Gunmen fired on Catholics celebrating Mass in a usually peaceful part of the country. There was no claim of responsibility and the motive was unclear.
As the number of cases outside Africa approaches 800, governments are scrambling for a limited pool of vaccines and treatments with unclear effectiveness.
Wally Green has played everywhere from Brooklyn to Pyongyang, becoming a beloved American ambassador for table tennis — and international understanding — in the process.
Big producers seem to be sticking to modest output raises and alliance with Russia.
The attackers used explosives to blow up the rail track before opening fire on the train in the latest in a series of train assaults.
After years of planting trees, farmers in Niger have begun to see results.
OPEC Plus, the United States and others have been slow to ramp up output, lagging production goals.
The social media site had been blocked after it deleted a post from President Muhammadu Buhari about secessionist groups that was widely seen as threatening.
Holdings from Ancient Egypt and sub-Saharan Africa come together in a masterpiece show. Now the Met should make clear how the wondrous works got here.
About 150,000 babies are born each year in Nigeria with sickle cell, a deadly disease. Tens of thousands of them die annually before their fifth birthdays.
Though meat dominates a number of the region’s most popular dishes, a growing number of cooks see adapting vegan and vegetarian diets as a way of embracing their heritage.
The sample, found in retrospective sequencing of previously confirmed cases, was collected weeks before the variant was first reported by researchers in southern Africa.
On a stop in Nigeria, the secretary of state said the U.S. would no longer treat African countries as pawns in a global game. But American competition with Beijing was hard to overlook.
The incident in October 2020 could be “equated with a massacre,” a government panel said, refuting the army’s claim that soldiers only fired blanks.
At least 20 people were killed when the high-rise in an upscale neighborhood in the commercial capital of Lagos crumbled on Monday afternoon.
As many as 100 workers were feared trapped at a construction site in Lagos, where building collapses are common, with contractors using shoddy materials and regulations often not enforced.
A top military commander said that Abu Musab al-Barnawi, head of an extremist organization known as the Islamic State West Africa Province, had died.
The Nobel laureate, whose new novel, “Chronicles From the Land of the Happiest People on Earth,” is his first in nearly 50 years, refuses to back down when he senses that his homeland’s freedom is under threat.
Known as “Africa’s answer to Oprah,” Abudu has built a media empire aimed at bringing Nigerian stories to the world. Her huge Netflix deal should help.
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.
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.
“I need to help my women to stand,” says Martha Agbani, who helped a group of women from the Niger Delta build a flourishing mangrove nursery.
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.”
The process of digitizing the operations of mom and pop stores in Nigeria is serious business right now. In fact, it might be the second-best thing after fintech at the moment.
Today’s news is from Alerzo, a little-known B2B e-commerce retail startup based in Ibadan, Nigeria. The company is announcing a $10.5 million Series A round led by New York-based Nosara Capital. FJ Labs and several family offices from the U.S., Europe and Asia, including Michael Novogratz’s, participated in the round.
In total, Alerzo has raised more than $20 million since its launch. Early investors include the Baobab Network, an Africa-focused accelerator based in London, and Signal Hill, a Singapore-based fund manager that participated in its $5.5 million seed round last year. The company also said it closed a $2.5 million working capital facility to serve its customers.
Adewale Opaleye founded Alerzo in 2018 as a last-mile distribution platform that helps retailers stock inventory directly from manufacturers. Its business, officially launched in 2019, is centered on helping street-side vendors and shops in Nigeria’s south-western cities access household supplies quicker and efficiently.
Speaking with TechCrunch, Opaleye said he started Alerzo to empower the millions of women who are the backbone of consumer commerce in Nigeria’s $100 billion informal retail sector.
The need to solve this problem stemmed from observing firsthand the challenges his mom faced while operating two mom-and-pop stores.
“Growing up in Ibadan, I watched my mother operate two informal retail stores to raise my three siblings and me. Seeing the many challenges she faced running her stores, and I decided to start a business that uniquely catered to the needs of retailers just like her,” he told TechCrunch in an interview.
These retailers are beholden to an inefficient distribution system that results in inconsistent inventory availability, opaque pricing and limited access to formal financial and banking services.
The founder says Ibadan was the ideal market to establish its headquarters because informal retailers in the region experience these challenges more than those in Lagos.
Alerzo’s core business distributes FMCG goods using a first-party relationship platform which allows suppliers to clear inventory faster and lets Alerzo control the supply chain and delivery.
Given the lack of trust in the marketplace and the requirement to pay on delivery, Opaleye says this was the most inclusive business model where the economics made sense for the company.
Alerzo claims to have built up a network of up to 100,000 small businesses, 90% of which are women-led. The company exclusively serves the country’s tier-2 to tier-4 cities in Southwest Nigeria — Ibadan, Ekiti and Abeokuta, to name a few. It connects retailers to local and multinational distributors of consumer brands, like Unilever, Nestlé, Procter & Gamble, Dangote, and PZ.
“Without Alerzo, these retailers need to take a day off from the store to visit a central market, pay for transportation and haul a large amount of inventory back to the store. Alerzo replaces this stressful experience by not only reducing costs and time spent running a retail shop but also improving the livelihood of these working women,” said the founder about the company’s growth.
About one-third of the total retailers on Alerzo use the platform monthly. According to its website, retailers can order products via SMS, voice and WhatsApp and deliver them to their stores in less than 10 hours. The company claims to have processed over 1 million orders this past year.
Alerzo owns and operates its full-stack tech-driven supply chain and logistics to process these orders. The company provides warehousing and fulfillment solutions to suppliers and storefront delivery to informal retailers. It currently owns over 200 vehicles and 20 warehouses to serve its thousands of customers.
The last couple of years have seen a rise in last-mile delivery and distribution companies with a large increase in on-demand services across many sectors. While most players in Nigeria tend to focus on Lagos and Nigeria’s capital city Abuja, Alerzo’s approach to covering other cities has seemingly paid off so far.
But though Alerzo has enjoyed almost a first-mover advantage in less crowded markets, stiff competition will play out as other key players look to come in. Omnibiz, for instance, has Ibadan in its sights, and TradeDepot is setting up a presence in 10 to 15 cities, aiming to cover all major cities in the country by the end of the year.
Nevertheless, Alerzo’s investors remain bullish on the company’s potentials.
“We’ve studied informal retail marketplaces globally over the last couple of years and Alerzo really stood out to us due to a strong management team led by a founder with a unique understanding of his customer and an attractive business model with exceptional unit economics,” said Ian Loizeaux, the managing partner at Nosara Capital, in a statement. “The company is at the beginning of a compelling multi-decade opportunity to streamline and digitize Nigeria’s retail supply chain.”
