Afridigest Week in Review: BNPL's beachhead

+Digitizing informal retail +Copying and pasting without context +Startup of the week +Thinking exponentially +Disposable income +Fintech is not enough +Podcasts (54gene, Amitruck, Medsaf) +more

The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers.

Welcome back! I didn’t publish an essay on Saturday unfortunately—blame it on the first dose of the Moderna vaccine
💉—and I may be traveling this upcoming weekend so heads up: there’s only a 50/50 chance of a new essay this upcoming weekend.
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Week 35 2021

📰 Deal of the week

Payflex, a South African buy-now-pay-later (BNPL) provider, was acquired by Australia’s Zip for an undisclosed amount.

The first and largest BNPL player in South Africa (according to the company), Payflex has grown from a base of 70 merchants in 2019 to over 1K active merchants today; it’s served over 135K customers to date, up from a customer base of 25K just a year ago.

💡 Why it’s the deal of the week: While Klarna and other major global BNPL providers expand their presence in the West, Zip is taking advantage of their limited presence in African markets.

BNPL solutions have been gaining momentum globally for a while now, accentuated by Square’s $29B purchase of Afterpay one month ago. And as BNPL and alternative credit options continue to become widespread, major global players have two main avenues for growth: expansion into other sectors beyond traditional retail and expansion into untapped global markets with large appetites for credit.

⛏️ Go deeper:

  • The Zip playbook: This acquisition reflects Zip’s traditional modus operandi — expansion to new markets via acquisitions rather than directly. In May, for example, Zip acquired UAE’s Spotii and the Czech Republic’s Twisto.

  • Harbinger of what’s to come: Payflex/Zip South Africa could be the beachhead for pan-African expansion to markets like Nigeria and/or Egypt.

  • Other players in Africa’s BNPL space: Carbon, Shahry, M-Kopa, CredPal, CDCare, Pavelon

🔦 Other deals
  • Agricorp, a Nigerian tech-enabled spices exporter raised a $17.5M Series A comprised of $11.5M in equity from Vami Nigeria, and $6M in working capital financing from One Capital LLC and AFEX — While Agricorp’s aims to be the largest player in Africa’s traditional spices export market, the company has also developed proprietary technology that includes Farmbase, a platform that collates hard-to-obtain agtech data by registering and paying farmers for produce sold

  • Sabi, a Nigerian B2B platform targeting Africa’s informal retail sector, raised an undisclosed seed round from CRE Ventures, Janngo Capital, Atlantica Ventures, Waarde Capital, and others — Sabi disclosed that it has 10,000+ agents and 150,000+ SMEs who have recorded over US$1.2B worth of sales via Sabi’s MyShop platform since mid-2020

  • Bumpa, a Nigerian provider of mobile-first tools for SMEs & the informal retail sector, raised a $200k pre-seed from Greencap Equity, HoaQ Club, Whogohost Venture Arm, Rizq Investment Group, Microtraction, DFS Labs, Aidi Ventures, and others — Launched in February 2021, Bumpa disclosed that it has onboarded over 7,000 merchants who have recorded over $500,000 worth of transactions

  • Ridelink, an Ugandan e-logistics platform that makes use of trucks, tuk-tuks, and boda-bodas (motorcycles), raised a $150k pre-seed from Ortus Africa Capital, Omidyar Network, and African Leadership Academy’s Young Entrepreneurs Fund (Anzisha) — Founded in 2017, Ridelink connects SMEs to transport operators and disclosed that it has over 2000 drivers across East Africa

  •, a Moroccan provider of POS & digital payment solutions for informal retailers, raised an undisclosed amount from WitaMax — Lacaisse also operates, a Moroccan food delivery platform


📚 Read of the Week

Rest of World’s Alizeh Kohari pens a perceptive piece on factors that inhibit digital payments in Mexico, and why copying & pasting, even from one emerging market to another, has its limitations.

“Gupta … is trying to replicate [Paytm]’s successes and build a mobile payments company in a country that’s still stoically clinging onto cash.… They aren’t looking to cater to the vast number of Mexicans who remain unbanked. Rather than targeting ‘the next billion users,’ they want to reach middle-class Mexicans who already have bank accounts and use the internet for communication and entertainment.”

🥇 “Why payment apps that thrive in India struggle to succeed in Mexico” by Alizeh Kohari

🚀 Startup of the Week

The pitch:

What problem does this solve?

  • Cryptocurrency curiosity & adoption is growing rapidly, particularly in emerging and developing markets, but many users are put off by the price volatility and the complexity of existing exchanges.

  • Accrue simplifies crypto & stock investing for the masses by helping users invest fixed amounts into targeted assets at pre-defined intervals; it helps users gain exposure to volatile assets while managing risk.

  • Accrue’s dollar-cost averaging approach takes the emotion out of investing, reduces the emotional toll of price volatility, and helps users build wealth over the long haul.

  • With a product pipeline that includes allowing users to fund Accrue with stablecoins, users anywhere across Africa and the world will soon be able to use Accrue.

Similar to:

  • Uphold — the global “multi-asset digital money platform” whose mission is “to make it easy and frictionless for anyone, anywhere to move, convert, hold and transact in any form of money.”

The team:

📢 Afridigest is the industry newsletter for Africa’s startup ecosystem.

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📚 Quick Hits

🙈 Visual of the week

Disposable income levels across African markets (excluding S. Africa) are generally 15%-30% of the world average, according to Euromonitor. Source: Global Consumer Trends in Sub-Saharan Africa

“All this necessitates consumers to further stretch already lean financial resources, making value-for-money offerings the most attractive….The search for value plays out in different ways…. In South Africa, where consumers tend to have higher disposable incomes and stronger spending power, bulk offers and private label commodities have gained prominence… In Nigeria where traditional and informal retail channels dominate, consumers have leveraged credit sales by their neighborhood grocery retailers. In Kenya, value-offerings entailed process improvements other than price cuts and product discounts.” — Euromonitor International

🕵️‍♀️ In case you missed it
  • Dr. Abasi Ene-Obong, Founder & CEO of 54gene discussed human genomics infrastructure in Africa on the Meb Faber Show

  • Mark Mwangi, Founder & CEO of Amitruck discussed his entrepreneurial journey on the Fiftyfaces Focus podcast

  • Vivian Nwakah, Co-Founder & CEO of Medsaf, discussed whether technology disrupt Nigeria's open drug markets on the African Tech Roundup podcast

  • The link between open banking and financial inclusion (TechCabal)

  • Chinese investors are again pouring millions into Africa’s fintech start-ups (South China Morning Post)

  • Experts explain how founders can strategically avoid the pitfalls of business partnerships (Techpoint)

  • Meet the 12 former Careem, Uber employees who run successful MENA startups (Forbes Middle East)

  • Gossy Ukanwoke: Bringing innovation to BetKing (The Guardian)

  • “Angel investing is more than just writing a cheque” — Biola Alabi, Nollywood producer and tech investor (Techpoint)

  • Tech in Africa is taking off (OZY)

🗣️ A final word

There is nothing in a caterpillar that tells you it's going to be a butterfly.” — R. Buckminster Fuller


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