Exclusive: Eyowo denies reports of a shutdown as it lays off 13 employees
Digital bank Eyowo has denied the reports claiming that it is shutting down on June 27. The CEO and founder confirmed that instead, the firm is decommissioning a product and letting go of about 11% of its employees. The Softcom-owned digital bank Eyowo has denied reports of a shutdown. Earlier today, TechNext published a news report claiming that Eyowo will shut down on June 27. A screenshot of an Eyowo email to employees accompanied the report. The email referenced an upcoming round of layoffs. Part of the email also said, “We are wrapping up Softcom and Eyowo as you know it.” Despite the email’s phrasing, Eyowo told TechCabal that it is not shutting down. The company’s executives clarified that the company is decommissioning a product—Kwiksell, a retail management tool and has let go of employees whose roles have consequently become redundant. The CEO of Eyowo, Omoseindemi Olobayo, speaking to TechCabal, confirmed that they sent emails to employees about significant changes at Eyowo. He, however, claimed that the news reports making the rounds misinterpreted the email. “The company is indeed letting go of employees, but the number is 13 out of the current workforce of 110,” Seinde said. The email published by TechNext read, “We are wrapping up Softcom and Eyowo as you know it. This means all our processes, procedures, responsibilities, and departments have now been dissolved.” Olobayo explained to TechCabal, “The company as an entity is not dissolving but evolving into a different kind of business and mindset.” The CEO Yomi added, “We started out as an enterprise-focused company, but we have been evolving into a retail business that offers entrepreneurs and individuals a roadmap for their money. Today, we stepped into a new phase, which requires changing our enterprise DNA to a retail-focused DNA.” The company confirmed that although the email mentioned dissolving departments, they are letting go of thirteen employees out of the 110 currently working there. “We are decommissioning a product, and that means some roles will no longer be needed. Additionally, when we mentioned dissolving departments in the email, it signifies that the team will no longer work in silos but will function in a closer and more integrated manner.” *This is a developing story
Read MoreDespite new rules, Nigerian banks aren’t asking customers for social media handles yet
New rules from the Central Bank of Nigeria (CBN) say that financial institutions should collect and verify the social media handles of customers. The banks seem unsure of how to go about it. Last week, the Central Bank of Nigeria (CBN) introduced the Customer Due Diligence Regulation 2023. According to the new regulations, banks will now collect customers’ social media handles as part of the Know Your Customer (KYC) process. However, several banks told TechCabal that they are waiting on further clarification from the CBN before they begin to implement the guidelines. While some banks said that they are waiting on an official memo from the regulator, others said that they are currently deliberating on how to implement the new regulation. “There has to be a stakeholder engagement between the bank and the customers, then a memo would be issued out to compliance officers in regions on implementation steps,” a Fidelity bank personnel told TechCabal. Concerns about the rules mandating identification on social media Per the regulation, the CBN requires social media handles as means of identification but also requires institutions to monitor customers’ online activities, in certain cases, especially if a substantial portion of their business is conducted online. This has been received poorly by many Nigerians who have cited privacy, concerns. Yanuza, a Twitter user said, “We cannot watch silently as CBN goes after the very core of our digital rights which is our privacy by harvesting and linking our social media footprints to our accounts.” The Socio-Economic Rights and Accountability Project (SERAP) has also threatened to sue the CBN. Questions have also arisen regarding the reliability of individuals’ online personas as reliable data for financial institutions. While social media activity is increasingly acknowledged in legal proceedings, users can create fake profiles, manipulate images, impersonate others, and make false claims about their financial status. Moreover, fraudulent businesses operate on social media, posing as legitimate entities. However, the CBN thinks that financial institutions can better assess the customers for potential risks associated with money laundering, and terrorism financing. Moreover, the new requirements do not take into account Nigeria’s low internet penetration which makes social media platforms a luxury for many, unlike the previous one. In 2009, the CBN published anti-money laundering regulations that detailed KYC requirements but recognized that many individuals lacked formal means of identification due to financial constraints. To avoid inadvertently excluding the poor, in January 2013, the apex bank introduced a three-tiered KYC requirement that provided flexible opening requirements for low-value and medium-value account holders, with increasing requirements as transaction amounts escalated. This three-tiered KYC requirement is also referenced in the new regulation, albeit briefly. In Section 16 (2), the regulation states, “Financial institutions shall comply with Tiered KYC measures as stipulated in the CBN circulars on TKYC [tiered KYC] and the CBN AML, CFT and CPF Regulations.” However, it remains to be seen how the banks and financial institutions will comply with the new regulations. Previous circulars permit them to create internal processes for verifying the identities of customers who are genuinely unable to meet certain identification requirements. This new regulation does so too but mandates that such policies be brought for approval before implementation. So it is possible that just as email address— the only internet-based identity required then—was optional for lower tier bank accounts, the social media handles might also be an optional KYC requirement for customers of low socio-economic status who would otherwise be excluded from financial services.