Seed investor Kevin Jung of Signal Hill cites Alerzo’s focus on the informal retail market outside Lagos as one of the reasons why he backed Alerzo earlier on. He also referred to the company’s orientation toward Asia (a playbook Opaleye adopted when he went to China for studies in 2016), as the best reference point for the emerging business model of digitizing informal retail markets.
Alerzo has an office in Singapore that the CEO says serves as a regional hub to identify best practices among similar high-growth businesses operating across Southeast Asia and India and adapt them to the Nigerian market. Likewise, to expand its digital footprint, the company recently launched an office in Lagos.
The proceeds from this Series A round will be used to expand geographically to northern Nigeria. Alerzo also plans to launch AlerzoPay, the company’s cashless payments and lending platform, as well as a portfolio of new business support services.
Several users from Zambia have taken to Twitter informing the general public that WhatsApp has been restricted in the country amidst ongoing general elections holding today.
The president and parliamentary elections culminate in a face-off between current President Edgar Lungu and opposition Hakainde Hichilema.
Internet monitoring organization Netblocks further corroborated these reports adding that multiple internet providers in Zambia had restricted access to the American social messaging platform. Some of these networks include Zambian government-owned Zamtel, Airtel Zambia, Liquid Telecom, and MTN.
Just this week, reports circulated that the Zambian government had threatened to shut down the internet if Zambians “failed to use the cyberspace during this year’s election correctly.” The reports say the government intended to go through with its plans from Thursday, the polling day, till Sunday, when vote counts are expected to have ended.
However, the Zambian government, via its Information and Broadcasting Services Permanent Secretary, Amos Malupenga, came out to deny the reports, calling them ‘malicious.’ Nevertheless, he mentioned that the government would not tolerate abuse of the internet and if any mischief occurred, there would be no hesitation to take appropriate measures.
“The government, therefore, expects citizens to use the internet responsibly. But if some people choose to abuse the internet to mislead and misinform, the government will not hesitate to invoke relevant legal provisions to forestall any breakdown of law and order as the country passes through the election period,” Malupenga said.
Zambia isn’t the first African country to witness this during an election as social media restrictions and internet shutdowns are now a recurring theme for most African states.
Countries like Cameroon, Congo, Uganda, Tanzania, Guinea, Togo, Benin, Mali, Mauritania have faced social media restrictions and internet shutdowns during elections. A handful of others like Chad, Nigeria, and Ethiopia, on the other hand, have experienced similar restrictions for unrelating events.
Most governments argue that they carry out social media restrictions and internet shutdowns to maintain security during elections; however, it’s glaring to see the process as a means to curb the spread of vital information among voters and the media within and outside the country.
Today’s event shows that despite denying reports about an imminent internet shutdown, the Zambian government is heading in that direction by first cutting off WhatsApp. While writing on the WhatsApp restriction, Netblocks also reported that the Zambian government has proceeded to restrict other social media platforms, including Facebook, Instagram, Messenger, and Twitter.
Still, internet users in Zambia are now using VPN services to bypass the restrictions on WhatsApp and these other social media platforms. Yet, it remains to be seen if the government will enforce a full internet shutdown.
Nigeria’s less than two-decade-old ecosystem is evolving fast. But behind the funding and legitimate hype, there’s without a doubt plenty of learning that needs to be done in running a startup.
In retrospect, founders in Nigeria do tremendous work when you consider the kind of harsh market they operate in. They are deserving of all the praise they get. However, some questionable antics require addressing.
There are instances when founders know their companies are dying but would rather sink with it (without having a plan) than let someone else lead. Or other instances where founders know there’s a need to hire someone as CEO to blitz scale their companies but would rather settle for mediocre growth.
Stories where startups take drastic actions to save or scale a company are few and far between.
Despite a relatively short time in the startup scene, Adia Sowho, one of the well-known operators around the region, has been fortunate to experience and live through one. Last year, she became the CEO of Thrive Agric, an agriculture fintech company, guiding it through a turnaround after the COVID-19 pandemic induced a crisis in the business.
Before that, she worked as the VP of Growth and managing director, Nigeria, for fintech platform Migo. And outside the startup scene, she was the director of Digital Business at telecom operator 9mobile and is currently the chief marketing officer of mobile telecoms giant MTN Nigeria.
TechCrunch sat down with Sowho to share her experience working as a telecom executive, an operator with Thrive Agric and Migo, her view on how operators can work with founders, her decision to leave the startup scene and how her new journey is all according to plan.
What was your career like before becoming an operator in tech?
I had a long career across different parts of the mobile telecom space, specifically, with my last role being responsible for digital business. Digital business in a telco is essentially that arm of the telco that interfaces with third parties, often startups who have products more innovative than what the telco might have, in its current portfolio, and of interest to customers.
I got that department in its inception at 9mobile and grew it to a $100 million revenue aspect of the business. In doing that, I interacted with various sectors and launched a couple of music apps, gaming platforms, content platforms from like, short-form two minutes to longer forms.
We also did mobile advertising, the Internet of Things and financial services. But the telco industry is very massive, and the infrastructure is very old and difficult to shift into the internet economy. After that, I was looking for something else to do and having been bitten by the startup bug because my team was essentially the internal startup to 9mobile, I was looking for more of that excitement. And I guess I wanted to put my money where my mouth was.
So, why Migo, since a lot of startups existed at the time? I mean, we’re talking early 2018 here.
After 9mobile, I decided to go to Migo because I felt like financial services was critical and the bedrock of a holistic financial system with four elements — savings, credit, insurance and payments.
So in the Nigerian tech scene, a little bit was happening in savings, but to me, it was not a priority in a country that didn’t have a massive GDP per capita. This period was also still in the early stages of Flutterwave and Paystack and we had just started waking up to payments in a big way.
But there was very little happening in credit. I could walk into my bank and get a loan only if the company I worked for was known to that bank, and the bank had some visibility of that company’s finances as well. It was still tough to access credit. That’s why I joined Migo, because I felt like if you don’t solve your financial services problem, you can’t really do anything else. After all, it’s the underlying infrastructure that everything else needs.
How was your experience at the fintech startup?
When I joined, the team was very small at that time. Everyone could fit into one conference room, and then, I started building out the Nigeria business as the managing director.
I hired the team to start delivering products through partnerships and got the userbase to over a million users before leaving. So that was definitely a fun but trying experience. It taught me a lot about myself, and I definitely got first-hand experience of the challenge of building and leading a startup in emerging markets.
Did anything transpire within the startup that led to you leaving?
Let’s say I wanted to start a new journey. I mean, look, COVID hit a lot of businesses hard, and in your startup journey, you have to make some directional changes.
Migo has now more cleanly focused on embedded finance, which required making some changes within the organization, and that happened with COVID. It just seemed like a good time to leave, which I did, plus I might have been a bit burnt out, as I was exhausted when I left.
But you joined Thrive Agric four months after leaving?
