TechCabal Daily – Caantin wants call centres for lunch
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy midweek! AI wants your job. Okay, not your job (we hope), but call center agents might want to watch their backs. Meanwhile, Temu’s making a payment play in Nigeria, and KCB is scooping up a majority stake in Riverbank. Shall we? KCB acquires 75% of Riverbank Solutions Caantin wants to do the talking for call centres Temu partners with Interswitch’s Verve World Wide Web 3 Opportunities M&A KCB acquires 75% of Riverbank Solutions KCB chief executive Paul Russo/Image Source: KCB What do Nigeria’s and Kenya’s banking industries have in common right now? Both countries are forcing banks to recapitalise. While Nigeria is only twelve months away from its March 2026 deadline, Kenya’s finance committee is trying to approve KES10 billion ($78 million) as the threshold for banks to recapitalise within three years. Recapitalisation can save a whole banking sector and prevent retail customers from losing confidence in the system. Yet, it is a nerve-wracking process for small banks. But not for KCB; not for Kenya’s largest bank by assets which, instead of keeping and raising more money for the recapitalisation exercise, has chosen to stray to the opposite side and complete a 75% acquisition of Riverbank Solutions, a Kenyan payments solutions provider, for $15.4 million. But it’s not hard to see why KCB bagged the deal. Riverbank Solutions offers payment systems to a diverse clientele, including manufacturers, microfinance institutions, retailers, county governments, and the military. Operating in Kenya, Uganda, and Rwanda, the company has been a key partner for KCB since 2013, particularly in agency banking services. The acquisition will allow KCB to expand its digital service offerings, particularly to government counties. Counties, being public institutions, process large transactions, which could be a useful clientele for KCB, giving the bank an edge over other commercial banks focused on retail investors. There is also the possibility for KCB to upsell its new corporate clients on its wealth management services through its subsidiary, KCB Capital Ltd, keeping its high-value customers in a closed loop system. The acquisition of Riverbank may have eaten deep into KCB’s pocket, but it is a minor dent compared to what it makes annually. In 2024, the bank’s profit after tax was KES 61.8 billion ($478 million) following strong business growth. Its cash flow position remains positive, and if the acquisition were to come back to bite KCB during the anticipated recapitalisation exercise—which is unlikely—the bank is owned by a holding company, KCB Group, which is willing to step in with a cash injection to balance its capital adequacy ratio, as we’ve seen in the past. Are you a freelancer or a remote worker? Fincra wants to understand the challenges and opportunities related to cross-border work payments for freelancers and remote workers in Nigeria. Please take just a few minutes to complete this survey. Startups Caantin wants to do the talking for call centres Njavwa Mutambo, founder and CEO at Caantin/Image Source: Caantin AI When AI became mainstream—thanks to ChatGPT’s viral launch in November 2022—the touted narrative was that AI was going to take your job. There’s no sugar-coating it; that might become the reality for business process outsourcing (BPO) firms and call centres across Africa if AI voice startups like Caantin perfect their tech. Caantin, the Zambian AI communications company, wants to help businesses reduce the cost of making phone calls daily. The Zambian startup launched in 2021 is building voice bots that can make thousands of phone calls a day for businesses—from fintechs chasing loan repayments to FMCG brands managing daily retail orders. TechCabal’s startup reporter, Faith Omoniyi, had a go at using the incredibly human-sounding AI voice bots by role-playing a mom-and-pop shop placing orders. The experience was surprisingly natural, complete with human-like intonations, pauses, and interruptions. Still, the product isn’t perfect yet. Conversations can occasionally fall flat, and the price—₦117 ($0.076) per minute in Nigeria—is nearly nine times what telecom operators charge in the country. Caantin defends its pricing, citing the cost of running human-staffed call centres. It claims fintech Cowrywise completed 100,000 calls with one employee using the tool. If Caantin pulls it off, Africa’s call centres may have more than dropped calls to worry about. Read our full review of the product here. Introducing Paystack’s new consumer app — Zap! Zap by Paystack is a mobile app for instant, secure payments via bank transfers. Download Zap on Android and iOS → E-commerce Temu partners with Interswitch’s Verve Image source: MSN Like customer behaviour, market trends are fleeting. Today, you’re excited to be the first to provide a new technology (read: contactless payments); tomorrow, the market tide shifts back to the old-school tech you thought was dying. Case in point: Temu, the Chinese e-commerce startup you can’t get out of your ad streams, has partnered with Nigerian card provider Verve. For years, local Nigerian cards were a giant pain because they didn’t work for international transactions. Banks and regulators restricted them to domestic use, making it difficult to pay for global services, subscriptions, and travel. Banks weren’t concerned; they weren’t trying to crack international payments or bring the exclusivity of dollar-denominated cards to the average Nigerian. GTBank, a tier 1 lender, stopped international transactions on its naira-denominated Mastercards on December 31, 2022. But for fintechs which exist to somehow make life easier for customers neglected by banks, this became a problem to solve. In the following years, the popularity of USD virtual cards—which allow customers to convert their local currency, hold dollars, and make international payments—took off. Fintechs plugged into card infrastructure providers like Alcineo, partnered with Visa and MasterCard, or used overlay solutions with USD virtual card issuers like Bridgecard. Soon, their selling proposition became: Get USD virtual cards, shop online—followed by a list of international platforms that punctuated marketing copies. Yet, local card scheme Verve, owned by payments giant Interswitch, remained in the lead—mostly thanks to banks that handed them out indiscriminately, it came right out of the box
