Afridigest Week in Review: Dollars for data
+Startup ideation +Reflections on a decade in VC +Spotlight on Showlove +Edtech in Africa +M-Pesa's evolution +Digitizing Africa’s SMEs +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! And thanks to Sam, Jess, Daniel, Moulaye, Jim, Abas, and others for great conversations over the last week. No essay was published this past Saturday, but I expect to publish one this upcoming Saturday, barring any unforeseen events.
If you’re new, welcome 🙌 — you’ll (generally) receive 2 weekly Afridigest emails: the weekly digest (every Monday) and an original essay/article (generally on Saturdays). For past essays and digests, visit the archive.
Week 33 2021
📰 Deal of the week
BUILDING THE INFRASTRUCTURE LAYER
Pngme, a financial data platform, raised a $15M Series A — London-based Octopus Ventures led the round, with participation from Raptor Group, Lateral Capital, EchoVC, Two Small Fish Ventures, Unshackled Ventures, Future Africa, Aruwa Capital, The51, and others.
Started in 2018 as a lending platform, Pngme today offers developers, fintechs, banks, and credit bureaus across the continent an open data platform delivered through a unified API, a mobile SDK, and a customer management platform. The startup aggregates various financial data to create a holistic picture of an individual's financial behavior, and Pngme’s clients use this data to power real-time credit and other financial products.
💡 Why it’s the deal of the week: The Series A round comes less than a year after Pngme’s Q3 2020 $3M seed round and sees the company describe itself as not just a financial data infrastructure platform, but also a machine learning-as-a-service platform. According to its co-founders, Pngme has processed billions of data points from hundreds of financial institutions across sub-Saharan Africa and is increasingly positioned as data processing and machine learning infrastructure for its clients.
⛏️ Go deeper:
Differentiation: Other players across Africa’s budding API financial infrastructure space include Okra, Stitch, Mono, and OnePipe. But according to Pngme’s CEO, “what [Pngme does] is that we’ve kind of really differentiated ourselves to be not just collecting the data that we can see but [also connect to players like Mono, Okra, etc. and] essentially merge all that data and then put machine learning models on top for the clients. That can be predictive credit models, segmentation models, [and so on.]”
Use of funds: Pngme is focused on customer acquisition and the expansion of its data science, engineering, product, and sales teams globally. The startup also announced additions to its executive team: Lorraine Kageni Maina as its new Chief Strategy Officer and Nick Masson as its new Chief Technology Officer.
Hear how Pngme describes itself:
🔦 Other deals
Alerzo, a Nigerian B2B e-commerce platform focused on informal retail, raised a $10.5M Series A — London-based Nosara Capital led the round, with FJ Labs, Galaxy Digital, the family office of Michael Novogratz, and several others from the US, Europe, and Asia participating.
To date, Alerzo has taken a differentiated approach from others broadly in the space in Nigeria (e.g, TradeDepot, Suplias, Omnibiz) by exclusively serving tier-2 to tier-4 cities in the country’s Southwest; the funding will be used to expand to the country’s North.
The startup also has an office in Singapore in order to “identify best practices among similar high-growth businesses operating across Southeast Asia and India and adapt them to the Nigerian market.”
VitruvianMD, a South African startup leveraging AI for medical diagnostics, raised a +$659K venture round
CashBackApp, a Kenyan customer loyalty platform, raised a $475k pre-seed round — Lofty Inc Capital, Sherpa Ventures, Loyal VC, and others participated
Showlove, a Nigerian social platform for gifting, raised a $300K pre-seed round from Fedha Capital and other angel investors — don’t miss the spotlight on Showlove later in this digest
Schoolz, an Egyptian student transportation platform, raised a ‘six-figure’ pre-seed round — according to the co-founders Cairo and Giza alone have 2M students in private and international schools who collectively spend over EGP 16B (~$1B) annually on transportation
Gamr, a Nigerian e-sports startup, raised an undisclosed seed round — empawa Africa (a vehicle of Nigerian singer, songwriter, and entrepreneur Mr. Eazi), Adrenaline Gaming, and others participated
AiCare Group, a Kenyan Saas insurtech provider that offers telematics insurance systems to insurers, raised a venture round from the Nairobi Business Angels Network (NaiBAN) — this comes after the startup’s May 2021 investment from Toyota Tsusho’s corporate VC arm, Mobility 54
myFanPark, a South African celebrity engagement platform, raised an undisclosed seed round from South Africa’s Seed South Capital — this comes after mFP’s merger with Silicon Valley’s Starsona last year; the company is also still raising what it calls a ‘seed+’ round.
Okhtein, an Egyptian fashion startup, sold a stake to Bidayat, the investment vehicle of Switzerland’s Alsara Investment Group — Alsara is led by Rachid Mohamed Rachid, Chairman of the Board of Italian luxury fashion company Valentino.
Rooomxix, a Nigerian streetwear brand, raised a $1.5M round from bitcoin trading company Patricia.
📚 Reads of the Week
ADVICE FOR FUTURE FOUNDERS
The First Round Capital team surfaced the best advice on ideation and problem selection from a variety of entrepreneurs, operators, and investors.
“Starting a company is like climbing a steep mountain — you need to take the time to prepare your pack. Part of the preparation includes keeping your mindset in check before you even set off. You have to put a lot of intellectual vigor into figuring out exactly what you want to do. You need to carve out time specifically for that task by reading up, doing diligence, exploring different spaces…If you want the chance to start your own company, work for it.”
