The World Bank is in a unique position to help developing countries prepare for climate change. Here are two things critics say it could do better, and one they say it shouldn’t do at all.
Global economic growth will be choked as war, inflation and ongoing supply chain problems take a toll.
The Treasury secretary, testifying before a House committee, said the U.S. would continue finding ways to punish Russia for its invasion of Ukraine.
A former president faces an upstart economist as the future of a political system that turned Costa Rica into a model of stability is cast in doubt.
In Costa Rica’s runoff on Sunday, voters will decide between a candidate found to have sexually harassed junior employees at the World Bank and a former president once accused of corruption.
The Biden administration said it would join Europe and other allies in stripping Russia of permanent normal trade relations, another step to inflict economic damage on the country over its invasion of Ukraine.
The United Nations’ first Sustainable Development Goal (SDG) aims to eradicate poverty around the world. If implemented, however, it might see people consume more—drive more often, buy more products—and, thus, produce more carbon emissions, fueling climate change. “With more money to spend, and therefore more consumption, there is usually a higher carbon footprint,” Benedikt Bruckner, a master’s student of energy and environmental sciences at the University of Groningen, told Ars.
But it doesn’t necessarily have to be that way, according to a new study put out by Bruckner, other researchers out of Groningen, and colleagues in the United States and China.
Published in Nature, the research makes use of high-level data about consumption patterns to show that reaching SDG 1—which shoots to move every person out of extreme poverty (under $1.90 per day) and half of everyone above the poverty lines of their respective countries—won’t excessively fuel climate change.
Global growth is expected to slow to 4.1 percent this year, from 5.5 percent in 2021, a projection underscores the stubborn nature of the public health crisis.
Farmers in India are desperate. Trucks in South Korea had to be idled. Food prices, already high, could rise even further.
The International Monetary Fund says the persistence of the coronavirus and global supply chain crisis weighs on economies.
Unless money starts flowing soon, Afghanistan is facing a catastrophe.
As the International Monetary Fund gets set for its annual meeting, economists ask if it’s time to update its mandate as the world’s financial crisis responder.
Health clinics are closing. Temperatures are dipping. Prices are rising. Food and money are scarce. A calamity looms, humanitarian groups warn.
The Taliban spurned calls from the United Nations and big donors to include women in its new cabinet, but did add a few men from minority ethnic groups.
After the Taliban’s takeover, international donors withdrew funds that hospitals and clinics depended on. Now a fourth wave of Covid looms.
The Taliban will be under pressure to keep a fragile economy afloat.
Singapore is home to fewer than six million people, making it one of the smallest ASEAN countries, in terms of population. It is a young country as well — having gained independence in 1963 — and resides in a neighborhood with far larger economies, including China, Indonesia, and Vietnam. When the country first became independent, its mandate was to simply survive rather than thrive.
So how does a country evolve from a position of relative uncertainty, with comparatively few resources, to one that leads the ASEAN region in venture capital investment and has been home to 10 unicorns?
Countries around the world examine Singapore’s ecosystem from a distance, hoping to learn from, and emulate, its story. The World Bank Group recently published a report, The Evolution and State of Singapore’s Start-up Ecosystem, documenting the country’s experience in building its startup ecosystem and the challenges facing it.
This article presents an overview of the report’s key findings and offers a few key recommendations on what other countries can learn from Singapore’s experience, as well as what Singapore itself can do to maintain progress.
A glimpse into Singapore’s current startup ecosystem
As of 2019, Singapore had over $19 billion in PE and VC assets under management, more than twice that of neighboring Indonesia, Philippines, Vietnam, Malaysia, and Thailand combined. In that same year, the country was home to an estimated 3,600 tech startups and nearly 200 different intermediary and supporting organizations (accelerators, co-working spaces, coding academies, etc.) – some which have a multinational presence, such as Blk71, whose Singapore headquarters has been referred to as “the world’s most tightly packed entrepreneurial ecosystem.”
While assessing the size and strength of startup ecosystems is an evolving method, Start-up Genome priced Singapore’s ecosystem at over $25 billion, five times the global median.
Arguably, the most eye-catching hallmark of this ecosystem is its population of current and former unicorns. Collectively, Singapore has been home to ten unicorns, three of which have offered an IPO (Nanofilm, Razer and Sea) and two of which have been acquired – one by giant Alibaba (Lazada) and one by Chinese streaming powerhouse YY (Bigo Live). The remaining five are Trax, Acronis, JustCo, PatSnap, and Grab – the ASEAN region’s largest unicorn to date.
