For some refugee families who traveled to Germany during the migrant crisis of 2015 and 2016, gratitude for Chancellor Angela Merkel’s decision to welcome them comes via a namesake.
Just 20 percent of people in low- and lower-middle-income countries have received a first Covid-19 vaccine dose — compared to 80 percent in high-and upper-middle income countries.
As rumors and misinformation about coronavirus vaccines gradually subside and the West African country emerges from a third wave, Senegalese are less reluctant to take a shot.
Less than 3% of genetic material used in global pharmaceutical research is from Africa. The staggering gap is quite surprising because Africans and people of African descent are reported to be more genetically diverse than any other population.
Since launching in 2019, African genomics startup 54gene has been at the forefront of bridging this divide in the global genomics market. Today, the company has secured $25 million in Series B funding to bolster its efforts.
This round comes a year after the company, founded by Dr Abasi Ene-Obong, raised $15 million in Series A and two years after closing a $4.5 million seed round.
In total, 54gene has raised more than $45 million since its inception.
With the world’s analyzed genomes coming mostly from anywhere that isn’t Africa, the continent remains a valuable source of new genetic information for health and drug discovery research.
This is where 54gene’s work is relevant. The company conducts and leverages this research to ensure Africans are recipients of upcoming drug and medical discoveries.
Last year when we covered the company last year, CEO Ene-Obong disclosed that for 54gene to conduct this research, it recruits voluntary participants who donate genetic samples via swab or blood tests.
It still very much works this way. However, instead of depending on third-party health centres like hospitals and sending the samples abroad for analysis, 54gene launched its own genetics sequencing and microarray lab in Lagos last September. The company did this in partnership with U.S.-based biotech company Illumina.
Speaking with TechCrunch, Ene-Obong says in addition to the genotyping capabilities offered, the lab also provides whole-genome sequencing (WGS) and whole-exome sequencing (WES).
Not to bore you with the jargon but here’s why this is important. Genotyping tends to show only 0.02% of an individual’s DNA; however, WGS can show almost 100% of the same person’s DNA.
For WES, although it represents only 1.5% of the human genome, it shows approximately 85% of known disease-related variants.
With these three in place, the company can advance genomics research and expand its ability to help scientists and researchers in Africa.
Unlike fintech and other fast-moving sectors like e-commerce, innovation in healthtech takes some time to take shape finally. 54gene is one of the few startups in the sector and even in Africa to have moved from seed stage to Series B in under two years.
It’s this sort of frightening speed that makes one wonder what the company is doing right. So I ask the CEO whether the company is indeed seeing significant progress in advancing African genomics; he answers in the affirmative.
“Though the arc of conducting early research through drug approval can be long in biotech, we have taken the approach to building the backbone that is needed for short-term successes to long-term gains that provide better healthcare delivery and treatment outcomes from diseases,” he added.
In addition to setting its first lab, the CEO says the company increasing its biobanking capacity by 5x and is counts that as a major success.
During its last raise, 54gene had a biobank capacity for 60,000 samples. If Ene-Obong comments are anything to go by, the two-year-old company currently has a biobank with over 300,000 samples, close to its longer-term aim to manage up to 500,000.
Another one is the recruitment and training of talent to generate and process data needed to produce insights for the company’s drug discovery efforts.
Nigeria has a dearth of experienced clinicians and with the remaining few leaving in droves, it is not hard to see why it is a win for the company. Knowing this, 54gene plans to use part of the new funding to recruit and train more professionals.
Other use of funding will expand its capabilities in sequencing, target identification and validation, and precision medicine clinical trials. Also of great importance is its expansion across the African continent.
To aid this expansion, 54gene will have to carry out partnerships. A recent one occurred between the company and the Tanzania Human Genetics Organization and Ene-Obong says 54gene is in varying stages of conversations with more partners. However, he was tight-lipped on who they might be.
“We are excited about our Africa-first approach which will see us expand to countries within East and West Africa in the coming year,” he added.
54gene made some hires to this end: Michelle Ephraim, Colm O’Dushlaine, Peter Fekkes, Teresia Bost, Jude Uzonwanne — all of who have decades of experience working with companies like Leica Biosystems, Regeneron Genetic Center, Novartis, Celgene, and the Bill and Melinda Gates Foundation.
Pan-African venture capital firm Cathay AfricInvest Innovation Fund led this round. Lead investor from the company’s Series A funding, Adjuvant Capital invested once again with participation from other VCs including KdT Ventures, Plexo Capital, Endeavor Capital, and Ingressive Capital.
Adnan Abu Walid al-Sahraoui’s group claimed responsibility for an attack that killed four U.S. soldiers in Niger. President Emmanuel Macron also blamed the group for killing French charity workers.
After a journey that began on the war-torn streets of Sierra Leone, the Dazed editor in chief is now one of fashion’s most influential stylists.
The distance between their farms and the nearest processor is key for smallholder farmers who need to process their crops. And though Nigeria’s food processing systems have a keen resemblance to the West with respect to big factories and huge economies of scale in high-demand cities, farmers still suffer from poor logistics networks.
With distance and logistics problems, farmers’ crops can go bad and when factories buy them, it affects their processing yields and price. Farmers, witnessing post-harvest loss, also get paid less and miss the opportunity to invest in their crops production.
Nigerian agritech startup Releaf is solving this by building proprietary hardware and software solutions to make these farmers and food factories more efficient and profitable. Today, the company is announcing that it has raised $2.7 million in seed and grants towards this effort.
Pan-African focused venture capital firms Samurai Incubate Africa, Future Africa and Consonance Investment Managers led the round. Individual investors like Stephen Pagliuca, the chairman of Bain Capital and Justin Kan of Twitch also participated.
In addition to the seed round, the agritech startup secured $1.5 million in grants from The Challenge Fund for Youth Employment (CFYE) and USAID.
Founded by Ikenna Nzewi and Uzoma Ayogu, Releaf focuses on value chains where smaller factories are set up near smallholder farmers. This allows them to get better processing yields and fewer logistics costs; in the end, the farmer has more money to work with.
When the pair started the company in 2017, the idea behind Relead was not concrete yet as the team, based in the U.S., had not figured out product-market fit.
First, it planned to increase productivity in Nigeria’s agricultural sector using software. Even after graduating from Y Combinator’s summer batch that year, Releaf toyed around with ideas around trade finance and a marketplace for buyers and sellers of agricultural products.
The team would get a clearer picture of what it wanted to build when the founders moved back to Nigeria. The Americans of Nigerian descent toured across 20 states and studied different value chains for crops spotting inefficiencies that could be solved by technology.
“We took a much more broad approach to what the solution would be, but we really wanted to decide on a specific crop to work in. And we found that opportunity in the oil palm sector,” Nzewi said to TechCrunch in an interview.
The oil palm market in Nigeria is a $3 billion one with over 4 million smallholder farmers cultivating farms where those crops are planted.
These farmers drive 80% of the production of oil palm. But since the industry is quite fragmented, they have many challenges processing the oil palm because it’s a crop that requires serious processing power to extract vegetable oil from it.
Farmers typically go through this process by using rocks or inappropriate hardware — ineffective processes that lead to low-quality oil palm largely unfit as input for high-quality vegetable oil manufacturing.
Nzewi says the team saw an opportunity and set out to build a technology to help farmers crack oil palm nuts. The result was Kraken, a proprietary patent-pending machine.
So here’s how the company’s business model works. Releaf buys nuts from the farmers, then uses the Kraken to crack the nuts and crush the kernels into vegetable oil. Releaf then sells the vegetable oil to FMCG processors and local manufacturers, mainly in Nigeria’s south-southern region.
“Nigeria has about 60% more demand for vegetable oil than it does supply. And it can not be met due to supply shortfall with imports because the government banned the importation of vegetable oil. So there is a need to take these smallholders who are driving 80% of production and make them more efficient so that we can have a better balance of supply and demand for vegetable oil,” Nzewi said about the pain point Releaf is addressing.
But still, why does the company think it can break into a competitive Nigerian vegetable oil market with hardly differentiable products?
Nzewi explains that the answer lies in the quality of products. Typically vegetable oil is driven by a free fatty acid (FFA) metric that measures vegetable oil’s impurity. The CEO claims that while the industry standard is about 5% FFA, Releaf produces at 3.5%.
Despite having an edge in quality of production, Releaf products are sold on an industry standard. Nzewi says that might not be the case in the future as the company is looking to finally take advantage of its product quality and increase prices to improve its profit margins.
According to the company, Kraken already processes 500 tonnes of palm nuts. Its software connects to over 2,000 smallholder farmers who have supplied over 10 million kilograms of quality palm kernel nuts to food factories.
Regarding expansion, Nzewi noted that Releaf has more appetite for moving into new geographies instead of crop offerings. His argument is that processing oil palm and cultivation style is a straightforward method due to its similarities across West Africa.
But for crop expansion, the company may need to find crops that can be planted alongside oil palm and practice intercropping or work with crops like soybeans or groundnuts used in the vegetable oil industry.
Releaf will use the seed investment to develop technology and deploy it to smallholder farmers, Nzewi tells me. Then the $1.5 million in grants will focus on providing working capital financing to these farmers. He adds that Releaf has run financing trials already this year where it has increased smallholder incomes by three to five times.
“We think there’s a really great opportunity to bring both physical technology and financial services to these communities to make them more productive. And it’s kind of central to our thesis,” the CEO said. “We believe that our smart factories can serve as an economic pillar in these rural communities and make it easier for us to supply these communities with other services that they can find valuable like access to working capital, payment for education, and access to insurance services. So we see the food processing as like the first step it cements us in the value chain.”
Earlier this year, agritech startups like Gro Intelligence and Aerobotics raised huge sums of venture capital and showed the sector’s promise in Africa. However, venture capital has slowed down over the past few months and Releaf’s investment brings that spotlight back to the sector, albeit briefly.
Rena Yoneyama, the managing partner at Samurai Incubate Africa, said Releaf’s novel approach sets it aside from other agritech startups the venture capital firm has engaged with.
“We believe the firm’s thesis on decentralizing food processing would have a strong match with Africa’s economic development landscape for the next few decades. Ikenna and Uzo are the perfect founders to disrupt this market in Nigeria and beyond. We are thrilled to back them as they innovate in providing both agro-processing and financial services to rural communities and farmers,” she added.