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Lagos wants its innovation ecosystem to become a global leader
Africa’s tech startup ecosystem is experiencing rapid growth and attracting significant investments. Over the past two years, the number of tech startups in Africa has increased by 40%, while investments into the sector have surged from $1.3 billion in 2019 to $4.85 billion in 2022, reflecting investor confidence in the region’s potential. The rise of Lagos Amid this digital evolution, Lagos state has emerged as a frontrunner, capturing global attention and investor interest. “Lagos State is at the forefront of Africa’s digital transformation,” Governor Babajide Sanwo-Olu declared in his keynote address at the recently-concluded GITEX Africa. “This emphasises the region’s pivotal role in shaping the continent’s tech narrative with strategic initiatives to propel Lagos State’s tech ecosystem to unprecedented heights,” he added. According to Disrupt Africa, startups based in Lagos accounted for over 87% of total tech startup funding in Nigeria as of 2022, solidifying the city’s position as the epicentre of the country’s tech scene. In 2022, the startup ecosystem in Lagos is ranked 82 out of 100 globally, from 41 the previous year, according to StartupBlink Global Startup Ecosystem Index 2023. The ascendancy of Lagos as an African tech powerhouse can be attributed to two key factors. Firstly, the number of tech hubs in the city has grown from 10 to 85 in five years. These hubs provide a collaborative space for entrepreneurs, innovators, and investors. Secondly, Lagos boasts a large pool of tech talent, with 67% of Nigeria’s developers choosing to stay in the city, as reported by a survey conducted by DevCenter. This concentration of skilled professionals fuels the local industry and attracts investments from across the world. Building the future The Sanwo-Olu-led government of Lagos is seeking to consolidate the state’s status as the foremost tech ecosystem in Africa. One way the administration is doing this is through its equity-free investments in startups, and its support for R&D initiatives in tertiary institutions. Startups such as Farmz2u, a Techstars-backed agritech venture, WellaHealth, Pricepally and GIVO are beneficiaries of the Lagos State Science Research and Innovation Council (LASRIC) fund. Others include DOCi Healthcare, SolidLab, Adire Lounge, Celloop, Retreasure, Brickify, Scrapays, Amjurose, ThinkBikes, STEM METS, TeensCanCode, Terawork, SHIFA Technologies among others. The Science Research and Innovation Council has also driven and supported R&D projects with institutions like the University of Lagos, Lagos State University of Science & Technology, Yaba College of Technology and others. Some of the R&D projects include the use of Convolutional Neural Networks (CNNs) for viral load detection in medical images and the Conversion of Sargassum seaweed microalgae into multiple uses including alternative plastic replacement. According to Olatunbosun Alake, special adviser to the Lagos State governor on innovation and technology, the government has launched its own venture capital fund that is a fund of funds which will help derisk innovation funding at the very early stages for Nigerian startups. “The Lagos state government’s commitment to providing substantial support to the thriving startup ecosystem underscores its dedication to drive innovation and foster a favorable environment for entrepreneurial growth,” said Olatubosun. Lagos state is also focusing on cybersecurity, data privacy, and consumer protection to reinforce its role as a driving force for technological advancement across the continent. Lagos as a sub-national government is domesticating the Nigeria Startup Act and implementing supportive regulations. “We recognise the transformative power of the technology ecosystem and its ability to drive inclusive growth by injecting capital into the tech sector, propelling job creation, economic development, and unprecedented growth,” Sanwo-Olu emphasized. Removing obstacles However, as Lagos state embarks on its journey as a tech powerhouse, it faces significant challenges. Robust internet connectivity, reliable power infrastructure, and security, which are part of the pillars of a thriving digital economy, still need to be improved in Lagos. Given these existing infrastructural limitations, the government is confronting them head on. Over the past 24 months, Lagos State has been expanding on its Metrofibre Project: about 2900km of fibre optic cable has been deployed connecting multiple points of interest. A significant duct infrastructure has also been deployed to help derisk private sector investment in the internet connectivity market. This will increase internet connectivity to almost double digit rates in the coming years. “We are aware of the challenges we face regarding power and internet connectivity,” stated the Gov. Sanwo-Olu. “And we are actively working on improving these critical infrastructure elements to unlock the full potential of our tech ecosystem,” he added. Lagos state has also been at the forefront of the power sector reform. It helped push the national legislation for the decoupling of power from the federal government and on its own pushed its own power sector reform through the Lagos State House of Assembly. This will allow significant investment into the power sector in Lagos. The Lagos State Innovation MasterPlan also takes a comprehensive approach to addressing Innovation and Technology enablement in the State. The government aims to enhance the state’s tech ecosystem through infrastructure development, public-private partnerships, regulatory reforms, capacity building, and progress monitoring. Projections indicate that with sustained investments and infrastructure improvements, Lagos state’s digital economy will contribute about 40% to Nigeria’s GDP and increase job creation in the tech sector by 30%, according to Stears Insights. Lagos state’s journey towards reaching its digital economy ambitions is underway as it aims to lead Africa’s tech revolution by prioritizing digital policy initiatives.
