The novelist’s remarks went viral after she criticized former students as well as “social-media-savvy people who are choking on sanctimony and lacking in compassion.”
Two profound problems face the higher education sector globally — affordability and relevance. Whether you live in Africa, Europe, or the U.S., a major reason why people don’t go to university or college or even drop out because they cannot afford tuition fees. On the other hand, relevance shows the huge gap between what traditional universities teach and what global employers actually look for. It’s not a secret that universities focus a bit too much on theory.
Over the past few years, there has been the emergence of a number of alternative credential providers trying to provide students with the necessary skills to earn and make a living. Nexford University is one of such platforms, and today, it has a closed $10.8 million pre-Series A funding round.
Dubai-based VC Global Ventures led the new round. Other investors include Future Africa’s new thematic fund (focused on education), angel investors, and family offices. Unnamed VCs from 10 countries, including the U.S., U.K., France, Dubai, Switzerland, Qatar, Nigeria, Egypt and Saudi Arabia, also took part.
To date, Nexford has raised $15.3 million, following the first tranche of $4.5 million in seed funding raised two years ago.
“That way, you get the best of both worlds,” CEO Al Tarzi said to TechCrunch. “You get practical skills that you can put to work immediately or for your future career while actively keeping a job. So the whole experience is designed as a learning as a service model.”
Nexford Unversity lets students study at their own pace. Once they apply and get admitted into either a degree program or a course program, they choose how fast or slow they want the program to be.
The CEO says whatever students learn on the platform is directly applicable to their jobs. Currently, Nexford offers undergraduate degrees in business administration; 360° marketing; AI & automation; building a tech startup; business analytics; business in emerging markets; digital transformation; e-commerce; and product management. Its graduate degrees are business administration, advanced AI, e-commerce, hyperconnectivity, sustainability, and world business.
Nexford’s tuition structure is very different from traditional universities because it’s modelled monthly. Its accredited degrees cost between $3,000 to $4,000 paid in monthly instalments. In Nigeria, for instance, an MBA costs about $160 a month, while a bachelor degree costs $80 a month. But the catch for the monthly instalment structure means the faster a learner graduates, the less they pay.
What’s it like learning with Nexford University?
Nexford University doesn’t offer standardized and theoretical tests or assignments as most traditional universities do. Al Tarzi says the company employs what he calls a competency-based education model where students prove mastery by working on practical projects.
For instance, a student working on an accounting course will most likely need to create a P&L statement, analyze balance sheets and identify where the error is to correct it. The platform then gives the student different scenarios showing companies with different revenues and expense levels. The task? To analyse and extract certain ratios to help make sense of which company is profitable and the other unit economics involved.
Though Nexford plays in the edtech space, Al Tarzi doesn’t think the company is an edtech company. As a licensed and accredited online university, Nexford has a huge amount of automation across the organization and provides students with support from faculty and career advisors.
After offering degrees, Nexford puts on its placement hats by fixing its graduates with partner employers.
There’s a big shortage of jobs in Nigeria, and despite the high unemployment, it’s actually difficult to find extremely qualified entry-level graduates. So Nexford has carried out several partnerships where employers sponsor their employees or soon-to-be employees for upskilling and rescaling purposes.
An illustration is with Sterling Bank, a local bank in the country. Most Nigerian banks have yearly routines where they hire graduates and put them on weeks-long training programs. Sterling Bank employs any candidate it feels did great after the capital intensive (eight weeks in most cases) programs.
So what Nexford has done is to partner with Sterling to fund the tuition for high school leavers. When these students go through Nexford’s programs for the first year, they begin to get part-time placements at Sterling. Upon graduation, they get a job in the bank.
“That saves Sterling the training cost and our tuition fee is almost equal to the training that they provided for students. Also, students start paying back once they get placed, so it’s a win-win.”
Nexford University has learners from 70 countries, with Nigeria its biggest market yet. Nexford also has blue-chip partnerships with Microsoft, LinkedIn Learning, and IBM to provide access to tools, courses and programmes to improve the learning experience.
One of the major gains of this learning experience is how it prepares people for remote jobs. Nexford is bullish on its virtual skills grid, where people will get jobs remotely regardless of their location on the platform.
“Across Sub Saharan Africa by the year 2026, there’s gonna be a shortage of about 100 million university seats as a result of huge growth in youth population not met by growth and supply. Even if you want to build universities fast, you wouldn’t be able to meet the demand. And that spirals down to the job market. We don’t think the local economy will produce enough jobs in Nigeria, for instance. But we want to enable people to get remote jobs across the world and not necessarily have to migrate.”
Last year, Nexford’s revenues grew by 300%. This year, the company hopes to triple the size of its enrollment from last year, the CEO said.
Nexford is big on designing students’ curriculum based on analysis of what their employer needs. Al Tarzi tells me that the company always follow the Big Data approach, asking themselves, “how do we find out what employers worldwide are looking for and keep our curriculum alive and relevant?”
“We develop proprietary technology that enables us to analyze job vacancies as well as several other data sources; use AI to understand how those data sets and build a curriculum based on those findings. So, in short, we start with the end in mind,” he answers.
The company is keen on improving its technology regardless. It wants to analyse skills more accurately and automate more functions to enhance user experience. That’s what the funding will be used for in addition to fuelling its regional expansion plans (particularly in Asia) and investing in growth and product development. Per the latter, the online university says it will be launching partner programs with more employers globally to facilitate both placement and upskilling and rescaling.
Merging both worlds of tech and the traditional university model is no easy feat. The former is about efficiency, user-centricity, product, among others. The latter embodies rigidity and continues to lag behind fast-paced innovation. And while there’s been a boom in edtech, most startups try to circumvent the industry’s bureaucracy by launching an app or a MOOC. Nexford’s model of running a degree-granting, licensed, accredited, and regulated university is more challenging but in it lies so much opportunity.
Iyin Aboyeji, Future Africa general partner CEO, understands this. It’s one reason why the company is the first investment out of Future Africa’s soon-to-be-launched fund focused on the future of learning and why he believes the company is a game-changer for higher education in Africa.
“During the pandemic, while many universities in Nigeria were shut down due to labour disputes, Nexford was already delivering an innovative and affordable new model of online higher education designed for a skills-based economy.”
For general partner at Global Ventures Noor Sweid, Nexford University is redressing the mismatch between the supply of talent and the demands of today’s digital economy. “We are thrilled to partner with Fadl and the Nexford team on their journey toward expanding access to universal quality higher education in emerging markets,” she said.
The museum, which has some 160 items from Benin City, becomes the latest institution to announce the restitution of some of the priceless artifacts.
A global partnership announced plans to spend more than $5 billion to eradicate poliovirus.
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
Extra Crunch members receive access to weekly “Dear Sophie” columns; use promo code ALCORN to purchase a one- or two-year subscription for 50% off.
I started a tech company about two years ago, and ever since I’ve dreamed of expanding my company in the United States.
I would love to have a green card. Someone mentioned that I should apply for a diversity green card. Would you please provide me with more details about it and how to apply?
— Technical in Tanzania
As a startup founder from Tanzania, you have several immigration options available to you, including the Diversity Immigrant Visa (green card) Program.
My law partner, Anita Koumriqian, and I recently discussed the Diversity Immigrant Visa Program (DV Program) on a podcast episode. Take a listen for how to apply and tips for applying. Each year, the U.S. Department of State, which oversees the DV Program, reserves 50,000 green cards for individuals born in countries that have low rates of immigration to the United States. The State Department publishes instructions each year, which includes the countries whose natives are eligible to register for the annual diversity lottery. Here is the latest version.
How does the diversity lottery work?
You must register online in the fall — usually from early October through early November — for the annual random lottery by completing the Electronic Diversity Visa Entry Form (DS-5501). There is no cost to register for the lottery, but be aware that you will be automatically disqualified if you register yourself more than once, and incomplete forms will not be accepted.
Once you complete the online registration form, you will get a confirmation number. Do not lose this number! It is the only way to access the online system that will tell you whether you were selected in the lottery and are eligible to submit a green card application. In May, registrants can log into the online system to find out whether they’ve been selected. No notification will be sent by email or snail mail; checking online by entering your confirmation code is the only way to find out. After you enter your confirmation code online, you will receive a diversity visa number, which you will use to determine when you can file your green card application.
According to research, 85% of African SMBs have zero access to financing, and each day, African SMBs have billions locked up in receivables due to long payment cycles. This leads to cash flow problems that cause businesses to be late on important expenses and fulfilment of new orders.
Ghansah is a serial entrepreneur. Since leaving the university in 2014, he has co-founded several tech startups but made his mark globally with OMG Digital, a startup with offices in Ghana and Nigeria that wanted to become the “BuzzFeed of Africa.” In 2016, OMG Digital was one of the first African companies accepted into Y Combinator.
Ghansah had a good run with the company and left two years ago. For his newest venture, he turned his focus outside media to fintech. Formerly Swipe, Float is an 18-month-old Lagos and San Francisco-based company aiming to close the $300 billion liquidity gap for Africa’s small and medium businesses. The company took part in YC’s Winter batch 2020, making Ghansah one of the few two-time YC founders in Africa.
