies like the US dollar or Euro. This creates bottlenecks for businesses needing to make international payments or manage cross-border investments. For instance, Nigeria has historically imposed FX controls that limit foreign currency availability, affecting businesses’ ability to conduct international transactions smoothly. Influencing policymaking Stakeholders, including payment service providers, regulators, and regional organisations, can influence policies to streamline cross-border payments in four ways: Advocate for harmonised regulations: Stakeholders can collaborate with regional economic blocs, such as the Economic Community of West African States (ECOWAS) and the Common Market for Eastern and Southern Africa (COMESA), to advocate for standardised payment regulations. A pertinent example is the Single Euro Payments Area (SEPA) in Europe, which harmonised payment systems across 36 countries, enabling cross-border euro transactions to be as straightforward as domestic ones. Public-private partnerships for improved financial infrastructure: Public-private partnerships (PPPs) can help build real-time payment systems, such as Nigeria’s NIBSS Instant Payment (NIP) platform, which processes millions of transactions daily in seconds. These partnerships can also create policies that encourage cross-border trade and investment. For example, the collaboration between the World Bank and several African countries under the “Regional Payments Integration Initiative” aims to improve interoperability between national payment systems, making cross-border transactions faster and cheaper. Engage with central banks to ease currency controls: By collaborating with central banks, stakeholders can advocate for policies that ease restrictive currency exchange rules and improve liquidity. For example, the Monetary Authority of Singapore (MAS) has partnered with industry players to develop Project Ubin. This blockchain-based cross-border payment system simplifies multi-currency payments while ensuring compliance. Similar innovations could address currency barriers in emerging markets like Africa. Build great products: Building great products, people love and are ready to push their authorities for. For example, consider how Uber has used its user base to push politicians in San Francisco to drop the anti-ride-hailing regulations. Challenges of multiple regulatory frameworks Each jurisdiction’s different regulatory requirements demand substantial financial and human resources. This fragmentation increases operational complexity and escalates compliance costs. Non-compliance can lead to severe penalties. In July 2024, Nigeria fined Meta $220 million for violating its local data and consumer laws. Another challenge is delays. Securing multiple licenses for similar activities across different regions can be time-consuming and redundant. This duplication often delays market entry, hindering a company’s ability to capitalise on growth opportunities. In emerging markets like Africa, licensing processes are further complicated by bureaucratic inefficiencies and unclear timelines, making it challenging for businesses. Data privacy laws and cross-border payment solutions In Nigeria, there has already been a rising need for compliance professionals in Fintechs. We’re seeing tech companies hire established compliance hires from traditional banks. This move was inspired by the attempt of central banks to derisk digital transactions. Laws like the Nigeria Data Protection Act and emerging frameworks like Kenya’s Data Protection Act demand solid compliance mechanisms. Providers operating across multiple regions must develop adaptable systems that meet these requirements without compromising efficiency. Some jurisdictions now mandate that specific categories of data be stored within their borders. Nigeria’s data protection law emphasises data residency, while India has proposed similar requirements. These demands can increase operational costs as companies invest in localised data centres and infrastructure to comply. Efforts to harmonise privacy laws across regions could reduce the compliance burden on payment providers. The African Continental Free Trade Area (AfCFTA) includes discussions on aligning data protection policies to facilitate smoother digital trade. Such initiatives could spur innovation and encourage more players to provide cross-border payments. Managing FX risks in cross-border transactions Fast settlements: The biggest unlock for FX risk management is fast settlements. If you can settle fast, then the time exposure you take the FX for can be limited. Stablecoins allow for a much faster settlement, almost instant, which is going to push down the spreads a lot in all markets. Hedging strategies: Using instruments such as forward contracts, options, and swaps to hedge against currency fluctuations. These tools allow companies to lock in exchange rates, reducing their vulnerability to market volatility. Forward contracts can provide certainty in cash flow management by ensuring a fixed rate for future transactions. Real-time FX monitoring: Advanced technology, such as APls, can monitor currency movements in real-time, providing valuable insights into market trends. Online FX monitoring platforms can help businesses make timely and informed decisions, minimising the impact of unfavourable exchange rate shifts. Use derivatives: This is one strategy that is currently being underutilised. For instance perpetual, when taking FX exposure, you can simultaneously hedge it on a perps market. This is not practiced that often in