Speaking on the investment as well, Iyin Aboyeji, general partner at co-lead investor Future Africa said, “…The team at Releaf is building the agro-allied industry of the future from the ground up, starting with palm oil which they have developed a novel technology to aggregate, deshell and process into critical ingredients like vegetable oil and glycerine. Future Africa is delighted to back Releaf to build the future of modern agriculture.”
But investigators said they could not confirm The Times’s reporting that the sport’s top global official, Hamane Niang, knew about the abuse.
Funding startups that help manufacturers and sellers distribute products and merchants access them on a single platform keeps soaring across Africa.
Today, Cairo-based B2B e-commerce startup Capiter continues that trend by raising a $33 million Series A round.
The investment was co-led by Quona Capital and MSA Capital. Other participating investors include Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab, and Derayah Ventures.
Many of the manufacturers in Egypt today do not have the right infrastructure of the supply chain in place to reach merchants. Nouh says that manufacturers can only reach 30% of merchants in the market, but with Capiter, that number goes up between 80% to 100%.
Also, a large portion of the manufacturers’ end trade happens via traditional channels where there is basically no transparency over data or market insights.
Using machine learning, Capiter says it helps these manufacturers gain critical insights into the markets they serve, the products they sell, and how they fair with competition.
Then for merchants, Capiter attends to three problems. The first is the inconvenience merchants have to deal with engaging several suppliers to find the right product. The second is transparency which involves some back and forth between merchants and manufacturers on pricing. The third is that merchants often have little or no access to working capital to get the right product and the right time.
With Capiter, merchants can order products from FMCGs and wholesalers while the company delivers them. Capiter also provides fair pricing and matching techniques that showcases a wide range of inventory for merchants.
Then it affords working capital to them to buy more products even when they are strapped with cash. Capiter partners with local banks in Egypt and the Central Bank to perform this.
Capiter has over 12 merchant types on its platform, including mom-and-pop stores, hotels, restaurants, cafes, electronic shops, supermarkets, grocery shops, and catering companies, each with its own customized solutions.
“We’re able to get the data from the products they buy. So we offer them the best solution on what they should sell, at what time and peak seasons, including when are the offerings happening. All of these are customized solutions that we offer,” said Mahmoud Nouh.
The company’s revenues are derived from little margins on the products bought from manufacturers and sold to merchants. Then on rebates for the suppliers and commission from the working capital provided to merchants. Capiter also makes money from providing market insights and data services to manufacturers and FMCGs.
Typically B2B e-commerce platforms operate either asset-light, inventory-heavy models. Nouh tells me that Capiter chose to use a hybrid model — making deliveries without owning any trucks to ensure scalability and owning inventory, especially for high turnover products helping the company with high availability and better pricing.
“This way has enabled us to scale the business in a very fast manner and at the same time, efficiently and reliably. Regarding warehouses and trucks, we don’t own them; we rent them. We deal with third-party logistics for transportation and we manage them.”
Over 50,000 merchants and 1,000 sellers use Capiter. According to CEO Nouh, the company has provided up to 6,000 SKUs. He also adds that the company is targeting an annualized revenue of $1 billion by next year.
“We’re on a very good trajectory for achieving this,” he added. “In terms of team members, we have a team of more than 1000 people at the moment, including in warehouses, delivery, etc. So we’ve seen good traction across all board,” he answered when asked about Capiter’s traction.
Quona Capital, the co-lead investor in this round, is known to have made some B2B e-commerce bets over the past years, for instance, Kenya’s Sokowatch. The investment in Capiter adds to the firm’s portfolio in that regard and a growing presence in the MENA region being its first check made in Egypt.
In a statement, Quona co-founder and managing partner Monica Brand Engel said, “Capiter’s embedded finance model, combined with its expertise and strong user engagement, can have a dramatic impact on the financial lives of SMEs, helping them optimize their income which helps communities to thrive.”
“SME supply chain inefficiencies are massive throughout the Middle East. We believe the key blocker is the lack of working capital in the system. Capiter has built an asset-light way to aggregate retailers and suppliers and facilitate credit into the system through a comprehensive multi-product offering such as commerce, credit financing, digital payments, bookkeeping and inventory management for SMEs, leveraging on the ecosystem built by the local banks and financial institutions.” adds Ben Harburg, partner at MSA Capital, a global VC that has invested in fintechs like Nubank and Klarna.
According to Ahmed Nouh, the company’s COO, Capiter will expand into new verticals like agriculture and pharmaceutical offerings.
The co-founder brings experience from the shipping and logistics space. Both he and Mahmoud are serial entrepreneurs. The latter’s journey is quite prominent, having worked in the mobility space as the co-founder and COO of Egyptian ride-hailing company SWVL. The company recently announced a potential SPAC deal valuing it at $1.5 billion and is one of the few African startups breeding a tech mafia. Ahmed Sabbah, another co-founder of the company, now runs early-stage fintech startup Telda.
Capiter has attracted a global team that brings together the expertise from companies like Careem and Flipkart needed to achieve the company’s targets, said Mahmoud.
He adds that the team, alongside the provision of financial services via partnerships with banks and its hybrid model, is how the company stands out in a competitive market, including the likes of Fatura, Bosta, and MaxAB.
Following this investment, the company plans to expand vertically (in terms of the buyer type) and geographically within the next year.
“We want to serve every single SME in the MENA region and expanding inside Egypt and globally.” He adds that Savola Group, one of its investors and the largest investor for FMCG products in the MENA region, will prove pivotal to this growth. Capiter also plans to diversify its financial services offerings to include payments.
Olympus said in a brief statement Sunday that it is “currently investigating a potential cybersecurity incident” affecting its European, Middle East and Africa computer network.
“Upon detection of suspicious activity, we immediately mobilized a specialized response team including forensics experts, and we are currently working with the highest priority to resolve this issue. As part of the investigation, we have suspended data transfers in the affected systems and have informed the relevant external partners,” the statement said.
But according to a person with knowledge of the incident, Olympus is recovering from a ransomware attack that began in the early morning of September 8. The person shared details of the incident prior to Olympus acknowledging the incident on Sunday.
A ransom note left behind on infected computers claimed to be from the BlackMatter ransomware group. “Your network is encrypted, and not currently operational,” it reads. “If you pay, we will provide you the programs for decryption.” The ransom note also included a web address to a site accessible only through the Tor Browser that’s known to be used by BlackMatter to communicate with its victims.
Read more on TechCrunch
Brett Callow, a ransomware expert and threat analyst at Emsisoft, told TechCrunch that the site in the ransom note is associated with the BlackMatter group.
BlackMatter is a ransomware-as-a-service group that was founded as a successor to several ransomware groups, including DarkSide, which recently bounced from the criminal world after the high-profile ransomware attack on Colonial Pipeline, and REvil, which went silent for months after the Kaseya attack flooded hundreds of companies with ransomware. Both attacks caught the attention of the U.S. government, which promised to take action if critical infrastructure was hit again.
Groups like BlackMatter rent access to their infrastructure, which affiliates use to launch attacks, while BlackMatter takes a cut of whatever ransoms are paid. Emsisoft has also found technical links and code overlaps between Darkside and BlackMatter.
Since the group emerged in June, Emsisoft has recorded more than 40 ransomware attacks attributed to BlackMatter, but that the total number of victims is likely to be significantly higher.
Ransomware groups like BlackMatter typically steal data from a company’s network before encrypting it, and later threaten to publish the files online if the ransom to decrypt the files is not paid. Another site associated with BlackMatter, which the group uses to publicize its victims and touts stolen data, did not have an entry for Olympus at the time of publication.
Japan-headquartered Olympus manufactures optical and digital reprography technology for the medical and life sciences industries. Until recently, the company built digital cameras and other electronics until it sold its struggling camera division in January.
Olympus said it was “currently working to determine the extent of the issue and will continue to provide updates as new information becomes available.”
Christian Pott, a spokesperson for Olympus, did not respond to emails and text messages requesting comment.
American military officials have denounced the ouster of a president in West Africa, and said they had no warning of what their students were planning.
China’s first data privacy laws go into effect on November 1, 2021. Will your company be in compliance?
Modeled after the EU’s GDPR, the new regulations “[introduce] perhaps the most stringent set of requirements and protections for data privacy in the world,” writes Scott W. Pink, special counsel in O’Melveny’s Data Security & Privacy practice.
In a comprehensive overview, he explains its key requirements and compliance steps for U.S.-based firms that service Chinese consumers.
“American firms doing business in China or with companies inside China will need to immediately start assessing how this new law will impact their activities,” he advises.
Now that the world has embraced remote work, are visas as critical for startup founders who want to succeed in the United States?
On Tuesday, September 14, at 2 p.m PT/5 p.m. ET, Managing Editor Danny Crichton and immigration law attorney Sophie Alcorn will discuss the matter on Twitter Spaces.
— TechCrunch (@TechCrunch) September 10, 2021
They’ll take questions from the audience, so mark your calendar and follow @techcrunch on Twitter to get a reminder before the chat.
Thanks very much for reading Extra Crunch; I hope you have a great weekend.
Senior Editor, TechCrunch
Fintech is transforming the world’s oldest asset class: Farmland
Whether or not he actually said it, “buy land, they ain’t making any more of it,” is one of Mark Twain’s best quotes on capitalism.
Past recessions and the ongoing pandemic have created real uncertainty about the future of commercial and residential real estate, but farmland is “historically stable,” says Artem Milinchuk, founder and CEO of FarmTogether.
Anatomy of a SPAC: Inside Better.com’s ambitious plans
Online mortgage company Better.com isn’t waiting to complete its SPAC merger before making big moves: Ryan Lawler reported that it purchased Property Partners, a U.K.-based startup that offers fractional property ownership.
It’s the second company Better bought in recent months: In July, it snapped up digital mortgage brokerage Trussle.
“We aren’t so easily categorized,” said Better CEO Vishal Garg, who told Ryan that the company plans to soon expand into traditional financial services like auto loans and insurance.
Said CFO Kevin Ryan, “a lot of people have their niches in the way they’re attacking this, but we feel like we’re on a path to being full stack where everything’s embedded in the same flow.”