Read MoreCaantin’s AI wants to do the talking for call centers
Zambian AI communications startup, Caantin, wants to reduce the cost of making phone calls for businesses by using AI voice agents that can have these conversations at scale. Communication is the lifeblood of many enterprises. From fintechs nudging users to complete signups or pay back loans to FMCG brands chasing daily orders from mom-and-pop shops, phone calls are a critical part of daily operations. Traditionally, that job has fallen to large or outsourced call centers, or in-house support teams that come with overhead costs, hiring headaches, and natural limits—there’s only so many calls a human can make in a day. Caantin, a new AI communications startup, thinks it has a better way: AI voice agents that can have these conversations at scale. Launched in 2021—Caantin’s first iteration was Topup Mama, a procurement and management software for restaurants—and self-described as an AI communications company, the Zambian startup says it wants to reduce the cost of making phone calls for businesses. “Businesses struggle to scale for a number of reasons, and when you peel into it, you end up with a communications issue—the cost of communicating,” said Njavwa Mutambo, CEO and Co-founder of Caantin. “We help businesses communicate with customers in a way that is intelligent, contextual, and cost-effective.” TechCabal had a go at using Caantin’s incredibly human-sounding AI voice bots by acting as a mom-and-pop shop trying to place orders. Save the few gaps in communication, the conversation felt really natural. The call included the intonations, pauses, and inadvertent interruptions of a real life conversation. The AI chatbot allows you to have conversations accented in major African languages—Igbo, Hausa, Swahili, and Yoruba. Mutambo claims the startup has helped the businesses it serves increase their efficiency. For example, Mutambo says Caantin helped Nigerian fintech Cowrywise achieve 100,000 calls with one employee, a feat that would normally be achieved with 30 employees in a 3-month period. Voice is the entry point While AI use cases on the continent are still nascent—largely due to the high cost of building and running models—Mutambo believes voice AI will be the most dominant use case of AI in Africa. With low smartphone penetration, inconsistent internet access, and high illiteracy rates in many regions, Mutambo sees voice—not text or chat—as the most practical interface for AI adoption at scale. “Voice is how AI will be distributed in Africa,” Mutambo said. But beyond just building voice bots, he argues the key is developing context-specific use cases that align with how enterprises operate on the continent. For Caantin, that means designing voice agents that can drive collections, complete sales flows, and reduce the cost of customer support—at scale. For example, Caantin’s voice bot can prompt payment during calls using webhooks for integration with payment providers like Paystack and Flutterwave. Caantin is also looking to add a feature that would analyse tons of phone conversations and deduce insights that can be used for business decisions. How Caantin makes money Caantin generates revenue by charging per second for phone calls, operating much like a telecom provider. In South Africa, it charges four rands (2 cents) per second; in Nigeria, about ₦117 (7 cents) per minute—roughly nine times the rate of a local telco. Mutambo defends the pricing by pointing to the broader costs businesses typically incur to run large customer support operations. “When you’re doing the math, you have to factor in staff salaries, power, internet—all the overhead it takes to run a call center,” he said. “Most chief commercial officers we work with see AI as a cost-cutting tool, not a cost center.” In Caantin’s pitch, the higher per-minute price is offset by the scale, consistency, and 24/7 availability that AI voice agents offer—without the hidden costs of managing human teams. The company claims it is currently profitable. Competition and differentiation Caantin’s main competitors are traditional call centers—Business Process Outsourcing (BPO) companies—and global players like YC-backed Bland AI. Unlike its global competitors, Caantin is built with an African context. The chatbot understands local dialects, accents, and speech patterns more effectively than generic language models. Caantin’s plan to offer an analytics feature puts it in direct competition with ToumAI, a Moroccan AI startup that works with businesses, including telecom providers, banks, and call centers, to gather and analyze voice data. Fundraising and future plans The startup raised an undisclosed round from Ventures Platform earlier this year. While Caantin’s goal is to make startup customer support more efficient, we asked if that spells the end for BPOs. “BPOs will need to adapt or struggle to survive,” said Mutambo. Caantin’s AI isn’t perfect yet—but when it is, call centers won’t just be in trouble. They’ll be lunch.
