Afridigest Week in Review: As Robinhood preps its IPO, the 'Robinhoods for Africa' press on
+Driving Wealth +An Egyptian exit +Big money is coming to town +Sweet super apps +The new trend: Uber for salaries +Growth markets not emerging +Shara is hiring +Much more
The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers.
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Week 29 2021
📰 Deal of the week
LOCAL ACCESS TO GLOBAL MARKETS
Chaka, a Nigerian trading and investment platform, raised a $1.5M pre-seed round. Breyer Capital led the round, with 4DX Ventures, Golden Palm Investments, Future Africa, Seedstars, and Musha Ventures participating.
Launched in 2019 by Founder & CEO Tosin Osibodu, Chaka offers Nigerians the opportunity to invest & trade in US & local stock markets via local currency accounts.
💡 Why it’s the deal of the week: When Flutterwave’s CEO was asked in March about the next frontier for fintech on the continent, he spoke about the companies “becoming the Robinhood of Africa.”
Africa’s fintech sector is white-hot overall, with payments and lending leading the way as they do in other markets; but this deal, coupled with Cowrywise’s January pre-Series A & others, is further evidence that digital wealth management is increasingly a focal point for fintech activity on the continent.
Chaka, EasyEquities, Thndr, Bamboo, and Trove are among those running a similar ‘Robinhood for Africa’' model while Risevest, Piggyvest, Cowrywise & others play in other corners of the space.
⛏️ Go deeper:
What’s driving the sector: Certain regions have been hit hard by inflation and individuals & businesses increasingly demand stable, foreign currency-denominated instruments to hedge against currency depreciation. The Nigerian naira, for example, has fallen ~28% since Chaka’s launch, going from ₦360/$1 in 2019 to ₦500/$1 today.
Behind the curtain: DriveWealth is becoming an increasingly significant worldwide player in providing API-driven access to the US stock market. Not only do they power Europe’s Revolut, but also various players across the continent including Chaka, EasyEquities, & more. The New Jersey-based company is rumored to be currently raising ~$400 million from SoftBank & others.
Chaka is the first Nigerian startup to be licensed by the Securities & Exchange Commission of Nigeria; it also offers a white-label version of its platform that will enable it to power other platforms and act, not only as Robinhood, but also DriveWealth for Nigeria.
A harbinger of what’s to come: Silicon Valley’s Breyer Capital leading the round is also noteworthy. More and more international investors are eager to participate in the ecosystem’s growth story and they’re increasingly taking active leadership roles. It’s yet another sign of the ecosystem’s global attractiveness, continued development, and future growth potential.
🔦 Other deals
RxAll, a U.S. and Nigerian-based AI-enabled anti-drug counterfeiting platform, raised $3.15M—“a cumulation of a recently closed $2.25 million seed round and a $900k pre-seed.” SOSV’s hard tech arm, HAX, led the round with participation from Launch Africa and Japanese pro football player Keisuke Honda’s KSK fund.
Damanesign, a Moroccan e-signature platform raised $450K from MITC Capital’s Maroc Numeric Fund I.
Feelgood Health, a South African health & wellness e-commerce platform, raised ~$270k from Enygma Ventures.
KOSA.ai, a Nairobi-founded B2B artificial intelligence platform, raised an undisclosed pre-seed funding round. EchoVC led the round with APX, Fineday Ventures, The Continent Venture Partners, Arch Capital & others participating. Read more about the investment from EchoVC here.
Kandua, a South African services home services marketplace, raised an undisclosed pre-Series A round, co-led by Knife Capital and Allan Gray E-Squared Ventures.
OTHER FUNDRAISES — AFRICA ADJACENT
Novastar Ventures, a Nairobi- & Lagos-based VC firm led a $4.2M round for Ignitia, a Swedish private weather forecaster that operates in West Africa. IKEA Social Entrepreneurship, Future Foodways, Mercy Corps, Norrsken, and Finca International also participated.
SmartHotel, a Polish hospitality software provider operating in Nigeria, Kenya, South Africa, and Tanzania, raised a $1 million pre-series A round. Smok Ventures led the round, with LT Capital Ventures and Next Road Ventures participating.