Read MoreDespite Kenya’s central bank backing, mobile money rivals are no match for M-PESA
Kenya’s ICT services in Q3 2023 show a decrease in mobile money subscriptions, Safaricom’s dominance in the market, a rise in mobile and 5G subscriptions, and a higher penetration rate of feature phones over smartphones. Kenya’s ICT regulator, the Communications Authority (CA), has released interesting numbers that shed light on the country’s ICT services for the third quarter of its financial year (January to March 2023). The data is provided by different players in the industry, including mobile carriers and broadband providers, as per their license obligations. There is no beating M-PESA Mobile money subscriptions in Kenya decreased to 38.4 million in March 2023 from 38.6 million in the previous quarter. This represents a penetration rate of 76.0%, a 2.2% decrease from the previous quarter. The penetration rate decline is due to the decline in activities in mobile money services during the quarter under review. Safaricom’s M-PESA tops the mobile money market share at 96.5%. Airtel Money comes in second at just 3.4%, followed by Telkom Kenya’s T-Kash at 0.1%. Through the Central Bank of Kenya (CBK), the state has been trying to make the mobile money space fair for all mobile money services, but such activities have not favoured small players. M-PESA is a dominant player in the payment services market in Kenya. Although Safaricom vehemently denies it is dominant, M-PESA takes the lion’s share of payment services channels. These channels have since been made interoperable, but the biggest boost could arise from agency interoperability. This could allow customers to use Airtel Money and T-Kash more by accessing M-PESA’s vast agency network. Currently, there are over 331,000 registered mobile money agents in the country. Other numbers A jump in mobile subscriptions The number of active mobile SIM subscriptions in Kenya increased to 66.1 million in March 2023, up from 65.7 million in the previous quarter. This represents a mobile penetration rate of 130.5%, a drop of 2.6% from the previous quarter. The decrease in the penetration rate has been linked to the revision of the country’s population figures from 49.4 million to 50.6 million. Safaricom leads in subscriptions with over 43.7 million, followed by Airtel Kenya, Telkom Kenya, Equitel, and JTL at 17.6 million, 2.7 million, 1.5 million, and 368,250 SIM subscriptions, respectively. 5G numbers are growing The overall number of mobile data/internet subscriptions during the quarter reached 47.96 million. Of this figure, around 67.1% were explicitly for mobile broadband. It’s worth noting that the demand for faster Internet speeds has led to a continuous rise in mobile broadband adoption among consumers. Over 21.2 million subscriptions are accessing the internet via 4G, followed by 2G at 17.7 million. 3G is still prominent, with over 10.5 million subscriptions. The latest generation, 5G, has 373,573 subscriptions, a notable jump from 299,000 recorded in the previous quarter. Multiple companies now sell 5G-powered devices, including affordable Chinese brands such as Xiaomi, Samsung, and Apple. Safaricom is the only operator that offers 5G after commercially launching the service last October. It also offers 5G-specific data bundles with more data units than other bundles. Feature phones still rule The total number of mobile phone devices reached 62.96 million for the quarter under review. This translates to a device penetration rate of 124.5%, indicating more mobile phones than the total population. Further analysis reveals that the penetration rate for feature phones stood at 66.2% with over 33.4 million units, while for smartphones, it stood at 58.3% with 29.4 million handsets.