The education sector is also prominent in Singapore’s ecosystem. Universities like the National University of Singapore (NUS) and Nanyang Technological University (NTU) are deeply embedded into this ecosystem, helping with R&D commercialization linkages, incubation, talent/knowledge transfer, and other areas.
So, how did Singapore’s startup ecosystem come to be?
Numerous factors have contributed to building Singapore’s startup ecosystem, with government intervention and leadership being the dominant driving forces. The government has spent more than USD60 billion over the past several decades to enhance the country’s R&D infrastructure, create VC funds, and launch accelerators and other support organizations.
With the pandemic wreaking havoc amongst early years education amid school lockdowns, it’s no wonder EdTech startups have piled into the space. But it’s also served to highlight the abysmal nature of earl years teaching: Some 40 million teachers across the globe are leaving the sector, according to to the World Bank. Of the 1.5 billion primary-age children, only a few can access high-quality education, and approximately 58 million primary-age children are out of education, most of whom are girls.
So the opportunity to make a difference, using online teaching, in these very young years is great, because classes sizes can be reduced online, and the quality of teaching improved.
This is the idea behind bina, which bills itself as a “digital primary education ecosystem”. It’s now raised $1.4M to aim at the education of 4 to 12-year-olds.
The funding round was led by Taizo Son, one of Japan’s billionaires. Other investors and advisors include Jutta Steiner, Founder at Parity Technologies, the company behind Polkadot decentralized protocol, and Lord Jim Knight, Ex-Minister of Education (UK).
Bina’s ‘schtick’ is that is has very small online class sizes of 6 students (3x smaller than the OECD average).
It also boasts of “adaptive learning paths” that cover international standards; teachers with a minimum of 8 years of digital teaching experience; and data-driven decision making for its pedagogical approach.
Noam Gerstein, bina’s CEO and founder said: “I’ve interviewed students, teachers, and parents globally for years, and it is clear a new systemic design is needed. With our founding families, we are building a world in which every child has access to quality education, educators’ skills are valued and continuously developed, and parents don’t need to choose between their work and family life.”
He says it also grants pupils company shares (RSUs) as they grow with the school. Currently available to English-speaking students in the CET timezone, the bina School is planning a SaaS product for governments, NGOs and school systems.
“We right now compete against companies like Outschool, Pearson’s online Academy, primer and Prisma,” he told me over a call. “So these are the big names of the last year for the first phase. But the strategy is that we’re building it in two phases. The first phase is actually building a school that we operate as a ‘lab’ school. And the second phase is what we call ‘bina as a service’. So it’s a SaaS ‘school as a service’. The idea is that we offer collaboration with NGOs and governments, doing accreditation and training and licencing of the product. So for that second part we’re actually competing against the big accreditation system.”
The World Bank said the financial crisis could rank among the world’s three worst since the mid-1800s. The currency has lost more than 90 percent of its value and unemployment has skyrocketed.
A proposal advanced by the International Monetary Fund aims to supply the developing world with extra money to buy vaccines, pay down debt and expand relief programs.
Last week, El Salvador’s government passed a law to accept bitcoin as legal tender alongside the US dollar. The country receives $6 billion in remittances per year—nearly a quarter of its gross domestic product—and the hope is that bitcoin’s lower transaction costs could boost that amount by a few percentage points.
The move was first proposed by the country’s president, Nayib Bukele, who said he hoped that in addition to facilitating lower remittance fees, the bitcoin plan would attract investment and provide an avenue for savings for residents, about 70 percent of whom are unbanked. (What Bukele didn’t say, but what Bloomberg has reported, is that he and members of his political party have owned bitcoin for years.)
Adding the cryptocurrency to the roster isn’t a simple task, though, and the new law gives the country just three months to roll the plan out nationwide. No country has ever used bitcoin or any other cryptocurrency as legal tender, and challenges abound. To address those concerns, El Salvador turned to the World Bank and the International Monetary Fund for assistance; the latter is currently considering a $1.3 billion financing request from the country.
Digital payments are going mainstream around the world. By the end of 2020, there were more than 300 mobile money providers with over 100,000 active users, according to a report published by GSMA, an industry association for mobile network operators. Altogether, over 300 million mobile money accounts were active every month around the world.
Mobile money providers — more commonly known as e-wallets — are used to transfer money, pay and receive payments through mobile phones without the need for a traditional bank. They are useful so long as they enjoy wide adoption and a strong network effect. But even a popular service like Ant Groups’s Alipay, which has over one billion annual users, is practically unusable outside China due to its low penetration in most countries.