Read MoreUBA lost ₦1.14 billion to fraud in 2024 amid record profits
United Bank for Africa (UBA) lost ₦1.14 billion ($744,200) to fraud in 2024, even as the Nigerian lender reported a profit after tax of ₦766.6 billion ($493 million), according to its latest audited financial statements. The losses, primarily from electronic fraud and unauthorised transfers, highlight the ongoing battle Nigerian banks face against rising fraud. UBA disclosed that ₦4.9 billion ($3.15 million) worth of transactions were linked to fraudulent activities in 2024, with 23% translating into actual losses. Electronic fraud accounted for the largest portion, costing the bank ₦805 million ($518,000), while fraudulent transfers led to ₦314 million ($202,000) in losses—88% of the value involved in such cases. Although its losses represent a small fraction of UBA’s record-breaking annual profit, they underscore the vulnerability of even the most profitable financial institutions to fraud. UBA’s profit after tax of ₦766.6 billion ($493 million) marks a significant 26% increase from ₦607.7 billion ($391 million) in 2023. UBA’s disclosure—-the first from the bank since 2012—comes at a time when Nigerian banks are under increased pressure to fight fraud. Nigerian banks lost ₦10.1 billion ($6.7 million) to fraud in Q3 2024, a 76.4% decline from the previous quarter according to a Financial Institutions Training Centre (FITC) report. Yet, the rising sophistication of fraudsters continues to pose a challenge to even the most robust security systems. According to the FITC report, outsider involvement in fraud cases surged by 70.4% between Q2 and Q3 2024, while staff-related fraud increased by 54% during the same period. “There is no fraud involving management or other employees who could have any significant role in the bank’s internal control,” UBA said in its financial statements. The rise in fraud incidents comes amid broader financial pressures in Nigeria’s banking sector. In January, the Central Bank of Nigeria directed NIBSS to debit the settlement accounts of commercial banks that receive fraud proceeds, a move aimed at forcing banks to tighten internal controls and curb illicit financial flows. UBA’s disclosure marks a shift toward transparency in Nigeria’s banking sector, where many institutions still choose to downplay fraud risks for fear of suffering reputational harm. Only 60 of 163 financial institutions in Nigeria reported fraud cases in 2023, according to a Nigeria Inter-Bank Settlement System (NIBSS) report. As financial crime grows more sophisticated, regulators and banks have their work cut out: strengthen controls while maintaining customer trust.
Read MoreKCB Group acquires 75% stake in payment solutions firm Riverbank Solutions for $15m
KCB Group, Kenya’s largest commercial bank by assets, is set to acquire a 75% stake in payments solutions startup Riverbank Solutions for $15.4 million (KES2 billion) to strengthen its digital operation. The transaction awaits regulatory approval. The acquisition marks KCB’s latest move to expand its footprint amid growing competition in Kenya’s banking sector. KCB Group hopes to increase its ability to offer integrated digital services with the Riverbank acquisition, which provides payment and revenue collection systems to banks, e-commerce platforms, and government agencies. “We are actualizing new digital capabilities to deliver customer-centered value propositions through technology to guarantee seamless, reliable, secure, and innovative solutions for our customers,” said Paul Russo, KCB chief executive. “Across the region, payments are expected to have the fastest growth, suggesting an opportunity to innovate.” Founded in 2010 by Nick Mwendwa, Riverbank Solutions provides payment systems to manufacturers, microfinance institutions, retailers, county governments, and the military. The company operates in Kenya, Uganda, and Rwanda. Russo said the bank has partnered with the startup since 2013, using its platforms to run its agency banking network. KCB plans to expand the platform to provide small and medium enterprises (SMEs) with financial management tools, digital loans, and treasury management. Riverbank offers a range of digital services, including Zed 360, a management tool for small businesses; Swipe, which supports agency banking services; Zizi, a revenue collection platform; and CheckSmart, designed for social payments. Kisumu and Migori counties currently use the company’s platform to collect revenues. “We have made this strategic acquisition to enable us to offer a full stack solution. This is a great opportunity to maximize value for our shareholders in the long term while strengthening the group’s competitive position,” said Russo. KCB Group’s profit after tax for 2024 grew 64.9% to $477.9 million (KES61.8 billion), driven by strong revenue growth across all business segments. Non-interest income, including earnings from non-banking services, rose 16.5% to $522 (KES67.5 billion), supported by higher foreign exchange trading income.