Float has evolved from the last time we partly covered them during their Demo Day as “Brex for Africa.” According to CEO Ghansah, Float is “rethinking the way African businesses manage their financial operations, from managing cash and making payments to accessing credit.”
After 18 months in stealth, Float is finally going live, and we spoke with the CEO to get a glimpse into its progress and what makes it different from similar platforms on the continent.
TC: What problem would you say Float is solving?
JG: If you ask any small business, cash flow will most likely be the number one problem that they face. And this stems from the whole payment cycle, which is after you provide a service or deliver a product. Businesses that serve other businesses have to wait typically for 30-90 days for their payments to come in. This is like a traditional payment cycle where you have to offer credit sales to your customers to stay competitive; that’s why you send an invoice, and the customer will pay you back within that time frame.
That creates a lot of problems in terms of constant cash crunches. Because you’re waiting for your revenue to come in, they sometimes fall behind in meeting certain expense payments like payroll, inventory, utilities. That’s what really causes a lot of these cash flow issues, and because of that, businesses can’t grow. For existing businesses, these are the issues they face and getting credit in terms of working capital is extremely difficult if you’re dealing with banks.
TC: Did you have a personal experience with this problem seeing as your past venture was in media?
JG: As you know, I was a co-founder at OMG Digital, and as a media company, we had to wait for months to get paid by our partners. We needed credit this time and proceeded to get an overdraft from a long-term partner bank where we had transacted more than $100,000. But the bank wanted us to deposit 100% collateral in cash before they could give the overdraft.
I also remember taking money from loan sharks with ridiculous interest rates, sometimes as high as 20% a month, just to meet payroll. That sort of threw me into solving those problems with Float.
TC: There are a plethora of lenders giving loans to businesses. How is Float solving the credit issue differently?
JG: So our credit product is quite different regarding how we present it to the customer. It is less complex than a loan; it is more flexible than a business overdraft. Also, there’s a difference in the tools that we provide. So we don’t just give money; what we’ve provided is a software solution with credit embedded.
Right now, we’ve built what we call the cash management tool for businesses where they get credit at the critical set of moments in time. For instance, if you want to pay a lender and need credit, you can withdraw the credit and make payment immediately. We provide a credit line that businesses can tap into any time they want as soon as they onboard to our platform, and it increases and decreases based on the transactions performed on our platform.
So that’s just on the credit side. We’ve also built tools to help businesses stay on top of their cash flow. We give them invoicing, budgeting tools and spend management tools and a way for them to manage all their bank accounts because we know that existing businesses usually have more than one bank account. On Float, they can see all their balances and transactions, and we’re building a way for these businesses to make payments from their accounts on Float.
You can think of Float as a really well-built cash management platform. You get credit when you need it to make vendor payments or boost your working capital, which has been pivotal to our loss rate of 0%. Then two, tools that give total visibility about your businesses so you know where your money is coming in and going out.
TC: Float’s loss rate is 0%? Does that mean no business has defaulted on your platform?
JG: Yes, we’ve not had any default so far. We’ve advanced $2.8 million to our pilot customers in Nigeria, and we don’t have any losses in the last eight months; it’s because of the type of loans we’re giving. We give businesses money to boost their working capital. So we’re essentially giving you an advance for your future revenue.
If you look like, in the U.S., Pipe has built this for SaaS companies and are building for other customer segments, which is essentially what we’re doing. So, for us, the way we’re solving the cash flow issue is that we’re sorting your future revenue and as your customers pay you through our platform, then we make deductions.
You can think of us as a Stripe Capital, Square Capital, Pipe or the new multidimensional lending platforms we have now. When you consider lending, I’d say there are different phases. Lending 1.0 was when you’d fill an application online, and you’d get a loan decision. Lending 2.0 and 3.0 is where credit is embedded in online tools businesses already use. That’s why it has worked really well because the businesses on our platform aren’t exactly looking for a lifeline but are looking to boost their cash flow and basically step on the gas to grow.
TC: But this loss rate will likely change as soon as you onboard more businesses, right?
JG: Yes, definitely it’s going to change. The thing with lending is that with more customers, your credit model gets tested. The more customers you have, the more probability that you’re going to have default losses. But as long as you have, like a solid credit risk criteria and assessment, you must always try to keep it as small as possible. It’s almost impossible to have a 0% default rate when you begin to grow fast.
TC: What strategy does Float put in place to mitigate losses and reduce risk?
JG: The way our credit product works is that we’re constantly connected to your bank; we know who your vendors are, know who your suppliers are, and know who your customers are. We know how much money is flowing in and out of your business at any point in time. So as I mentioned, we can quickly adjust your credit limits as soon as we sense a difference in your activity. If we notice your invoice activity has dropped and we’re not receiving as much money as you were in the previous weeks, we reduce your limit. It’s a very dynamic sort of type of product, and it is really different from what you see out there today.
TC: Aside from lending, how have the other tools been helpful to businesses?
JG: With our pilot phase, we’ve been able to give credit and also processed invoicing and vendor payments for our customers worth about $5 million.
When you think of business payments, sometimes people always think about Paystack and Flutterwave. They’re tackling a different segment which is basically consumers paying businesses. For us, we’re centred around businesses paying other businesses. Their method, as we know, is a very drawn-out process, and that market is 10 times bigger than the market Paystack and Flutterwave are serving.
If you look at your big multinational corporations, they have thousands of vendors on their payroll every month. Globally trillions of dollars are flowing from business to business, and that is where we want to play in. We’re launching the new version of our invoicing product and vendor payments, and a product where we can pay for services upfront on behalf of our customers and they pay back in 30 days.
TC: I’m tempted to call Float a digital bank for small businesses. Would you say there are differences?
JG: Of course there are. Almost any business owner will tell you that business banking is mostly broken. Legacy banks typically provide an outdated, underwhelming user experience. Businesses quickly move beyond basic banking needs, and for them, the options are frustratingly limited.
African neo-banks are aiming to compete with traditional banks. Still, in reality, they are actually now competing with each other for a relatively tiny slice of the market due to not solving the core problems facing businesses. A marginally better UX and a quick account opening experience is the value proposition that probably resonates well with a new startup business or a budding freelancer. However, to an already operating retail business owner that struggles to make timely payments to suppliers due to poor cash flow, that’s grossly inadequate.
This, coupled with the trust matters, reconciliation, and auditing headaches involved in moving accounts, is why neobanks haven’t taken off in this market.
There are little to no switching costs using Float because we have designed our platform to run on top of existing business bank accounts and payment processors. The idea is to provide a single platform that provides businesses with the credit they need, a consolidated view of their existing business banking and cashflow activity, coupled with various payment tools to enable them to speed through their financial operations so they can spend more time actually growing their business.
It’s a bad time for President Muhammadu Buhari to play the tyrant.
A notorious terrorist leader in Nigeria who kidnapped schoolgirls in Chibok has blown himself up, according to a new audio recording attributed to the head of a rival extremist group.
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’s WWDC week, so expect a deluge of Apple news to overtake your Twitter feed here and there over the next few days. But there’s a lot more going on, so let’s dig in:
- The Weekend: A supercharged, supercharged Model S Tesla car is not coming out. Instead, a merely supercharged version will come out. It’s still stupid fast and expensive. And Nigeria’s war with Twitter continued, with new efforts from the African nation to limit access to the social media service within its borders.
- This Morning: Flipkart is raising $3 billion at a roughly $40 billion valuation The deal underscores not just how big the Indian tech scene is, but also how much investor interest there is in ecommerce bets more generally. And Jeff Bezos is going to space. Soon!
- Funding Rounds: Trulioo raised a $394 million Series D. The Canadian startup is now worth far more than $1 billion. And Chinese company Kanzhun is going public in the United States, which raised an eyebrow here amongst the Equity Morning Crew.
- Take The Damn Equity Survey: Take it! All the cools kids are taking it!
And that’s your start to the week. More to come from your friends here on Wednesday, and Friday. Chat soon!
Hello friends, and welcome back to Week in Review!
Last week, I wrote about tech taking on Disney. This week, I’m talking about the search for a new crypto messiah.
The Big Thing
Elon has worn out his welcome among the crypto illuminati, and the acolytes of Bitcoin are searching out a new emperor god king.
This weekend, thousands of crypto acolytes and investors have descended on a Bitcoin-themed conference in Miami, a very real, very heavily-produced conference sporting crypto celebrities and actual celebrities all on a mission to make waves.
Even though I am not at the conference in person (panels from its main stage were live-streamed online), I have plenty of invites in my email for afterparties featuring celebrities, open bars and endless conversations on the perils of fiat. The cryptocurrency community has never been larger or richer thanks to its most fervent bull run yet, and despite a pretty noteworthy correction in the past few weeks, people believe the best is yet to come.
Despite having so much, what they still seem to be lacking is a patron saint.