The problem is there is no interoperability between most wallets as there is between traditional banks, suggested Xue Zhixiang, who worked on the basic infrastructure for Alibaba’s cloud unit and Alipay before starting WalletsClub.
Registered in Hong Kong in 2019 with a small operational team in mainland China, WalletsClub sets its sights on becoming the Visa for digital wallets, making money transfers possible between the world’s hundreds of electronic money services.
“We are like a clearinghouse for digital wallets,” said Xue, the company’s CEO.
A clearing system is an intermediary for two parties engaged in a financial transaction. It’s designed to ensure the efficiency and security of a transfer by validating the availability of the funds and logging the transfer between two transacting parties. Payments can be sent and received in real-time using WalletsClub, Xue claimed, and its technology is based on the “ISO 20022” standard, a common language for financial institutions to exchange data across the globe.
In other words, WalletsClub is going after the hundreds of e-wallets around the world rather than individual end-users. Its vision is to let people pay with any mobile wallet anywhere as long as the sender’s service provider or financial institution and the receiver’s equivalent services are members of WalletsClub, similar to how Visa and Mastercard process credit cards issued by different banks that are in their networks. The company plans to monetize by charging a flat fee per transaction.
By adding interoperability to electronic wallets, even small, regional players can thrive because they gain compatibility wherever a clearing system is in place.
Instead of challenging the traditional financial system, WalletsClub wants to provide a way for unbanked individuals to easily move money around through digital wallets, which are easier to obtain than a bank account. A big demand will come from overseas migrant workers who need to send money back to their home countries, such as the millions of Southeast Asian workers abroad.
WalletsClub is potentially encroaching on the territory of a few players. Expatriate workers sending money home currently revert to longstanding remittance services like Western Union or MoneyGram, which have large networks of “agent” locations where users go send or collect money. In 2018, Alipay began allowing users in Hong Kong to send money to GCash accounts in the Philippines, but “the focus of Ant Group is payments rather than remittance,” Xue observed.
In 2019, money sent home from diaspora workers became the largest source of external financing in low- and middle-income countries excluding China, according to World Bank data. The money flows amounted to over $500 billion and surpassed the levels of foreign direct investment in these regions.
The other type of business that a clearinghouse for mobile wallets could threaten is cross-border payment aggregators, which save merchants from having to integrate with various digital payment methods.
The biggest challenge for the nascent startup is to establish trust with clients. At this stage, WalletsClub in talks with electronic money services founded by Chinese entrepreneurs in Hong Kong, Singapore and Canada. Chinese-made wallets are especially plentiful in emerging markets, thanks to these founders’ learning from China’s fintech boom over the decade. Many of them found it hard to compete with behemoths like Tencent and Ant, let alone China’s tightening regulations around fintech.
“If we reach 20 members and have several hundreds of transactions between every pair of members on a daily basis, we are basically profitable,” said Xue, adding that the goal is to onboard a dozen customers by this year.
A new report offers a detailed picture of flaring around the world, with steep declines in some areas and surprising increases in others.
The two founders of Crusoe Energy think they may have a solution to two of the largest problems facing the planet today — the increasing energy footprint of the tech industry and the greenhouse gas emissions associated with the natural gas industry.
Crusoe, which uses excess natural gas from energy operations to power data centers and cryptocurrency mining operations, has just raised $128 million in new financing from some of the top names in the venture capital industry to build out its operations — and the timing couldn’t be better.
Methane emissions are emerging as a new area of focus for researchers and policymakers focused on reducing greenhouse gas emissions and keeping global warming within the 1.5 degree targets set under the Paris Agreement. And those emissions are just what Crusoe Energy is capturing to power its data centers and bitcoin mining operations.
The reason why addressing methane emissions is so critical in the short term is because these greenhouse gases trap more heat than their carbon dioxide counterparts and also dissipate more quickly. So dramatic reductions in methane emissions can do more in the short term to alleviate the global warming pressures that human industry is putting on the environment.
And the biggest source of methane emissions is the oil and gas industry. In the U.S. alone roughly 1.4 billion cubic feet of natural gas is flared daily, said Chase Lochmiller, a co-founder of Crusoe Energy. About two thirds of that is flared in Texas with another 500 million cubic feet flared in North Dakota, where Crusoe has focused its operations to date.
For Lochmiller, a former quant trader at some of the top American financial services institutions, and Cully Cavmess, a third generation oil and gas scion, the ability to capture natural gas and harness it for computing operations is a natural combination of the two men’s interests in financial engineering and environmental preservation.