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Paystack welcomes consumers to its ecosystem with Zap, a transfer app
Nine years ago, Shola Akinlade, Paystack’s CEO, bet on making online payments frictionless and that bet paid off with a $200 million acquisition by Stripe. Now, his startup is betting on consumers transferring money with Zap, its new app, to fuel its next growth phase—a shift for the fintech known for its business-focused products. Zap does one thing well: it allows users to send money to any Nigerian bank account within 10 seconds. Customers can fund their Zap account by linking their Nigerian bank accounts to Zap using Paystack’s direct debit infrastructure or depositing money directly into a Paystack-Titan account. “We have a partnership already with Titan Trust Bank and we extended that partnership to Zap,” Akinlade told TechCabal, explaining how Paystack can hold deposits. Only commercial bank accounts can be linked through Paystack Vault, excluding neobanks like OPay, PalmPay, and Moniepoint from the list of supported institutions. Depositing ₦10,000 via a linked account costs ₦35, while withdrawing ₦9,900 incurs an additional ₦25 fee—meaning customers pay ₦50 in fees for depositing and withdrawing ₦10,000. This pricing makes Zap more expensive for users than OPay, PalmPay, and Moniepoint, which have already established themselves as more affordable alternatives. “The pricing is going to evolve,” Akinlade said. Users can also link debit or credit cards from any country to Zap. In a demonstration at the company’s Evening With Paystack, Akinlade transferred money from his Bank of America card to a Nigerian account almost instantly. Although the card feature resembles a remittance service by allowing Nigerians abroad to link their cards and instantly send money home, Akinlade told TechCabal that Paystack is not yet entering the remittance market. Fairs. I just sent money from my Revolut (dollar) account to my access Naira account (in less than 30 secs) with Paystack’s Zap. This changes a lot! — Ovie (@ovie_tag) March 24, 2025 “Today, we’re not targeting the remittance scenario. Our ideal scenario is for people from abroad to come to Nigeria and make transfers using Zap. If you’re sending money to Nigeria from abroad, you can wait a couple of minutes. Our priority is immediate delivery,” he said. Customers can only send or deposit money on the app after completing know-your-customer (KYC) checks. Tier-1 users, who verify with only their Bank Verification Number (BVN), can send up to ₦50,000 daily and maintain a maximum balance of ₦200,000. For Tier-2 users, who must provide a selfie, physical address, and National Identification Number (NIN), the limits rise to ₦200,000 daily and ₦500,000 maximum balance. Tier-3 users can send up to ₦5 million daily and hold up to ₦100 million in their accounts after verifying their address. Why bank transfers? Why now? In 2023, bank transfers accounted for over half of the transactions Paystack processed, double the previous year, growing from 28% in 2022 to 58%. In the two years since then, the startup has deepened its pay-by-account infrastructure with several products like Paystack Terminal, its attempt at in-person payments, and integrations with other fintechs like OPay. These products have all been built on Paystack’s pay-by-bank infrastructure and contributed to the payment channel surpassing card networks like Visa and Mastercard on its network. “What’s important (to Paystack) is building reliable infrastructure: starting from the bottom with the infrastructure, then delivering great experiences, then crossing borders,” Akinlade told TechCabal. While getting customers to use Zap directly from their phones could drive revenue growth for the Stripe-owned fintech, the app represents Paystack’s ambition to build a financial services ecosystem. After years of dominating Nigeria’s online payment processing, consumer-focused payments will allow Paystack to exert more control over the flow of funds within its network. If a Chowdeck user pays by transferring money from their Zap account to Chowdeck’s Paystack-Titan account, the money never leaves Paystack’s ecosystem. This closed-loop model could improve the online payment experience, powered by Paystack’s APIs—which process transactions faster than you can blink—and a bank transfer infrastructure where 98% of transactions are confirmed within 10 seconds. Zap’s minimal homepage also streamlines the user experience. The customer’s balance appears at the top left, recent transactions fill most of the screen, and a single “Send Money” button sits at the bottom. “Bank transfers are now a big thing but still broken in many ways. So we designed Zap as your everyday tool: when you open it, the only thing you see is sending money out. I should pull out my phone without going through multiple steps. That’s it,” Akinlade said. Competing against the big boys Zap places Paystack in direct competition with fintechs like PalmPay, Kuda, OPay, and Moniepoint in Nigeria’s highly competitive consumer banking and payments market. Its new rivals grew rapidly during the cash scarcity in 2023 by offering exactly what Paystack now aims to deliver: fast and reliable transfers. Despite varying approaches and successes, these fintechs have become entrenched in Nigeria’s financial ecosystem, amassing millions of customers—Kuda with 7.2 million users and OPay with over 30 million users. For Paystack, differentiating itself quickly in this competitive landscape will be the key to success. Akinlade believes Zap’s success will come from delivering a superior transfer experience. “We are not competing against other fintechs. Our ideal users are people who send money frequently and are on the go a lot; think of Nigerians travelling across Africa. We have our audience: people who deeply care about great experiences—taste, speed, reliability.” If Zap is to gain traction in Nigeria’s consumer market, Paystack will need to revisit its pricing strategy and compete on more than just design and user experience. With millions of Nigerians facing mounting economic pressure from inflation, affordability is more important than aesthetics. Yet Akinlade is undeterred. “A lot of our work is shaping the country’s experience. It’s important to me that things in Nigeria are as elegant as everywhere else. Zap will get even better.”