For the longest bout, that was SpaceX and Tesla CEO Elon Musk who bolstered the currency by pushing Tesla to invest cash on its balance sheet into bitcoin, while also pushing for Tesla to accept bitcoin payments for its vehicles. As I’ve noted in this newsletter in the past, Musk had a tough time reconciling the sheer energy use of bitcoin’s global network with his eco warrior bravado which has seemed to lead to his mild and uneven excommunication (though I’m sure he’s welcome back at any time).
There are plenty of celebrities looking to fill his shoes — a recent endorsement gone wrong by Soulja Boy was one of the more comical instances.
Crypto has been no stranger to grift — of that even the most hardcore crypto grifters can likely agree — and I think there’s been some agreement that the only leader who can truly preach the gospel is someone who is already so rich they don’t even need more money. It’s one reason the community has offered up so much respect for Ethereum founder Vitalik Buterin who truly doesn’t seem to care too much about getting any wealthier — he donated about $1 billion worth of crypto to Covid relief efforts in India. A Musk-like cheerleader serves a different purpose though, and so the community is in search of a Good Billionaire.
The best runner-up at the moment appears to be one Jack Dorsey, and while — like Musk — he is also another double-CEO, he is quite a bit different from him in demeanor and desire for the spotlight. He was, however, a headline speaker at Miami’s Bitcoin conference.
Dorsey gathers the most headlines for his work at Twitter but it’s Square where he is pushing most of his crypto enthusiasm. Users can already use Square’s Cash App to buy Bitcoin. Minutes before going onstage Friday, Dorsey tweeted out a thread detailing that Square was interested in building its own hardware wallet that users could store cryptocurrency like bitcoin on outside of the confines of an exchange.
“Bitcoin changes absolutely everything,” Dorsey said onstage. “I don’t think there is anything more important in my lifetime to work on.”
And while the billionaire Dorsey seems like a good choice on paper — he tweets about bitcoin often, but only good tweets. He defends its environmental effects. He shows up to House misinformation hearings with a bitcoin tracker clearly visible in the background. He is also unfortunately the CEO of Twitter, a company that’s desire to reign in its more troublesome users — including one very troublesome user — has caused a rift between him and the crypto community’s very vocal libertarian sect.
Dorsey didn’t make it very far into his speech before a heckler made a scene calling him a hypocrite because of all this with a few others piping in, but like any good potential crypto king would know to do, he just waited quietly for the noise to die down.
Here are the TechCrunch news stories that especially caught my eye this week:
Facebook’s Trump ban will last at least 2 years
In response to the Facebook Oversight Board’s recommendations that the company offer more specificity around its ban of former President Trump, the company announced Friday that it will be banning Trump from its platforms through January 2023 at least, though the company has basically given itself the ability to extend that deadline if it so desires…
Nigeria suspends Twitter
Nigeria is shutting down access to Twitter inside the country with a government official citing the “use of the platform for activities that are capable of undermining Nigeria’s corporate existence.” Twitter called the shutdown “deeply concerning.”
Stack Overflow gets acquired for $1.8 billion
Stack Overflow, one of the most-visited sites of developers across the technology industry, was acquired by Prosus. The heavy hitter investment firm is best known for owning a huge chunk of Tencent. Stack Overflow’s founders say the site will continue to operate independently under the new management.
Spotify ups its personalization
Music service Spotify launched a dedicated section this week called Only You which aims to capture some of the personalization it has been serving up in its annual Spotify Wrapped review. Highlights of the new feature include blended playlists with friends and mid-year reviews.
Supreme Court limits US hacking law in landmark case
Justices from the conservative and liberal wings joined together in a landmark ruling that put limits on what kind of conduct can be prosecuted under the controversial Computer Fraud and Abuse Act.
This one email explains Apple
Here’s a fun one, the email exchange that birthed the App Store between the late Steve Jobs and SVP of Software Engineering, Bertrand Serlet as annotated by my boss Matthew Panzarino.
Some of my favorite reads from our Extra Crunch subscription service this week:
For SaaS startups, differentiation is an iterative process
“The more you know about your target customers’ pain points with current solutions, the easier it will be to stand out. Take every opportunity to learn about the people you are aiming to serve, and which problems they want to solve the most. Analyst reports about specific sectors may be useful, but there is no better source of information than the people who, hopefully, will pay to use your solution..”
3 lessons we learned after raising $6 million from 50 investors
“…being pre-product at the time, we had to lean on our experience and our vision to drive conviction and urgency among investors. Unfortunately, it just wasn’t enough. Investors either felt that our experience was a bad fit for the space we were entering (productivity/scheduling) or that our vision wasn’t compelling enough to merit investment on the terms we wanted.“
The existential cost of decelerated growth
“Just because a technology startup has a hot start, that doesn’t mean it will grow quickly forever. Most will wind up somewhere in the middle — or worse. Put simply, there is a larger number of tech companies that do fine or a little bit worse after they reach scale.”
The popular social media site had removed a post by President Muhammadu Buhari threatening secessionists in the southeast of the country.
Fintech in Africa is a goldmine. Investors are betting big on startups offering a plethora of services from payments and lending to neobanks, remittances and cross-border transfers, and rightfully so. Each of these services solves unique sets of challenges. For cross-border payments, it’s the outrageous rates and regulatory hassles involved with completing transactions from one African country to another.
Chipper Cash, a three-year-old startup that facilitates cross-border payment across Africa, has closed a $100 million Series C round to introduce more products and grow its team.
It hasn’t been too long ago since Chipper Cash was last in the news. In November 2020, the African cross-border fintech startup raised $30 million Series B led by Ribbit Capital and Jeff Bezos fund Bezos Expeditions. This was after closing a $13.8 million Series A round from Deciens Capital and other investors in June 2020. Hence, Chipper Cash has gone through three rounds totalling $143.8 million in a year. However, when the $8.4 million raised in two seed rounds back in 2019 is included, this number increases to $152.2 million.
SVB Capital, the investment arm of U.S. high-tech commercial bank Silicon Valley Bank led this Series C round. Others who participated in this round include existing investors — Deciens Capital, Ribbit Capital, Bezos Expeditions, One Way Ventures, 500 Startups, Tribe Capital, and Brue2 Ventures.
Chipper Cash was launched in 2018 by Ham Serunjogi and Maijid Moujaled. The pair met in Iowa after coming to the U.S. for studies. Following their stints at big names like Facebook, Flickr and Yahoo!, the founders decided to work on their own startup.
Last year, the company which offers mobile-based, no fee, P2P payment services, was present in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya. Now, it has expanded to a new territory outside Africa. “We’ve expanded to the U.K., it’s the first market we’ve expanded to outside Africa,” CEO Serunjogi said to TechCrunch.
In addition and as a sign of growth, the company which boasts more than 200 employees plans to increase its workforce by hiring 100 staff throughout the year. The number of users on Chipper Cash has increased to 4 million, up 33% from last year. And while the company averaged 80,000 transactions daily in November 2020 and processed $100 million in payments value in June 2020, it is unclear what those figures are now as Serunjogi declined to comment on them, including its revenues.
When we reported its Series B last year, Chipper Cash wanted to offer more business payment solutions, cryptocurrency trading options, and investment services. So what has been the progress since then? “We’ve launched cards products in Nigeria and we’ve also launched our crypto product. We’re also launching our US stocks product in Uganda, Nigeria and a few other countries soon,” Serunjogi answered.
Crypto is widely adopted in Africa. African users are responsible for a sizeable chunk of transactions that take place on some global crypto-trading platforms. For instance, African users accounted for $7 billion of the $8.3 billion in Luno’s total trading volume. Binance P2P users in Africa also grew 2,000% within the past five months while their volumes increased by over 380%.
Individuals and small businesses across Nigeria, South Africa and Kenya account for most of the crypto activity on the continent. Chipper Cash is active in these countries and tapping into this opportunity is basically a no brainer. “Our approach to growing products and adding products is based on what our users find valuable. As you can imagine, crypto is one technology that has been widely adopted in Africa and many emerging markets. So we want to give them the power to access crypto and to be able to buy, hold, and sell crypto whenever,” the CEO added.
However, its crypto service isn’t available in Nigeria, the largest crypto market in Africa. The reason behind this is the Central Bank of Nigeria’s (CBN) regulation on crypto activities in the country prohibiting users from converting fiat into crypto from their bank accounts. To survive, most crypto players have adopted P2P methods but Chipper Cash isn’t offering that yet and according to Serunjogi, the company is “looking forward to any development in Nigeria that allows it to be offered freely again.”
The same goes for the investment service Chipper Cash plans to roll out in Nigeria and Uganda soon. Presently, Nigeria’s capital market regulator SEC is keeping tabs on local investment platforms and bringing their activities under its purview. Chipper Cash will not be exempt when the product is live in Nigeria and has begun engaging regulators to be ahead of the curve.
“As fintech explodes and as innovation continues to move forward, consumers have to be protected. We invest millions of dollars every year in our compliance programs, so I think working closely with the regulators directly so that these products are offered in a compliant manner is important,” Serunjogi noted.
Six billion-dollar companies in Africa; the fifth fintech unicorn
During our call, Serunjogi made some remarks about Nigeria’s central bank which resembles comments made by Flutterwave CEO Olugbenga Agboola back in March.