5 factors that can make or break a startup’s growth journey
If you don’t have a good story to share, it doesn’t matter how big your marketing budget is.
“Paid marketing can be a useful tool in your toolkit to accelerate an already humming flywheel. Just don’t let it be the only one,” suggests Brian Rothenberg, a two-time founder who’s now a partner at Defy.
Drawing from his time as VP of growth for Eventbrite, he shares five critical factors for kick-starting, maintaining and measuring growth over the long term.
Debt versus equity: When do non-traditional funding strategies make sense?
Many potential founders are well-versed in startup economics — and many are completely green.
When it comes to raising funds, understanding the relative benefits (and limitations) of debt and equity financing is required knowledge, however.
Founders who are less willing to dilute their control may be willing to use debt financing to fund their capital expenditures, “but it doesn’t make sense for everyone,” says six-time entrepreneur David Friend.
Investors are doubling down on Southeast Asia’s digital economy
Last year, startups based in Southeast Asia raised more than $8.2 billion, a 4x increase from 2015.
In the first half of 2021, regional M&A has increased 83% to a record $124.8 billion.
It’s not just venture capitalists and Big Tech who are beefing up their presence in the region.
“Over 229 family offices have been registered in Singapore since 2020, with total assets under management of an estimated $20 billion,” writes Amit Anand, a founding partner of Jungle Ventures.
Edtech leans into the creator economy with cohort-based classes
Natasha Mascarenhas examined the parallels between edtech and the creator economy, both of which boomed amid the pandemic — and blurred amid the rise of cohort-based classes.
“Edtech and the creator economy certainly differ in the problems they try to solve: Finding a VR solution to make online STEM classes more realistic is a different nut to crack than streamlining all of a creator’s different monetization strategies into one platform. Still, the two sectors have found common ground in the past year.”
Meet retail’s new sustainability strategy: Personalization
Were the shoes, jacket and makeup that looked so good on Instagram (and in your shopping cart) disappointing when you put them on for the first time?
Due to buyer’s remorse, it’s not uncommon for apparel or beauty products to languish in the back of a drawer or end up as gifts, but there are also serious consequences.
“The beauty industry produces over 120 billion units of packaging every year, little of which is recycled. Globally, an estimated 92 million tons of textile waste ends up in landfills,” Sindhya Valloppillil, founder and CEO of Skin Dossier, notes in a guest column.
The answer to bringing sustainability to the industry, she says, is using tech to personalize the retail experience:
- AR virtual try-on with shade matching
- Advanced virtual fitting rooms with VR/AR for fashion
- Smart packaging with IoT and distributed ledger technology
Plentywaka founder Onyeka Akumah on African startups and global expansion
Twenty million people live in Lagos, Nigeria, and each day, 14 million of them use the city’s transit system.
Travelers rely on overcrowded public buses that navigate congested routes: What should be a 30-minute trip is often a three-hour journey, but Treepz CEO and co-founder Onyeka Akumah “has big plans to ameliorate the public transport infrastructure in Africa and beyond,” writes Rebecca Bellan.
“We wanted to give people a better way to commute with predictability, where they can know when the bus will get here, the certainty that they will have a seat in a vehicle, that it’s a decent vehicle and a safe one where you can bring your laptop,” said Akumah.
“Those are the things we said we wanted to change.”
Dear Sophie: When can I apply for my US work permit?
My husband just accepted a job in Silicon Valley. His new employer will be sponsoring him for an E-3 visa.
I would like to continue working after we move to the United States. I understand I can get a work permit with the E-3 visa for spouses.
How soon can I apply for my U.S. work permit?
— Adaptive Aussie
Plentywaka wants to change the way Africans move. It’s starting with one of the busiest cities on the continent.
The startup, a ride-share and bus-booking platform, is based in Lagos, the Nigerian city where 20 million people and 45% of the country’s skilled workforce live. The public transportation system strains under the weight of 14 million commuters who use it daily.
Relying on the public bus can be more than unpredictable — it also can be dangerous, according to Onyeka Akumah, co-founder and CEO of Plentywaka. The buses are often old, in disrepair and packed beyond safe limits; traffic congestion turns what should be a 30-minute commute into a three-hour journey.
Plentywaka, a combination of English and Nigerian that means “plenty movement,” was founded in 2019. While it’s still young, the startup has big plans to ameliorate the public transport infrastructure in Africa and beyond.
Plentywaka has two models. “Daily Waka” offers riders in a city fixed daily routes from bus stop to bus stop. Riders can view the schedule of buses, how many seats are available and reserve seats via the app, which tracks the movements of SUVs, minivans, vans and buses driven by gig workers, also known as “heroes.” When the bus arrives, riders can check in with a QR code, and when they hop off, the app automatically charges the rider via a wallet system.
“Travel Waka” is a newer model that offers interstate travel. It basically serves as a booking engine for other bus companies that offer city-to-city services.
In March this year, Plentywaka was accepted into the Techstars Toronto accelerator program, securing funding as it looks toward global expansion across Africa and into Canada. Just this month, the company also announced expansion plans into Ghana via an acquisition of Star Bus.
Akumah talks us through what the TechStars funding means to Plentywaka, the startup landscape in Africa and tips for African startups looking for investors.
The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.
Before founding Plentywaka, you were the CEO of Farmcrowdy, another startup that connected investors to farmers via a digital platform. What was the impetus for starting a second business? Are you a serial entrepreneur, or do you plan on sticking with this one?
I was the CEO of Farmcrowdy until the end of May this year, but I’ve handed it over to my other co-founder who is now the CEO, so I’m fully focused on Plentywaka now. We started Plentywaka in January 2019. I was flying back from Qatar, where I spoke at an event, and landed in Lagos around 8:15 a.m. that day. I had to be at a meeting by 10 a.m., and going through traffic in Lagos is a pain. The state has 20 million people and everybody’s rushing to work, so I had to abandon my car and take two bikes to make that meeting. When that was done, to make another meeting, I had to take a boat ride across the lagoon. I tweeted about it saying, “Today, I have flown, I have used two bikes and now I’m on a boat ride. This is the life of an entrepreneur in Lagos.”
What I wasn’t prepared for was the shock my colleagues gave me when they said we should experiment with taking the bus. I hadn’t taken the bus in about 15 years, and I took that trip and had a panic attack. I never knew how frightened I would be getting on a 30-year-old bus with torn-out parts and worn-out chairs. I literally had to hold one of the doors throughout the trip from falling off. That was the day the concept of Plentywaka started.
Over 70% of Egypt’s young and fast-growing population of over 100 million is financially underserved despite mobile penetration exceeding 90%.
Traditional banks often overlook this segment because of their spending power or financial status and fintechs have seized the opportunity to cater to their needs.
One such fintech is MNT-Halan, and today, the company which describes itself as “Egypt’s leading fintech ecosystem” is announcing that it has closed a $120 million investment.
The investors backing MNT-Halan include private equity firms Apis Growth Fund II, Development Partners International (DPI), and Lorax Capital Partners; VCs like Venture Partners, Endeavor Catalyst, and DisruptTech.
They join previous local investors like GB Capital, DPI, Algebra Ventures, Wamda, Egypt Ventures, Shaka VC, Nowaisi Capital, Unidelta, Battery Road Digital Holdings that have backed the company in the past.
In 2017, Mounir Nakhla and Ahmed Mohsen started Halan as a ride-hailing and delivery app offering two and three-wheeler services to customers in Egypt. Since then, it has provided other features including wallets, bill payment services, e-commerce with buy now, pay later (BNPL), micro and consumer loans, all in a bid to become a super app.
Then in June this year, Netherlands-based MNT Investments BV entered a share swap agreement with the Egyptian super app to accelerate the progress of its payments and lending arm, especially in BNPL across Egypt and the MENA region.
Before the merger, MNT acquired the shares of Raseedy, the first independent and interoperable digital wallet in Egypt licensed by its Central Bank to disburse, collect and transfer money digitally through mobile applications.
As MNT-Halan, it has also obtained the micro, consumer, and nano finance licenses to provide services to both businesses and consumers across Egypt.
This has enabled the company to build a fintech ecosystem that connects consumers, merchants, and micro-enterprises via a digital platform and payment solutions.
As a business and consumer lender, MNT-Halan offers BNPL services, nano loans, microfinance, SME lending, payroll lending, and light-vehicle finance.
Its digital payments ecosystem provides services around loan disbursement and collection, peer-to-peer transfers, payroll disbursement, remittances, and bill payments.
Then in mobility, MNT-Halan provides courier, delivery, and ride-hailing services.
MNT-Halan claims to be Egypt’s largest and fastest-growing lender to the unbanked. Serving over 4 million customers in Egypt, of which 1 million are monthly active users, MNT-Halan has disbursed over $1.7 billion worth of loans to 1.8 million borrowers since inception. The company also claims to process $100 million monthly, growing 20x over the past five years.
The investment, a mixture of private equity and venture capital money, will help the company improve its technology and product while scaling to customers within and outside Egypt.
“We are at the forefront of the digital revolution sweeping across Egypt, bringing together the unbanked population with our technology. We are on track to bring financial inclusion to tens of millions of Egyptians. As a result, we will unleash this segment’s earnings potential and drive greater participation in the economy,” said CEO Nakhla.
One of its investors, Apis Growth Fund II, is a London-based private equity fund. It makes quasi-equity investments in the financial sector and related market infrastructure — payment gateways, switches, and payment platforms — in Africa and Asia.
MNT-Halan is its first landmark investment in Egypt but second on the continent after taking part in TymeBank’s $109 million investment in February this year.
The co-founders and managing partners Matteo Stefanel and Udayan Goyal said this in a statement, “We are thrilled to be investing in MNT-Halan, which is our first investment in Egypt. Our belief is that they will be the leading player digitizing the unbanked and bringing financial services to millions of underserved customers in the country.
“We look forward to partnering with them to extend their impressive growth trajectory and believe Mounir Nakhla’s track record, combined with MNT-Halan’s tech team and operational expertise, provide the ideal opportunity to invest in Egypt’s fintech sector.”
Prior to this news, Halan as an independent entity had raised $26.4 million, according to Crunchbase. This investment takes it to a combined total of $146.4 million, of which the latest is one of the largest raised in Africa this year and continues to prove the dominance of fintech on the continent.