Yeah, it was a few months after, that’s interesting [laughs]. So I mean, we’ve talked about how I was drawn to financial services because that’s sort of fundamental to economic development. With Thrive Agric, I definitely felt the same: we eat food. There are millions of smallholder farmers in Nigeria. What Thrive does in consolidating their output to be sold to local off-takers is a critical aspect of Nigeria’s future.
It’s food security. If you sit down and think about the Global Sustainable Development Goals, food security shows up somehow, right? So for me, even though I was still trying to rest, I couldn’t say no. It felt like a call to service to help them figure out what was wrong and try to get them out of the crisis; I really didn’t want to see a company like that die.
I remember it was a rough period for the company. How challenging was it, as it was a new experience for you?
Oh, it was pretty tough. I don’t think I’ve apologized for anything I’ve ever done in my life as much as I did that period. It was definitely intense to be confronted with the rage of thousands of people at the same time. It’s a one-of-a-kind experience. It definitely wasn’t enjoyable, but then again, everybody was under pressure.
The rage was definitely understandable. I couldn’t challenge or argue with it. It was valid, but at the same time, so many companies worldwide suffered due to the pandemic. Sure, Thrive could have handled things better; obviously, that’s why I joined.
But it was a tough job keeping customers happy and protecting the founders because there were many people ready to take some very extreme measures, as you can imagine, but we managed to all largely survive it.
In a nutshell, how did you bring the company out of the crisis it was facing?
When I stepped in, I was extremely focused on addressing the problem. It took me a while to meet the whole company because I was keenly focused on the specific teams, people and resources required to solve the problem first.
It was only after creating a plan that I could start looking at the rest of the company to address what systemic issue led to the problem. There’s no chronic problem in a startup that is not led or supported by something systemic within the startup.
Let’s talk about the problem. What exactly happened?
Essentially, the challenge with Thrive was a timing issue. Thrive works with the farmers to grow crops. They deliver fertilizer and seeds, and the farmers grow the crops. We support farmers during harvest and manage them getting the harvest to the warehouse. Then we take the goods from the warehouse into the market and sell them to our clients.
So COVID prevented farmers from accessing the farms. It prevented us from accessing the markets to sell the goods. It prevented us from going to the farms to gather the produce and take them to sell.
During the lockdown, you can’t do any of that because you can’t move. You can’t deliver seeds to the farmers; the farmers cannot plant, you cannot get people to support them with harvest, you cannot receive the goods. So the fundamental ability for the company to make money was compromised.
When that happened, it wasn’t a problem anybody had seen before. The team didn’t know how to react and did not pass on the bad news to subscribers. And bad news is always tough to deliver. What it created was this timing issue and that’s why though we were able to pay back, we did with delay. We wanted to honor the obligations to subscribers. The business model does work. It’s just that Thrive wasn’t prepared for a pandemic, but eventually, we’ve been able to catch up a little bit.
Your case with Thrive Agric is quite unique because you were brought as someone with managerial experience to help the company. That’s not the case generally within the ecosystem. Some founders rarely want to relinquish their position even if the company is going downhill. Why do you think this is so?
I think part of it is because startup culture comes from Silicon Valley and startup culture there prefers to rely on less-experienced people at the beginning. And to be honest, experience and innovation are not comfortable bedfellows because when you have experience, you will lean on what is tried and tested. When you’re trying to be innovative, you are throwing away what is tried and tested.
So essentially, the challenge that African founders now have is that we have to find a way to localize that context. But going to my first point, we can also see that Google and Facebook made changes when necessary. With Facebook, it was Sheryl Sandberg. Google did with Eric Schmidt. Maybe our startups have to do it a little bit earlier and a little bit more informally first, and that’s fine because of the lack of infrastructure existing in the country.
Experience helps you know where someone may have tried something or made a mistake before. That’s why my joining Thrive made sense. I’m happy to see that there is more interest in welcoming people with experience and quite a few more people feel emboldened to make the jump into startups.
So I believe that the trend is changing, although it can be definitely difficult when you want a long career. To jump into the startup culture, you have to throw away many comforts and embrace an extremely dynamic environment.
How would you say Thrive Agric is faring now?
Because I took a systemic approach to manage the team and the startup, I believe they are on better footing. Now, the founders and the senior team can a little bit more comfortably see around corners. The only thing you can do with risk is to manage it or prevent it.
When I got into Thrive, I was highly focused on what went wrong, understanding the causality and retraining the team to better see around those kinds of corners. That work continues. I stay on as an advisor because I want to ensure the company’s continued success for the same reason I gave before: food security.
I mean, Thrive is one of three companies that the Central Bank of Nigeria is satisfied with giving support to deliver food security nationwide. It means that the sky is the limit in terms of growth because Thrive is aggregating 100,000 farmers in the country just this year. The growth potential for this company is astounding.
So, in all this, what does your experience at Thrive tell you about startups and the Nigerian tech ecosystem in general?
Startup life is hard in countries that are infrastructure rich. It is harder in countries that are infrastructure light. In Nigeria and Africa, that internally forces startups to build infrastructure that they don’t have. But the problem for some is that when they build it, they individualize it, which kind of sucks.
But at the same time, the low-hanging fruit around here is just amazing. I’m excited by the potential and possibility of creating a new version of what the economy can look like by tapping into the internet and connectivity.
So for me, there are definitely opportunities to support startups differently. I think maybe that’s going to be the focus of my work with the ecosystem going forward. Figuring out how to help the ecosystem build better products and run better startups based on my experience.
Since I can’t obviously go in and do that for everybody, I’ll try to figure out a way to share my knowledge at scale.
How will you do that now that you’ve left the startup scene and gone back to the corporate world with MTN?
Well, let’s talk about infrastructure. You know, if you think about your startup with MTN as a partner, what does the trajectory of that startup now look like? It’s massive. So that’s why I took this role.
I’m still doing a lot of startup ecosystem work. For me, there is a telco role in all future unicorn stories. That requires empathy on both sides to happen. It’s something I’ve talked about, written about, been working for years, just figuring out how to make these relationships work better. I guess that’s why, you know, a candidate like me was appealing to the company. I’m keen to go there and continue the same work at scale with the knowledge I have.
Despite the prevalence of shopping malls and the emergence of VC-backed e-commerce companies like Jumia, informal retail in Africa is still king.
A 2016 study by PwC states that 90% of sales in Africa’s major economies come through informal channels — markets and kiosks.
This presents a large market ripe for digitization, and over the past five years, African startups have risen to the challenge, raising millions of dollars in the process. Today, Omnibiz, a Lagos-based startup, joins the fray and has raised a seed round of $3 million to expand into new markets.
Omnibiz is a B2B e-commerce platform that connects fast-moving consumer goods (FMCGs) manufacturers to retailers by digitizing the supply chain stakeholders.