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TechCabal Daily – Cassava, but make it AI
In partnership with Lire en Français اقرأ هذا باللغة العربية Happy salary day! We have one question for you: Who owns an idea? The AI race is heating up in Africa, Paystack is making money move faster, and a Kenyan court just reminded everyone that pitching an idea might be nice, but terms and conditions apply. Let’s dive right in! Paystack welcomes consumers with the launch of Zap NIBSS and Ceva want a share of the Kenyan FPS contract Cassava Technologies is building Africa’s first AI factory Safaricom beats inventor’s claim over Reverse Call idea World Wide Web 3 Opportunities Fintech Paystack welcomes consumers to its financial ecosystem with the launch of Zap Paystack CEO Shola Akinlade speaking at the Zap launch event/Image Source: TechCabal On the evening of March 24, many prominent Nigerian tech figures gathered at Paystack’s maiden Apple-style launch event to witness the debut of Zap—its first consumer-focused app. Users can send money to any Nigerian bank account with the app by depositing money in their Zap account or linking their Nigerian bank account using Paystack’s direct debit infrastructure. Deposits are powered by Paystack’s partnership with Titan Trust Bank. Users can also link their cards to Zap, and in an interesting demonstration, Shola Akinlade, Paystack’s CEO, sent money from his Bank of America card directly to a Nigerian bank account within 10 seconds; opening up new possibilities for Nigerians abroad. After nine years of processing payments for businesses, Paystack is now splitting its focus to include customers. Widening its focus makes a lot of sense for Paystack: keeping transactions within its ecosystem allows the startup to control the money that moves through its network. By combining its APIs—which process payments in 0.2 seconds (faster than you can blink)—and a bank transfer system that confirms transactions within 10 seconds, Paystack can also enable its new users to pay online in about the same time it takes Ferdinand Omanyala, Africa’s fastest man to run 100 metres. But there are still snags to be fixed before we can all enter Valhalla. Zap is more expensive for a user than OPay, PalmPay and Moniepoint. Depositing and withdrawing ₦10,000 ($6.57) costs ₦50 ($0.033), costlier than other consumer-focused fintechs, which typically offer free transfers. Paystack believes that by delivering a superior transfer experience and revisiting its pricing, Zap can become a daily-use app for Nigerians who value well-designed products. However, Nigeria’s recent macroeconomic pressures have deepened user inertia. Consumers, long used to freebies, may hesitate to switch—especially with Zap’s relatively high fees. Still, given Paystack’s track record, few would bet against its ability to win users over. TechCabal’s reporter, Muktar Oladunmade sat with Shola at Paystack’s launch event in Lagos to talk about their ecosystem play. Look out for this article today. Are you a freelancer or a remote worker? Fincra wants to understand the challenges and opportunities related to cross-border work payments for freelancers and remote workers in Nigeria. Please take just a few minutes to complete this survey. Banking NIBSS and Ceva want a share of the lucrative Kenyan FPS contract Image Source: Google You may not recognise the similarities at first, but the early years of the seven-year California Gold Rush which ended in 1855, are analogous to the scramble for Kenya’s new fast payment system (FPS) contract with striking parallels. Back then, hopeful miners flooded California, dreaming of striking it rich overnight. Now, it’s fintechs, banks, and tech firms rushing to stake their claim in Kenya’s digital payments sector. Just like the gold rush, the FPS frenzy has its fair share of prospectors, speculators, and big-money players looking to control the financial veins of Kenya’s economy. Staking its claim for Kenya’s un-interoperable digital payments sector is the Nigeria Inter-Bank Settlement Scheme (NIBSS), which became Nigeria’s payment switch in 2006. Ceva, a Kenyan payments software provider, has named NIBSS its “strategic partner” in its bid for the contract. With NIBSS’ reputation as a payments switch that supports multiple digital payment forms in Nigeria, there’s reason to believe it’s also eyeing the role of technology provider for Kenya. Does NIBSS have the bandwidth to be a payment infrastructure provider for another country? While we cannot answer that, let’s consider the pros and the cons. The central switch launched the NIBSS Instant Payment (NIP) technology in 2011, a key driver of the speed Nigeria’s banking industry now boasts. Despite this, downtimes still plague fintechs, businesses, and Nigerians relying on NIBSS for stability. Its worst outage in the last five years came in 2023, totaling 218.6 hours, per data aggregated from payment processors Flutterwave and Paystack. NIBSS improved in 2024, shifting to a hybrid data backup system to counter frequent cable cuts that disrupted service availability. With ongoing upgrades, it could pitch stability as a key selling point to the Central Bank of Kenya (CBK). Yet, NIBSS and Ceva will still have to battle Safaricom and the Kenya Bankers Association (KBA), which have strongly opposed building a new FPS. But in the end, bidders can only cast their die; the decision stays firmly in the CBK’s hand—to either take Ceva and NIBSS up on their offer or decide it is better off counting the syllables in the word “interoperability” instead. Introducing Paystack’s new consumer app — Zap! Zap by Paystack is a mobile app for instant, secure payments via bank transfers. Download Zap on Android and iOS → AI Cassava Technologies is building Africa’s first AI factory, powered by NVIDIA Image Source: Google Cassava Technologies, a South African telecom infrastructure provider, is making a big play to keep Africa’s AI computing power on home soil. The company is teaming up with NVIDIA to build Africa’s first AI factory, a high-tech data centre designed to keep the continent’s AI computing power local. The first facility launches in June 2025, with expansions planned for Egypt, Kenya, Morocco, and Nigeria. Much of Africa’s AI computing happens overseas, forcing businesses and researchers to high costs, slow speeds, and geopolitical red tape. Cassava’s move eliminates that dependency,