The two Denver natives met in prep-school and remained friends. When Lochmiller left for MIT and Cavness headed off to Middlebury they didn’t know that they’d eventually be launching a business together. But through Lochmiller’s exposure to large scale computing and the financial services industry, and Cavness assumption of the family business they came to the conclusion that there had to be a better way to address the massive waste associated with natural gas.
Conversation around Crusoe Energy began in 2018 when Lochmiller and Cavness went climbing in the Rockies to talk about Lochmiller’s trip to Mt. Everest.
When the two men started building their business, the initial focus was on finding an environmentally friendly way to deal with the energy footprint of bitcoin mining operations. It was this pitch that brought the company to the attention of investors at Polychain, the investment firm started by Olaf Carlson-Wee (and Lochmiller’s former employer), and investors like Bain Capital Ventures and new investor Valor Equity Partners.
(This was also the pitch that Lochmiller made to me to cover the company’s seed round. At the time I was skeptical of the company’s premise and was worried that the business would just be another way to prolong the use of hydrocarbons while propping up a cryptocurrency that had limited actual utility beyond a speculative hedge against governmental collapse. I was wrong on at least one of those assessments.)
“Regarding questions about sustainability, Crusoe has a clear standard of only pursuing projects that are net reducers of emissions. Generally the wells that Crusoe works with are already flaring and would continue to do so in the absence of Crusoe’s solution. The company has turned down numerous projects where they would be a buyer of low cost gas from a traditional pipeline because they explicitly do not want to be net adders of demand and emissions,” wrote a spokesman for Valor Equity in an email. “In addition, mining is increasingly moving to renewables and Crusoe’s approach to stranded energy can enable better economics for stranded or marginalized renewables, ultimately bringing more renewables into the mix. Mining can provide an interruptible base load demand that can be cut back when grid demand increases, so overall the effect to incentivize the addition of more renewable energy sources to the grid.”
Other investors have since piled on including: Lowercarbon Capital, DRW Ventures, Founders Fund, Coinbase Ventures, KCK Group, Upper90, Winklevoss Capital, Zigg Capital and Tesla co-founder JB Straubel.
The company now operate 40 modular data centers powered by otherwise wasted and flared natural gas throughout North Dakota, Montana, Wyoming and Colorado. Next year that number should expand to 100 units as Crusoe enters new markets such as Texas and New Mexico. Since launching in 2018, Crusoe has emerged as a scalable solution to reduce flaring through energy intensive computing such as bitcoin mining, graphical rendering, artificial intelligence model training and even protein folding simulations for COVID-19 therapeutic research.
Crusoe boasts 99.9% combustion efficiency for its methane, and is also bringing additional benefits in the form of new networking buildout at its data center and mining sites. Eventually, this networking capacity could lead to increased connectivity for rural communities surrounding the Crusoe sites.
Currently, 80% of the company’s operations are being used for bitcoin mining, but there’s increasing demand for use in data center operations and some universities, including Lochmiller’s alma mater of MIT are looking at the company’s offerings for their own computing needs.
“That’s very much in an incubated phase right now,” said Lochmiller. “A private alpha where we have a few test customers… we’ll make that available for public use later this year.”
Crusoe Energy Systems should have the lowest data center operating costs in the world, according to Lochmiller and while the company will spend money to support the infrastructure buildout necessary to get the data to customers, those costs are negligible when compared to energy consumption, Lochmiller said.
The same holds true for bitcoin mining, where the company can offer an alternative to coal powered mining operations in China and the construction of new renewable capacity that wouldn’t be used to service the grid. As cryptocurrencies look for a way to blunt criticism about the energy usage involved in their creation and distribution, Crusoe becomes an elegant solution.
Institutional and regulatory tailwinds are also propelling the company forward. Recently New Mexico passed new laws limiting flaring and venting to no more than 2 percent of an operator’s production by April of next year and North Dakota is pushing for incentives to support on-site flare capture systems while Wyoming signed a law creating incentives for flare gas reduction applied to bitcoin mining. The world’s largest financial services firms are also taking a stand against flare gas with BlackRock calling for an end to routine flaring by 2025.
“Where we view our power consumption, we draw a very clear line in our project evaluation stage where we’re reducing emissions for an oil and gas projects,” Lochmiller said.
David Malpass, who was met with skepticism when he got the job in 2019, has become increasingly vocal about the risk of climate change.
With dozens of countries struggling to manage both staggering debt and mounting climate disasters, some financial leaders are debating green debt relief.
Fintech startup ClearGlass Analytics has closed a £2.6 million ($3.6M) funding round for its platform, which aims to create greater transparency on fees in the long-term savings market, such as pensions and the wider asset management market.