Read MoreEcobank taps Africa Union’s PAPSS system for cross-border transfers
The Pan African Payment and Settlement System (PAPPS), which was launched to make cross-border transactions seamless, has since onboarded over 25 commercial banks on its system since its launch by the African Union and the Afreximbank in 2022. The partnership with Ecobank could make adoption even easier. Ecobank Group and the Pan African Payment and Settlement System (PAPSS) have announced a partnership that will support cross-border transactions of the bank and its subsidiaries through PAPSS. The collaboration was announced at the 30th Afreximbank Annual Meeting in Accra, Ghana. For Ecobank Group CEO Jeremy Awori, “Partnerships such as the one we have signed on PAPSS are essential for the delivery and success of the AfCFTA and for our continent’s financial integration and economic development. We are committed to the success of PAPSS and are pleased to bring on board our payments and collections expertise from our African coverage of 33 markets.” “This partnership ensures that all partner banks and PAPSS can expand their reach rapidly and enable greater and wider intra-African trade. Today, we begin to change and rewrite the narrative of low intra-African trade by removing the barrier to efficient and instant payments and collections in African currencies,” Awori added. What is PAPSS, and why is it important? PAPSS is a pan-African payment system facilitating instant cross-border payments in local African currencies. It is a centralised platform that connects central banks, commercial banks, and other financial institutions across the continent. The platform was launched in January 2022 by the African Export-Import Bank (Afreximbank) and the African Union (AU). At launch, it was sold as a system that could reduce the cost and time of cross-border payments in Africa and boost intra-African trade. It has partnered with over 25 commercial banks since its launch and helps accelerates payment processing as a real-time gross settlement system. The system also boosts security compared to the current correspondent banking system, as it operates on a centralised platform governed by the AU and Afreximbank. At launch, PAPSS introduced a new settlement model called the Commercial Bank Settlement Model, which allows commercial banks to open and fund their settlement accounts at Afreximbank and manage their liquidity as per their banking requirements. The Ecobank angle Ecobank has a 33-subsidiary network on the continent, with several partnerships with individual banks in other countries. To this end, the partnership aims to allow traders from across continents to receive and send payments through the Ecobank network instantly. “Having the cooperation of Ecobank Group, one of the major banks in Africa, is a huge honour, but more importantly, it shows that PAPSS is the payment system that will transform the way that people in Africa conduct cross-border transactions. To this end, I appreciate the bank’s management for having faith in PAPSS,” said PAPSS CEO, Mike Ogbalu III. Not Ecobank’s first product in 2023 Earlier in May, Ecobank partnered with neobank platform Fingo App. The digital bank, accessed in Ecobank’s network in Africa, allows users to send funds to each other for free. It includes other features, such as utility payments. Fingo, launched in 2021, has since been licensed by the Central Bank of Kenya (CBK) and raised over $4 million in two rounds. It claims to be Kenya’s first digital bank, but that is inaccurate since NCBA launched NCBA Loop in 2017. Digital lender Branch has since joined the neobanking race in the country too.
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Next Wave: Questioning Africa’s booming tech event circus
Cet article est aussi disponible en français <!– In partnership with –> <!— –> First published 24 June 2023 Everyone wants to host the definitive “African tech event”, but what is the true value of an African tech event? One of the most fascinating things to watch has been the increasing number of tech events organised in or targeting Africa’s technology “ecosystem”. As the numbers continue to grow, the impromptu small group “mixers”, large multi-day multi-track conferences, even bigger exhibitions, plus the staid business and policy affairs are all blurring into each other. The African tech media circus is on a roll, and while I am not complaining, I can’t help but wonder if the generic versions of the same event format are not a sign that the newborn sector needs an infusion of inventiveness. Partner Message Calling technologists and creatives across Africa! Are you working on an innovative product that helps address disinformation and extremism challenges? If so, we want you to apply to the U.S.-West Africa Tech Challenge! The U.S.-West Africa Tech Challenge funds promising technologies that offer innovative solutions to help expose, understand, or counter disinformation, propaganda, and violent extremism within Coastal West Africa. We invite technologists from across Africa to submit an application to present their solutions for a chance to receive funding totaling $250,000 USD. The event will take place on September 27-28 2023 in Abidjan, Côte d’Ivoire. Eight finalists will have the opportunity to present their tech to a panel of judges and an audience of government, civil society, and private sector stakeholders. The deadline for submissions is July 16, 2023. To receive the full details of how to apply, click the button below: See application details The tech event “industry” is a significant several-billion-dollar market globally. In the days and weeks after COVID-19 was officially recognised as a global health emergency, tech event cancellations in the US alone reportedly caused losses of more than $1.1 billion. This was according to PredictHQ, a market intelligence firm focused on the business of events and adjacent industries. That a firm (and likely several others) could find a viable business model in predicting how events shape retail and B2B businesses is a testament to how much value events generate—at least in the United States. You could see the immediate result of the losses facing the events industry in how virtual event startups received massive bouts of venture and public funding as investors (both venture capitalists and in public markets) saw the billions of dollars events market as up for grabs. Zoom anyone? Unfortunately, it did not last even beyond the first year of the COVID-19 health emergency. Not all and randomly selected on a Sunday afternoon, please don’t be angry with us, if we missed something | Infographic: Ayomide Agbaje — TechCabal Insights. With digital technology penetrating all aspects of urban life, the idea of cities that are smart, where services and infrastructure are optimal for all residents, has taken hold. Especially when paired with technology solutions that are supposed to deliver this urban transformation. Slums have been reimagined in glowing utopian visions. Physical events are now on an upswing and Africa’s technology ecosystems, which received significant injections of capital in the three years following March 2020, are building their marketplaces of technology events. It is not new, it is just…a lot more and happening in more places than before. London, Paris, Dubai, Marrakech, Cape Town, Kigali, Lagos, Lusaka, Washington DC, heck I’ve seen African tech media being invited to Punjab (you may or may not see me rocking a dark green shalwar kameez in Lahore). The most recent events I have been part of were all first-time events and were excellent in their different ways. But for today’s Sunday essay, I would deeply appreciate responses from organisers (especially) and attendees. I happen to be on both sides. But I am one person and I don’t know it all and I have a responsibility to push the hard questions, no? So here are a few questions for you: Is there an actual events industry developing alongside or this is all just a sideshow? Let me explain. The business value of attending industry events, generally, is obvious. You get to meet people in person. That is often invaluable for a business and I understand that. But the more these events happen and are not differentiated, the more I question if the model (profit for organisers) is that valuable especially as more events resemble each other and are multiplying. Is there really a demand for and a deep-enough pocket for undifferentiated tech events happening throughout the year? If there is a growing demand for these events, that might be a proxy for learning how much business is generated by events. It sounds like data airlines and other types of travel/hospitality businesses will want to look into and use it to create custom packages. If there is not, the question is, how much do regionally disjointed events really help in fostering networking or connections? Or are the same set of people always seeing the same set of other people? If you’ve attended tech events (especially the conferences and exhibitions) in Africa, what were the top three things you looked forward to when deciding what event to be a part of? There is a school of thought that dismisses the overall value of attending events. I think it’s an incredibly short-sighted school of thought, especially when applied broadly and they got louder during the “focus on positive unit economics” era of venture capitalists, just a few months ago. And while there is merit to the argument that startup money is not supposed to fund tourism, one could just as easily dismiss the real chance to score new leads or even deals, find and nurture relationships. Or have the opportunity to do things as basic as increasing discoverability—especially for B2B firms. Partner Content: LiteUp Naija: Illuminating Nigeria with the power of the sun My point is not whether attending events can be
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👨🏿🚀TechCabal Daily – Nigerian banks to use social media for KYC
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy salary day Congratulations to all 25 African startups who got into Google’s Black Founders Fund. Ten of the grantees were from Nigeria, five from Kenya, and three from South Africa. Ghana, Uganda, Côte d’Ivoire, Rwanda, and Senegal each have one grant recipient, completing the list. We got a chance to speak to some of the startups including Herconomy and Fez Delivery, and here’s how the founders plan to leverage the opportunity. In today’s edition Nigerian banks to use social media for KYC Flutterwave enters 5-year deal with Microsoft TC Insights: The impact of internet shutdowns on Africa’s economy The World Wide Web3 Event: The Moonshot Conference Job openings Economy Nigerian banks to use social media for KYC It’s not “just Twitter” anymore. At least not in Nigeria. Last week, the Central Bank of Nigeria (CBN), released its Customer Due Diligence Regulations 2023 for all financial institutions under its regulatory purview. Under the new regulations, the apex bank has made it mandatory for all financial institutions to use social media handles for KYC operations. Side bar: KYC stands for know-your-customer and it’s the various processes all services use to verify the identities of their users. If you’ve ever had to verify your identity for an app by entering your national identity number, social security, phone number or email, then you’ve completed a KYC process. Now, Section 6(iv) of the CBN’s new regulations will make it so that banks have to ask users to confirm their identities using social media—platforms that already have poor and troubling KYC policies. The requirements cover both individuals and businesses, all of whom will need to provide social media handles moving forward. Business publication Nairametrics states that the new requirements come as the country recognises the growing importance