In Nigeria, there are more than 40 million micro-businesses underserved in some form or another regarding banking services. Although some of these businesses have registered bank accounts, gaps exist in how banks use the data available to serve the needs of each business.
With banks, presenting a series of transactions as statements is all these businesses require. They care less about providing them with insights and growth opportunities around their customers and products.
A fintech startup, Prospa wants to change that and has begun to tap into this market. In March, the company was one of the 10 African startups participating in Y Combinator’s winter batch. A few months past graduation, the startup, combining both worlds of banking and business management tools for micro and small businesses, has closed a $3.8 million pre-seed round.
Prospa was founded by Frederik Obasi, Chioma Ugo and Rodney Jackson-Cole. As a serial entrepreneur running businesses in tech and media, Obasi experienced how tough running operations and banking his business simultaneously was in Nigeria.
Banks only concerned themselves with providing some financial services so people like Obasi had to look for software or personnel to cater to the operational parts of their businesses.
For someone who runs a large business with a considerable influx of cash, it is easy to assign staff or buy software to delegate tasks. But it can be expensive and a daunting task for smaller businesses; that’s why most of them struggle.
Sensing an opportunity, Obasi and his team launched Prospa under the premise that they would cheaply solve the needs of these small business owners in banking and software.
“When I left my last business, I wanted to do something really big and something that I knew the problem inside out. That’s why I started Prospa,” Obasi told TechCrunch over a call.
The founders built the product between June and September 2019 and went live in October. Since then, the company acquired customers in stealth even when they got into YC. Obasi explains that he wanted Prospa to have organic traction void of the growth driven by hype and media noise.
“We like to think a really long-term game. We really wanted to really test the hypotheses, build an actual business with revenue and understand what we were doing. Then the COVID period came and we started seeing enough traction,” he added.
But when the company began to get some buzz, the typical description people had about Prospa was “a neobank for small businesses.” Over the call, CEO Obasi is quick to dispel that notion. Alongside providing banking services, he says Prospa offers invoicing tools, inventory management, employee and vendor management, an e-commerce store, and payroll features.
“Banking is just a little part of what we do. We know we’re put into the neobank category, but we see our product as 10% banking and 90% software. So the experience is very much different from what you’d get from a neobank and the use case for Prospa users is quite different,” he added.
Prospa focuses on freelancers and entrepreneurs, acting as the “operating system” for their businesses.
Registered businesses on the platform get access to an account number and other features Prospa provides. For unregistered businesses, Prospa takes them through a process of formalizing their business and providing bank accounts. However, in the grand scheme of things, this segment is more of an inroad into an upsell.
Talking on traction, Obasi says the company has tens of thousands of businesses and is growing 35% month-on-month. And from a non-banking perspective, Prospa has managed over 150,000 product catalogs while small businesses have sent out 360,000 invoices on the platform.
Then pricing depends on the business’ turnover. For instance, a business with a turnover of ₦100,000 (~$200) is not expected to pay Prospa any subscription fee. But businesses with turnovers exceeding ₦100,000 pay fees between ₦3,000 (~$6) and ₦5,000 (~$10) monthly.
This past year, African VC has seen incredible numbers from all corners of the continent at different stages of investment. Prospa’s pre-seed investment, for instance, is the largest round of its kind in Nigeria and sub-Saharan Africa at the moment. In Africa, only Egyptian fintech Telda has raised a larger round.
Obasi believes the company’s understanding of the market and what it wants to achieve was the main reason it could command such a price which, according to him, was almost four times oversubscribed.
The investors in the round include VCs like Global Founders Capital and Liquid 2 Ventures. Founders of global fintechs like Mercury’s Immad Akhund, Karim Atiyeh of Ramp, and executives from Teachable, Square, Facebook and Nubank also participated in the round.
Seeing the likes of Akhund and Atiyeh on Prospa’s cap table might suggest to some that Prospa was backed because the company is building a replica of those businesses in Nigeria. However, Obasi says while there are similarities, Prospa is not building a product for startups.
“There’s not a massive startup ecosystem in the U.S. where you can basically grow a billion-dollar company just serving YC companies. We don’t have that here. We’re really building for the backbone of the economy, which is small and micro-businesses. Speaking to and being able to build relationships with investors, one of the things we made clear is that we’re not an American copycat,” he said when asked if Prospa could be likened with Mercury and other U.S. startup-focused financial product.
Prospa plans to use its new capital to double down and expand with acquisition strategies to get more customers. In addition to that, the company plans to hire more talent, especially in product and engineering.
Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast where we unpack the numbers behind the headlines.
This is Equity Monday, our weekly kickoff to catch up on weekend news and prep for the days ahead. We’re here on Tuesday this week since us folks in the United States had off for labor day. You can follow the show on Twitter here, and while you’re at it, throw me a follow too.
- Jobs report: Over the weekend, the US government posted the Jobs Report. It wasn’t ideal, with a sharp drop in percentage of women rejoining the workforce. I give you the startup angle, and talk about a somewhat poetic unicorn.
- Instacart, meet Instagram: WSJ reports that new Instacart CEO Fidji Simo is expanding the grocery delivery store’s consumer-product advertising business, with a goal of hitting $1 billion in revenue next year. I riff on why this makes sense and what challenges the business make come up against.
- Behemoths, beware: The largest Series A within Africa just closed, and it’s not even close. Wave is taking on telecom-led mobile money, now with four-big name backers. It’s not the only startup trying to take on a behemoth. I also gave a shout out to Glass, which wants to take on Instagram as a new go-to destination for photographers to share their content.
And that’s a wrap. I have a fun edtech piece coming out on Extra Crunch this week, so keep your eyes out for it.
Spanish on-demand delivery platform Glovo today announced plans to double its investment in Africa and expand its operations on the continent.
The Barcelona-based company has invested up to €25M ($30M) by bringing its food delivery service to six African countries — Morocco, Uganda, Kenya, Ghana, Côte d’Ivoire, and Nigeria.
Glovo is available in more than 40 cities with more than 300,000 users, 8,000 restaurants and 12,000 couriers in these countries. Earlier this year, it launched operations in Lagos, Nigeria and Accra, Ghana before expanding to Tema, another Ghanaian city last month.
Over the next 12 months, Glovo says it will invest an additional €50M ($60M) to drive expansion into more cities on the continent and move into new markets like Tunisia, where it plans to launch in Tunis next month.
According to a statement released by the company, the expansion will make Glovo’s services available to 6.5 million people. Co-founder Sacha Michaud believes these markets are currently underserved, and Glovo has found the right opportunity to work with local restaurants, bringing them online to reach new customers in a bid to “make everything, within all towns and cities, available to everyone.”
The attention on Africa follows a series of regional moves Glovo has pulled this year. After its mammoth $528 million Series F raise, it acquired several Delivery Hero’s businesses in Central and Eastern Europe for $208 million.
Now present in 23 countries, Africa represents 30% of the company’s geographical footprint. And the Spanish company plans to be live in 30 countries before the end of next year, a decision in part due to an IPO target in three years.
Glovo says it is a market leader in 80% of the countries where it has operations. The company’s grocery service arm has grown the fastest and revenue has been increasing significantly after a steady rise in orders. To meet the growing needs of customers, Glovo has had to invest heavily in dark stores and in July also launched virtual brands for restaurants.
It’s not clear if Glovo will extend these add-on services to Africa where it has its largest market in terms of population size: Nigeria. Yet, the West African nation does not come without its own fair share of troubles like poor logistics infrastructure and an unpredictable regulatory environment.
Despite that, a couple of food delivery platforms like Gokada and Jumia Food, a subsidiary of e-commerce giant Jumia have tried to scale, finding varying degrees of success doing so.
While Glovo will have to compete for market share with these players, the company says it is bullish because of its multi-category strategy. According to the company, grocery sales account for half of its business in some African markets.
That said, Glovo’s performance in emerging markets is questionable. Last year, the company pulled out of all the Latin American countries — Argentina, Ecuador, Peru, Panama, Costa Rica, Honduras, Guatemala, and the Dominican Republic. It sold operations in these markets to Delivery Hero for $272 million.
The company also exited the Middle East and North Africa (Egypt and Turkey) and Uruguay and Puerto Rico in January 2020.
Over the past couple of years, Glovo has said it wanted to achieve profitability in a short amount of time. The delivery space is a thin-margin business and it is thinner in emerging markets. This played a part in why Glovo exited both Middle East and Latin America. The market isn’t any different in Africa, and time will tell if the Spanish delivery will stay put, exit, or close shop.
Whatever the case, Glovo says it is “committed to continuing its policy to hire top local talent” on the continent and plans to double its number of staff and add an extra 200 employees before the end of next year.
“Our expansion in Nigeria, Ghana, and our upcoming launch in Tunisia is something we’ve been looking at for some time now, so it’s great to be able to make it official. There’s been an unprecedented spike in the on-demand delivery business in Africa and the expansion of our services to new countries and cities is both a reflection of that trend and a testament to our commitment to the continent. We’re looking forward to making food, groceries, pharmaceuticals and retail products available to our new users at the touch of a button,” William Benthall, Glovo’s general manager of sub-Saharan Africa, said in a statement.
Francophone Africa has its first unicorn, and if you’ve been following tech on the continent, you will be very unsurprised to hear that it’s coming from the world of fintech.
Wave, a U.S. and Senegal-based mobile money provider, has raised $200 million in Series A round of funding. The investment is the largest-ever Series A round for the region, and it values Wave at $1.7 billion.
Four big-name backers jointly led the round — Sequoia Heritage, a private investment fund and a subsidiary of Sequoia; Founders Fund; payments upstart Stripe; and Ribbit Capital. Others in the round include existing investor Partech Africa and Sam Altman, the former CEO of Y Combinator and current CEO of OpenAI.
The mobile money market in sub-Saharan Africa is growing exponentially. This past year, up to $500 billion has moved through the accounts of 300 million active mobile money users in the region. But despite being one of the largest alternative financial infrastructures known globally, this represents only a fraction of the overall market.
The International Monetary Fund says that as of 2017, only 43% of adults in sub-Saharan Africa were “banked” by way of a traditional bank or mobile money account. When it comes to growing that proportion, however, mobile money — based on simpler technology and with an easier onboarding process — wins out, and it is set to capture more market share faster than traditional banking in the region. And this has investors, especially foreign ones, excited and looking to get on board.