Read MoreKey telecom executives say Nigeria’s tariff hike insufficient to address challenges
After 11 years of negotiations, the Nigerian Communications Commission (NCC) approved a 50% tariff hike in telecom services like calls, SMS, and internet bundles. While the decision is a step forward in addressing the sector’s financial strains, industry players say it’s only a partial win—falling short of the 100% hike they had long lobbied for. The 50% hike will not solve the sector’s challenges, including underfunded infrastructure and rising operational costs. Under the new policy, operators can adjust prices within the established tariff bands of ₦6.40 to ₦50, as outlined in the NCC’s 2013 Cost Study. While Monday’s announcement did not state when the new rates would take effect, an MTN executive confirmed to TechCabal that the increase would be rolled out in a week. Subscribers who recharge before the new tariffs are implemented or have ongoing data plans will not experience immediate price hikes unless they make new purchases. While the adjustment helps bridge the gap between operational costs and revenues, it does not fully address the broader issues plaguing the sector. “Tariff adjustment is a step towards bridging the gap between operational costs and revenues, but it does not fully address our need for a 100% increase. However, we understand this is a move in the right direction,” said Tony Izuagbe Emoekpere, President of the Association of Telecommunications Operators of Nigeria (ATCON). “This adjustment will help operators invest in infrastructure, expand coverage, and improve service quality.” Gbenga Adebayo, President of the Association of Licensed Telecommunications Operators of Nigeria (ALTON), said the tariff increase is just one part of a broader agenda to ensure the sector’s sustainability. “Increasing tariffs was only part of the solution. We are grateful for the progress made, but we are taking it one step at a time,” he said. Industry stakeholders like Adebayo and Emoekpere believe addressing problems like multiple taxation, the protection of telecom infrastructure, and uniformity in the right of way for infrastructure are critical to improving service quality. “The focus should not only be on tariffs,” said Adebayo. “We need a holistic approach to improve the ecosystem—starting with the protection of telecom infrastructure through proper enforcement of the Critical National Infrastructure gazette.” The tariff hike will help major operators like MTN and Airtel manage their expenses and service debts, as operational costs have surged by 120%. The additional revenue will also be directed toward capital investments to enhance service quality. NCC Executive Vice Chairman Aminu Maida has given operators a three-month window to recover losses, after which the regulator will now focus on service quality improvements. “We remain committed to supporting Nigeria’s digital transformation agenda and driving inclusive growth,” said Karl Toriola, MTN Nigeria CEO. “This tariff adjustment will help us maintain the critical investments required to deliver high-quality services to Nigerians.” Nigeria’s broader economic challenges, including multiple currency devaluations, inflation, and the removal of fuel subsidies, have exacerbated the telecom industry’s financial pressures. In the last two decades, Nigeria has experienced four currency devaluations and two economic recessions, all of which have significantly impacted telecom operators’ operational costs.. At the time of Nigeria’s telecom liberalization in 2001, the naira exchanged at ₦104 to the dollar. By 2003, it had risen to ₦135, prompting the NCC to approve a tariff hike. By 2013, when the naira stabilized at ₦155, tariffs were revised downward as the sector grew faster than headline inflation r. However, the current tariff structure has become increasingly unsustainable as the naira has fluctuated between ₦1,500 and ₦1,700 over the past year. Headline inflation has accelerated above 33% since October 2024, putting additional strain on telecom operators’ ability to meet rising costs. “What has happened over the years is compounded inflation and the devaluation of the naira, which has made production costs significantly higher than they used to be,” said a telecom CEO who asked not to be named for fear of suggesting bad faith around the negotiations. Many operators believe the long-term solution lies in fully deregulating the telecom sector, allowing prices to be determined by market forces rather than a centralized tariff system. Under the current regulatory framework, the Nigerian Communications Act of 2003 gives the NCC the authority to set price floors and ceilings for telecom services. For instance, the price floor for a one-minute call is ₦6.40, while the ceiling is ₦50. Operators can set their prices within this range but must seek NCC approval for any adjustments—a process that is often slow and restrictive. “The ideal solution would be to fully deregulate the telecom market and let tariffs be set by market forces,” said one senior telecom executive who asked not to be named so he could speak freely. “This would allow operators the flexibility to adjust prices in real-time to respond to economic conditions. However, such a move would require a comprehensive review of the Nigerian Communications Act.” Some have proposed an alternative solution: implementing a fixed approval timeline for any tariff hike. For example, operators would have 90 days to submit price changes, and if the NCC does not respond within that period, the proposed price changes would be considered approved.