While acknowledging the central banks in Kenya, Rwanda, Uganda for creating environments where innovation can thrive, he said: “Nigeria has probably the most exciting and vibrant tech ecosystem in Africa. And that’s credit directly to CBN for creating and fostering an environment that allowed multiple startups like ourselves and others like Flutterwave to blossom.”
Most fintechs would argue that the CBN stifles innovation but comments from both CEOs seems to suggest otherwise. From all indication, Chipper Cash and Flutterwave strive to be on the right side of the country’s apex bank policies and regulations. It is why they are one of the fastest-growing fintechs in the region and also billion-dollar companies.
“Obviously, we’re not getting into our valuation, but we’re probably the most valuable private startup in Africa today after this round. So that’s a reflection of the environment that regulators like CBN have created to allowed innovation and growth, ” Serunjogi commented when asked about the company’s valuation.
Up until last week, the only private unicorn startup in Africa this year was Flutterwave. Then China-backed and African-focused fintech came along as the company was reported to be in the process of raising $400 million at a $1.5 billion valuation. If Serunjogi’s comment is anything to go by, Chipper Cash is currently valued between $1-2 billion thus joining the exclusive billion-dollar club.
But to be sure, I asked Serunjogi again if the company is indeed a unicorn. This time, he gave a more cryptic answer. “We’re not commenting on the size of our valuation publicly. One of the things that I’ve been quite keen on internally and externally is that the valuation of our company has not been a focus for us. It’s not a goal we’re aspiring to achieve. For us, the thing that drives us is that we have a product that is impactful to our users.”
Serunjogi added that this investment actualizes the importance of possessing a solid balance sheet and onboarding SVB Capital and getting existing investors to double down is a means to that end. According to him, a strong balance sheet will provide the infrastructure needed to support key long-term investments which will translate to more exciting products down the road.
“We look at our investors as key partners to the business. So having very strong partners around the table makes us a stronger company. These are partners who can put capital into our business, and we’re also able to learn from them in several other ways,” he said of the investors backing the three-year-old company.
Just like Ribbit Capital and Bezos Expeditions in last year’s Series B, this is SVB Capital’s first foray into the African market. In an email, the managing director of SVB Capital Tilli Bannett, confirmed the fund’s investment in Chipper Cash. According to him, the VC firm invested in Chipper Cash because it has created an easy and accessible way for people living in Africa to fulfil their financial needs through enhanced products and user experiences.
“As a result, Chipper has had a phenomenal trajectory of consumer adoption and volume through the product. We are excited at the role Chipper has forged for itself in fostering financial inclusion across Africa and the vast potential that still lies ahead,” he added.
Fintech remains the bright spot in African tech investment. In 2020, the sector accounted for more than 25% of the almost $1.5 billion raised by African startups. This figure will likely increase this year as four startups have raised $100 million rounds already: TymeBank in February, Flutterwave in March, OPay and Chipper Cash this May. All except TymeBank are now valued at over $1 billion, and it becomes the first time Africa has seen two or more billion-dollar companies in a year. In addition to Jumia (e-commerce), Interswitch (fintech), and Fawry (fintech), the continent now has six billion-dollar tech companies.
Here’s another interesting piece of information. The timeframe at which startups are reaching this landmark seems to be shortening. While it took Interswitch and Fawry seventeen and thirteen years respectively, it took Flutterwave five years; Jumia, four years; then OPay and Chipper Cash three years.
Chinese-backed and Africa-focused fintech platform OPay is in talks to raise up to $400 million, The Information reported today. The fundraising will be coming two years after OPay announced two funding rounds in 2019 — $50 million in June and $120 million Series B in November.
The $170 million raised so far comes from mainly Chinese investors who have begun to bet big on Africa over the past few years. Some of them include SoftBank, Sequoia Capital China, IDG Capital, SoftBank Ventures Asia, GSR Ventures, Source Code Capital.
In 2018, Opera, popularly known for its internet search engine and browser, launched the OPay mobile money platform in Lagos. It didn’t take long for the company to expand aggressively within the city using ORide, a now-defunct ride-hailing service, as an entry point to the array of services it wanted to offer. The company has tested several verticals — OBus, a bus-booking platform (also defunct); OExpress, a logistics delivery service; OTrade, a B2B e-commerce platform; OFood, a food delivery service, among others.
While none of these services has significantly scaled, OPay’s fintech and mobile money arm (which is its main play) is thriving. This year, its parent company Opera reported that OPay’s monthly transactions grew 4.5x last year to over $2 billion in December. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions.Last year, the company also said it acquired an international money transfer license with a partnership with WorldRemit also in the works.
It’s quite surprising that none of OPay’s plans to expand to South Africa and Kenya (countries it expressed interest in during its Series B) has come to fruition despite its large raises. The company blamed the pandemic for these shortcomings. However, earlier this year, the country set up shop in North Africa by expanding to Egypt. This next raise, likely a Series C, will be instrumental in the company’s quest for expansion, both geographically and product offerings. Per The Information, OPay’s valuation will increase to about $1.5 billion, three times its valuation in 2019.
We reached out to OPay, but they declined to comment on the story.
Investments in African startups keep growing at a healthy pace ever since reports started keeping count in 2015. That year, publications Disrupt Africa and Partech released independently researched and contrasting figures showing that venture capital investments hit $186 million and $277 million, respectively. Those are ridiculously low figures for a continent when you consider that four-year-old Snapchat raised more than $500 million in one round that same year. However, while the disparity in funding between Africa and a single high-growth U.S. startup continues, the good news is that more money is coming into the continent.
In 2019, Africa’s venture capital investments rose to an all-time high, per Partech’s report. According to Partech, 234 African tech companies raised $2.02 billion in 250 equity rounds. This indicated a 74% increase from 2018’s figure of $1.163 billion raised by 146 startups in 164 rounds.
There was shared optimism that 2020 would record a new high, but that was before the pandemic struck. For that reason, African tech ecosystem accelerator AfricArena predicted that venture capital funding in the continent’s startups would fall between $1.2 billion and $1.8 billion. In what may be described as an educated guess or a calculated prediction by the publication, year-end reports by Partech and Briter Bridges pegged total investment raised at $1.4 billion and $1.3 billion, respectively.
This year, AfricArena, in a new report, is predicting that VC funding in the continent’s startups would increase between $2.25 billion and $2.8 billion, which, if met, will surpass 2019 figures for a record high on the continent.
Here’s the rationale behind the prediction from an excerpt in the report:
We foresee that the first two quarters of 2021 will be similar Q4 2020 with the mix of factors. Vaccine campaigns will likely take longer than hoped to have a meaningful impact. However, this rollout – regardless of how long they will actually take – will eliminate the major uncertainty about the end of the pandemic, which is only a question of time.
As a result, we expect an extremely strong acceleration of deals from seed to Series B as well as major growth deals, together with some IPOs (Nigeria’s Interswitch, for example), that will propel deal activity to never seen before levels of activity. As of April 2020, our forecast for 2021 ranged from under $1.6 billion to over $3 billion. The worst-case scenario was based on a prolonged and fragmented impact on the African economies and the best-case scenario factoring in a full recovery Q1 2021. Based on the above observations, our views are now that 2021 will range between $2.25 and $2.8 billion.
As of April 30, the total disclosed venture capital funding stood a little over $800 million, according to Maxime Bayen, deal tracker and senior venture builder at BFA Global. If that pace is kept throughout the year, African startups might raise more than $2 billion.
In 2020, the number of early-stage deals increased, but there was a drop in growth deals and overall ticket sizes, constituting the drop in funding activities. Per Partech, seed rounds grew 80% year-on-year and accounted for 64% of all deals made. In total, African startups raised $220 million in seed funding, which was a 47% increase year on year. Series A and B rounds grew likewise. Series A deals went up 9% (86 rounds), and Series B deals, 16% (29 rounds), yet their investment sizes dropped 5% ($447 million) and 8% ($449 million), respectively.
Growth deals also dropped by 16%, and only two deals closed above $50 million compared to the 10 that took place in 2019, some of which include Interswitch, OPay, Branch and Andela.
The driving force to exceed the $2 billion mark in 2021 lies on VCs to make more deals and startups to replicate the large growth rounds of 2019. The former appears to be in place as African startups continue to raise money week in and week out. However, there’s still work to be done for the latter, as only two African startups have raised more than $100 million in a single round so far — fintech startups Flutterwave and TymeBank.
Invasive species could cost the agricultural sector more than $3.5 trillion across the continent, a new study estimated.
On April 16, Uganda-based two-wheel ride-hailing platform SafeBoda announced that it had completed 1 million rides in Ibadan, a southwestern city in Nigeria. This might not seem spectacular from a global perspective because it took the startup a year and two months to achieve but it’s a noteworthy feat in African markets.
Ibadan is one of the cities where SafeBoda operates. The company, which first launched in Uganda, is disrupting the offline market of local motorcycles referred to as boda-bodas in Uganda and okadas in Nigeria.