(Neobanking, based on mobile technology too, falls somewhere in the middle of the two).
From Sendwave to Wave
If you’re wondering why you haven’t heard of Wave, the reason might be because you don’t know it’s a spinoff from Africa-focused remittance provider Sendwave.
Drew Durbin and Lincoln Quirk founded Sendwave in 2014 to offer little or no fee remittances from North America and Europe to select African and Asian countries. The YC-backed company became a WorldRemit subsidiary last year when the global fintech paid up to $500 million in cash and stock for Sendwave.
But before that, the team stealthily worked on a mobile money product described as having no account fees and “instantly available and accepted everywhere.”
In 2018, the product was piloted as Wave in Senegal but it was still within the Sendwave ecosystem. When WorldRemit acquired Sendwave, Durbin and his team turned their focus to Wave.
“We saw an opportunity to make a bigger impact by trying to build a better, much more affordable mobile money service than the telcos are building throughout much of sub-Saharan Africa,” Durbin told TechCrunch in an interview. “We didn’t see any companies besides the telcos trying to solve that problem.”
Going up against incumbents
Telecom operators and banks have been the early entrants in the mobile money space, not least because they control much of the infrastructure in the process, from having mobile subscribers using handsets on their networks through to building the financial services to manage money and payments at the back end, and everything in between.
Third-party providers, mostly fintechs, have tried to capture some market share from these incumbents. Wave, however, wants to disrupt it.
Durbin tells TechCrunch that unlike M-Pesa, the mobile payment provider led by Safaricom, and other products of telecom operators like Orange and Tigo, Wave is building a mobile money service that is “radically affordable.”
The Dakar-based platform is akin to PayPal (with mobile money accounts, not bank accounts) runs an agent network that uses their cash on hand to service Wave users. According to the company, users can make free deposits and withdrawals and charge a 1% fee whenever they send money.
Durbin says this is 70% cheaper than telecom-led mobile money and whenever there is a transfer problem, refunds are made instantly, unlike with incumbents where users might need to wait for some days.
Wave’s technology also differs from telecom-led mobile money. Whereas the incumbents mostly focus on USSD (although there are provisions to use applications), Wave is solely app-based. For users without a smartphone, Wave also provides a free QR-card to transact with an agent.
By building its own infrastructure full-stack — agent network, agent and consumer applications, QR cards, business collections, and disbursements — Wave has been able to fuel its growth to several million monthly active users and billions of dollars in annual volume.
The two-year-old startup claims to be the largest mobile money player in Senegal and that over half of the country’s adults are active users. That pegs the number of users between 4 million and 5 million, and Wave wants to replicate this growth in Ivory Coast, the second market it officially expanded to last year.
This sort of growth pressure on telecom operators. That has indeed been the case for the leading telecom operator in both regions, Orange. In June, the telecom operator stopped users in Senegal from purchasing Orange airtime via Wave’s mobile application.
Per this report, Wave argued that Orange was applying anti-competitive tactics by restricting it from selling directly or via an approved wholesaler. Orange said it had made proposals “in line with those offered to its other providers” and that Wave wanted special treatment.
To reach a fair decision, both parties are working with the regulatory body in charge, Regulatory Authority for Telecommunications and Posts (RATP). And if the regulator isn’t capable of settling the issue, BCEAO, the regional bank of Francophone countries, is the next in line to resolve the dispute.
According to Wave’s CEO, the bank’s regulatory approach is one reason why Wave has been able to take on the telecom operators in the first place. But among all the West African countries where mobile money is prevalent, why start with Senegal, an emerging market?
“Senegal is a big enough market that we would have to work really hard to potentially win the market. But also a small enough market that if we were doing well, we could win the market quicker than if we were in a giant country. And so that combination of those two things made it seem like a good place to start,” Durbin remarked.
Following this fundraise, Wave will deepen its presence in Senegal and Ivory Coast and grow its already 800-strong team across product, engineering, and business. In addition, Wave will expand into other markets it feels are regulatory-friendly like Uganda.
“I think there’s a pretty broad array of countries that have strong central banks and clear regulations are open to new players, or even want new players to come in and try to compete with the telcos. And so we have a lot of licenses that are in progress, and we’ll try to prioritize the countries where we’re able to get started sooner over the ones that it takes longer.”
A unicorn after two rounds
While some reports say Wave had raised $13.8 million prior to this, Durbin declined to comment on the figure when asked. However, he did mention that Partech, the French outfit with an African fund, invested in a seed round alongside other investors like Founders Fund and Stripe.
In addition to Sequoia and Sam Altman, the same crop of investors also participated in this monster Series A round.
In a market that has typically lacked innovation, Partech general partner Tidjane Deme says the investment will help Wave improve its service.
“Since 2018, we’ve supported Wave because we were convinced mobile money is still an unsolved problem in Africa,” he said in a statement. “Wave has great product design, stellar execution, and a strong financial trajectory. We are proud to see it become the first unicorn from Senegal.”
In May, Sequoia Capital invested in Egyptian fintech Telda, its first big deal on the continent. The Wave investment, meanwhile, is coming via subsidiary Sequoia Heritage and is the latter’s first investment in an Africa-focused startup.
In a call with TechCrunch, Altman said that Wave ticked the boxes he considers before an investment — strong founders, an important problem in a large market, working product, and traction.
“I’ve known these founders for a long time, and I think they’re like off the charts good. I’ve been super impressed with their ability to figure out what users want and how to grow,” he said. “I think the company is solving the most important problem around money transfer in Africa and fixing the inefficient agent networks.”
The largest venture rounds for any venture in Africa remain OPay’s recent $400 million fundraise and Jumia’s equivalent in 2016. Both were Series C rounds. The next biggest rounds include Interswitch’s $200 million investment from Visa and Flutterwave’s $170 million Series C.
All these companies attained unicorn status following their respective rounds. The same goes for Wave but more spectacularly, considering the company bagged it in a Series A round, it’s transcending the region and is one of the largest A-rounds globally this year.
Wave joins OPay and Flutterwave as the newly minted unicorns in Africa this year — that is, startups valued above $1 billion — and the fourth African unicorn after Interswitch. Other billion-dollar companies include publicly traded Jumia and Egyptian fintech Fawry.
Funding rounds in Africa keep getting bigger and the continent has reached an inflection point. However, some skeptics have questioned the valuations of previous unicorns; Wave wouldn’t be an exception.
The argument would be around why Wave commands such a high valuation when for instance, two prominent telecom operators, Airtel and MTN, are looking to list their mobile money businesses between $2 to $6 billion despite being in the operations for several years across multiple African countries.
Yet like any investor optimistic about a portfolio company, Altman doesn’t believe Wave is overvalued. In fact, he thinks the company is undervalued.
“The opportunity in front of the company is massive. But plenty of times, I’ve gotten it wrong, so you never know. However, I have been fortunate to make a number of great investments and I feel Wave has as good of a shot as you can ask for,” he said. “Africa is going to be the fastest growing and most important market over the next coming decades for many companies. I think people are realizing how big the market opportunity is and how much value is going to be created and we’ll see a lot more things like this happen.”
Nigerian automotive tech company Autochek today is announcing the acquisition of Cheki Kenya and Uganda from Ringier One Africa Media (ROAM) for an undisclosed amount.
Per a statement, Autochek will finalize the deal in the coming weeks. With the acquisition, Autochek completes its expansion into East Africa and follows the first acquisition made almost a year ago when it acquired both Nigeria and Ghana businesses from Cheki.
In 2010, Cheki launched as an online car classified for dealers, importers, and private sellers in Nigeria. The startup, headquartered in Lagos, expanded operations to Kenya, Ghana, Tanzania, Uganda, Zambia, and Zimbabwe.
Cheki got acquired by ROAM in 2017 and joined a list of online marketplaces and classifieds in its network like Jobberman.
Per ROAM’s website, Cheki still has operations in Tanzania, Zambia, and Zimbabwe. However, these markets are quite inactive so it is safe to say Autochek has fully acquired all of Cheki’s main operations.
Cheki Kenya is an exciting market for both parties. The subsidiary has 700,000 users and lists over 12,000 vehicles monthly. It also claims to have grown 80% year-on-year in the last two years, making it a valuable asset for Autochek’s plan for regional expansion.
“Cheki Kenya has always been sort of the crown jewel,” Autochek CEO Etop Ikpe said to TechCrunch. “At the time, when we completed the Nigeria and Ghana acquisition, it wasn’t a conscious effort to make this happen, but it’s great that it happened.”
Credit penetration in terms of vehicle financing is higher in Kenya than in Nigeria and Ghana. The East African country has a 27.5% penetration compared to the whole West African market at 5%. Therefore, it explains why Autochek is optimistic about the East African market. Before making the acquisition, the one-year-old company ran a stealthy pilot with some banks in Kenya — a similar strategy used in Ghana and Nigeria — to provide car owners with financing. So, the acquisition cements the company’s position in the market, Ikpe says.
The sale of Cheki operations in all of its major markets, which happened within a year, might lead some to ask if the four entities did poorly and forced the classifieds giant to find a suitable buyer quickly.
But CEO Ikpe refuted any claims of a distress sale when asked. He stated that the acquisition happened in quick succession because both parties understood that the classifieds model (run by Cheki) needed to make way for the more modern transactional model (employed by Autochek and leading automotive players in Africa). Therefore, ROAM Africa saw it as a needed transition for Cheki.
Building off Ikpe’s past relationship with Ringier (one arm of ROAM before the merger), where he ran DealDey, a classifieds deal company Ringier eventually bought, it wasn’t a tough decision to sell the company to Autochek, Ikpe tells TechCrunch.
“I think for them it’s really long term strategy and they believe in our business model. And there’s a lot of hope that we can do things in the future. It was also really about finding the right home for the business and their employees.”
From a statement, ROAM CEO Clemens Weitz said, “Across the world, we see a new evolution of digital automotive platforms, requiring deep specialization. Specifically in Africa, we believe that Autochek is the one player with the best team and expertise to truly create a game-changing consumer experience. For ROAM Africa, this deal is more than a very good transaction: It unleashes even more focus on our strategic playbook for our other businesses.”