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“Most African companies don’t need VC” – Launch Africa’s Umem Uwemakpan
Launch Africa is arguably Africa’s most active early-stage investor. The firm started investing in African startups in 2020, and by the time it had finished deploying its $36.3 million fund, it had invested in 133 startups across 25 countries and sectors, including startups like Kuda, Omnibiz, and Julaya. “If you look at our first fund, 90% are still operational—an impressive rate for any fund in Africa,” Umem Uwemakpan, Launch Africa’s head of investment, told TechCabal. The firm is currently deploying its second fund and has already backed startups such as VaulFi, an Algerian fintech, and Toum AI, an artificial intelligence startup. The second fund targets business-to-business (B2B) and business-to-business-to-customer (B2B2C) early-stage startups across the continent, with cheques between $250,000 and $500,000. The fund can also invest up to $1 million cumulatively through follow-on investments in a few startups. “We believe B2B models offer more sustainable growth, lower acquisition costs, and clearer paths to profitability in the African context,” Uwemakpan said, describing Launch Africa’s investment approach. “We actively invest across five regions, including underserved markets in Central and North Africa. Our strategy is rooted in disciplined, conservative decision-making. We’re not chasing trends or inflated valuations—we’re building a balanced portfolio with sound fundamentals.” If you hear Uwemakpan tell it, Launch Africa was created to solve four problems in Africa’s startup ecosystem: bridging the critical gap between seed-stage funding and Series A rounds—a stage where many startups struggle and often fail to scale; bridging the knowledge gap for international investors; and creating a “more structured pipeline for Series A investors in Africa” by identifying, funding, and supporting promising seed-stage companies. Now, Launch Africa is raising its third fund—but with a different approach. This time, the fund will follow a mezzanine structure, offering a hybrid of debt and equity financing. “Equity—or VC funding—is the most expensive form of capital and for most founders on the continent, it’s not what they need. The real issue is the lack of viable alternatives,” Uwemakpan said. In this interview, Uwemakpan speaks about the thinking behind the third fund and the lessons from the first two funds. This interview has been edited for length and clarity. Why is your third fund a mezzanine fund? In our experience, especially in high-growth sectors, what’s often needed isn’t equity but debt—working capital to keep the business running and growing. That’s what inspired our third fund. We’re asking: how can we invest using debt instruments, take meaningful ownership stakes, and still position ourselves to exit at higher valuations and deliver returns to our limited partners (LPs)? At the same time, we want to recycle capital from one company to the next without relying solely on new fundraising. That’s where a mezzanine fund comes in—a hybrid of debt and equity. It allows us to deploy capital as debt, take equity positions, and recycle repayments. As founders repay the debt, we can reinvest that capital into other companies. This flexibility is critical if we want to build more high-growth companies across the continent. Looking back, was there a defining moment that validated your approach to early-stage investing in Africa? The defining moment that validated our approach came during Fund I when we began seeing strong follow-on rounds for our portfolio companies, with international investors coming in at significantly higher valuations. This validated both our thesis and our ability to identify promising startups at the seed stage. Another validation came through our B2B focus. While many consumer-focused startups struggled with high customer acquisition costs and challenging unit economics, our B2B companies were achieving sustainable growth with clearer paths to profitability – exactly as our thesis predicted. The most powerful validation, however, was seeing the real economic impact of our portfolio companies – creating jobs, solving critical infrastructure gaps, and demonstrating that technology can indeed address fundamental challenges across Africa. What type of support does Launch Africa give founders, given that you have a lot of startups in your portfolio, and how do you measure the success of that support? I often give this analogy: First-time founders will say their biggest challenge is access to capital—and rightly so. But when you speak with second or third-time founders, their concerns shift dramatically. They talk about recruitment issues, internal culture, marketing challenges, and board formation. Given our extensive Fund I portfolio, we’ve identified two main support areas for founders: strategic support and operational support. Early-stage founders—post-angel or pre-seed—need very different resources than those preparing for a Series A round. For early-stage founders; we leverage relationships with corporate partners like MTN and other leading corporates, connecting them directly with startups. These corporates often become customers or even potential acquirers, helping founders secure early revenues and validation. While B2B sales cycles can be lengthy, once closed, they’re beneficial to our startups. Because we’ve spent years building a robust network, we often co-invest alongside trusted partners and maintain close relationships with later-stage investors—Series A, B, and growth-stage funds. These relationships create a natural progression for further fundraising. We also go beyond simple introductions. We actively coach founders on pitch preparation, deck refinement, cap-table management, and investor targeting. Inspired by private equity models, we’ve implemented a “coverage model”, assigning each team member a set number of portfolio companies. This fosters deeper, one-to-one relationships, crucial when founders face challenges. Founders who trust us enough to communicate transparently, especially in tough times, are the relationships we aim to build. We hold regular weekly office hours where founders can openly discuss issues or seek guidance. Our portfolio management team also reviews monthly founder reports, enabling us to proactively address issues, offer assistance, or identify companies ready for their next funding round. Finally, having a large portfolio has allowed us to organically build a founder community, fostering peer-to-peer learning and support. Founders actively engage with each other, and we encourage this from the start by identifying potential synergies in our investment memos. Do you have sector favourites or do you maintain a purely sector-agnostic stance? While we maintain a sector-agnostic approach, the data and market dynamics