In 2017, SafeBoda officially started operations in Kampala and almost immediately began to deal with the threat posed by new entrants at the time: uberBODA and Bolt boda.
Uber and Bolt are two of the most well-known ride-hailing companies in the markets in which they operate. Uganda was the first African country the pair decided to test out their two-wheel ride-hailing ambitions and it was the second market globally after Thailand for Uber. So given the clout and money these companies hold, most people anticipated they would give SafeBoda a run for its money. But that didn’t happen.
According to Alastair Sussock, co-CEO of SafeBoda, who founded the company with Ricky Rapa Thomson and Maxime Dieudonne, SafeBoda was clocking about 1,000 rides daily at the time. He argued that even though the company’s volumes were one of the best, there was a misrepresentation in the media that SafeBoda wasn’t in the league as other platforms.
“Everyone thought Uber and Bolt would enter Africa to revolutionize the informal boda market,” Sussock told TechCrunch. “There was mention of other players, some of which have folded now, but no one mentioned SafeBoda although we were actually doing quite good stuff. And that energized us to prove the perception wrong, which was that SafeBoda didn’t really exist”.
Strategy, hard work and a large Series B investment followed the next couple of years, which has established SafeBoda as a market leader in Uganda. Sussock said the company now completes about 40,000 rides a day. Uber and Bolt barely complete 10,000 rides in the country.
So what has been pivotal to this growth? Before founding SafeBoda, Rapa Thomson was also a boda rider. As the company’s director of operations, he’s pivotal in making sure the company adopts localized methods with its riders. And despite its exciting features, pieces of equipment and safety measures employed, what stands out is how SafeBoda adapts to the boda boda community. This has been responsible for the 80% year-on-year retention the company currently enjoys, Sussock said.
“We tend to localize our product and take a local approach where we hire local guys to be part of the team. They help to have boots on the ground and of course, what you see with Nigeria, is not as much a dissimilar story,” the co-CEO added.
When starting in Nigeria, most two-wheel ride-hailing startups begin from Lagos, the nation’s hotbed of commerce and transport. In recent times, the city has had entrants like Opera’s OPay, Gokada and MAX.ng. These startups, like SafeBoda, are heavily backed by U.S., Chinese and Japanese investors. They have been at loggerheads with each other to capture on-demand mobility market share in Africa’s most populous country.
SafeBoda first hinted at a possible expansion into Nigeria in 2019. All the aforementioned ride-hailing companies were already in operation and it appeared as if SafeBoda was a very late entrant. But according to Babajide Duroshola, the country head for SafeBoda in Nigeria, the team knew it was going to thrive in spite of the timing and what competition looked like. “For us, it was a no-brainer decision to come into Nigeria and do the same thing that we did at Kampala, which is to grow quickly and make SafeBoda a household name,” he said to TechCrunch.
When time came to reveal which city it was going to start with, it was Ibadan, not Lagos. SafeBoda caught everyone unawares with the decision and subsequently faced heavy backlash. This was in December 2019 but fast-forward to February 2020; it proved to be a masterstroke because in one fell swoop, the Lagos State government rendered bike-hailing operations obsolete with new regulations. For the next couple of months, SafeBoda was the only reliable source of two-wheel ride-hail service in the country. While the regulations forced others to pivot into asset financing for bikes and logistics services, SafeBoda was waxing strong with its ride-hailing operations in Ibadan.
In its first five months, SafeBoda had completed more than 250,000 rides and onboarded thousands of drivers. Once again, adopting a local strategy and community building proved vital to the seemingly modest but explosive growth it experienced in a market no company had really tested.
“One of the things that really separated us from all the other guys in the market was a localization play. The fact that we could connect with and employ these people who were okada drivers right off the streets to become part of our operations team was very key,” Duroshola said.
The country manager added that SafeBoda’s progress showed other two-wheel operators that a market outside Lagos existed. “Lagos is the commercial capital. There’s a lot of money in the city and income per household is high. But then, it is not a true representation of Nigeria. We saw that if you really want to scale across the country, Ibadan was actually a very good place to start because it had all the kinds of people you’d typically find in Nigeria.”
The ease of doing business for a ride-hailing platform in Ibadan is also easier than in Lagos. The latter is known for endorsing NURTW, a transport group known to legally extort riders daily or weekly in the city. Such activities are prohibited in Ibadan giving SafeBoda a smooth path to achieving scale and allowing its drivers to work effectively.
A year in the city has rewarded the company with over 2,500 drivers and 40,000 customers. Together, they performed more than 750,000 trips in SafeBoda’s first year, which has since surpassed more than 1 million trips.
SafeBoda’s progress in Uganda and Nigeria makes it one of the most active players in Sub-Saharan Africa. The company has completed more than 35 million rides across both countries, with over 25,000 registered riders. It also claims to hold more than 80% market share in the two countries.
Despite this success, SafeBoda struggled in its third market, Kenya — a market it expanded to and left before Nigeria. The company had onboarded over 1,500 riders in less than a year, but it wasn’t growing at the pace it wanted. The pandemic made SafeBoda’s struggles obvious and per this report, riders’ dissatisfaction with pricing caused an upheaval that sent the company out of the Kenyan market.
In addition to rider troubles, Sussock noted that Kenya’s motorcycle taxi market wasn’t as highly dense as Uganda and Nigeria which, according to him, contributed to the exit.
“We were the market leader in Kenya, and we were doing like the most rides in Kenya. But it was still quite small in terms of volume compared to Uganda. And we knew what the potential would be in Nigeria, which we hadn’t done at the time. So it was just quite clear that Kenya, while very developed for tech, and developed per capita, was just really quite hard to scale in terms of motorcycle taxi transportation,” he said.
SafeBoda isn’t ruling out a return to the East African market. But with the East African market out of the way for now, it has the resources to focus ride-hailing efforts on Uganda and Nigeria. The ultimate goal, however, is to scale its super app play.
In Uganda, it is already in motion. SafeBoda offers on-demand food, grocery, pharmacy, essentials and beverages delivery services, of which more than 500,000 orders have been completed. This model is inspired by the Go-Pay model at GoJek, where two-wheel ride-hailing was an entry point to high-frequency wallet spend behavior.
The Asian multi-service company is one of the investors in SafeBoda via its GoVentures arm. Other backers include Transsion Holdings, Beenext, and serial entrepreneur Justin Kan.
SafeBoda has no real competition in the bike-hailing wars in Uganda and Nigeria as it stands. The company’s challenge remains the large offline market, where more than 1.5 million rides are completed daily in Uganda alone. The plan for SafeBoda is to convert more of this base to its existing online market share. Additionally, it wants to expand into P2P, merchant and bill payments and grow its on-demand business in Uganda. Its plan in Nigeria? Maintaining its core transport business before venturing into payments and deliveries.
Nigerian fintech startup Paystack has been relatively quiet since it was bought by fintech giant Stripe last October. The deal, worth more than $200 million, caused shockwaves to the African tech ecosystem and offered some form of validation to work done by founders, startups and investors alike.
Today, the payments company, which powers businesses with its payment API and is actively present in Nigeria and Ghana, is announcing its official launch in South Africa.
In 2018 when we reported Paystack’s $8 million Series A (which Stripe also led), it was powering 15% of all online payments in Nigeria. The company had more than 10,000 businesses on its platform and expansion to other African countries was one way it planned to use the money. Ghana was its next stop.
Since expanding to Ghana, Paystack has grown and claims to power 50% of all online payments in Nigeria with around 60,000 customers, including small businesses, larger corporates, fintechs, educational institutions and online betting companies. Some of its customers include MTN, SPAR and UPS, and they use the company’s software to collect payments globally.
The South African launch was preceded by a six-month pilot, which means the project kickstarted a month after Stripe acquired it. Stripe is gearing toward a hotly anticipated IPO and has been aggressively expanding to other markets. Before acquiring Paystack, the company added 17 countries to its platform in 18 months, but none from Africa. Paystack was its meal ticket to the African online commerce market, and CEO Patrick Collison didn’t mince words when talking about the acquisition in October.
“There is an enormous opportunity. In absolute numbers, Africa may be smaller right now than other regions, but online commerce will grow about 30% every year. And even with wider global declines, online shoppers are growing twice as fast. Stripe thinks on a longer time horizon than others because we are an infrastructure company. We are thinking of what the world will look like in 2040-2050,” he said.
Although Stripe said the $600 million it raised in Series H this March would be used mainly for European expansion, its foray deeper into Africa has kicked off. And while Paystack claims to have had a clear expansion roadmap prior to the acquisition, its relationship with Stripe is accelerating the realization of that pan-African expansion goal.
Now, Africa accounts for three of the 42 countries where Stripe currently has customers today.
“South Africa is one of the continent’s most important markets, and our launch here is a significant milestone in our mission to accelerate commerce across Africa,” said Paystack CEO Shola Akinlade of the expansion. “We’re excited to continue building the financial infrastructure that empowers ambitious businesses in Africa, helps them scale and connects them to global markets.”