of social media. A concerning move? Already, Nigeria has a slew of other options for KYC including its NIN and BVN services which many Nigerians still have trouble accessing. It’s questionable why social media handles would be necessary, given that only 31.6 million Nigerians—about 16% of the entire population—have access to social media. Image source: Zikoko Memes Another concern surfaces with Nigeria’s troubling history with social media. Since its 2020 #EndSARS campaign, led by the country’s youth, went viral on social media, the country has been trying to censor social media, even banning Twitter for seven months in 2021. The country has tried to enact a social media bill, a hate speech bill, and several amendments to different acts which censor social media. With several Nigerians imprisoned and targeted by government officials for their online presence, many Nigerians have tagged the move as yet another move by the government to curtail social media. You’ll be in good company Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today on moniepoint.com/ng. Fintech Flutterwave enters 5-year deal with Microsoft Olugbenga Agboola, CEO of Flutterwave Fintech unicorn Flutterwave isn’t just racking up licences across Africa, it’s also entering big deals. Last week, the company announced that it had signed a 5-year deal with Microsoft. The partnership will see the fintech company build a new generation of payment services on Microsoft Azure, powering payments infrastructure across the African continent and beyond. This partnership, according to a statement forwarded to TechCabal, will enable the African payment firm to service multinational firms. Some of them include enabling payments of Uber, Netflix, and Microsoft, solidifying Azure’s role in facilitating a seamless, reliable, and secure payment experience. Flutterwave on Azure: Flutterwave will also onboard its products such as Flutterwave for Business, Send by Flutterwave, Flutterwave Store, and Flutterwave for Fintech Platform onto Microsoft’s Azure Cloud Platform. The goal is to offer payment services to-and-from Africa. An East African hub: Meanwhile, the payments company is also looking to make Kigali, Rwanda, its East African hub. Since it acquired electronic money and remittance licences in Rwanda earlier this year, the company has been planning to set up a financial operations centre for East Africa in the county’s capital. Flutterwave CEO Gbenga Agboola believes the country has ambitions of being a premier destination for foreign investment funds management into Africa. The big picture: Meanwhile, the company is moving ahead with its plan for an IPO. Agboola confirmed to TechCabal that the company isn’t looking to raise more funding, but will instead focus on deepening its market presence across regions where it has licences, including Egypt. TC Insights Student expulsion in Nigeria sparks digital rights debate With a 40% internet penetration rate as of 2022, sub-Saharan African remains the least connected region in the world. The International Telecommunications Union (ITU) estimated that an investment of almost $97 billion is needed to bridge this connectivity gap on the continent. Depending on the level of connectivity achieved, Africa’s internet economy is projected to grow to $180 billion by 2025 and $712 billion by 2050. Despite the pressing need for improved internet access, there is a growing trend of government-directed internet shutdowns in various African countries, which have implications for the digital economy. Internet shutdowns have more than doubled in Africa between 2020 and 2022, from 12 to 25 respectively, making one in four Africans affected. A recent example is the Senegalese government’s decision to cut off internet access in response to violent protests and the spread of controversial messages on social media platforms during the first week of June. Image source: Ayomide Agbaje/TechCabal Insights According to Surfshark’s internet censorship annual recap, Africa ranks as the second in terms of internet shutdowns, with over 300 million Africans affected, trailing behind only Asia. The economic consequences of internet shutdowns are evident, as highlighted by the estimated combined loss of $2.4 billion suffered by African nations in 2022 due to internet restrictions. For instance, Sudan’s 185-day shutdown also cost the country approximately 7.3% of its 2020 GDP. Despite the potential for significant economic growth in the internet
Read MoreHow founders plan to leverage the Google Black Founders Fund
Some beneficiaries of the Google Black Founders Fund share with TechCabal why they applied for the fund and how the funding will make a difference. On Tuesday, Google announced that it had selected 25 African startups that would receive up to $150,000 in cash without any equity requirements in the startups and up to $200,000 in Google Cloud credits as recipients of the Google Black Founders Fund (BFF). Already in its third year, the $4 million fund aims to address the funding gap that black and female founders experience globally. The startups would also receive ad support, mentoring by industry experts, and connections within Google’s network. Here are some of the startups and what they plan to do with the BFF: Fez Delivery With 72% of the startups being led or co-founded by women, the fund makes good on its promise to support female-led startups. One such female-led startup is Nigeria’s Fez Delivery, a last-mile logistics company for individuals and businesses. Seun Alley, its founder, told TechCabal that BFF would allow the startup to improve its product offering and its mission to deliver to Africa’s diaspora community. “Google’s community of industry experts and its tank load of resources will help give us the fuel to drive effective last mile operations in Nigeria. With what we can leverage from Google with features like Maps, we can even touch every nook and cranny easily