Read MoreSeamlessHR informally explored PaidHR acquisition in 2024 as competition in HR-SaaS intensifies
After raising $9 million in a Series A extension round in late 2024, the Nigerian HR Software-as-a-service (SaaS) company SeamlessHR initiated informal discussions with competitor PaidHR about a possible acquisition, according to multiple sources familiar with the discussions. However, those early stage talks did not progress to a formal offer or agreement, the same people said. According to one person close to the discussions who requested anonymity due to the sensitive nature of the talks, SeamlessHR initiated those informal conversations in the fourth quarter of 2024 but was rebuffed. Typically, a formal acquisition offer involves sending an indication of interest (IOI), while informal talks often occur without paperwork. No formal IOI was ever presented in this case. Instead of focusing on acquisition opportunities, PaidHR has continued to focus on its aggressive growth trajectory. Since its 2020 launch, the company has rapidly expanded, offering key payroll and HR services to over 200 businesses, including major Nigerian firms such as Flutterwave, Oando, and Mavin Group. In 2023, it paid ₦11 billion ($77 million) in client salaries, a significant jump from ₦2.7 billion ($18.5 million) in 2022. The company has also invested heavily in cross-border payroll technology, which many view as a unique competitive advantage. The acquisition would have allowed SeamlessHR, founded in 2018, to consolidate its position in the fiercely competitive HR-tech space. A successful deal would have enabled SeamlessHR to absorb PaidHR’s customer base in a space where customer acquisition is expensive and switching costs are high. Both companies declined to comment on the matter. SeamlessHR confirmed, however, that no formal acquisition discussions took place. The Nigerian HR-tech sector has become increasingly fragmented, with companies like BizEdge, PaidHR, Motherboard, Bento Africa, NotchHR, and Ropay all vying for market share. This growing competition has made it more challenging for a clear market leader to emerge, but there have been notable developments in the space. PaidHR’s cross-border payroll system, which enables companies to pay employees in different countries using local currencies, has been a standout feature since its launch. Within 10 weeks of launch, it contributed 9% of PaidHR’s revenue, said a company executive who asked not to be named because they were not authorised to speak to the press. The cross-border capability is a key reason SeamlessHR reached out, the same person said. The feature would have complemented SeamlessHR’s product suite, including HR management, performance management, leave and payroll management, recruitment, and HR analytics. In addition, the broader HR-tech sector in Nigeria is increasingly seen as ripe for consolidation. With over 20 companies competing in a crowded market, industry experts believe the sector would benefit from reduced fragmentation. “The HR Payroll space will benefit from contraction,” said the CEO of one HR-SaaS startup who asked not to be named so he could speak freely. “The ecosystem is better served by a few larger companies that can deliver high-quality services, rather than many small ones that may struggle with scaling.” However, other industry stakeholders caution that sub-Saharan Africa’s HR-tech space may not yet be ready for consolidation. “Most players in the region are still in the early stages of product development,” said another HR-SaaS CEO, who also spoke anonymously. “For consolidation to succeed, companies need to have reached product maturity.” Deel’s acquisition of South Africa’s PaySpace was possible because the company had been in operation for over two decades, giving it the time to refine its product and establish a mature offering, the same person added.
Read MoreKenya’s startup bill mandates R&D investment, but ownership rule sparks concerns
Kenya’s Senate has passed the controversial 2022 Startup Bill, setting the stage for a transformative shift in the country’s burgeoning startup ecosystem. If President William Ruto signs the bill into law, it will mandate Kenyan startups to allocate at least 15% of their expenses to research and development (R&D) and maintain wholly Kenyan ownership to qualify for legal recognition and government support. The bill now awaits presidential assent. While the bill introduces a range of incentives—such as tax breaks, grants, incubation programmes, and credit guarantee schemes aimed at boosting innovation—it has sparked concerns, particularly around its requirement for wholly Kenyan ownership. Critics argue that the bill could stifle growth by excluding startups with foreign co-founders or foreign investors that do not meet the bill’s ownership criteria. Such startups, which have been a significant part of Kenya’s entrepreneurial rise, would be unable to access key benefits, limiting their growth potential. “An entity shall be eligible to be registered as a startup and for admission into an incubation programme if the entity is wholly owned by one or more citizens of Kenya and at least fifteen percent of the entity’s expenses can be attributed to research and development activities,” a section of the bill states. The bill’s critics warn that while the intent is positive, its rigid requirements could stymie the innovation it seeks to encourage. Many successful Kenyan startups have attracted significant foreign capital and have foreign founders or co-founders whose contributions and expertise have positioned Kenya as an African innovation hub. The bill’s local ownership mandate could exclude such startups, potentially undermining the country’s appeal as a magnet for international venture capital. Kenyan startups have attracted millions of dollars in VC funding over the last decade, highlighting the country’s growing appeal for investors. In 2024, the country’s startups raised $638 million (KES82.3 billion), according to a report by Africa the Big Deal. The 15% R&D expenditure mandate has been received more warmly as it aims to spur deeper innovation within the Kenyan startup ecosystem, encouraging founders to secure patents, register software, and engage in critical research—all vital for staying competitive globally. As Kenya’s startup sector matures, this requirement will push companies to prioritize long-term innovation and intellectual property. If President Willliam Ruto signs the bill into law, the Registrar of Startups will oversee startup operations, including research activities and tracking the flow of venture funding. While this oversight could improve accountability, it also raises questions about the burden of compliance for startups already dealing with tight budgets and complex business challenges. Steve Okoth, a tax director at BDO East Africa, described the 15% R&D requirement as a move to “institutionalise” innovation among founders and enhance “competitiveness” in the startup ecosystem. He argues that it would strain startups as most operate on thin margins and cannot prioritise cash flow for survival over discretionary spending like R&D. “This approach may be overly prescriptive. Startups are diverse, and their ability to innovate often depends on their specific industry, stage of development, and business model. A blanket mandate could be counterproductive,” Okoth said. “A more flexible, incentive-driven approach that accounts for the realities of Kenya’s startup ecosystem would be more effective in fostering sustainable innovation and growth.”
Read More