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The true cost of M-PESA is catching up with M-PESA
Cet article est aussi disponible en français <!– In partnership with –> <!–TopBanner Join us for TechCabal Battlefield, Moonshot’s startup competition where you can showcase your startup idea to a global audience and an esteemed panel of judges and stand a chance to win up to 2.5 million naira in funding for your business! Click to register for TC Battlefield First published 23 March, 2025 Image: NMG A news item piece by TechCabal this week showed that Safaricom’s M-PESA market share dropped sharply from 97% to 91% over five consecutive quarters leading to December 2024, while Airtel Money grew from just 3% to 9% in the same period. This is the most sustained erosion of M-PESA’s dominance in years, signalling the beginning of a fundamental change in the mobile money market. Yet, what stands out is not just the numbers but Safaricom’s muted response. Despite clear signs of competitive pressure, M-PESA’s pricing has stayed the same. There have been no adjustments to transaction fees or cost structures to reflect growing user frustration. This raises questions about Safaricom’s view of these losses: whether it sees them as temporary or negligible. It also points to a possible strategic blind spot, where protecting shareholder returns takes priority over responding to market signals that would, in any other business, trigger urgent action. Most Kenyans operate in a low-trust, high-cost environment where every shilling counts. Informal work dominates, incomes fluctuate, and credit is hard to access. These realities shape a society of budget hunters (people who scrutinise charges, compare services, and switch based on value). Mobile money (once seen as a convenience) has become part of this daily cost management. Airtel Money’s flat rates and zero-fee options (for some services such as sending money to other Airtel Money users) appeal directly to this survival instinct. In contrast, M-PESA’s complex, tiered pricing feels out of touch with how most Kenyans make financial decisions. The longer this continues, the more likely it is that price-sensitive users will see Airtel Money and other players as better aligned with their realities. Next Wave continues after this ad. Africa’s youth are shaping the future, but are their voices truly heard? The Citizen Report provides a deeper understanding of the challenges and opportunities young Africans face, spotlighting their perspectives on AI, governance, education, human rights, and more, backed by data and research. This report bridges the gap between lived experiences and policy decisions that impact millions. Download The Citizen Report here Profit motives over customer needs Safaricom’s reluctance to act decisively on the perception that M-PESA is expensive points to a deeper corporate strategy. As a listed company, Safaricom is built to prioritise shareholder returns. Mobile money is now its strongest revenue stream, often cushioning weaker voice and SMS performance. M-PESA’s fees are designed to maximise revenue while avoiding regulatory pushback. Lowering charges or simplifying fees risks cannibalising this core profit driver. M-PESA’s transaction fees have changed over time. When it officially launched in 2007, transaction fees were introduced and have been periodically adjusted. In 2014, Safaricom reduced charges for transactions between KES 10 and KES 1,500 by up to 67% to encourage low-value transactions. In 2018, it lowered fees for sending KES 101 to KES 500 from KES 11 to KES 6. During the COVID-19 pandemic, M-PESA, along with other mobile money services and banks, zero-rated all transfers under KES 1,000. Despite these changes, frequent low-value transactions remain costly, which reinforces the perception that M-PESA is expensive. The growing gap between user experience and Safaricom’s response exposes a hard truth: M-PESA increasingly serves investor needs over those of users. Many Kenyans believe Safaricom only responds when pushed, either by regulators or competitors. Safaricom’s delayed compliance with interoperability rules reinforced this view, as did its slow pace in improving user experiences. Next Wave continues after this ad. The funding surge of 2021–2022 feels like a distant memory. In 2024, total VC funding hit $2.21B, but the real story is how capital is shifting. Uganda (+304%), Tanzania (+108%), and Côte d’Ivoire (+97%) saw significant funding gains, while fintech remained dominant at $1.04B. Download the full report here There is also an unspoken class divide in how M-PESA operates. Premium services like M-PESA Global and Globalpay and investment tools target middle-class users. Meanwhile, core services, including transfers, withdrawals, Fuliza, remain costly and inflexible. This builds a perception that Safaricom designs products for the wealthy while treating mass-market users as cash cows. Airtel Money has moved quickly to exploit this gap and has positioned itself as the affordable choice for ordinary Kenyans. Airtel Money’s market share jump to 9% signals a real shift, not a short-term fluctuation. The growth comes from free Airtel-to-Airtel transfers, lower cross-network fees, and cheaper withdrawals. Sending KES 1,000 to other networks costs KES 11 on Airtel Money, while M-PESA charges KES 13. Withdrawing the same amount costs KES 29 on Airtel, KES 2 less than M-PESA. Still, Airtel Money struggles to break M-PESA’s grip on the agent network. M-PESA agents dominate the country. A 2022 Central Bank plan to open up agency networks stalled, missing deadlines by two years. Safaricom may be resisting because it knows what’s at stake: its agents were built with its resources, and opening them up could weaken a key advantage. Safaricom also benefits from deep market inertia. Users remain on M-PESA because it is embedded in everything, including rent, school fees, hospital bills, and government services. The psychological and practical costs of switching are high, and Safaricom appears comfortable with this, calculating that it can delay reforms as long as the ecosystem keeps users tethered. While users often complain about high M-PESA charges, the cost of running a reliable payment infrastructure is rarely discussed. Safaricom invests heavily in maintaining M-PESA’s network, including security upgrades, compliance with financial regulations, and expanding its reach to remote areas. Next Wave continues after this ad. Registration for GITEX AFRICA 3rd edition is NOW OPEN – Africa’s largest tech and start-up event from 14-16 April, 2025 in Marrakech,
