Afridigest Week in Review: Calls for justice reach Nigeria's tech ecosystem ⚖️
+Deals +Big Problems, Small Wins +Africa's most popular apps +Platforms & Aggregators +Mobile money in Rwanda +Exit rumors
The Afridigest Week in Review is a must-read weekly business & innovation recap for founders, operators, and investors in African markets, as well as interested observers.
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Week 23 2020
⚖️ Calls for Justice
“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”
— Martin Luther King, Jr.
Last week was largely quiet relative to the Africa-related deals of interest to this newsletter. Elsewhere, however, it was a week pockmarked by pain and calls for justice. Widespread protests gripped the US following the death of George Floyd, and globally, even as far away as Japan, citizens demonstrated in solidarity.
In Africa, similar calls for justice reverberated, but not for racial equality or freedom from police brutality, but rather for gender equality and freedom from sexual violence. In Uganda, The Economist writes, a “new wave of activism is spreading…as young women push back against harassment and unequal treatment.” And in Nigeria, citizens took to the streets and to social media to call for justice in the rape and murder of 22-year-old Vera Uwaila Omozuwa in a Benin City church.
Against this backdrop, an allegation of sexual assault & indecent exposure was made against Kendall Ananyi, co-founder and CEO of Tizeti, the internet service provider backed by 4DX Ventures, Y Combinator, Social Capital, Golden Palm Investments, and others. The allegation may be one of the highest-profile in Nigeria’s modern tech ecosystem, and given the context in which it arrives, the cachet of the organizations involved, and the potential impact not only on the tech sector’s appeal to women, but also on the general perception of the sector as a force for positive change in Africa, many eyes will be watching the process and the outcome here.
For now, Mr. Ananyi seems to have accepted, not without drama, to step down from his role as Tizeti’s chief executive while an independent investigation is carried out; he published a vague denial of the allegations via Twitter before taking his account private at the time of writing.
Jamborow, a blockchain-based B2B credit platform, raised $400,000. Founded in 2018 by Olusegun George, Moses Onitilo, and John Kamara, the company has secured partnerships with lending institutions across East & West Africa and will use the funds to launch its services in Nigeria & other markets.
Sticitt, a South African mobile payments platform, raised ~$180,000 (3M rand) in convertible notes from Crucis VC. The startup was founded in 2018 by Mitch Dart, Theo Kitshoff, and Dennis Wevell, and provides cashless payment solutions via a rechargeable mobile wallet. It has primarily enjoyed traction among educational institutions (e.g., parents using Sticitt to pay school fees) and the funds will be used to further penetrate South Africa’s education sector. With this raise, Crucis becomes Sticitt’s first institutional investor.
Lipa Later, a Kenyan consumer credit platform, raised an undisclosed amount from Platform Capital. Launched in 2016 by Eric Muli and Michael Maina, Lipa Later offers a point-of-sale credit option that allows consumers to purchase electronics, mobile phones, furniture, and other items, and pay in monthly installments. The company has secured partnerships with brands such as Apple, Huawei, Tecno, and more. This deal continues Platform Capital’s penchant for identifying and investing in interesting but under the radar portfolio companies. Other Lipa Later investors including Musha Ventures, Majilis Investment, Lateral Capital, and Mastercard (Start Path). For more on Lipa Later, click here.
Busymed, a South-African platform connecting pharmacies & consumers, raised an undisclosed amount from the LionPride Agility Fund, an investment vehicle managed by Newtown Partners and LionPride. Founded in 2019 by Mphati Jezile, the startup completed a pilot in October 2019 and has signed up over 130 pharmacies across South Africa.
Harambe Entrepreneur Alliance, a network of African entrepreneurs, raised $1M to invest in African startups; it also ‘allocated’ $100,000 to Max.ng and the Releaf Group. The funds are structured as co-investments, meaning investees must attract other investors before the funds are released. This fundraise seems to be the current iteration of its previously announced seed fund.
⚔️ Strategy Read of the Week
Big idea: Grand visions and long-term strategic initiatives should be broken into smaller, more manageable components.
Small wins are compact, tangible, upbeat, and noncontroversial. Moreover, since small wins are dispersed, they are harder to find and attack than is one big win that is noticed by everyone.
“To Solve Big Problems, Look for Small Wins” by Bill Taylor, co-founder of Fast Company
💡 Innovation Read of the Week
Big idea: People systematically underestimate their originality.
“As a manager, make it a point to invite your team members to share their ideas which may otherwise never see the light of day because they assume their ideas are not innovative enough. By acknowledging their creativity, you can reduce their bias, at least to some extent.”
“You May Be More Original Than You Think” by Ella Miron-Spektor, INSEAD Associate Professor of Organisational Behaviour
📚 Author’s recommended Read
Big idea: The most popular apps in a country reveal insights about its consumers.