The £2.6m seed round includes European VC Lakestar and Outward VC, the venture arm of Investec, as well as several angels from both the asset management and pension fund worlds. These include Ruston Smith, a pension trustee; Richard Butcher, Chair of the PLSA (UK pension trade body); Chris Wilcox, former Global Head of JP Morgan Asset Management; and Rob O’Rahilly, Sikander Ilyas and Alex Large, also former JP Morgan employees.
ClearGlass is targeting the £1.5trillion mature ‘Defined Benefit’ pension schemes market and claims to now work with over 500 DB pension funds. It will use the funding to expand into the UK Defined Contribution pension market, and consolidate its early footprint in Europe and Africa.
How ClearGlass works is that it acts as a data interface between asset managers and their clients. Pension funds then use the platform to see all of their investment costs in one place, thus getting more data than usual from more asset managers and other suppliers. This helps the funds see the ‘true cost’ of what they are paying for the management of their investments. ClearGlass claims to be able to uncover the kinds of costs of asset management that, in some instances, can be more than double those expected.
The startup recently did an analysis of the cost and performance of over 400 asset managers. It found that while most UK asset managers were meeting minimum standards for data delivery, quality, and accuracy, 30 (including some powerful players) did not pass their tests.
The company was founded by Dr. Christopher Sier, a World Bank and FCA expert who previously developed the cost transparency standard at the request of the FCA, and co-founders Ritesh Singhania and Kunal Varma.
Sier, founder and CEO, said: “Finding your costs are so much larger is shocking, but also something to be celebrated. These incremental costs were always there, they just weren’t exposed, and now you can identify those and bring about change. You can’t manage what you don’t measure.”
In an interview with TechCrunch, Ritesh Singhaniam, COO, said getting the data about pension funds is normally “super challenging and complicated. And second of all, even when you got the data, you couldn’t make head nor tail of it because you can’t compare it across funds. What we have done is that we have been the line of communication between the manager and the pension fund. So we have built a piece of technology that helps with the communication between the asset managers, and the pension funds to be able to collect that data, check that data. And finally, give them something that doesn’t require them to spend 20 hours to understand it.”
ClearGlass was incubated by the Founders Factory accelerator.
The emergence of vaccines has taken the edge off the worst fears, but a meaningful economic recovery probably remains distant.
He was a force on Wall Street before taking the reins of the bank in 1995, then proceeded to shake it up. He did the same at both Carnegie Hall and the Kennedy Center.
Despite pledges for debt relief and expanded programs, the World Bank and International Monetary Fund have delivered meager aid, say economists.
The country debates women’s honor inexhaustibly but pays little attention to the ferocious and imminent dangers of climate disasters.
The Nigerian founder didn’t offer much new on the Lagos-based firm’s expected IPO, but he did reveal Interswitch will revive investments in African startups.
Founded by Elegbe in 2002, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly cash-based economy. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population of 200 million people. Interswitch has expanded to offer personal and business payment products in 23 Africa countries.
The fintech firm achieved unicorn status in 2019 after a $200 million equity investment by Visa gave it a $1 billion valuation.
Reviving venture investing
But Interswitch will soon be back in the business of making startup bets and acquisitions, according to Elegbe. “We’ve just certified a team and the plan is to begin to make those kinds of investments again.”
He offered a glimpse into the new fund’s focus. “This time around we want to make financial investments and also leverage the network that Interswitch has and put that at the disposal of these companies,” Elegbe told TechCrunch.
“We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have,” he said.
Recent venture events in African tech have likely pressed Interswitch to get back in the investing arena. As an ecosystem, VC on the continent has increased (roughly) by a factor of four over last five years, to around $2 billion in 2019. But most of that has come from single-entity investment funds, while corporate venture funding (and tech M&A activity) has remained light. That’s shifted over the last several months and the entire uptick has occurred in African fintech around entities that could be viewed as Interswitch competitors.
In July, Dubai’s Network International acquired Kenya -based payment mobile payment processing company DPO for $288 million. Shortly after the acquisition, DPO’s CEO Eran Feinstein said the company would pursue more African acquisitions on its own. In June, another mobile-money payment processor, MFS Africa, acquired digital finance company Beyonic. And in August, South Africa’s Standard Bank—Africa’s largest by assets and lending—acquired a stake in fintech security firm TradeSafe.
Since the rise of Safaricom’s dominant M-Pesa mobile money product in Kenya, fintech in Africa has become infinitely larger and more competitive. The sector has hundreds of startups and now receives nearly 50% of all VC investment on the continent.
The opportunity investors and founders are chasing is bringing Africa’s large unbanked population and underbanked consumers and SMEs online. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data, and mobile-based finance platforms have presented the best use-cases to shift that across the region.