Read MoreKenyan court dismisses lawsuit claiming Safaricom copied “Reverse Call” idea
A Nairobi court has dismissed a lawsuit filed by Davidson Ivusa, a Kenyan innovator who accused Safaricom of copying his concept for its “Reverse Call” feature. The February 27, 2025 ruling seen by TechCabal brings to a close a three-year legal battle over one of Safaricom’s core services, raising questions about how big corporations handle unsolicited ideas. According to court documents, Ivusa claimed he pitched a “Jichomoe” proposal to Safaricom in 2010. He argued that Safaricom delayed the implementation of his concept—which allowed users to make calls even with zero airtime—and then launched it under a different name without his involvement. Safaricom denied the claim, arguing that the “Reverse Call” service, launched in April 2019, was independently developed. The telco said the feature was developed to address a common user need: making calls without sufficient airtime. Justice Mugambi determined that Ivusa’s concept was shared voluntarily, with no expectation of confidentiality or fiduciary duty on Safaricom’s part, saying “The concept was sent unsolicited, and there was no evidence that the defendant undertook to hold it in trust or act in a fiduciary capacity.” Ivusa’s lawsuit centred on claims of breach of trust, passing off, and loss of income. However, the court found no grounds to impose a constructive trust, a legal remedy for unjust enrichment. “Proof of parties’ intention is immaterial; for the trust will nonetheless be imposed by the law for the benefit of the settlor,” Justice Mugambi ruled. “The plaintiff has not substantiated the claim of dishonesty on the defendant’s part.” Safaricom did not immediately respond to a request for comment. On copyright infringement, the court drew a sharp distinction between protecting an idea and protecting its execution. Justice Mugambi cited Kenyan case law and global copyright standards. “Copyright law protects the expression of ideas, not the ideas themselves,” he said. Ivusa failed to provide detailed evidence of “Jichomoe’s” expression. He did not present a source code, diagrams, or prototype, only a concept note shared via email. “Without evidence of the plaintiff’s unique implementation, it is difficult to establish that the defendant appropriated the plaintiff’s specific expression,” the judge said. The court dismissed the claim of passing off, as Ivusa could not prove that “Jichomoe” had gained goodwill or market recognition before Safaricom’s launch. “There was no proof that consumers or industry stakeholders associated Safaricom Reverse Call Feature with “Jichomoe”,” the ruling read. The case shows the murky legal terrain where unsolicited ideas meet commercial implementation, a common dispute in markets like Kenya, where tech startups often pitch to dominant players.
Read MoreNigeria’s NIBBS, Ceva, lobby Ruto to build Kenya’s new payment system
Nigeria’s Interbank Settlement System (NIBBS) and Kenyan payments software provider Ceva Limited are lobbying President William Ruto to develop Kenya’s new Fast Payment System (FPS) and national digital ID programme, intensifying competition for one of Kenya’s most lucrative financial projects. In a letter to Ruto seen by TechCabal, Ceva Limited requested a meeting to present NIBBS as its strategic partner in building the country’s new payment infrastructure. “We are writing to formally request a meeting with you at your earliest convenience, on either 20th or 21st March 2025,” the letter read. “ The purpose of the meeting is to introduce our partner, the Nigerian Interbank Settlement Systems (NIBBS).” The meeting will include top executives from NIBBS and Ceva, including NIBSS CEO Premier Oiwoh, Yvonne Ige, its head of partnership, and Ceva MD Yatin Mehta. David Kiprono, the director of Webmaster—the firm behind developing Kenya’s e-Citizen—is also expected to attend. NIBBS, owned by the Central Bank of Nigeria (CBN) and licensed banks, is Nigeria’s national switch and payment infrastructure. Ceva, founded in 2010, operates in India, Nigeria, Kenya, and Brazil and claims to process $40 billion in transactions annually. In its letter, Ceva argued that NIBBS has the credentials and a system that can ensure seamless interoperability across different payment platforms including banks, SACCOS, mobile money operators like M-Pesa, and fintechs. “Our robust infrastructure is developed in Africa, for Africa,” Ceva wrote in the letter. “ AfriGo is NIBBS’ answer to Africa having its card processing, driving our economic independence and efficiency. India has done it with Rupay, China has done it with UnionPay, UAE has done it with Jaywan, Brazil has done it with PIX.” Ceva and NIBBS did not respond to requests for comments. If successful, the deal could face a pushback from local mobile money operators like Safaricom and commercial banks who have been pushing for the Central Bank of Kenya to upgrade Pesalink. Safaricom and KBA estimate that building a new FPS from scratch could cost $200 million and take up to four years to complete, while an upgrade to Pesalink—a system handling $8.5 billion annually—would be faster and cheaper. While the CBK has not yet decided on the proposed FPS upgrade, there is significant lobbying from local and international firms for the lucrative contract.
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