“Today’s internet user in [sub-Saharan Africa] primarily goes online to communicate with friends and family (likely via Whatsapp or another Facebook product). And while high relative data costs appear to be a key concern, he/she navigates the environment by utilizing apps designed to thrive in such an environment like Xender and Shareit and ‘lite’ or basic versions of common apps (e.g., Opera Mini, Facebook Lite, Youtube Go, TikTok Lite).”
“Africa's most popular apps & the insights they reveal” by Emeka Ajene, your humble author
🎙️ Podcasts of the Week
Invest Like the Best Podcast, episode 176 featuring Ben Thompson: Platforms, Ecosystems, and Aggregators
Ben Thompson is the author & founder of Stratechery, a widely respected blog (estimated to generate $3M in profit this year) on the strategy and business side of technology and media. Here he discussed his aggregation theory and the idea of aggregators vs platforms, the future of media and independent content creators, and more.
Scale Up Africa Podcast, featuring Manji Cheto: Manji Cheto on being mission driven
Manji Cheto is the Vice President of Learner Experience & Growth at uLesson Education, a fast-growing Nigerian education technology platform founded by Sim Shagaya. Here, she discusses uLesson’s business plan and growth, the rewards and challenges of being mission & impact-driven, the wisdom in expanding across countries to hedge macro & regulatory risks, and more.
💼 Job Opportunity of the Week
Endeavor Nigeria, the Nigerian affiliate of the global impact entrepreneurship organization, is hiring a Senior Associate/Manager. If you have formal consulting experience or program management experience with relevant organizations, please reach out to Eloho Gihan-Mbelu.
🖼️ Visual of the Week
In Rwanda, weekly mobile money transfers grew 5x from pre-pandemic figures to 3M, and the value of transfers rose 6x to 40B Rwandan francs ($42M).
“Many of these effects will be temporary…But as the m-Pesa story shows, habits formed during a crisis can sometimes outlast it.” — The Economist, May 28th, 2020 edition, The Covid-19 crisis is boosting mobile money.
For more on the subject, see: When Digital Payment Goes Viral: Lessons from COVID-19’s Impact on Mobile Money in Rwanda
🕵️♀️ In case you missed it
As the world slowly begins to rebound from the pandemic, COVID-related fee waivers for financial transactions are expiring or being phased out. In some countries, like Rwanda, policymakers are going all-in on fee waivers, yet elsewhere, like Ghana and Uganda, charges are being reinstated. It’ll be interesting to watch this play out over the medium and long-term. As the Rwandan example suggests, the elimination of fees can be a key driver of digital payments uptake.
StartupBlink released its 3rd global startup ecosystem report which they bill as “the world’s most comprehensive startup ecosystem ranking.” This year South Africa (#52), Kenya (#62), Rwanda (#65), Nigeria (#68), and Tunisia (#77) lead Africa while Egypt, Morocco, Ghana, Uganda, Cape Verde, and Somalia also make the ranking.
Idinvest Partners, a European private equity firm released its Consumer Startups Map. Some of the firms listed like Luno and Glovo are also enjoying success in Africa, whereas others like Heetch have tried to enter the African market unsuccessfully.
Zipline, the drone delivery unicorn, which started operations in Rwanda and Ghana, launched operations in the US where it will deliver medical supplies & equipment via drone in North Carolina. From Africa to the world. 🙌
Apple Music reduced its prices in Kenya by nearly 50% and increased its free trial period from zero to six months. This recalls Jason Njoku’s 2015 experience building the Nollywood-focused consumer media platform, Iroko (the so-called Netflix of Africa); at the time, he said of the price reduction, “new customers need new prices, so our Africa mobile-only customers will receive one.”
McKinsey, the consulting firm, released its report ‘Safeguarding Africa’s food systems through and beyond the crisis.’ Most of the data points & insights relate to agriculture, but still worth a look for those in other sectors. For example, McKinsey finds that the majority of consumers in Africa are concerned about job security given the impact of COVID-19.
Orange Ventures, the VC arm of the telco Orange, launched a competition for startups in certain parts of Northern and Francophone-Africa, including Cameroon, Côte d'Ivoire, Egypt, Morocco, Senegal and Tunisia. Francophone Africa’s startup ecosystem continues to develop but is often overlooked by institutional investors, so this is a welcome development.
🕵️♂️🐤 In case you missed it - Twitter edition
A high profile exit in African tech coming soon?
In this tweet, Dustyn Winder, co-founder of venture builder, Akili Ventures, shares some recent chatter he’s heard. 🤔
Perhaps the acquisition rumor is linked to PayStack?
In this thread, Toyosi Ajayi, an entrepreneur & independent consultant, shares her experience with Paystack. The differentiated customer experience may help explain why Paystack processes over 50% of online transactions in Nigeria. (See also my article on customer experience in Africa.)
Gro Intelligence founded by Sara Menker, will be a $50B company?
In this thread, Eghosa Omoigui, founder & GP of venture capital firm, EchoVC shares some of his past experiences and investing theses, culminating in a prediction for portfolio company, Gro Intelligence.
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