Interswitch has established itself as a leader in the Africa’s digital finance race. But it’s hard to envision how it can maintain or extend that role without an active venture arm that invests in and acquires innovative, young fintech startups.
No news on IPO
Elegbe had less to offer on Interswitch’s long-anticipated IPO. Asked if the company still planned to list publicly, he offered up a non-answer answer. “At this point in time we’re focused on growing the business and creating value for our customers and that is the our primary focus.”
When pressed “yes or no” on whether an IPO was still a possibility Elegbe confirmed it was. “We have private equity investors and at some point in the life of the business they want exits.” he said. “When it is time for them to exit there are various options on the table and an IPO is an option.”
There’s been talk of an Interswitch IPO for years. In 2016, Elegbe told TechCrunch a dual-listing on the Lagos and London Stock Exchanges was possible. Then word came through other Interswitch channels that it was delayed due to recession and currency volatility in Nigeria in 2017. In November 2019, a source with knowledge of the situation told TechCrunch on background, “an IPO is still very much in the cards; likely sometime in the first half of 2020.” Then came the Covid-19 crisis and the accompanying global economic slump, which may have delayed Interswitch’s IPO plans yet again.
If and when the company goes public, it would be a major event for Nigerian and African fintech. No VC backed fintech firm on the continent has listed globally. Exits for Interswitch’s investors would likely attract to Nigeria and broader Africa more VC from major funds—many of whom remain on the fence about startup opportunities on the continent.
Focus on Africa
On global product expansion, Interswitch plans to maintain an African focus for now, Elegbe explained. “There are enough opportunities for Interswitch on the continent. We’d like to be in as many African countries as possible…and position Interswitch as the (financial) gateway to the continent,” he said.
Elegbe explained the company would continue to work through alliances with major financial services firms to open up global financial access for its African client base. In August 2019, Interswitch launched a partnership that allows its Verve cardholders to make payments on Discover’s global network.
CEO Mitchell Elegbe concluded his Disrupt session with some perspective on balancing the stigmas and possibilities of doing business in Nigeria. Over recent years the country has shifted to become an unofficial hub for big tech expansion, VC investment, and startup formation in Africa. But Nigeria continues to have a difficult operating environment with regard to infrastructure and is often associated with political corruption and instability in its Northeast region due to the Boko Haram insurgency.
“Nigeria has a very large population and a very large market. We have lots of challenges that need to be solved, but it makes sense to me that lots of money is finding its way to Nigeria because the opportunity is there,” he said.
Elegbe’s advice to tech investors considering the country, “Don’t take a short-termist view. There are good people on the ground doing fantastic work—honest people who want to make impact. You need to seek those people out.”
The CEO of Pan-African fintech unicorn, Mitchell Elegbe, is set to speak at TechCrunch Disrupt 2020 on September 16. He founded the company in Lagos in 2002 to connect Nigeria’s — then — largely disconnected banking system.
Over the next decade plus, Interswitch accelerated the adoption of digital payments across Africa and now stands as one of the continent’s rare fintech unicorns. The company is poised to list on a global exchange, which would also create Africa’s next big tech IPO.
At Disrupt 2020, TechCrunch will seek Elegbe’s perspective on the continent’s fintech scene, Interswitch’s venture plans, and the economic impact of Covid-19 on African startups. This year’s event is 100% virtual, making it possible for anyone with an internet connection to sign in and learn more about Elegbe’s company and digital innovation in Africa.
If you’re a VC or founder in London, Bangalore or San Francisco, you’ll likely interact with some part of Africa’s tech landscape for the first time — or more — in the near future. When measured by monetary values, the continent’s tech ecosystem is small by Shenzhen or Silicon Valley standards.
But when you look at year-over-year expansion in venture capital, startup formation and tech hubs, it’s one of the fastest-growing tech markets in the world.
Bringing the continent’s large unbanked population and underbanked consumers and SMEs online has factored prominently. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data.
As such, fintech has become Africa’s highest funded tech sector, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019.
Interswitch became a pioneer of building the infrastructure to digitize finance on the continent. The company pre-dates the rise of mobile money in Kenya through Safaricom’s M-Pesa product, which is one of Africa’s most recognized fintech use-cases.
Interswitch’s path from startup to unicorn traces back to the vision of CEO Mitchell Elegbe, who was a Nigerian electrical engineering graduate before founding the firm in 2002. The company has since produced a run of product innovation and expansion, starting in Nigeria. Interswitch created the first electronic switch whereby Nigerian financial institutions could communicate and operate ATMs and point of sales operations. The company now provides much of the rails for Nigeria’s online banking system.