The platform offers a mobile app, WhatsApp channel and a phone number that retailers can use to stock their shops. Omnibiz says in a statement that retailers “can place orders at their convenience and have goods delivered to their doorstep at no cost.”
Omnibiz was launched in 2019 by Deepankar Rustagi. The Indian founder and CEO who has stayed in Nigeria for over two decades started his first startup, VConnect, in 2011 as an online marketplace and search engine to find local professionals for service needs.
The platform connected individuals with more than 100 services and over 500,000 listed businesses across the country before shutting down in 2017, Rustagi claims.
Post-VConnect, Rustagi consulted for multiple FMCG brands. He figured a need existed for manufacturers and retailers of goods to digitize their processes leading to the launch of Omnibiz in late 2019.
Omnibiz operates an asset-light retail distribution model. When a retailer makes an order on the Omnibiz platform, it is requested from partner distributors who store goods on behalf of manufacturers and are traditionally known to help out with warehousing and transportation.
With Omnibiz, these distributors can focus solely on warehousing and pass on the responsibility of transporting goods to Omnibiz’s third-party logistics providers. The drivers of these logistics providers use Omnibiz to efficiently distribute the orders to the retailers within 24 hours.
“We work with manufacturers to provide visibility. Then buy goods from them and keep them in partner hubs that act as warehouses and distributors. Then, use the services of drivers that work with third-party logistics drivers who get paid on every delivery made,” Rustagi told TechCrunch.
Digitizing this value chain helps retailers save working capital while Omnibiz connects them with more than 20 brands, including Coca-Cola, Nestlé, Kellogg’s, Unilever, Procter & Gamble and Kimberly-Clark.
The B2B e-commerce retail company is currently in four cities across Nigeria — Lagos, Abuja, Port Harcourt, and Kaduna. The company will add two more cities, Ibadan and Kano, before the end of August, Rustagi adds.
By Rustagi’s account, Omnibiz will feed off his experience at VConnect, his prior business that struggled to monetize and scale despite the huge traction it got as a popular local marketplace.
“We knew about small businesses and what sort of technology they like. That was our specialization, but our business model didn’t work. But in this case [Omnibiz], the monetization happens on our platform, and there’s money to be made for the small business. We’ve been growing 30% month-on-month for the last 12 months,” he said.
The B2B informal e-commerce market has seen a resurgence in the last couple of years. Kenya’s Sokowatch and Twiga, Nigeria’s TradeDepot and Egypt’s MaxAB have longed vied for market-leader positions in their respective markets.
The pandemic spiked more interest in their activities as all the aforementioned startups have raised money this past year, including newcomers Kenya’s MarketForce and now Omnibiz.
Some operate asset-light models, while others take up the responsibility of managing the end-to-end digitization process. Rustagi believes the former is perfect for the company because it helps distributors expand their reach rather than eliminate them.
“I think scaling in one city with assets is not that difficult. But if you have to scale in 20, 24 cities in a country like Nigeria or Ghana, or Ivory Coast or East Africa, the investment required will be very high.” Rustagi continued. “So we think without significant investment in assets, we will be able to scale much faster. And since we took the tech-first approach, we have good control over the business. I believe we’re in the right space and the right time with the right model.”
Omnibiz’s seed round was led by V&R Africa, Timon Capital and Tangerine Insurance. The round also included Lofty Inc., Musha Ventures, Sunu Capital, Launch Africa, and Rising Tide Africa. It takes the company’s total investment to $4 million. Rustagi also disclosed that the company also got funding from Seedstars and will participate in the accelerator’s growth program.
“I think Omnibiz will be the role model for B2B retail in Africa and can scale well into other emerging markets. We are excited and happy to be supporting Omnibiz in all ways beyond just providing capital,” Raj Kulasingam and Vishal Agarwal of V&R Africa said in a statement.
Over the next few months, Omnibiz will use the investment to expand in other West African cities outside Nigeria — Abidjan, Takoradi, Kumasi and Accra. Food, non-alcoholic beverages, personal care, and baby care products are the top categories on the Omnibiz platform. The company is planning to expand into new categories like alcoholic beverages and OTC pharmaceutical products.
Omnibiz will also use the investment to create new tech products that will enhance value for the retailers. The company will work with partners to increase the working capital availability for the retailers and digital tools to manage their business more efficiently.
“One of the key things we intend to do is to bring on medium-scale manufacturers who find it difficult to get the last-mile delivery to reach customers. We want to scale them so they can reach a large number of retailers. That’s something we are rolling out so we can onboard more and more manufacturers,” said the CEO on Omnibiz’s next plans.
Africa is home to more than a billion people where a majority have limited or no access to vehicle financing. In fact, the continent has the lowest per capita vehicle ownership in the world. In 2019, Africa had fewer than 900,000 new vehicle sales. The U.S. sold more than 17 million new cars that same year.
In Nigeria, owning a car is a luxury very few people can afford. It is a similar case across Africa where car owners often recycle used cars between themselves because of the difficulty of accessing new ones. Moove, an African mobility company with a fintech play, wants to change that and is raising $23 million in Series A to scale rapidly across the continent.
Moove was founded by Ladi Delano and Jide Odunsi in 2019. In an interview with TechCrunch, Delano said he and Odunsi, whilst trying to figure out the problems to solve in Nigeria after years of running successful businesses, were left startled by the figures highlighted above: Less than a million new cars sold in an entire continent and over 17 million in the U.S. alone.
“It became clear to us that people aren’t buying cars in Africa because there’s no access to finance. When you look anywhere else in the world, you have financing in most parts of the developed world when you try to buy a car. It’s that way in the UK, or Europe and the US. And that’s what’s driving mobility drive and vehicle sales,” Delano said during the interview.
The founders saw it as a huge task to address this deficit and figured that deploying an asset financing model was the go-to approach. Moove says it is democratizing vehicle ownership by employing a revenue-based vehicle financing model. However, this applies to only a subset of the driving population across the continent: mobility entrepreneurs.
Why mobility entrepreneurs instead of the overall populace? Delano tells TechCrunch that inasmuch as Moove is changing how people have access to new cars in Africa, he wants the company to solve some of the unemployment problems facing the continent, even more so in Nigeria.
So instead of providing the service for individuals from all spheres of life who cannot guarantee a payback, why not target mobility entrepreneurs who would use the opportunity to work and, in turn, generate income to pay back.
Mobility entrepreneurs include drivers who work in the mobility space (car-hailing, ride-hailing, bus-hailing, among others). Although they make up a small part of Africans who need Moove’s services, Delano says the market for mobility entrepreneurs is enormous.