with high-quality zoning operations,” she told TechCabal. Herconomy Another startup that would use the fund to improve its current operations is Herconomy, a Nigerian fintech that seeks to provide core banking solutions for women in Africa. “Herconomy will be able to secure a microfinance bank licence that will enable it to onboard more women, including underserved communities, and empower them with the financial services they need to succeed and thrive,” Ife Durosimi-Etti, the founder and CEO, told TechCabal. Google lists 25 African startups for its Black Founders Fund 2023 cohort Zydii Zydii is a Kenyan startup that provides African courses tailored for upskilling African employees via an online and offline platform. These courses are developed in partnership with local experts. Joyce Mbaya, the founder of Zydii, told TechCabal that the opportunity to work with Google, connect with founders across Africa, and receive funds made her apply for the BFF. She added that the funding would help Zydii expand its services and its market presence in Kenya, Nigeria, and South Africa. “The funding enables us to collaborate with more local experts and organisations, ensuring that our training courses are tailored to meet the specific needs and challenges of the African workforce. We can continue to develop high-quality courses that address the skills gap and equip individuals with the competencies required for success in their respective industries,” she said. Raenest This year’s cohorts cut across eight African countries and industries like healthcare, construction, legal services, and fintech. For Victor Alade, the CEO and co-founder of Raenest, a fintech that allows startups and freelancers to receive global payments, the fund came at the right time as the company is looking to expand into another country. “This fund presents a valuable opportunity for us to not only reduce costs associated with our current services through the utilisation of Google credits but also gain access to essential resources and mentorship. These resources and mentorship will be instrumental in enabling us to scale our operations effectively. Google’s support will also play a pivotal role in our growth journey, providing us with the necessary tools and guidance to navigate new markets with efficiency and success,” Alade said. truQ As expected for what amounts to a sizable seed round, the Google BFF has a high cutoff mark. For Williams Fatayo, the founder of truQ, a logistics infrastructure provider, the third application did the trick. “We wanted it so bad, we wanted the resources, the community, and the validation that comes with it. [To see] “truQ is backed by Google” is huge.” truQ runs an AI-powered infrastructure for third-party logistics, using technology to connect businesses and individuals to logistics companies and vehicles. Fatayo told TechCabal that the funds, access to Googlers, and community of founders would be a “major catalyst for [truQ’s] journey and vision.” “Getting up to $150,000 in non-equity funding is a huge boost for our $1 million seed round fundraise, and up to $200,000 in Google Cloud credits [will] help our infrastructure costs,” he added.
Read MoreNigeria’s proposed electricity tariff hike means a fresh headache for small businesses
Electricity distributors in Nigeria are planning to increase tariffs by 40% from July. Fueled by the FX rate unification, this development will hurt small businesses. Jikka Bobo runs a small restaurant in Abuja and currently spends about ₦50,000 on electricity monthly with an average of six hours of power daily. According to him, he already struggles with running the business and the planned hike in electricity tariff will only make his business less profitable. “In the past month, the prices of ingredients have gone up by about 25%, not to mention the cost of transporting the ingredients down here. We have appliances like a freezer, a fridge, and other cooking equipment that require electricity to run,” he told TechCabal. From July 1, 2023, power distribution companies (DisCos) in Nigeria will increase electricity tariff by over 40% due to several reasons including the recent unification of the country’s foreign rate. For small businesses already grappling with existing problems including fuel hike and rising inflation, the proposed hike in electricity tariff will mean an increase in their energy costs which already form a significant portion of their running costs. According to the World Bank, businesses in Nigeria lose $29 billion yearly to poor electricity. Like many other small businesses, one of Bobo’s major frustrations is that he still has to buy fuel and diesel for his generators as the power supply is not stable enough to run his business. He spends an average of ₦30,000 weekly on diesel to supplement the electricity he gets. Bobo confesses that he’s not even sure how to navigate the proposed tariff hike. “We only raised our prices last week due to the fuel price hike, and customers have already started to complain about that. We’ll see how business goes before implementing another increase, just to see how much loss we’re incurring and if we can manage. We’re not a big restaurant yet and can’t charge as much as we’d like without losing some customers, or even making up for our loss in other areas,” he shared. Bala Zakka, an energy analyst, said small businesses can’t afford to incur additional costs considering the state of the Nigerian economy. “Before now, small businesses were already groaning in pain due to lack of electricity. With the increase in tariff, their operating cost will go up and what that means is an increase in the cost of goods and services,” he told TechCabal. For Anisa of Amica Salon, there just isn’t enough profit in sales to cover the jump in electricity. Anisa runs a female salon in the heart of Kaduna, and she cannot envision having to pay 40% more for electricity without increasing prices. “I