The six-month pilot saw Paystack work with different businesses and grow a local team to handle on-the-ground operations. However, unlike Nigeria and Ghana, where Paystack has managed to be a top player, what are the company’s prospects in the South African market where it will face stiff competition from the likes of Yoco and DPO?
“The opportunity for innovation in the South African payment space is far from saturated. Today, for instance, digital payments make up less than half of all transactions in the country,” Abdulrahman Jogbojogbo, product marketer at Paystack said. “So, the presence of competition is not only welcome; it’s encouraged. The more innovative plays there are, the faster it’ll be to realize our goal of having an integrated African market.”
Khadijah Abu, head of product expansion, added that “for many businesses in South Africa, we know that accepting payments online can be cumbersome. Our pilot in South Africa was hyper-focused on removing barriers to entry, eliminating tedious paperwork, providing world-class API documentation to developers, and making it a lot simpler for businesses to accept payments online.”
Many people compare Paystack to Africa’s newest fintech unicorn Flutterwave. Founded a year apart, both companies help businesses accept payments from thousands of businesses. When the latter raised its recent juggernaut $170 million round, it claimed to have 290,000 businesses on its platform. While Flutterwave has been high-flying with its pan-African expansion (it has a presence in 20 African countries), Paystack has adopted a rather scrupulous approach. The company said the reason behind this lies with the peculiarities each African country presents and because each country has different regulations, launching at scale takes time.
“Our goal isn’t to have a presence in lots of countries, with little regard for service quality. We care deeply that we deliver a stellar end-to-end payment experience in the countries we operate in,” Jogbojogbo continued. “And this takes some time, careful planning and lots of behind-the-scenes, foundational work.”
But being backed by Stripe and armed with millions of dollars, Paystack might need to switch things up eventually. Even as it operates independently, its pan-African vision is equally important to Stripe, and speed will be crucial, even the five-year-old company acknowledges this and said, “its pace of expansion will quicken as it expands into more African countries.”
In 2016, Ivorian e-commerce startup Afrikrea started as a marketplace for African-based and inspired clothing, accessories, arts, and crafts. Over the past five years, Afrikrea has served more than 7,000 sellers from 47 African countries and buyers from 170 countries.
Per the company’s data, it records more than 500,000 visits monthly, with the majority of its customers from Europe and North America recording over $15 million in transactions.
But while Afrikrea presents African merchants to showcase and sell their products to the world, it is just one of the many channels available, including personal websites and social media.
Co-founder and CEO Moulaye Taboure says that he noticed that merchants were splitting time and concentration across different channels, which affected their engagement with Afrikrea.
“We noticed that it was getting harder for our sellers to make sales because they were losing time, money and energy switching between channels,” Taboure told TechCrunch. “Every time they want to sell a product, they put it on social media, Afrikrea, and other websites. And when one buyer shows interest, there is no single place to track and see all the orders. That’s hard for these businesses to offer quality services and grow effectively.”
Then last year, Afrikrea began testing an all-in-one SaaS e-commerce platform for these merchants. Today, it is announcing its launch. The platform called ANKA will allow users to sell from Africa, ship products to anywhere in the world and get paid through local and international African payment methods.
E-commerce, payments and global shipping. That’s ANKA’s play for thousands of micro-retailers and businesses on the continent and around the world.
The platform lets users sell via an omnichannel dashboard with a single inventory, orders and messages management. Customers can carry out transactions via a customized online storefront like Shopify, social media platforms, links such as on Gumroad and the Afrikrea marketplace.
Merchants can carry out payments and payouts via a wallet and an Afrikrea Visa card. The platform, which costs $12, allows customers to perform mobile money and mobile banking transactions with MPesa, Orange, MTN and PayPal.
Shipping completes the entire sales life cycle, from the point of sale to receipt of goods. In 2019, Afrikrea partnered with global logistics partner DHL to offer shipping services to its customers.
Fashion is ANKA’s best-selling category because of its affiliation with Afrikrea. The African fashion and apparel market is worth $31billion, per Euromonitor, and Afrikrea estimates the yearly spend of its major markets to be worth $12.5 billion. A breakdown from the company puts “the African diaspora in Europe at $1 billion, those in America and the Caribbean at $9 billion and non-Africans with links to the continent at $2.5 billion.”
But in terms of general e-commerce activities on the continent, McKinsey & Company pegs consumer spending to reach $2.1 trillion by 2025. African e-commerce is also expected to account for up to 10% of retail sales.
Platforms like Jumia, Mall4Africa and Takealot have been at the forefront of this growth over this past decade. MallforAfrica struck a partnership with DHL in 2015, then launched DHL Africa eShop with the logistics giant four years later. More than 200 sellers from the U.S. and U.K. serve African consumers in more than 30 countries on the platform.
Unlike MallforAfrica and other e-commerce platforms, ANKA differentiates itself as a platform for export rather than import, specifically for African products. According to Moulaye, ANKA is currently the largest e-commerce exporter on the continent, and since its partnership with DHL, it has shipped more than 10 tons of cargo monthly from Africa.
“We are the biggest client of DHL exporting from Africa. We ship 10 tons every month and have sellers in 47 African countries, with Kenya and Nigeria as our largest markets. We have something African that is going to a global scale. That’s one of the angles we had with Afrikrea, and we want to keep that with ANKA. What sets us apart is that we’re not just trying to solve a purely African problem; we want to solve a global problem for Africans.”
Since launching five years ago, Afrikrea, which Taboure launched with Luc B. Perussault Diallo and Kadry Diallo, has raised a total of $2.1 million per Crunchbase. In this period, the company has seen its revenue grow 5x and claims to have ARR more than it has raised in its lifetime. To continue its growth efforts, Afrikrea is in the process of concluding a Series A round later this year.
WayaWaya’s customers and partners include the likes of I&M Bank, Interswitch and MTN. The company offers a range of services, from digital banking and payment services to financial services APIs and payment bots.
According to Ajua, the acquisition is primarily focused on WayaWaya’s payments bots system known as Janja. The platform, which has customers like Airtel, Ezee Money, Housing Finance Company of Kenya (HF Group), enables borderless banking and payments across apps and social media platforms. Teddy Ogallo, the entrepreneur who founded WayaWaya, joins Ajua as VP of Product APIs and Integrations.
Per Crunchbase, WayaWaya has just raised $75,000. Although the two companies did not disclose the financial details of the acquisition, Ajua is expected to have paid 10 times more than WayaWaya’s total raise.
“There’s a lot of commerce happening on the continent and Ajua wants companies to move from transaction numbers to the customers behind such transaction,” Griffith told TechCrunch. “Imagine if we knew what drove consumer habits for businesses. I mean, that’s a huge exponential curve for African businesses.”
Nigeria’s SME market alone is valued at $220 billion annually. And while businesses, mostly big enterprises, can afford customer communication tools, a large segment of small businesses are being left out. Ajua’s play is to use data and analytics to connect companies with their customers in real time. “We’ve taken what makes enterprise customers successful, and we’re capturing it in a simple format so SMEs can have the same tools,” Griffith added.
Since most consumer behavior for these SMEs happens offline, Ajua gives businesses unique USSD codes to receive payments, get feedback and offer discounts to their customers. It is one of the products Ajua has launched over the years for customer feedback at the point of service to businesses that cumulatively have over 45 million customers.
The company’s partners and clients also include Coca-Cola, FBNQuest, GoodLife Pharmacy, Java House, Safaricom, Standard Chartered and Total.
As an intelligent messaging bot, Janja is used by individuals and businesses across WhatsApp, Facebook Messenger and Telegram to automate customer support and make cross-border payments. So, Janja’s integration into Ajua’s product stack will close much of the acquirer’s customer experience loop by automating responses and giving customers what they want, when they want it.
This acquisition comes a month after Ajua announced that it partnered with telecom operator MTN Nigeria to launch a customer management product for Nigerian businesses. The product called MTN EnGauge carries the same features present in Ajua but, in this case, is tailored solely for businesses using the MTN network. The roll-out is expected to generate more data for Ajua’s thousands of users. It will also be upgraded to incorporate Janja and other services.
In hindsight, it appears Ajua could have created a product like Janja in-house due to its vast experience in the consumer experience space. However, the company chose an acquisition and Griffith gave two reasons why — building a similar product would have taken a long time and Ogallo seemed to know Janja’s business and operations so well, it just made sense to get him on board.
“Teddy was going the same direction we’re going. We just thought to acquire WayaWaya instead and make a really good company out of both products attempting to solve the same problem. To me, it’s all about solving the problem together rather than going alone,” said the CEO.
On why he accepted the acquisition, Ogallo, who now has a new role, noted that Ajua’s ability to scale customer service and experience and also help businesses was one reason and earned admiration from him. “Seeing how WayaWaya’s technology can complement Ajua’s innovative products and services, and help scale and monetize businesses, is an exciting opportunity for us, and we are happy that our teams will be collaborating to build something unique for the continent,” he added.
This is a solid infrastructure play from Ajua coming from a founder who is a massive advocate of acquisition and consolidation. Griffith believes that the two are strategies for a speedier route to new markets and channels in Africa.