Autochek’s expansion to East Africa is coming at a time when automotive tech companies like Moove, Planet42, and FlexClub are receiving attention from investors as the need for flexible vehicle financing keeps growing across the continent.
The most important car financing market on the continent is arguably South Africa. Other automotive companies have some form of presence in the market and for Autochek, the plan is to expand there too, and understandably why.
South Africa is the crème de la crème market and has the highest car financing penetration on the continent. Yet despite the seeming competition, Ikpe believes opportunities exist for the company to provide services tailored to the market different from what other companies have.
“The beauty of our platform is that we can be diverse; for instance, we can have a retail or B2B approach. There’s a lot of dynamic ways we can work. So I think it’s natural that our goal is to typically be in every region. We’ve made our inroads into East and West, and we’ll continue to work as we want to be in North and South Africa,” he said.
Autochek says a funding round is in the works to execute on this front and might close before the end of the year.
Heavy gunfire was heard in Conakry, the West African country’s capital, on Sunday, and then a colonel announced on state television that he’d suspended the Constitution.
Australian buy now, pay later (BNPL) company Zip this week acquired South Africa-based BNPL player Payflex for an undisclosed amount.
It’s a piece of news that once again highlights the hype around BNPL services and the quest for global dominance among the leading players.
This year we have covered BNPL services from the likes of Afterpay, Klarna and Affirm. And tech and payments giants Apple, Square, PayPal and Visa have joined in the action, too, massively funneling cash to their respective BNPL initiatives (for one, Square acquired Afterpay).
Australia, the U.K. and the U.S. are key markets for BNPL services. The U.S. market is so big that the number of BNPL service users is expected to hit 45 million by year’s end, representing an 81% growth from last year. But despite its Western focus, BNPL is exploding in other markets driven by a collective effort from local and global players.
For instance, in the Middle East, companies like tabby and Tamara have raised millions in debt and equity financing to provide BNPL services. Also, Checkout is a significant shareholder in Tamara; Afterpay is one in PostPay, while Zip acquired Spotii for $26 million after initially investing in the company in December 2020.
Spotii isn’t the only acquisition Zip has made this past year. The Australian company also bought U.S.-based QuadPay and Twisto, a BNPL service in the Czech Republic, to expand footprints in both regions.
Payflex is the latest addition to that list. The company, founded in 2017, claims to be the first and largest BNPL player in South Africa with more than 1,000 merchants and 135,000 customers. Before fully acquiring Payflex, Zip had a 25% stake when it invested in the South African BNPL service six months ago.
Zip’s entry to Africa is important for several reasons. First, the continent is a largely untapped market that has enormous growth potential.
Credit appetite on the continent is very much in its infancy compared to Western markets, but it is growing rapidly. These days, people take loans to finance their needs at ridiculous interest rates while lending companies report low NPL ratios. Think of what happens when these consumers get a taste of low or no-interest alternative financing options that BNPL players like Zip provide: adoption rates will be off the charts.
Second, there’s a lack of infrastructure and BNPL innovation that only new entrants like Zip can execute because it has a large monetary chest.
And with the absence of credit cards and data on the continent, Zip can provide a competitive advantage with its technology, gather alternative data and build creditworthiness for customers in South Africa and other markets it plans to expand “with sizable underbanked, digitally savvy populations.”
Two of those markets are Egypt and Nigeria. If Zip expands to these regions, it will face competition from local players like Carbon, Shahry, M-Kopa, CredPal and CDCare, which are already pulling their weight. African e-commerce giant Jumia is also rumored to be revamping its BNPL service; it started one years ago but was discontinued after gaining little traction.
That said, Africa doesn’t have a concrete market leader yet since most of these products are yet to reach mass scale. On the other hand, Zip has been quite aggressive with its expansion into other markets — evident in some of its numbers.
The company currently serves 51,000 merchants and 7.3 million customers across 12 markets. This fiscal year, June 2021, a period when most of its acquisitions have occurred, Zip hit $5.8 billion in total transaction volume, up 176% year-over-year (YoY).
Zip numbers are impressive, but if there’s anything we’ve learnt from the BNPL business it’s that it isn’t a winner-takes-all market. If Zip makes significant headway and cracks the market, expect more global BNPL players to bring the heat. Also, local players will be encouraged to step up their game because global players have surplus cash to burn if they move into Africa, which is a win-win for the market.
Y Combinator’s summer batch of 2021 features 377 startups from 47 countries. It’s the 33rd Demo Day of the well-known accelerator and holds the largest cohort yet. YC S20 had 198 startups, so that’s a 90% increase from last year.
About half of the companies represented are based outside the U.S. The countries with the most representatives (aside from the U.S.) include India, with 33 startups; the U.K., with 18 startups; Mexico with 17; Singapore with 12; and Canada and Brazil, 11 each.
While the Demo Day for this year’s winter batch was held in a day, it’s two days for this summer batch. Today, 189 companies will pitch, while the rest will pitch tomorrow.
African startups also increased from 10 in the winter batch to 15 this time around, a record for African startups in a single YC cohort.
“This is the largest batch we have ever funded and it’s about 50% international. As a result, it is not surprising that this is the largest cohort from Africa,” Y Combinator managing director and group arptner Michael Seibel told TechCrunch when asked if any extra factor contributed to the rise in accepted African startups.
Another valid reason for the uptick could be that YC is getting more applications from Africa due to the recent success stories of Paystack and Flutterwave. At least, that’s the view shared by Kat Mañalac, the head of Outreach at YC.
“Alumni are always the best spokespeople and representatives for YC. A lot of African founders (and future founders) I’ve spoken to were encouraged by seeing Paystack do so well and get acquired. The success of a lot of our African alumni are inspiring more African teams to apply,” she told TechCrunch.
Nigeria leads the way again with five startups, while Egypt has four, Morocco has two, and Kenya, Ghana, Zambia and South Africa each have one. Here’s the list of African startups that made it to YC S21 in alphabetical order.
Africa has the lowest insurance penetrations globally. In Egypt, the insurance penetration rate stands at a minuscule 1%.
Amenli, founded by Shady El Tohfa and Adham Nauman in 2020, is addressing an untapped $2 billion market, being the first licensed online insurance broker in the country.
A wave of disruption of digitizing informal retail stores is sweeping across emerging markets this year, and Chari is joining in on the action.
Sophia Alj and Ismael Belkhayat founded Chari in 2020. The company allows traditional retailers in Morocco and some parts of North Africa to order consumer goods via its platform and handles free delivery to their stores. Chari has a fintech side by providing these retailers with credit.
Neobanks have taken the world by storm and Africa is the last frontier for this brand of fintech innovation. Fingo is providing an alternative brand of banking to African millennials, starting from Kenya.
Founded by Kiiru Muhoya Gitari Tirima James da Costa and Ian Njuguna in 2020, the digital bank claims to offer fees 90% cheaper than traditional banks in Kenya, among other services.
FloatPays (South Africa)
In South Africa, up to 5 million employees borrow money to meet their monthly needs when they exhaust their salaries. However, the lending options for these employees come with outrageous interest rates.
Simon Ward founded FloatPays in 2019 as an on-demand wage access platform to help employees access, spend, save and manage their money.
Managers of delivery businesses handle hundreds or thousands of delivery points every day. With a fleet made up of many trucks or vans, there’s a need to drop a delivery plan for each at different locations daily. How do they optimize for costs and efficiency at the same time?
Enter Freterium. The company allows contractors, manufacturers, distributors and logisticians to plan and optimize their B2B or B2C shipments while providing a cloud platform for real-time visibility of shipments, logistics infrastructure and seamless collaboration that breaks down traditional organizational silos. Omar El Kouhene and Mehdi Cherif Alami founded Freterium in 2018.
Infiuss Health (Nigeria)
A large number of Africans are exempt from clinical research studies due to time constraints. Per reports, it can take up to ten months to conduct such studies in these climes.
Infiuss Health says it is building a decentralized platform for remote research and clinical trials in Africa. How? By connecting researchers directly to patients who want to participate in clinical research studies in less than a week.
The company was founded by Melissa Bime and Mbah Charles in 2020.
Lemonade Finance (Nigeria)
There are millions of African immigrants in Europe and North America. Some have established businesses in both these regions and also in Africa.
In another digital banking play, Lemonade Finance provides multi-currency accounts for these migrants to enable seamless transactions and banking. The company was founded by Rian Cochran and Ridwan Olalere in 2020
Mecho Autotech (Nigeria)
Repairing one’s vehicle can be a painstaking process in Africa due to pricing and quality issues. The latter is because many of these professionals (mechanics) are unvetted.
Ayoola Akinkunmi and Olusegun Owoade started Mecho Autotech in 2021 as an on-demand auto maintenance and repairs platform. Mecho Autotech has created a network of vetted mechanics, and via an app, car owners can book and pay for their services.
Like its predecessor on this list, Odiggo connects car owners with mobile mechanics in the Middle East. On the platform, car owners can also access extra services, which include car washing and maintenance.
Although Odiggo lists as a Dubai-based company on the YC database, it has origins in Egypt and launched operations first in the North African country.
Access to credit is still very much a problem to the millions of small and medium businesses in Nigeria, which make up most of the country’s businesses.
Founded by Zach Bijesse, Uche Nnadi and Chioma Okotcha in 2019, Payhippo provides loans to businesses that couldn’t ordinarily get loans or credit cards from banks or other financial institutions.
Water and electricity distribution companies face losses from leakages and thefts when opening new revenue streams in emerging markets.
Pylon acts as an infrastructure management platform for these distribution companies and helps to reduce these losses. It was founded in 2017 by Ahmed Ashour and Omar Radi.
When merchants start to grow their e-commerce businesses, it can be difficult to manage the end-to-end delivery and fulfilment needs. In Egypt, several platforms are already offering solutions to this ever-growing need, and ShipBlu is adding to that list.
Founded by Ahmed ElKawass, Abdelrahman Hosny and Ali Nasser in 2020, ShipBlu claims to offer a full suite of delivery services for e-commerce merchants from overnight to delivery to five- to seven-day delivery.
Another digitizing-informal-retail-stores play, this time from Nigeria. Suplias is a B2B marketplace where mom-and -op stores in Africa buy inventory directly from manufacturers using a mobile app.
The company was founded by Stephen Igwue, Michael Adesanya and Sefa Ikyaator in 2019.