did a quick calculation as soon as I heard the news and discovered that it just wasn’t possible.” Anisa is trying to build a salon that prioritizes quality and customer satisfaction but that just gets harder to achieve by the day. “I started out trying to build a high-standard salon and while this looks pretty straightforward, the policies in Nigeria just make that vision blurry. I import a lot of my products and materials, from wigs to hair products and appliances, and so the rising price of the dollar already makes it difficult for me to make a decent profit,” she told TechCabal. Businesses in major cities like Lagos and Abuja might be able to raise prices easily but not Anisa’s, as her business operates in Kaduna, where the cost of living is relatively lower to cities like Lagos and Abuja. “We currently don’t make a lot of profit, considering that I have to pay rent and my four staff. Unless we miraculously begin getting more clients, I’m going to have to increase my prices, which will probably discourage some of my already loyal clients.” Anisa boasts six electricity-guzzling bonnet hair dryers, electrical chairs, and some other appliances including water heaters and steamers. Nearly all of her services require electricity, and even when they don’t, she still has to turn on the air conditioning for her clients. “Some clients can’t sit in your shop without the AC being turned on. Sometimes we even try to conserve units by turning on the fan, and they insist on air conditioning,” she shared. Her salon gets a relatively steady power supply, but that also means that she spends a lot more on electricity units for their prepaid meter. While ₦10,000 could get her salon about 200 units, a 40% increase means that she’ll only be able to purchase just about 120 units with the same amount. Small businesses have little choice but to resign themselves to the current reality, and hang on as long as they can. However, Adeola Adenikinju, a professor of Energy Economics at the University of Ibadan, told TechCabal that the upward price review reflects the market but the consumers shouldn’t have to bear the burden alone. “There is a responsibility for the DisCos to improve the quality of service so people have adequate and stable electricity. It is high time we did away with estimated billing that places the burden of payments on the citizens,” he said.
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Lire en français Read this email in French. Editor’s Note Week 25, 2023 Read time: 5 minutes Hello How are you doing? Read on for your weekly dose of relevant tech news from across the continent. Pamela Tetteh Editor, TechCabal. Editor’s Picks Glade loses $214,000 to hackers Glade has joined the list of Nigerian financial service providers that have had a not-so-merry encounter with hackers. This time, $214,000 was lost. What is the founder saying? Google to invest $4 million in black founders Google is granting equity-free funds, $4 million, to startups in Europe and Africa through its Black Founders Fund (BFF). Which startups? Samsung breaks the law in Kenya Toeing the steps of Apple, Samsung and other phone providers are defying the South Africa’s ICT regulator’s guidelines by selling phones without chargers in Kenya. What is Kenya doing about it?. Somalia launches QR code The Central Bank of Somalia has launched a Quick Response Code (QR code) standard—the SOMQR—to facilitate cashless payment across the country. Is this a big deal? Airtel Nigeria launches 5G Airtel Nigeria has joined the 5G gang. It launched its 5G network in four states in Nigeria—Lagos, Ogun, Abuja, and Rivers states. Learn more. Kenya gets contactless payment KCB and Visa have partnered to offer contactless payments powered by NFC. Telco Safaricom had tried to pull off something similar with M-PESA but failed more than five years ago. How will it work? A pricey data violation In this week’s episode of costly lessons, 100 banks and institutions in Nigeria paid over ₦200 million ($289,885) as penalties for violating the data privacy of Nigerian citizens. Learn more. Entering Tech Interested in getting tech career resources and insights?. Then sign up for Entering Tech to get started! A Safaricom CEO steps down Anwar Soussa is exiting his role as CEO of Safaricom Ethiopia. He was the first CEO of the telecom, which launched in the country in 2021. Learn more. Load-shedding bites another gaint South African retail giant Mr Price has blamed its multi-million dollar loss on load-shedding. Other publicly traded companies including MultiChoice, Vodacom, Telkom, and MTN have done the exact same thing too. Wondering how many millions of dollars the business lost? Find out. Heritage Bank denies fraud Last week, reports surfaced that ₦49 billion ($83 million) had been stolen from the Nigeria-based Heritage Bank’s accounts. This week the bank has denied all reports. Learn more. Who brought the money this week? South African solar energy company Yellow raised $14 million in Series B funding, in a round led by Convergence Partners. Nigerian electronics B2B marketplace Eze received $3.7 million in seed funding. Egypt’s fintech company Agel raised an undisclosed amount in an undisclosed funding round from Sand River Venture Capital. What else to read this weekend? Nigeria’s Gen X and baby boomers are finding joy and community while creating content on TikTok Flutterwave wants to make Kigali its settlement hub in East Africa UniAbuja student’s expulsion sparks a debate on digital rights Failure to launch: South Africa’s challenge in transforming technical talent into investable founders With SA experiencing a cybercrime epidemic, startups are coming to the rescue Can Mobile Virtual Network Operators (MNVOs) challenge Nigeria’s big telcos? Written by: Ngozi Chukwu Edited by: Pamela Tetteh 18, Nnobi Street, Surulere, Lagos, Nigeria Unsubscribe from TC Weekender
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