Interswitch has since moved into high-volume personal and business finance, with its Verve payment cards and Quickteller payment app. The fintech firm (now well beyond startup phase) has also shaped a Pan-African and global reach — selling its products in 23 African countries with a physical presence in Uganda, Gambia and Kenya . In August 2019, Interswitch launched a partnership that allows its Verve cardholders to make payments on Discover’s global network.
Interswitch also launched a venture arm in 2015 called its global ePayment Growth Fund. Another milestone came in November 2019 when Interswitch achieved a $1 billion unicorn valuation after Visa took a reported $200 million minority stake in the company. Other Interswitch backers include IFC and Helios Investment Partners.
The company’s Nigerian origins and operations have become more significant as Nigeria is now Africa’s most populous nation and largest economy. The West African country has become the continent’s unofficial tech hub and fintech capital. Nigerian startups now raise the majority of Africa’s annual VC haul, according to a study by Partech.
Heading into 2020, the momentum was there and the pieces were falling in place for Interswitch to mark that next big achievement — an IPO. Where that listing stands for the firm, particularly in the wake of the Covid-19 crisis, is one of many topics TechCrunch is excited to discuss with CEO Mitchell Elegbe at Disrupt 2020.
The event runs from September 14 through September 18 and (as mentioned) is 100% virtual this year, making it possible for anyone from London to Lagos to sign in. Get your front row seat to see Mitchell Elegbe live with a Disrupt Digital Pro Pass or a Digital Startup Alley Exhibitor Package. We’re excited to see you there.
A sharp drop in the value of the lira is testing businesses and residents while they are coping with the pandemic.
The vow to accelerate help, made during a video call with other heads of state, comes amid furious demonstrations in Beirut against the Lebanese government.
“You know we don’t drive down that road,” my father said.
I had asked him why we never took the shortest path to the beach. Just eight years old, I was fascinated by maps and was questioning my father’s choice. Years later I would learn the route I suggested was mired with armed groups of all stripes whose interests didn’t align with mine or that of other Colombian families.
You may be familiar with the conflicts that plagued Colombia for decades, but you might not be aware of the progress institutions, advocacy groups and its government have made with regard to building a future where citizens have options and mobility that’s not constrained by armed conflict.
In fact, Colombia has at times improved its “ease of doing business” ranking as measured by the World Bank. The country, its institutions and its leaders have a longer way to go when it comes to ensuring that opportunity reaches all corners of the country, particularly at a time that COVID-19 magnifies the inequities that persist. But one thing is for sure, the path to prosperity would look a lot better if Colombia further embraced innovation.
I have dedicated the last decade to Colombia’s path to prosperity. I have done so by studying at Colombia’s most prestigious Universidad de Los Andes, raising more than $10 million in venture capital and building two companies that generate direct and indirect earnings for more than 70,000 Colombians. I have directly retained hundreds of computer engineers by showing young Colombians that it’s possible to earn a good living without emigrating for professional opportunities. Heck, I’ve even convinced a few past emigrants to return to Colombia and work for me at Picap.
My contribution to Colombia’s prosperity and the contribution of thousands of talented engineers that build technology in Colombia is at risk. It’s at risk because the Colombian authorities and the legislative branch have been slow to update transportation and technology regulation designed for an era when regulation could last decades because the pace of societal innovation was measured in, well, decades.
In Colombia, we need to update regulations governing technology and transportation. The ever present threats that Colombian authorities and regulators have imposed on Uber and Picap are not only futile attempts to put the technology genie back into the bottle, but also delay the critical conversations that would build long-term partnership for mutual success.
It’s urgent that Colombia and countries around the globe construct regulatory frameworks that simultaneously advance the public good and technology innovation. We, in fact, have evidence of the kinds of benefits that can expand when new mobility models and technologies are embraced. Take GoJek or Grab which started, like Picap, as two-wheel ride-hailing platforms. Each is now worth billions and facilitates commerce, financial services and more, all for the benefit of societies which then produce more consumer surplus, formalize economic activity and stimulate new forms of innovation. Picap, and others, can do this in Colombia and more places across Latin America with regulatory advancements.
There are congressional leaders in Colombia who have made considerable efforts to advance their understanding of technology platforms, but their efforts, however laudable, have not advanced. Now, more than ever, Colombia’s leaders must, for example, recognize that private transport services need regulation that works for the citizens that power new mobility options. Every country in the globe faces a reckoning based on how easily COVID-19 weakened state-supported and independent systems of health, mobility and economic activity. Technology will be an inevitable component of strengthening health, mobility and economic activity in every country. We’ve already seen that delivery platforms, including Pibox by Picap, increasingly play a role in helping countries preserve social distancing. And yet there’s an opportunity for states to differentiate and think about not just defensive strategies during the pandemic, but also how to remake themselves for the future.