Moove is Uber’s exclusive car financing and vehicle supply partner in sub-Saharan Africa. The company embeds its alternative credit-scoring technology, allowing access to proprietary performance and revenue analytics to underwrite loans. It provides loans to these drivers by selling them new vehicles and financing up to 95% of the purchase within five days of sign up. They can choose to pay back their loans over 24, 36, or 48 months, using a percentage of the weekly revenue generated while driving on Uber.
Moove’s loan repayment process is more suitable to drivers than what traditionally exists in the market. Nigerian banks, for instance, are known to collect a 10-50% deposit from drivers; Moove says it charges 5%. The net effective annual interest rate also differs significantly. Nigerian banks charge between 20 to 25%; however, Moove runs on an 8-13% rate.
Also, when you consider the tenure of a vehicle financing loan, Nigerian banks rarely give a repayment duration of more than two years. Moove’s maximum duration is four years. In the long run, Delano says the company wants to extend the repayment duration to five years, a span with more parity to the West.
That said, Moove is looking to add financing to other vehicle classes and types in the coming months, including buses and trucks.
Though Moove was founded in 2019, it didn’t fully launch until June 2020. In a full year of operation, Moove has scaled aggressively. With headquarters in the Netherlands, the company counts Lagos, Accra, Johannesburg as cities where it operates. Moove has over 19,000 drivers using its platform, while up to 13,000 are on its waitlist. Moove-financed cars have also completed over 850,000 Uber trips, and Delano says the company has grown 60% month-on-month since last year.
Moove raised a $5.5 million seed round last year. The majority of the funding came from the founders and Iyinoluwa Aboyeji, c-founder of Andela and Flutterwave, and a key partner at the company. In addition to its $23 million Series A, Moove also revealed that it raised $40 million in debt financing, bringing Moove’s total funding to $68.5 million.
Speedinvest and Left Lane Capital led the Series A round. Other investors like DCM, Clocktower Technology Ventures, thelatest.ventures, LocalGlobe, Tekton, FJ Labs, Palm Drive Capital, Kora Capital, KAAF Investments, Class 5 Global, and Victoria van Lennep, co-founder of Lendable, Verod, Kepple Africa Ventures, and one of Moove’s existing lenders, Emso Asset Management, also joined the round. Moove’s investment is the first for many of its U.S. backers in this round.
“With Ladi and Jide at the helm of a world-class team, and their unique approach to vehicle financing, Moove has quickly established itself as one of the most exciting tech companies in Africa,” said the general partner at Speedinvest, Stefan Klestil. “The company’s expansion to three cities in under 12 months demonstrates the huge demand for vehicle financing in Africa, where just five percent of new cars are purchased with financing, compared to 92 percent in Europe.”
Delano and Odunsi are British-born Nigerians educated at the London School of Economics, Oxford University, and MIT. Delano has always been an entrepreneur. Odunsi, on the other hand, was an investment banker at Goldman Sachs and a management consultant at McKinsey.
Both reconnected years after (since parting ways in their teens) to run a venture studio called Grace Lake Partners with thick they have built three non-tech successful businesses in Africa in the past decade. Moove is their first tech business, and Delano calls it the fastest-growing he has ever run.
The Series A funding will allow Moove to grow and expand into new markets. It gives the company ammunition to develop and launch new products and services geared towards gaining more share in a competitive market where Nigeria’s Autochek and South Africa’s FlexClub are making significant strides.
Delano believes what gives Moove an edge over other companies is its trademark of getting drivers to access new cars instead of used ones. He also adds that the company is moving towards creating electric and hybrid vehicle fleets. He cites helping mobility entrepreneurs who need to have fuel-efficient cars and climate change as reasons for creating this new product line.
But how will EVs be affordable for the average Uber driver in Africa? Delano argues that with Moove’s strong bargaining power with its OEM partners and the debt financing raised, Moove can buy new EV cars and resell them at a lower price to thousands of drivers. The aim is to ensure that at least 60% of the vehicles it finances are electric or hybrid in the coming years. The company is also trying to drive gender inclusion by increasing the number of female drivers using its platform to 50%.
One interesting bit in Moove’s imminent plans is creating wallets for drivers who do not have bank accounts to make and accept payments. The feature is live only in Ghana and will be coming to other markets in no distant time.
“Moove’s technology is fundamentally changing access to mobility and empowering thousands to earn a new source of income,” said managing partner at Left Lane Capital, Dan Ahrens. “As we look ahead, the potential for that technology and the Moove team to expand even further is very exciting. They have the opportunity to become a full-service mobility fintech and expand their offerings to insurance and other financial services.”
This past decade, Nigeria has seen several companies cater to the development and growth of software engineers and tech talent in general. It’s a space many in the Nigerian ecosystem like to think is budding yet overcrowded.
So when Chika Nwobi started Decagon in 2018, the perception was generally “here comes another tech talent accelerator.” Two years on, the entrepreneur who is a household name has significantly scaled the company to new heights.
Today, Decagon is announcing its $1.5 million seed round and a student loan financing facility of $25 million from Nigerian financial institution Sterling Bank.
As a serial founder, Nwobi ran a couple of tech businesses, most notably mobile internet company MTech in the early 2000s. With Decagon, Nwobi is charting new territory in the fast-paced startup world after years of investing via his seed-stage firm called L5Lab.
Nwobi says Decagon aims to address the underrepresentation of black people in tech globally, starting with Nigeria. The West African country is the most populous on the continent and the most populous black nation globally.
The dire need for tech talent in Nigeria has become more evident these days, where startups are raising venture capital at a ridiculous pace. Youth unemployment in the country is at a staggering 50%, and while tech has presented an avenue to create jobs, supply isn’t catching up with demand. And more worrisome is the fact that the country’s best talents are leaving in droves to foreign companies in the U.S, Canada, the U.K., and Germany.
So the issue really is supply. If supply is fixed, everyone is happy. That’s what Decagon hopes for by training and connecting engineers to work remotely with both local and international companies. “Microsoft, Facebook and Google have all invested in building engineering offices in Nigeria, but most other companies can’t afford to do that, so we help them access top talent to work as remote engineers,” Nwobi said.
Decagon runs a six-month software engineering program and selects its candidates based on merit. It’s a paid program, and the software engineers are expected to pay about N2 million (~$4,000) tuition to get in. Then, the company employs an income-sharing model when the engineers find work and start earning upon graduation.
But what if the trainees can not afford the program in the first place? The student loan financing takes care of that, and students who take that option are expected to repay N3 million (~$6,000) in the space of three years.
The company claims to be the first to create such merit-based loan financing for students in Nigeria. The financing is in partnership with the financier Sterling Bank and Nigeria’s apex bank, the Central Bank of Nigeria (CBN). It allows Decagon to offer a Pay-After-Learning plan that provides the trainees with laptops, accommodation, internet, meal allowance and a stipend. No upfront payment is expected, says the company.