Connect Ads, an Egyptian advertising platform sold an 86% stake to Aleph Holding, a Miami-based digital media company that’s one of the largest global partners of Facebook, TikTok, Snapchat, Linkedin, Twitter, and others. The exit returns the entire fund for Egyptian VC firm A15 🙃
THE MORE THE MERRIER
Last week, international VC firm Index Ventures announced that it raised $3 billion in new capital. Guess which region was explicitly mentioned…🌍
See also, this May tweet from Index Ventures Principal, Kyle Harrison:
Rex Woodbury @rex_woodburyThe map we see vs. the true size of countries • Canada & Russia look to take up 25% of Earth's surface, but it's more like 5% • Greenland looks the same size as Africa but is 7% as big The Mercator map we're taught takes a spherical object & makes it 2D, which distorts sizes. https://t.co/KMEZcMNN04
🌏 Asia Read of the Week
ON EXITS IN GROWING ECOSYSTEMS
A somewhat interesting take on what the Zomato IPO (and exits in general) means for India’s startup ecosystem. (For more on exits in emerging markets see: ‘The Chicken or the Exit.’)
“Indian VC firms have scaled their fund sizes and firms from all over the globe have set up shop (some left and some stayed). However, the ecosystem is missing a key component — exits. The few major exit events we have seen have largely been M&As by American (Walmart's acquisition of Flipkart) or Indian (Tata's acquisition of BigBasket) companies. But why does India need exits?”
💡 “Exits are coming” by Anmol Maini and Vedica Kant
📚 Read of the Week
THE SUPER APP SAGA CONTINUES
Super apps are trending worldwide. Here’s a primer on the emerging super app landscape across Africa, including key players & market drivers. (It’s finally complete.)
“Unlike in other more developed parts of the world, African markets offer companies a unique opportunity to influence and shape the emerging internet consumer. And since, for many across the continent, the internet is mobile-only, the market effectively pushes firms to experiment and seek to establish dominant positions via innovative mobile-first models; super apps are a prime candidate.”
🥇 “How Africa's super app landscape is evolving” by Emeka Ajene 👋
Pair this with: Can a motorcycle-hailing company create an African super app?
🔮 Trend Watching
UBER FOR SALARIES
One of the more interesting, under-the-radar trends in the global fintech space recently is the rise of ‘pay on demand,’ ‘pay advance,’ ‘real-time pay,’ ‘instant pay,’ or ‘earned wage access’ (EWA) startups. As the various names (try to) indicate, these platforms allow workers to withdraw earned but unpaid salary on demand instead of waiting until payday — they’re effectively solving liquidity gaps employees have between paychecks.
Across emerging/growth markets, in June alone, India’s Refyne raised a $16M Series A round, Indonesia’s Wagely raised a $5.6M seed round, and Pakistan’s Abhi raised a $2M seed round. And this doesn’t include what happened earlier in the year like the $14M Series A fundraise in March by Mexico’s Minu. (Note that earned wage access platforms are also finding traction in developed markets — see, for example, DailyPay reaching unicorn status in the US after its $500M Series D in May.)
In theory, at least, these platforms should be particularly well-suited to multiple African markets as the problem they tackle is a real and acute one; salaries are generally paid only once per month and this is a universal pain point for employees across the continent.
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📚 Quick Hits
FOR YOUR READING PLEASURE
Job Opportunities of the Week
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Visual of the week
THERE ARE TWO TYPES OF COUNTRIES IN THE WORLD: THOSE WITH & THOSE WITHOUT MOBILE MONEY
Number of mobile money services per country, 2020 via GSMA - State of the Mobile Money Industry 2021 (PDF)
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Journalist Oliver Nieburg writes about alternative credit scoring on the continent in ‘Will AI risk analysis really expand access to credit in Africa?’ (The Africa Report)
Editor Yinka Adegoke explores a particular issue around startup funding in East Africa in ‘Kenya hasn’t figured out how to put its local founders first’ (Rest of World)
🗣️ A final word
WHAT I’M THINKING ABOUT
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