Colombia can learn from the example of South Korea, which for years positioned itself to fulfill the world’s future demands for the types of silicon chips that subsequently made LG and Samsung household names. South Korea did this not by impeding technological advancement, but by facilitating the development of know-how, investing in education and partnering with technology. As technologists, there’s nothing that would make us prouder than helping Colombia develop the kinds of economic activity that will strengthen the country in the long-term. I’ve seen the future, I practice it daily, and I know that Latin America, and Colombia in particular, need to invest in retaining tech talent and advancing regulatory frameworks that attract technology investment, or our economies will struggle even further in the coming years of potential recovery from COVID-19.
Recently, the Alianza IN, a mobility platform trade group, launched in Colombia with the goal of advancing conversations with Colombian lawmakers and regulators on the principles that the Colombian MinTIC (Ministry of Information Technologies and Communications) could incorporate to help attract more investment, retain talent and proactively prepare for a future in which mobility and technology platforms are critical partners of the country’s economic future. Technology platforms are already a part of the present, and the Alianza IN’s actions are a great step on the path toward ensuring that updated regulatory frameworks serve the millions of Colombian citizens who depend on mobility and technology platforms for income, mobility and improved quality of life.
Last year, Colombian technology companies received more than $1.2 billion of investment capital. I am impressed with the new headlines my generation and Colombian colleagues across technology have achieved in only 20 years. But I can assure you that Colombia’s headlines in the 21st century will be stunted if Colombian politicians and authorities do not address the underlying need to improve regulation that embraces technology and new mobility, including Picap. We have room to grow and show the world how our tenacity and resilience will help address not just Colombian or Latin American challenges, but global challenges.
I look forward to soon meeting the young Colombian woman who in 20 or even three years will have developed a renewable energy or disease-prevention innovation that serves billions of people. We have to remove roadblocks. We’ve begun doing so across Colombia on some fronts; we need to continue to do so on the technology front. I, alongside, my generation, will continue to attract the capital, retain the talent and further develop the competitive advantages that will position Colombia to lead in the 21st century.
I hope that the Colombian government, regulators and the Duque administration does this, as well.
Medical workers are falling ill in Pakistan at alarming rates as the country registers at least 100,000 new coronavirus cases since the lockdown was lifted.
Why would China go to the trouble of capsizing the global order when it can simply take it over?
Dozens of countries that borrowed from private investors have debt payments coming due as their economies have crashed because of the coronavirus.
A long stretch of remote working has led companies to rethink their office space — namely, whether they need as much of it after the pandemic subsides.
As the fallout from COVID-19 continues to grip Africa’s major economies, the tech ventures in those countries need state support.
National legislation that creates clear frameworks and operational support for startups are one of the best ways to help Africa’s digital companies survive and thrive through the coronavirus crisis — and improve their environment over the long term.
Africa has dozens of thriving startup ecosystems that are persevering through this crisis, but now more than ever, they need a boost. The gains made by founders thus far are in danger due to the ongoing economic slowdown. The World Bank estimates that economic growth in sub-Saharan Africa alone will decline from 2.4% last year to -2.1 to -5.1% this year. If correct, the region will experience its first recession in a quarter of a century.
Now is the time for something that was already long-overdue in many African countries: political leaders should support startups through national startup acts.
Last December, Senegal became the second African nation to enact a national Startup Act, following Tunisia’s landmark bill that passed in April 2018. Other countries may follow soon: startup legislation was being discussed in Ghana and Mali before the novel coronavirus monopolized headlines.
The rest of the continent can learn a lot from Tunisia, which passed its Startup Act in 2018 after receiving input from entrepreneurs and economists. In addition to clarifying rules surrounding angel, seed and venture capital funding, the act bestows benefits on companies designated as startups. This includes alleviating their tax and social security contribution burdens, providing access to forex bank accounts and offering subsidized salaries for founders. More than 50 startups have taken advantage of the “startup” label. A number of Tunisian entrepreneurs have told me that thanks to the new legislation, they are able reinvest savings from these incentives back into their businesses.
Experts say that for the first time since 1998, global poverty will increase. At least a half a billion people could slip into destitution by the end of the year.
More suffering is ahead for the developing world.
What happens when the pandemic strikes nations of millions of people that have only a half-dozen ventilators?