Decagon says while more than 80,000 people have applied to partake in its program, it has accepted only 440 candidates. That’s a 0.55% acceptance rate. However, Nwobi discloses three figures to show the company is on the right track: the company has recorded a 100% placement rate for its trainees, a 100% loan repayment rate, and a 410% salary increment made by its software engineers after getting placement.
Global tech talent company Andela employed this model before pivoting, and while it didn’t work for them, it seems to be working for Decagon. The reason is likely because Andela used equity financing to carry out these operations, whereas Decagon uses debt.
Obinna Ukachukwu, the divisional head of Sterling Bank, commenting on the student loan financing, said, “We got involved to support alternative education by providing loans for Nigerian students complemented with financial literacy training. Based on the excellent performance of the current portfolio, it made sense to scale our support to Decagon.”
For its equity financing, Decagon raised money from Kepple Africa and Timon Capital. Some angel investors like Paul Kokoricha, managing partner of the private equity business of ACA, and Tokyo-based UNITED Inc., also took part.
Nwobi says Decagon operates at the intersection of edtech, fintech and the future of work, and the funds will be used to scale its efforts on the three fronts. The company will also be looking to deepen gender inclusion by increasing female participation in its cohorts from 25% (its current stats) to 50% in the next three years.
The CEO adds that the company which he refers to as a “tech talent catalyst” is profitable and growing at 500% per annum. “We see this capital as fuel to accelerate our mission to transform exceptional people, often from under-represented backgrounds, into world-class engineers by connecting them with financing, in-demand skills and their dream jobs.”
“We’re thrilled to work with Decagon to build up the top 0.5% of vetted engineering talent in Africa and help connect them to global tech opportunities. The frequency of engineering leaders from US and European companies in our network ask about sourcing African and Nigerian technical talent has increased at a rapid clip, and we’re excited to lean into that and help Decagon on their mission,” partner at Timon Capital, Chris Muscarella, said in a statement.
Decagon’s raise comes when there is general skepticism about the viability of tech talent accelerators on the continent despite their apparent need.
Before Andela changed its model, it was a clear market leader with over $180 million in its arsenal. Since it’s pivot, funding has relatively stalled for most of these companies. Maybe Decagon’s student loan financing method will be the new trendsetter in a space that desperately needs investment to solve Africa’s talent problem.
In Africa, chartering vessels and processing ocean freight can be challenging. The sector is largely inefficient and fragmented. Merchants also struggle to access finance to perform cross-border trade in the continent. A couple of digital freight companies are tackling this problem, like Nigerian-based MVX. The company today is announcing its $1.3 million seed round to bolster its efforts.
Tonye Membere-Otaji thought about the idea for MVX in 2016. Having worked in the maritime industry (running his family business and in a professional capacity building apps and websites for companies), Membere-Otaji was intrigued by how no online marketplace for vessels existed.
“I decided to figure out how to solve that problem of finding vessels because there were too many intermediaries, which made processes difficult,” he told TechCrunch. However, a few issues relating to not having the right team to build out the product stalled the company’s progress. In 2019, Membere-Otaji finally launched the company with CTO Tobi Amusan after securing a $100,000 pre-seed investment from Oui Capital, a pan-African VC firm.
The company was called MVXchange at first. Its business model revolved around providing a support vessel booking platform that matched vessel chartering requests made by operators with available Offshore Support Vessels (OSVs).
But in March 2020, the company made a sharp pivot and tweaked its model. CEO Membere-Otaji cites uncertainty of oil prices and the pandemic as reasons behind the decision.
“We couldn’t see ourselves doing vessel chartering for the long term because the demand for fossil fuels will definitely reduce over the next few decades. We wanted to do something scalable, something that was impactful, and something that we could be proud of in the next 20 years,” he added.
What followed was the launch of MVXtransit, a digital freight booking platform, helping cargo owners find deals on moving containers across Nigeria. This April, the company launched MVXpay, a finance and payment solution to provide trade finance for freight operators. However, both offerings are now rolled into one: MVX.
According to the CEO, MVX wants to make freight shipping and trade finance easier for African businesses by bringing booking and deployment processes online. The startup has expanded beyond Nigeria and claims that merchants from the West African country, as well as Kenya, South Africa, Ghana and Rwanda, can use its platform to move freight in and out of their countries.
MVX charges a commission for the services provided, including trucking, warehousing, shipping, and cargo stuffing.
“We make it easy and convenient for businesses. Instead of trying to do everything themselves, which can be chaotic and cause distraction from their core businesses, we handle everything because we have all these service providers in one platform. So as shippers work with us, MVX works with like seven to 10 other service providers,” said Membere-Otaji.
The market for cross-border logistics services is said to hit revenues of $32 billion by 2025. Multiple companies are needed for the market to reach its full potential. That has been the case, and investors are noticing too. For instance, Ghana’s Jetstream offers a similar service and raised $3 million two months ago. SEND is another example; YC backs the startup.
However, what stands out for MVX, according to Membere-Otaji, is that the company also sees itself as a trade finance company.
The concept brings together the best of both worlds of fintech and trade. So the way it works is that with merchants looking to move shipments from Africa to the U.S. or China, some lack adequate capital to pay for freight or supply. With MVX, they can proceed to request credit. MVX passes it over to its financial partners, who lend to the consumers if they meet the minimum requirement. Next, MVX takes care of the shipment and delivers it abroad. Once the transaction is done, the merchant pays back, with all partners taking commissions.
“Our job really is to empower trade in Africa, and freight is a means to that. From every step involved in that process, from providing trade and finance to warehousing to payments processing, we want to play in all that space. There aren’t a lot of companies with that trading finance element doing that like us. And also, we see a huge potential in the offline market. Right now, the reason why we have this problem is that transactions are offline. Our strategy in capturing offline markets is also key.”
The pan-African freight company has already recorded more than 300 shipments this year but plans to end with 1,500. Per revenue and traction, the CEO claims the company has surpassed its 2020 numbers.
MVX raised money for its seed round from Africa-focused firms Kepple Africa, The Continent Venture Partners, Founders Factory, Launch Africa, and Capital Oak. Some angel investors in the U.S., Japan, Nigeria, and South Africa also participated. The two-year-old startup will use the investment to scale its operations, hire staff and improve its technology. MVX is also talking to investors to raise more money, most likely debt, for its trade financing product.
In a statement, Satoshi Shinada, general partner at Kepple Africa, said, “The trade sector in Africa is one that we believe is ripe for disruption. MVX is building a game-changing technology and platform to revolutionize how businesses in Africa move shipment and trade around the world.”
Pharmacies in Africa struggle with access to finance, but inventory management is really what bogs them down. How do pharmaceutical retailers know how much stock they need? How do they know which products to stock at a given time? How do they know what products aren’t selling?