“I think there are lots of ways we can build the ecosystem. There are lots of young talent building stuff, and they don’t have access to capital to get to the next stage. The question is if they want to race to the finish line or take off time and get acquired. I think there’s a huge opportunity in Africa if you want to solve complex problems by acquisition.”
There has been an uptick in local acquisitions in Africa from startups within a single country and between two countries in the past three years. For the former, Nigerian recruitment platform Jobberman’s acquisition of NGCareers last year comes to mind. And there are pan-African instances like Lagos-based hub CcHub’s acquisition of iHub, its Nairobi counterpart; Ethiopian software provider Apposit sell-off to Nigerian fintech Paga; and Johannesburg-based fintech MFS Africa acquiring Uganda’s Beyonic.
The common theme among the acquisitions (and most African acquisitions) is their undisclosed sums. For Ajua, Griffith cited regulatory issues as one reason why the company is keeping the figure under wraps.
Since launching nine years ago, Ajua has raised a total of $3.5 million, according to Crunchbase. Given the nature of this acquisition and partnership with MTN, the company might set sights on another fundraise to scale aggressively into Nigeria (a market it entered in 2019) and other African countries.
The last five years have seen a plethora of fintech applications in Nigeria (and Africa, in general) grow at an astonishing rate. But most of these companies and developers find it difficult to access real-time banking data. This, in turn, creates a bottleneck when onboarding and verifying customers.
Since 2019, Plaid-esque companies, but with different twists to their offerings, have emerged to solve these issues. Today, Nigeria’s Okra, arguably the first to gain mainstream attention, is announcing that it has closed a seed round of $3.5 million.
U.S.-based Susa Ventures led this latest tranche of investment. Other investors include TLcom Capital (the sole investor from its $1 million pre-seed round in 2020), newly joined Accenture Ventures and some angel investors. In total, Okra has raised $4.5 million in two rounds and the company will use the investment to expand its data infrastructure across Nigeria.
Okra likes to describe itself as an API “super-connector” that creates a secure portal and process to exchange real-time financial information between customers, applications and banks.
Fara Ashiru Jituboh and David Peterside founded the company in June 2019. Since its launch in January 2020, Okra has aggressively pushed by connecting to all banks in Nigeria and even claims to have a 99.9% guaranteed uptime.
Its business model provides integrations to developers and businesses into existing banking services and takes commissions off subsequent transactions. These integrations include accounts authorization, balance, identity, income, payments and transactions. Per partners (developers and businesses), they are well over 100 with some big names like Access Bank, Aella, Interswitch and uLesson.
Ashiru Jituboh tells TechCrunch that besides making APIs, Okra is in the business of selling “digital first-experiences and transformation”.
“We are building an open finance infrastructure that enables developers and businesses to offer digital-first experiences and financial products,” she said. “We’re at a point where businesses are realizing that digital transformation is one of the most conversation happening in most boardrooms. So for us, we’re essentially just making tools and services needed to achieve digital transformation at scale with our APIs.”
Positioning the company in such a way might be the reason for its immense growth in over a year. The company says it has recorded over 150,000 live API calls noticing an average month-on-month API call growth of 281%. Okra has also analyzed more than 20 million transactions; last month, it analyzed 27.5% of this figure at over 5.5 million transaction lines. For a bit of context, Plaid has analyzed more than 10 billion transactions in its eight years of existence.
“I think it’s a good indicator that we’re on the right trajectory in terms of traction,” COO Peterside added.
If anything one can learn from the Nigerian fintech ecosystem over the past two years is that with growth comes regulatory scrutiny. Since last year, different regulatory moves from some of the country’s financial bodies have been targeted toward payments, crypto and wealth tech startups. While these regulators claim to foster the interests of the Nigerian public and protect consumers, their moves reek of innovation stifling and jurisdictional play.
So far, these regulators appear not to be concerned with the activities of API fintech infrastructure startups. But will they be prepared to deal with the situation should that change?
According to Peterside, Okra is preparing for unforeseen circumstances by taking the initiative and engaging with the regulators in its space. Since 2018 when the EU released the General Data Protection Regulation (GDPR) to deal with data protection and violations resulting from it, most African countries have mirrored these laws for their region. In Nigeria, there’s the Nigeria Data Protection Regulation (NDPR), and due to its similarities with the GDPR, Peterside believes Okra has nothing to worry about — at least for now.
“In terms of what the law says, I think the fine print is clear not just in Nigeria but globally, so how we operate as a business is straightforward. But in terms of what we think, the regulators whether they make the necessary decisions… we can’t really speak about that but generally, the laws and global standards are clear,” he said.
If the company succeeds in keeping harmful regulations at bay, it can grow at whatever pace it wants. However, a bane that might threaten this pace is hiring, according to the CEO. “The one challenge I’ll say we face has to be hiring,” Ashiru Jituboh said.
Now, one of the significant reasons Okra proves attractive despite just over a year in operation is how it prioritizes speed. The company claims to onboard new clients in 24 hours or less while supporting them through the use cases specific to their product.
An increasing clientele means increased problems which means more personnel to handle them. So besides using the recent check to expand its data infrastructure across Nigeria, Okra will put a sizeable chunk into sourcing for talent.
“We want to ensure that we’re solving our customers’ problems as fast as possible and give the clients the support they need. We want to make sure our hiring speed is the same as the speed of our growth and I think being able to raise capital is one of the solvers of that problem… making sure we’re bringing great talent and building a great team,” she added.
Ashiru Jituboh understands the need for great engineering talent because of her engineering-heavy background. Before starting Okra with Peterside, she worked with JP Morgan, Fidelity Investments and Daimler Mercedes Benz. At Okra, she doubles as the chief executive and CTO, staking a claim as one of the most promising founders in Africa’s male-dominated fintech scene.
Omobola Johnson, a senior partner at TLcom Capital, maintains that these qualities and Okra’s proposition made the company its first fintech investment. It was more than enough to convince the firm to follow up in this round.
A year on, Okra has managed to make its investor list more impressive. Susa Ventures, its lead investor, has made notable early investments in Robinhood, Flexport and Fast. However, Okra is the only African-based startup the VC firm has invested in asides from Andela.
“We’re thrilled to partner with Okra as they enable developers across the African continent to transform digital financial services,” general partner at Susa, Seth Berman said. “We’re blown away by the quality of Okra’s team, pace of development and the excitement from the customers building on their API.”
As part of a Fortune Global 500 company, Accenture Ventures has invested in more than 30 startups. However, Okra is the first Black founded startup in its portfolio. Tom Lounibos, the firm’s president and managing director, said the reason behind the investment stems from partnering with Okra to bring open finance to Africa, the calibre of founders and their technology.
The founders tell me that Accenture and Susa represent smart money investors aligned with Okra’s vision and technology infrastructure play.
“For us, if we’re building an API infrastructure for the continent, we thought Accenture would be a really good partner because we’re essentially building an API which is a technology-based infrastructure.”
Besides, the investors will be pivotal to the company’s hiring and imminent pan-African expansion plans to Kenya and South Africa, where Okra is currently in beta.
Accenture coming onboard to Okra as an investor marks the latest in a line of major companies jumping in on the African fintech wave — Stripe with the acquisition of Paystack and Visa and WorldPay partnership with Flutterwave.
In terms of investments, Accenture Ventures continues the list of first-time U.S. investors in African fintech. Names like Bezos Expeditions in Chipper, Tiger Global and Avenir Growth Capital in Flutterwave and Valar in Kuda come to mind.
Beyond Susa and Accenture Ventures, Okra also brought on three angel investors to the round. Rob Solomon, chairman at GoFundMe and former partner at Accel; and two ex founding engineers at Robinhood — Arpan Shah and Hongxia Zhong.
Okra is not the only company looking to capitalize on the budding API financial infrastructure space. Stitch, another South African API fintech, came out of stealth with $4 million in funding. Pngme raised $3 million in February. Others like Nigeria’s Mono and OnePipe have raised six-figure pre-seed rounds and are backed by Y Combinator and Techstars.
Despite seeming competition, the infrastructure business, unlike a commoditized business, is one with room for many winners.
Africa’s fintech space has gained proper attention over the past few years in investments but it is not news that startups still battle with offering high-quality products. However, they seem to be doing quite well compared with traditional banks that face challenges like legacy cost structures and a major lack of operational efficiency.
Appzone is a fintech software provider. It is one of the few companies that builds proprietary solutions for these financial institutions and their banking and payments services. Today, the company is announcing that it has closed $10 million in Series A investment.
Typically, African financial institutions rely on using foreign technology solutions to solve their problems. But issues around pricing, flexibility to innovate, and a lack of local tech support always come up. This is where Appzone has found its sweet spot. The company based in Lagos, Nigeria, was founded by Emeka Emetarom, Obi Emetarom, and Wale Onawunmi in 2008.
Appzone clearly plays a different game from other African fintechs. One clear differentiator is that the company functions as an enabler (at payment rails and the core infrastructure) within banking and payments.