African fintechs are in the business of providing virtual and physical cards to their customers. However, it doesn’t come easy and cheap when done in partnership with banks.
Union54 is an alternative and provides an API for them to issue debit cards cheaper and faster. It was founded by Alessandra Martini and Perseus Mlambo in 2021.
Yemaachi Biotechnology (Ghana)
Yaw Attua-Afari, Yaw Bediako, David Hutchful and Joyce Ngoi founded Yemaachi Biotechnology in 2020. The startup’s idea is to diversify precision cancer diagnostics and treatments across the continent, starting with Ghana.
An estimated 752,000 new cancer cases, 4% of the world’s total, occurred in sub-Saharan Africa in 2018. Yemaachi is working to lower the burden cancer causes by creating molecular diagnostics optimized for all Africans.
Researchers ended a large trial in South Africa after finding that an experimental vaccine offered little protection.
As we confront climate change, focusing on a single metric, like greenhouse gas emissions, could leave other harmful practices unaddressed.
When companies create digital payments-facing solutions for African countries outside Nigeria and South Africa, building around mobile money is key. It’s literally a no-brainer.
The concept is ubiquitous in East Africa, but since mobile money is a telecom operators-led initiative, there are technical complexities in creating a unified infrastructure for businesses that need it.
PawaPay, a U.K.-based and Africa-focused payments company, is one of the few tackling these complexities. The company takes the technical integrations from telecom operators like AirtelTigo, Econet, MTN, Safaricom, Orange and Vodafone and collapses them into one API for businesses.
Today, the company is announcing that it has closed $9 million in seed funding to scale its operational presence, recruit talent and expand into new markets.
U.K.-based fund 88mph co-led the round with China-based MSA Capital, with participation from Zagadat Capital, Kepple Ventures and Vunani Capital.
PawaPay spun off last year from online sports betting company betPawa. The company is led by CEO Nikolai Barnwell, betPawa’s former head of New Markets, Africa. He also sits on the board of 88mph.
According to him, starting pawaPay was to help people send and receive money internationally using mobile money.
An interesting instance would be freelancers in Ivory Coast trying to receive payment for services on a global payments platform. Typically, they would be required to use a bank account or card. But in places like Ivory Coast, where mobile money is prevalent, that becomes an issue.
How big is mobile money in Africa?
From the World Bank’s 2015 figures, there are over 350 million unbanked individuals in sub-Saharan Africa. Various inadequacies are responsible for this stat, but from banks’ perspectives, no incentive drives them to actually bank these people.
Most unbanked people rarely earn minimum wage in their respective countries, so it’s difficult for banks to make money off these individuals. Also, opening a bank account involves many KYC (Know Your Customer) processes for this population subset.
But one thing is for sure: The unbanked have mobile phones, and there are over 850 million mobile connections in Africa.
This huge market is why mobile money is prevalent across the continent. Telecom operators using proxies bypassed the banks and created their own systems to allow people to transfer money securely using mobile phones for low or no transfer fees.
So, individuals with phone numbers can have basic financial services such as savings and transfers.
Presently, up to $500 billion flows through the mobile money market in sub-Saharan Africa yearly via the accounts of nearly 300 million active monthly users. This alternative financial infrastructure is one of the largest globally.
But it’s also one of the most underdeveloped because each telecom operator having its own unique mobile money product has created a fragmented infrastructure. For merchants, fragmentation means that it can be exorbitantly expensive to use at scale.
Mobile money and card payment gateways
PawaPay wants to position itself as a market leader in high-volume mobile money payments while delivering reliability and transparency for merchants. Its API allows these merchants to access telecom operators’ mobile money systems to receive and send payments to millions of mobile money accounts.
“We’re making a very heavy bet on the rise of mobile money and all the complexities that arise out of mobile money and all the infrastructure that needs to be built around payments with mobile money at its core,” Barnwell told TechCrunch.
“And the way we’re looking at the continent, we’re looking at adoption rates for mobile money growing at an insane speed. It has become quite obvious that this is a very significant financial infrastructure and there’s a lot of it that’s been missing if you want to work serious volume and businesses on mobile money.”
PawaPay handles local operations, compliance, regulatory cover and bank accounts, making it simple to receive payments in a new market.
The company claims to be handling over 10 million transactions on its rails per week, with beta operations in 10 African countries — Cameroon, DRC, Ghana, Kenya, Mozambique, Nigeria, Rwanda, Tanzania, Uganda, and Zambia.
Barnwell tells TechCrunch that although these transaction volumes look impressive, pawaPay would have done more if not for regulatory hurdles and licensing approaches in each market.
“In each country, we’ve had to start from scratch with the right data to understand how they look at the space, at the licensing sheets, what kind of companies they want to license, what kind of requirements they’re looking for, how we can work quite closely with them to make sure that they’re comfortable with us,” he said.
However, the CEO states that while regulation slows down processes, it’s important for pawaPay because many unregulated companies operate without licenses and unstable technologies, some with the intention to commit fraud.
“We’ve gone in and decided we want to be completely regulated. We want to be completely covered in all the markets, with full licensing and be a very stable reliable premium product in these markets,” he added.
There are various payment gateways facilitating payments for businesses in Africa, like Flutterwave, DPO Group, Yoco, MFS Africa and Paystack. But in terms of pure mobile money play, MFS Africa is a clear competitor to pawaPay. Both platforms are largely focused on addressing the unique challenges accompanying mobile money, while the others drive innovation around bank and card payments.
MFS Africa connects over 300 million mobile money wallets enabling a range of banks, telcos, money transfer operators and other financial institutions interoperability at scale in Africa through a single integration point.
PawaPay isn’t far off. Barnwell says the company connects to nearly the same number of wallets and hopes to go live across 30 to 40 telco integrations soon.
While East Africa (buoyed by Kenya’s M-Pesa) has largely been the critical market for mobile money, West Africa is catching up nicely. Last year, West Africa recorded 198 million mobile money accounts compared to East Africa’s 293 million.
The West African region also grew the most in terms of transaction value by 46%, to over $178 billion, and countries like Ghana, Senegal and Ivory Coast are leading the charge, which presents a vast opportunity for these payment gateway providers, unlike the card payments market where two countries are prominent.
“Although most of the attention is on card payments, the big giant in payments in Africa really is mobile money,” the CEO said.
PawaPay’s mobile money focus was a key reason Kresten Buch, founder of 88mph and chairman of pawaPay, led the round. He said that when 88mph actively invested in Africa a decade ago, “one of the key drivers was that mobile money was a superior payment method to credit and debit cards when used for online payment.”
For Zagadat Capital, here’s what founder Oluwatosin Ajibade (also known as Mr Eazi, a singer-songwriter and entrepreneur popular in Africa’s music scene), who also sits on pawaPay’s board, had to say about the investment:
Being investors hugely focused on Africa and very familiar with the landscape, we believe that mobile money-focused fintech is not just one of the most exciting places to invest but also one of the most important bridges to ensuring financial inclusion of the billions of people across the continent. The kicker for us was that we believe in the clear mission, vision and strategy and we are confident that the pawaPay team is the best team to achieve it.
A milestone for Jolla, the Finnish startup behind the Sailfish OS — which formed, almost a decade ago, when a band of Nokia staffers left to keep the torch burning for a mobile linux-based alternative to Google’s Android — today it’s announcing hitting profitability.
The mobile OS licensing startup describes 2020 as a “turning point” for the business — reporting revenues that grew 53% YoY, and EBITDA (which provides a snapshot of operational efficiency) standing at 34%.
It has a new iron in the fire too now — having recently started offering a new licensing product (called AppSupport for Linux Platforms) which, as the name suggests, can provide linux platforms with standalone compatibility with general Android applications — without a customer needing to licence the full Sailfish OS (the latter has of course baked in Android app compatibility since 2013).
Jolla says AppSupport has had some “strong” early interest from automotive companies looking for solutions to develop their in-case infotainment systems — as it offers a way for embedded Linux-compatible platform the capability to run Android apps without needing to opt for Google’s automotive offerings. And while plenty of car makers have opted for Android, there are still players Jolla could net for its ‘Google-free’ alternative.
Embedded linux systems also run in plenty of other places, too, so it’s hopeful of wider demand. The software could be used to enable an IoT device to run a particularly popular app, for example, as a value add for customers.
“Jolla is doing fine,” says CEO and co-founder Sami Pienimäki. “I’m happy to see the company turning profitable last year officially.
“In general it’s the overall maturity of the asset and the company that we start to have customers here and there — and it’s been honestly a while that we’ve been pushing this,” he goes, fleshing out the reasons behind the positive numbers with trademark understatement. “The company is turning ten years in October so it’s been a long journey. And because of that we’ve been steadily improving our efficiency and our revenue.
“Our revenue grew over 50% since 2019 to 2020 and we made €5.4M revenue. At the same time the cost base of the operation has stablized quite well so the sum of those resulted to nice profitability.”
While the consumer mobile OS market has — for years — been almost entirely sewn up by Google’s Android and Apple’s iOS, Jolla licenses its open source Sailfish OS to governments and business as an alternative platform they can shape to their needs — without requiring any involvement of Google.
Perhaps unsurprisingly, Russia was one of the early markets that tapped in.
The case for digital sovereignty in general — and an independent (non-US-based) mobile OS platform provider, specifically — has been strengthened in recent years as geopolitical tensions have played out via the medium of tech platforms; leading to, in some cases, infamous bans on foreign companies being able to access US-based technologies.
In a related development this summer, China’s Huawei launched its own Android alternative for smartphones, which it’s called HarmonyOS.
Pienimäki is welcoming of that specific development — couching it as a validation of the market in which Sailfish plays.
“I wouldn’t necessarily see Huawei coming out with the HarmonyOS value proposition and the technology as a competitor to us — I think it’s more proving the point that there is appetite in the market for something else than Android itself,” he says when we ask whether HarmonyOS risks eating Sailfish’s lunch.
“They are tapping into that market and we are tapping into that market. And I think both of our strategies and messages support each other very firmly.”
Jolla has been working on selling Sailfish into the Chinese market for several years — and that sought for business remains a work in progress at this stage. But, again, Pienimäki says Jolla doesn’t see Huawei’s move as any kind of blocker to its ambitions of licensing its Android alternative in the Far East.