At the moment, there’s not enough data to answer these questions. Cash gets tied up; there are more or fewer products than are needed at a particular time. If it’s the former, they run a risk of selling expired products. If it’s the latter, patients can’t get what they need.
Field Intelligence is digitizing this supply-chain process to help African pharmacies sell better. The company, which started in 2015, was government-focused and tried to tackle the challenges facing the public health supply chain in Nigeria’s capital city, Abuja.
Co-founder and CEO Michael Moreland said he noticed that independent pharmacies in Abuja faced similar challenges to the government-owned ones. After building a SaaS platform to manage complex and large-scale pharmaceutical distribution for the government, the company decided to branch out into the private space.
In trying to solve that supply-chain problem, Field Intelligence shifted from strictly being a software company to become a pharmaceutical distributor using technology to reimagine how the value chain works.
Field Intelligence launched Shelf Life in 2017 as the standalone product to handle this transition. Up until now, they had operations in Abuja, Lagos and Nairobi. The product aims to solve the inventory problem across Africa’s $65 billion pharmaceutical market. Today, the company announced its expansion into 11 cities across Nigeria and Kenya. The seven cities in Nigeria include Delta, Edo, Enugu, Kaduna, Kano, Kwara and Rivers. In Kenya, it’s Eldoret, Kisumi, Mombasa and Naivasha. The expansion will build on Field Intelligence’s more than 700 existing pharmacies, which have served over 1.4 million patients so far.
Shelf Life takes the burden and risk of inventory off the pharmacies. It manages forecasting, quality assurance, fulfillment and inventory management via a subscription service. Pharmacies sell Shelf Life-supplied goods on consignment through a pay-as-you-sell program, avoiding expiry risk and accessing a cheaper alternative to working capital finance. The company claims that this model allowed pharmacies to grow an average of 25% CAGR.
“We launched Shelf Life in 2017 to allow pharmacies to outsource their supply chain to us. And it really just grew very organically from there,” Moreland said. “And as we built up, we expanded down to Lagos and eventually to Nairobi to see if it would work in East Africa in that context, and it did. We haven’t looked back since then. The future of the business is in the private pharmacy market.”
Field Intelligence concluded its first round of outside capital in March last year, a $3.6 million Series A. The money was raised for expansion, but the pandemic stalled that plan. Field Intelligence went back to work by the end of Q4 2020 and planted the initial seeds of what has grown until this moment.
Importance of data in Field Intelligence’s operations
This expansion comes a year after the company experienced rapid sales and Shelf Life membership subscriptions. Sales grew by 47% in Nigeria and 65% in Kenya, selling over 586,950 products in 63 different product categories.
By using data to optimize predictions and identify irregularities in the market, Field Intelligence met the demands for prescription and over-the-counter drugs. But how does it receive and aggregate this data?
“We see that as a math problem. And that starts with having really great data about what’s selling across a wide number of locations and different seasons, across a wide formulary of products,” the CEO said.
When Field Intelligence introduces Shelf Life to a pharmacy, it takes over its supply chain and inventory management processes. The company has fulfillment partners to manage the pharmacy’s stock counts, inventory management and merchandising.
Data about stock positions and movements at the retail level comes from a wide array of locations. Thus, the company can build a proprietary dataset that shows pharmacies in real-time, providing insights into demand. With that, Field Intelligence provides visibility and control of pharmaceutical procurement and inventory management. This eliminates frequent over- and understocking; pharmacies can change products or prices based on the information available.
The fulfillment partners operate an asset-light model, which Moreland said allowed the company “to build a scalable and intelligent distribution service that operates lean but yet creates a lot of value for the patients and retailers.”
“I can say that our level of the value chain here as sort of this tech-enabled distributor, there’s nobody that operates at this level of the supply chain in so many cities,” he added.
Shelf Life is currently being used in more than 700 pharmacies across Nigeria and Kenya. The company says Nigeria has more than 4,500 registered pharmacies and over 15,000 drugstores; while Kenya has 6,000 registered pharmacies. So there’s plenty of market share to capture. By next year, Field Intelligence plans to surpass 2,000 Shelf Life pharmacies and drugstores. By 2025, the company is targeting 12,000 pharmacies and drugstores.
Moreland said that the company has grown 5x in terms of recurring revenue, adding that Shelf Life has sold more drugs and served more patients in the last three months than its first three years of business.
While Field Intelligence is looking to tackle inventory management with Shelf Life, Moreland believes the company is also effectively solving a finance problem too because it provides an alternative to traditional financing options by lowering the cost of running a pharmacy.
“One of the big value propositions for us is that because we are selling on consignment, we free up a lot of working capital for the retailer. So in the market, we’re broadly seen as a financial services provider and a form of alternative finance for our pharmacies. And I think it’s a big part of our story because when you compare the cost of joining Shelf Life to accessing the equivalent amount of working capital from microfinance or traditional bank, even concessionary lenders, we can be 60 to 80% cheaper with far more value-added services,” he said.
A major attraction of Africa is its large population of 1.2 billion, which hints at a sizable addressable market. But what happens when your target audience is the governments of 54 countries?
In our situation, that was the case. We started Domineum Blockchain Solutions with the intention to help African governments solve problems with shipping and keeping records.
We knew it’d be hard work, but didn’t anticipate that getting our first customer would be the most difficult part.
It’s typical when entering Africa to want to focus on the big and popular markets like Nigeria, South Africa and Kenya. But what we’ve learned so far is that there’s a high probability that these countries might not be your first entry point.
Our first product was a cargo service that tracks shipment origin and movement and determines the contents of goods being imported or exported in any country. We built this to solve the problem of lost revenue due to shipments being passed through informal backdoor channels.
With our focus on sub-Saharan Africa, we approached four countries in 2019: our home country of Nigeria, plus Kenya, Gambia and Guinea-Conakry.
We started this conversation and didn’t get a substantial response from the four countries’ governments. They weren’t open to trying out our solution — it was new and they weren’t familiar with blockchain technology. Distraught, we decided to add a smaller country to our list: Sierra Leone.
The Freetown seaport, located in the country’s capital, is the main gateway for trade in and out of Sierra Leone, with 80% of trade passing through this port. The port has a long history as a trading hub and benefits from the country’s strategically important location midway between Europe and the Americas.
But Freetown isn’t one of the top ports in Africa or even sub-Saharan Africa; a fraction of a percentage point of the world’s trade shipment flows through its ports. The small African country, with about 0.1% of the world’s population, exports diamonds, cocoa and coffee and imports food, machinery and chemicals.
Notably, it faced big challenges in shipping these products in and out of the country. A Sierra Leonean supply chain manager described this situation, “We used to face big challenges during the export process. There would be long delays at the port. Our trucks would arrive before midnight and could be stuck in queue for hours, even days. The documentation process was so complicated.”