It commenced as a services firm to provide commercial banks with custom software development services. In 2011, the company launched its first core banking product targeting microfinance institutions. The following year, Appzone launched its first product (branchless banking) for commercial banks. It went live with its mobile and internet banking service in 2016 and launched an instant card issuance product in 2017. In 2020, the company launched services catered to end-to-end automation of lending operations for banks and blockchain switching.
“We started Appzone with the intention to build out innovative local solutions for banking and payments on the continent,” CEO Obi Emetarom told TechCrunch. “The focus was to leverage our ability as an enabler to create proprietary technology for both segments.”
Appzone platforms are used by 18 commercial banks and over 450 microfinance banks in Africa. Together, they amass a yearly transaction value and yearly loan disbursement of $2 billion and $300million.
Since its inception, the Google for Startups Accelerator alumnus claims to have led Africa’s fintech sector in some global firsts from the continent. First, the company says it created the world’s first decentralised payment processing network. Second, the first core banking and omnichannel software on the cloud. Third, the first multi-bank direct debit service based on single global mandates.
Emetarom likes to describe Appzone as a fintech product ecosystem with an emphasis on proprietary technology. So far, we’ve touched on two layers of this ecosystem—the digital core banking service providing software that runs financial institutions’ entire operations and interbank processing, which integrates these institutions into a decentralized network powered by blockchain.
Coinciding with this investment is the introduction and scaling of a third layer that focuses on end-user applications. Appzone, having built both banking and fintech layers, wants to connect individuals and businesses to their services. This is where most new-age fintech startups operate, and although Appzone is coming late to the party, it has a bit of an edge, the CEO believes.
“Most of these companies operating in end-user applications have to depend on services from core banking and interbank processing to be able to get their own offerings out there. For us, I think we have an advantage in terms of costs and flexibility because we are already operating in both layers,” Emeratom said in relation to what he thinks of competition.
The company is coming out to blitz scale its products and services after working in stealth mode for more than a decade. One way it wants to carry this out will be to take its pan-African expansion sternly even though a large part of its 450 clients are based in Nigeria. Other countries with a presence include the Democratic Republic of Congo, Ghana, Gambia, Guinea, Tanzania, and Senegal. Before now, Appzone lacked the resources to push into these markets aggressively even though they showed promise. But having closed its Series A, the plan is to drive growth in these countries and expand across more African countries.
Another means Appzone plans to achieve scale is by growing its engineering team — a department it takes pride in. These engineers make up half of Appzone’s 150 employees and there are plans to double down on this number. Like most Nigerian startups these days, Appzone is big on senior engineers. Still, while it might present a problem to other companies, Emetarom says the company has no issue training promising junior talent to grow in expertise.
“Our proprietary tech allows us to innovate at a fraction of a cost, and they are built by essentially the best local talent available. Because those systems are really complex and the level of innovation required is on another level, we literally seek out the to 1% of talent in Nigeria,” he remarked. “We know that even though the expertise isn’t there, we can accelerate acquiring that expertise when we train the very best talents. The more we train our engineers, the faster they grow in terms of expertise, and they will be able to deliver at the same level of world-class quality we expect.“
Back to the round, a noteworthy event is that most investors who took part are based in Nigeria despite its size. CardinalStone Capital Advisers, a Lagos-based investment firm, led the Series A investment. Other investors based in the country include V8 Capital, Constant Capital, and Itanna Capital Ventures. New York-based but Africa-focused firm Lateral Investment Partners also participated.
Before now, Appzone closed a $2 million from South African Business Connexion (BCX) in 2014. Four years later, it raised $2.5 million in convertible debt and bought back shares from BCX in the process. But overall, the company says it has raised $15 million in equity funding.
Speaking on the investment, Yomi Jemibewon, the co-founder and managing director of Cardinal Stone Capital Advisers, said the firm’s investment in Appzone is further proof of Africa’s potential as the future hub of world-class technology.
“Appzone is building a disruptive fintech ecosystem that will be the backbone of Africa’s finance industry with products across payments, infrastructure and software as a service. The impact of Appzone’s work is multifold — the company’s products deepen financial inclusion across the continent whilst providing best-fit and low-cost solutions to financial institutions. Its emphasis on premium talent also helps stem brain drain, rewarding Africa’s best brains with best in class employment opportunities,” he added.
Appzone’s funding continues the fast-paced investment activities witnessed by Africa’s fintech space after a slow January. In the last two months, more than eight fintech startups have secured million-dollar rounds. This includes very large rounds by South African digital bank TymeBank ($109 million) in February and African payments company, Flutterwave ($170 million) in March.
Kunun gyada, a subtly sweet West African blend of rice and peanuts, is a dish you want for iftar — and all year round.
Gunmen arrived at a prison in Nigeria’s southeast early Monday morning and let loose all who wanted to flee.
In Africa, Y Combinator is known to be a major backer of most of the continent’s well-known startups.
Two of the most talked-about in the last two quarters — Flutterwave and Paystack — are YC-backed. Their successes (Flutterwave’s billion-dollar valuation and Paystack’s rare exit to Stripe) have greatly increased YC’s appeal in the eyes of founders on the continent with local investors clamoring to get their portfolio into the accelerator.
Unlike last year where Y Combinator held its Demo Day, both winter and summer in two days, it’s a single day for this Winter 2021 batch.
This is the accelerator’s third online demo day, its second all-virtual class and remote pitch session following its decision to go fully remote from the previous batch (Summer 2020).
A total of 319 companies pitched today from 41 countries drawing attention from more than 2,400 investors. However, only ten African startups pitched and similar to other batches; most of them are fintechs.
Other startups offer e-commerce fulfillment, edtech and B2B food marketplace services. Five startups represent Nigeria; three are from Egypt, and one from the Ivory Coast and Kenya. Here they are building.
Most of the gig workers in Egypt are unbanked, and it’s difficult for digital platforms to pay them for their services. The traditional method would be to use cash or third-party institutions.
Founded by Omar Ekram, Dayra is trying to solve this via an API. With its platform, Egyptian businesses can offer financial services including loans to unbanked workers and customers in the country.
Djamo (Ivory Coast)
While there has been a huge profusion of financial services that have emerged in recent years in Africa, there’s still a huge underserved gap in Francophone Africa. In fact, less than 25% of the population is banked.
Djamo acts as a challenger bank and offers banking solutions to break into this huge untapped market and help with financial inclusion in the region. Hassan Bourgi and Regis Bamba founded the Ivorian startup.
In African public schools, the student-teacher ratio can be as high as 50:1. This doesn’t aid effective learning. Other options like private schools can be costly.
Kidato, an edtech startup founded by Sam Gichuru, have classes with student-teacher ratios at 5:1. They also offer the same international curriculum as private schools in the country but collect much lower fees.
It takes days and sometimes weeks to send money from the U.S. to Nigeria and most African countries. There’s also the problem with expensive fees.
Flux, a Nigerian remittance startup, is using crypto to tackle this. Via an application and from a wallet, people can convert fiat into crypto and send it to the wallets of people in other countries who convert back to fiat if they choose. The startup was founded by Ben Eluan, Osezele Orukpe, and Israel Akintunde.
Financial stress plays a major role as a top distraction for employees. NowPay, a startup founded by Sabry Abuelenien and Mostafa Ashour, bridges that gap and provides several benefits for employers that choose to address this area of employee wellness proactively.
The company enables corporates to offer salary advances to employees. It also improves savings, spending, budgeting, and borrowing for employees by building products that tackle every vertical.
Due to the proliferation of financial services in Africa, it has become extremely difficult for banks and fintechs to combine users’ data from multiple points and make sense of it.
By streamlining various data in a single API, Mono helps companies and third-party developers retrieve vital information like account statements, real-time balance, historical transactions, income, expense, and account owner identification. Abdul Hassan and Prakhar Singh founded the company.
In the U.S. or the U.K, you can set up a business account in minutes but it can take hours and days in Nigeria. And most of this is still executed offline and on paper.
Prospa is a neobank for microbusinesses in Nigeria founded by Frederik Obasi and Rodney Jackson-Cole. It helps these businesses make international payments to more than 10 countries including China, Kenya, the U.K., and the U.S.
When merchants launch their e-commerce businesses, they can easily manage the end-to-end operations in the early stages. But as they begin to grow, managing their own operations can become difficult.
This is a burden for most businesses in Egypt and Flextock, a startup founded by Mohamed Mossaad and Enas Siam, solves it by providing an end to end fulfilment service. They manage a business inventory, pick, pack and ship orders while providing real-time visibility and insights into their products.
For some individuals and merchants, shipping can be a painstaking process. To operate efficiently, they partner with one or more service providers or build their delivery operations themselves.
Sendbox describes itself as a “fulfillment by Amazon for African merchants.” The company provides shipping, escrow payments, among other services, to social commerce merchants in Nigeria. Emotu Balogun and Olusegun Afolahan founded the company.
For small and mid-sized restaurants in Nigeria and most of Africa, food procurement can be a complex process to manage.
Founded by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, Vendease solves this problem by building a marketplace that allows restaurants to buy directly from farms and food manufacturers.
“The Milkmaid” and other African productions are putting extremism under the microscope and drawing diaspora audiences in the process.