“The way we see the Chinese market in general is that it’s been always open to healthy competition and there is always competing solutions — actually heavily competing solutions — in the Chinese market. And Huawei’s offering one and we are happy to offer Sailfish OS for this very big, challenging market as well.”
“We do have good relationships there and we are building a case together with our local partners also to access the China market,” he adds. “I think in general it’s also very good that big corporations like Huawei really recognize this opportunity in general — and this shapes the overall industry so that you don’t need to, by default, opt into Android always. There are other alternatives around.”
On AppSupport, Jolla says the automative sector is “actively looking for such solutions”, noting that the “digital cockpit is a key differentiator for car markers — and arguing that makes it a strategically important piece for them to own and control.
“There’s been a lot of, let’s say, positive vibes in that sector in the past few years — new comers on the block like Tesla have really shaken the industry so that the traditional vendors need to think differently about how and what kind of user experience they provide in the cockpit,” he suggests.
“That’s been heavily invested and rapidly developing in the past years but I’m going to emphasize that at the same time, with our limited resources, we’re just learning where the opportunities for this technology are. Automative seems to have a lot of appetite but then [we also see potential in] other sectors — IoT… heavy industry as well… we are openly exploring opportunities… but as we know automotive is very hot at the moment.”
“There is plenty of general linux OS base in the world for which we are offering a good additional piece of technology so that those operating solutions can actually also tap into — for example — selected applications. You can think of like running the likes of Spotify or Netflix or some communications solutions specific for a certain sector,” he goes on.
“Most of those applications are naturally available both for iOS and Android platforms. And those applications as they simply exist the capability to run those applications independently on top of a linux platform — that creates a lot of interest.”
In another development, Jolla is in the process of raising a new growth financing round — it’s targeting €20M — to support its push to market AppSupport and also to put towards further growing its Sailfish licensing business.
It sees growth potential for Sailfish in Europe, which remains the biggest market for licensing the mobile OS. Pienimäki also says it’s seeing “good development” in certain parts of Africa. Nor has it given up on its ambitions to crack into China.
The growth round was opened to investors in the summer and hasn’t yet closed — but Jolla is confident of nailing the raise.
“We are really turning a next chapter in the Jolla story so exploring to new emerging opportunities — that requires capital and that’s what are looking for. There’s plenty of money available these days, in the investor front, and we are seeing good traction there together with the investment bank with whom we are working,” says Pienimäki.
“There’s definitely an appetite for this and that will definitely put us in a better position to invest further — both to Sailfish OS and the AppSupport technology. And in particular to the go-to market operation — to make this technology available for more people out there in the market.”
Last month, MaxAB, the Egyptian B2B e-commerce platform that serves food and grocery retailers, raised one of the largest Series A on the continent, to the tune of $40 million. Today, it has raised a $15 million extension from existing investors — RMBV, IFC, Flourish Ventures, Crystal Stream Capital, Rise Capital, Endeavour Catalyst, Beco Capital and 4DX Ventures — bringing its total Series A fundraise to $55 million.
The company, founded by Belal El-Megharbel and Mohamed Ben Halim in 2018, manages procurement and grocery delivery to shops in Egypt. Store owners can use the platform to purchase goods, request delivery or logistics to move the goods, and access a customer support team.
When CEO El-Megharbel spoke to TechCrunch during its first Series A tranche, he said MaxAB, which operates in Egypt alone, was looking to expand across the Middle East and North Africa besides launching new product offerings and growing its team.
Today’s announcement marks MaxAB’s first step toward regional scale. The startup is announcing the acquisition of Morocco-based B2B e-commerce and distribution platform WaystoCap for an undisclosed amount.
Niama El Bassunie co-founded WaystoCap with Mehdi Daoui, Anis Abdeddine and Aziz Jaouhari Tissafi in 2015. The company was originally a cross-border trade platform for transacting business goods in Africa. That business model got WaystoCap into Y Combinator’s Winter batch in 2017, making it the first company accepted from Morocco. The company subsequently raised a $3 million seed round.
WaystoCap took its cross-border services to Ivory Coast and Togo, and at some point, was processing over $3 million worth of transactions per quarter. However, since its pivot to a similar model to MaxAB, in that it connects retailers with suppliers across Morocco, WaystoCap has pulled out from both countries while growing to a network of over 8,000 retailers in Morocco.
El-Megharbel mentioned to TechCrunch that MaxAB’s plan to move into Morocco coincided with WaystoCap’s bid to raise new funding (the last time the company took venture capital was in 2017) and push further into the Moroccan market. But both companies agreed to work together rather than compete with each other.
“I love the team. They share the same values and they’re on a mission that is using a tech-enabled supply chain to optimize food distribution across the continent,” he said in an interview. “For us, our strategy is to build a global team that can think local and execute properly. And we figured out that they’re already a perfect fit for that.”
While the acquisition signals MaxAB’s move into Morocco, it also shows the company’s entry into the Maghreb markets — Algeria, Libya, Mauritania, Morocco and Tunisia, where there’s little or no contest.
MaxAB says more than 70,000 retailers across both platforms will “benefit from its technology, expanded end-to-end supply chain solutions and business intelligence tools as well as WaystoCap’s knowledge and expertise.”
El Bassunie will take over the position as the managing director at MaxAB Morocco. Commenting on the acquisition of her startup, she said, “… We are thrilled to play a pivotal role in the new all-star team being created and led by experienced, innovative entrepreneurs to establish a regional market leader in food and grocery supply. We are looking forward to continuing our close working relationship with our new team and taking the business to its next phase.”
The Maghreb market is new territory for MaxAB and the acquisition positions it as the most funded and largest B2B e-commerce platform for retailers and suppliers. Morocco’s growing tech hub offers huge potential and the acquisition of WaystoCap empowers MaxAB to become a truly global team with a targeted local approach, setting the company on track to be the leading B2B retail and grocery platform in the Middle East and Africa.
“At the end of the day, what we want to do is build a tech-enabled supply chain, in all the African countries, in the Middle Eastern countries, and then connect them together. That’s where the magic happens. This is where we can actually have a real impact by putting the right amount of food at the right place at the right time, and minimizing the waste which MENA cannot afford,” said MaxAB CEO El-Meghabel.
MaxAB’s acquisition of WaystoCap is the second local cross-border acquisition that has played out in Africa this week. On Monday, Nigeria and Canada-based mobility startup Plentywaka announced the acquisition of Stabus, its counterpart in Ghana, for an undisclosed amount. From a narrower consolidation perspective, Kenyan consumer experience platform Ajua acquired Kenyan AI and ML messaging and payments company WayaWaya, early in April.
WaystoCap is also the second YC-backed company in Africa to exit, after Paystack got bought by Stripe for more than $200 million last October.
Lagos and Toronto-based mobility startup Plentywaka has raised a $1.2 million seed round to scale its operations on the back of leaving the Techstars Toronto accelerator program last month.
Canadian-based VC firm The Xchange led the round, SOSV and Shock Ventures participated, while Techstars Toronto made a follow-on investment. Nigerian firms Argentil Capital Partners and ODBA & Co Ventures took part in the seed round, alongside some angel investors from Canada, other parts of Africa, and the U.S.
In March, when TechCrunch covered Plentywaka, CEO Onyeka Akumah said the two-year-old company eyed both regional and global expansion. There hasn’t been much development on the latter except that the company set up its headquarters in Canada. However, for the former, it’s in the form of an acquisition. The company says it has fully acquired Ghanaian mobility startup Stabus but declined to comment on the acquisition price.
Plentywaka is primarily a bus-booking platform but, per its website, has over 900 vehicles ranging from cars to vans to buses. The company provides intrastate travel (via its Dailywaka offering) and interstate travel (via its Travelwaka offering) for its users via a mobile application. Since going live in September 2019, Plentywaka says it has acquired over 80,000 users while completing up to half a million rides.
Stabus, on the other hand, commenced operations in Ghana a month after Plentywaka’s launch. Its co-founder and CEO, Isidore Kpotufe, shared that the startup has since moved over 100,000 people within the country’s capital city Accra using different vehicles.
Akumah tells TechCrunch that before talks on an acquisition started, he and Kpotufe kept in touch frequently on a personal and business level since they launched their respective companies two years ago.
Then in April this year, Isidore, intrigued by the pace at which Plentywaka was scaling, asked Akumah if his company had plans to scale to Ghana. The Plentywaka CEO answered in the affirmative, revealing a timeline edging towards the end of the year. That meant competition, but the duo thought the better outcome for both companies was to merge.
“Isidore is someone I’ve known for going to two years now. And I’ve seen what he has done with Stabus and I understand exactly how they operate. So it was an easy yes for us to do this,” Akumah said to TechCrunch.
The complexities of what structure to use came up; run with the Stabus brand or change it. Eventually, they settled for the latter, renaming the acquired 12,000-user strong business to Plentywaka Ghana. Some of Stabus’ (now Plentywaka Ghana) customers include multinationals like MTN and GB Foods. Meanwhile, Kpotufe becomes Country Manager of the new business.
“Plentywaka’s acquisition of Stabus is a firm statement about our commitment to grow and build the largest shared mobility startup in Africa, one country at a time. Isidore is a brilliant entrepreneur and we are excited about having him and his team execute our plans for the Ghanaian market,” Akumah said in a statement.
In Nigeria, the company caters to travelers across 21 cities. Travelers in Accra will begin to use the service when Plentywaka Ghana goes live on September 16. And the next plan after Accra is to replicate the expansion in six other African countries within 24 months. Akumah also mentioned that Plentywaka is raising its Series A to ramp up these expansion efforts.
“We are incredibly excited by our investment in Plentywaka. Techstars is a huge believer in the future of Africa and a proud supporter of African entrepreneurs. Onyeka is a two-time Techstars founder which deepens this relationship further,” managing director of Techstars Sunil Sharma said in a statement.
Speaking on the seed round, managing partner at lead investor The Xchange, Todd Finch said, “The Xchange is on a mission to fuel purpose-driven founders with the capital and resources they need to realize the world-changing potential of their ideas. Given Onyeka’s proven track record, his team’s undeniable thirst for making an impact, and Plentywaka’s impressive growth, we knew this was an opportunity we wanted to invest in.”