According to the World Bank, Sierra Leone’s “trade challenges can be attributed to several factors: lack of access to trade information; high levels of physical inspections; multiple fees, licenses, permits and certificates; manual processes; and the lack of coordination among agencies.” Domineum set out to solve this.
Our initial conversations with the Sierra Leone government went well. Fortunately, Sierra had developed a five-year plan (2018-2023), supported by the World Bank Group, to reduce the time and costs needed to move goods across its borders. The goal is to reduce trade costs by 10%. After three months of discussion, our cargo tracking system was implemented.
In late 2019, we started this partnership, and so far we’ve been able to capture $2 million in revenue that would have been lost. The business model is simple: We get a 40% commission out of extra revenue we’re able to capture for the Sierra Leone government via our cargo tracking system.
It’s typical when entering Africa to want to focus on the big and popular markets like Nigeria, South Africa and Kenya. But what we’ve learned so far is that there’s a high probability that these countries might not be your first entry point. A business-to-government model is a difficult one. There’s a lot of politicking that goes into working with the government.
What we’ve seen work is to approach other countries and gain a foothold, then use that as validation that the concept works. With the success of Sierra Leone, we’re hoping to return to other countries and get a better reception.
The success of Sierra Leone got us rethinking the services we were offering. The initial conversation started with a cargo tracking service, but then we wondered if we should offer a different service to countries that said no at first.
We identified that land registration was a common problem in Africa. More than 90% of rural land in Africa is undocumented and therefore vulnerable to land-grabbing. This hampers the growth of agriculture and other sectors because land is lost to other parties or taken forcefully by the government during times of conflict.
We returned to these countries, offering other services like land ownership registration via blockchain. We got a positive response from a state government in Nigeria to carry out a pilot program. We’re optimistic that once this pilot phase is over, we’ll be able to seal the next business deal.
What’s it like working with African governments? It’s a smaller addressable market. If you’re looking to pitch a product or service to governments in Africa, it’d be helpful to keep in mind that your first customer might be from a smaller country.
To seize other opportunities, we’ll keep looking to expand to other African countries with this mindset.
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 that tracks the latest private market news, talks about the coming week, digs into some recent funding rounds and mulls over a larger theme or narrative from the private markets. You can follow the show on Twitter here and myself here.
It was a big damn morning, so we had to cut some stuff. Here’s what we got into:
- Stocks and cryptos are off this morning, as inflation and COVID-19 concerns rise.
- Zoom is buying Five9. The deal is not super expensive, nor is it cheap. But given the huge percentage of Zoom’s market cap that it represents, it’s a serious wager from the video conferencing startup.
- Carlyle is buying LiveU for around $400 million. TechCrunch broke this news. The deal shows that private equity interest in startups that aren’t unicorns.
- Robinhood dropped a new SEC filing this morning! That means we have a price range and valuation target to play with. More from TechCrunch on the matter shortly.
- From India: A huge round for Lenskart, and a big Series A for GlobalBees.
- And we covered this round from Nigeria. A smaller transaction, but one that could prove to be quite neat, we reckon.
Ok! Chat Wednesday!
When Robinhood raised its $3 million seed round in 2013, it was a couple of months old with huge ambitions of democratizing securities access to the underserved and unserved. Robinhood has since taken the world by storm and grown to serve more than 30 million users with its zero-commission trading.
In the past, we’ve seen such growth trickle down to other regions across the world, inspiring similar businesses. Robinhood is no exception. Several platforms have sprung forth to bring stock trading opportunities in their respective markets. In Nigeria, at least four platforms offer both local and foreign stocks to individuals. Chaka is one such platform. Today, it is announcing the close of its $1.5 million pre-seed round to power digital investments for individuals and businesses.
The pre-seed round was led by Breyer Capital, while 4DX Ventures, Golden Palm Investments, Future Africa, Seedstars, and Musha Ventures participated. It’s the second joint deal for 4DX Ventures and Breyer Capital in the space of two weeks, the first in Egyptian social e-commerce platform Taager.
It is a well-known fact that even before Robinhood, the average American actively participated in stock trading. According to a survey by Gallup, about 60% of Americans owned some form of stock in 2000; that number was down to 55% in 2020. This was partly due to the global financial crisis that occurred in 2008.
The crash also affected the Nigerian capital market and because Nigerians lost a lot of money during that period, stock trading is mostly frowned upon by most of the public. Yet for the average Nigerian interested, participating in trading local stocks is hard; and practically impossible for foreign ones.
Tosin Osibodu, while in the U.S., recognised this problem and came back to Nigeria to start Chaka officially launching the company in 2019. According to Osibodu, Chaka wanted to create opportunities for Nigerians to invest in foreign assets and at the same time allow foreigners to invest in Nigerian assets.
“If there’s more demand in the market, over time, we expect there’ll be more supply. If you fast forward over a long period of time, we expect that our local capital markets will continue to grow,” he said to TechCrunch in an interview. “We will provide borderless digital access to multiple solutions, and so it’s not just about Nigerians investing in the market, it’s about making the markets accessible for people locally and globally.”
For the most part, Chaka has executed on one front. The platform Nigerians access to more than 10,000 stocks and ETFs trading on local and foreign capital markets. The CEO maintains that the platform has levelled entry barriers for borderless investments in Nigeria by providing customers with compliant access to the capital market.
“The thing about markets is that they have demand and supply with barriers to entry. We’re committed to lowering those barriers in local markets and by lowering barriers to investing for retail, more people will come to the market. In fact, more people came into the Nigerian stock market through us last year than any other broker. It’s like a demand-supply flywheel,” the CEO added.
Chaka’s local assets are registered with the Nigerian Stock Exchange (NSE) Central Securities Clearing System (CSCS) and regulated by the Securities Exchange Commission of Nigeria (SEC). Dollar assets, on the other hand, are regulated by the US FINRA and the US SEC.
In April this year, digital investment platforms were caught in crosshairs with Nigeria’s SEC. The regulator declared their activities illegal and warned capital market operators working with them to renege on providing brokerage services for foreign securities. Unlike Robinhood which offers online brokerages, Nigerian investment platforms do not. Chaka, for instance, partners with Citi Investment Capital in Nigeria and DriveWealth LLC in the U.S. to issue stocks and securities.
According to Nigeria’s SEC, the bottom line was to bring the activities of these platforms under its purview as part of its efforts to safeguard the investing public. Although Osibodu claims Chaka had always engaged the SEC since the company was formed in 2019, it did not seem that way last December when the regulator singled out the two-year-old company for “selling and advertising stocks.”
The event set the precedence for the regulator’s all-out attack on other digital investment platforms, giving Chaka enough time to engage and conclude talks in about half a year. And last month, Chaka acquired the first fintech license issued by the SEC, making it the only investment platform operating as a digital sub-broker.
“When we launched, we kept SEC in the loop. But now, over the last six months, we’ve engage