🥇 “12 Frameworks for Finding Startup Ideas” by First Round Review
TRACTION CREATES OPPORTUNITY
Co-Founder & Partner Rob Go shares ten reflections from NextView Ventures’ first decade as a firm.
“I think the biggest miss for most VC’s occur when they pass on an exceptional team and opportunity because they underestimate the potential of a company’s market. In some cases, great companies massively expand the definition or potential of the market with innovative products, technology leverage, and great execution. This obviously doesn’t happen all the time, but it does happen sometimes, and when it does, it often yields the biggest companies on the planet.”
“10 Reflections After 10 Years of NextView” by Rob Go
📢 Afridigest is the industry newsletter for Africa’s startup ecosystem.
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📚 Quick Hits
FOR YOUR READING PLEASURE
Spotlight on a Nigerian pre-seed startup
Showlove, a Nigerian peer-to-peer social gifting platform, raised a $300K pre-seed round, and Co-Founder Chikodi Ukaiwe was generous enough to answer a few questions for Afridigest:
1) What is Showlove?
Showlove is a social networking platform, making it fun and simple for anybody to gift anybody, anything; be it cash, food, airtime, spa sessions, or gift vouchers to their favorite African or international business. We’re creating a fun global community, starting with Africa, where new and existing relationships are strengthened through gift exchange, irrespective of distance or currency.
2) Why did you start it? What problem is it solving? And for whom?
Showlove was born during lockdown 2020, people couldn’t connect as they normally would, couldn’t attend weddings, birthdays, and other expressions of celebration of one another... We wanted to create a platform where people could still gift and celebrate one another online, while also helping African businesses promote their services during a difficult time for the entire world.
So in order to solve the difficulties accompanying gifting (like knowing exactly what gift a recipient wants, keeping up with birth dates, anniversaries, and other important occasions, etc.), we’re building a fun community for people to share their wants, either with a closed circle or the general public, making it easy for them to request, and making it even easier for you, the gifter, to give your friends and loved ones things they actually value.
3) How do you plan to use the proceeds of this funding round? What milestones are you targeting?
Our focus is on strengthening our local team, particularly our product and engineering functions, and breathing the desired life into our corporate culture by creating an enabling environment for our people to learn, grow and be ambitious.
We’re currently developing our mobile app to launch before the end of the year, and we’re currently on a #RoadTo1M user acquisition drive, within the shortest possible time.
4) The social gifting/giveaway space seems to be enjoying a bit of attention these days, led, arguably, by Nigeria’s Abeg app. How is Showlove differentiated and how do you think about the competitive space?
Abeg — it’s a pretty exciting brand, they provide something different, I’m sure their target audience is thrilled, definitely looking forward to seeing how they scale.
Showlove is creating a platform that simplifies and makes gifting fun — for receivers as well as gifters. I like the youthfulness of Abeg, I think the ecosystem is maturing to accommodate various types of P2P exchange. We have a different proposition and are quite focused on our journey toward fostering relationships and connections through gifting.
Thanks again, Chikodi — we’ll be cheering you & the team on. 🙏
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Nigeria’s Central Bank freezes bank accounts of fintech platforms Risevest, Bamboo, Trove and Chaka — this follows the Lagos motorbike taxi ban in early 2020 that affected ride-hailing startups, a ban on transacting in cryptos through banks in March 2021, and a ban on Twitter in the country in June 2021
Olumide Oyo who stepped down from the CEO role at Nigeria’s Printivo in recent weeks is now working on borderless asset management platform, Cova
Sitoyo Lopokoiyit, M-PESA Africa CEO, discusses the future of M-PESA and signals its shift beyond the provision of basic CICO/payments mobile money services to more sophisticated offerings in ‘Why fintech is critical to driving Africa’s recovery’
“The next challenge for businesses is growth. Our focus is shifting to help businesses achieve that – through M-PESA, we’re starting to provide money management education and business training, for example. For every dollar our business customers collect as payments on M-PESA we want to provide them with solutions to generate an extra five.”
Omoniyi Kolade, Founder/CEO of Nigerian payment gateway SeerBit, pens a HBR piece on the need for and opportunity in driving digital solutions for Africa’s offline markets in ‘Digitizing Africa’s Small and Midsize Businesses’
“[N]on-digital, micro, small and medium enterprises (MSMEs) make up 90% of businesses on the continent. And they’re serving non-digital customers: Currently, less than half of the population in Africa uses the internet and only 24% shops online. In Africa, our biggest competitor is cash. Around 95% of all transactions in Africa are in cash.”
Hafiz Juma, Founder/CEO of Tanzanian e-commerce startup Inalipa, responds to the fact that venture capital targeting Africa is concentrated in a select few markets in ‘Spontaneous catharsis of a Tanzanian Entrepreneur’
“[Here’s] my listicle on why Tanzania is one of the most exciting growth markets despite politics and policy and due to what I see as inevitable growth indicators.”
Explosion in electronic payments powers start-up boom in Nigeria (Financial Times - $)
A conversation with GTBank CEO Segun Agbaje (African Business)
In conversation with Alison Collier, managing director at Endeavor South Africa (BusinessTech South Africa)
A conversation with Amadou Daffe, CEO/Cofounder of Gebeya (BusinessDay Nigeria)
Digital wallets give rise to African ‘super apps’ (ITWeb South Africa)
What a $25,000 first check does for Africa’s female founders (Quartz Africa)
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