Afridigest Week in Review: Maximum mobility
+Other deals including debt financing & VC fundraises +North African last-mile delivery +Essays from CEOs of Cellulant, Terragon, & Eversend +Network effects overrated? +Too early for web3 excitement?
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, friends! Hope you had an enjoyable Christmas holiday & thanks for opening this email. The most clicked link from last week was a tie between the piece on playing startup versus building a company and the four quadrants of product-market fit. Hope you end the year on a strong note and have a happy new year. 💪 See you in 2022! ✨
If you’re new, welcome 🙌 — you’ll receive a weekly digest like this one every Monday and, generally (but not always), an original essay/article on Saturdays. For past essays and digests, visit the archive.
Week 51 2021: December 19-25
📰 Deal of the Week
MAX (Metro Africa Xpress), a Nigerian mobility platform focused on ride-hailing, delivery services, and vehicle financing, raised a $31M Series B (debt & equity) co-led by Lightrock and Global Ventures with participation from Novastar Ventures, Yamaha, & other equity investors, and venture debt from Proparco (via Digital Africa Bridge Fund)
💡 Why it’s the deal of the week: MAX has completed over 17 million trips since its 2015 launch and serves over 13,000 drivers. It first announced plans to introduce electric vehicles after its June 2019 Series A and those plans seem to have come to fruition now as the company seems to primarily position itself as Africa’s leading green/energy-efficient/eco-friendly/mobility 2.0/‘low-to-zero’ emission platform.
MAX now offers two-, three-, and four-wheeled electric vehicles via various leasing and financing options; it also recently partnered with global ride-hailing platform Bolt to enable 10,000 Bolt drivers in Nigeria to lease-to-own energy-efficient vehicles.
⛏️ Go deeper:
A Pan-African EV/Mobility platform? According to Techcrunch, “MAX currently designs and assembles its own line of electric motorcycles” and “work[s] with partners across the ecosystem…to deliver their EVs.” Coupled with the partnership with Bolt described above, and MAX’s ties to Yamaha, it looks like MAX is increasingly targeting becoming a platform, not just for MAX drivers, but for various mobility players across the continent.
Use of funds:
Regional Expansion: The proceeds “will be used to drive international expansion into Egypt and Ghana during the first quarter of 2022, followed by Francophone, East, and Southern Africa.
Verticals & Business Lines: The capital will enable “deployment of electric vehicles and charging infrastructure, and the provision of credit and financial products to over 100,000 drivers.”
Resilience: While COVID-19 and associated curfews & lockdowns dealt a blow to mobility companies across the globe in 2020, MAX also had to deal with a ban on passenger motorcycle-taxis in Lagos — its largest market at the time. The company navigated this rough patch by focusing on delivery/logistics services (in Lagos and elsewhere), by accelerating its operations & expansion outside of Lagos, and by growing its EV financing initiatives. Read MAX’s retrospective February 2021 press release here and watch the BusinessDay ‘Scaling through Crisis’ interview with MAX Co-Founder & CEO Adetayo Bamiduro below:
🔦 Other deals
SOUTH AFRICA, KENYA, NIGERIA, MOROCCO, EGYPT
Planet42, a South African/Estonian rent-to-buy car subscription service, raised a $30M bridge round ($6M equity, $25M debt) with Naspers Foundry leading the equity portion and participation from existing investors Change Ventures, Startup Wise Guys, Bolt Co-founders Martin & Markus Villig, and Pipedrive’s Co-founder & CEO Ragnar Sass — Founded in 2017, Planet42 works with over 700 dealerships from which it has bought over 7,000 cars for rental to customers
IMFact, a Kenyan ‘pooled receivables’ supply chain financing platform, raised ~4M from FSD Africa Investments (FSDAi), the investing arm of FSD Africa — This is the first external equity investment in IMFact; it previously received financing from Germany’s KfW and grant funding from The Rockefeller Foundation and Convergence
Paylend, a Kenyan B2B-focused digital bookkeeping & credit access platform, raised a $2M million seed round from Next Chymia Consulting HK Limited — Founded in September 2019, Paylend is an Adanian Labs venture studio startup and has worked with over 10,000 MSMEs
Teesas, a Nigerian subscription-based platform that connects tutors and students, raised a $1.6M pre-seed led by Tolaram Group’s Africa MD Haresh Aswani, with the participation of Olivegreen Advisory Partners, and others — Teesas focused on students younger than 12 and has over 150,000 Google Play Store downloads since it began beta testing in August
Agenz, a Moroccan property valuation platform, raised a ~$540K seed round from Azur Innovation Partners — The round is one of Morocco’s largest at the seed stage seed funding round and will enable Agenz’s cross-country expansion; since it’s launch less than a year ago, Agenz has processed over 20,000 estimates in Casablanca
AIM Technologies, an Egyptian AI-enabled customer experience platform, raised an undisclosed seed round led by Sequence Ventures — In the last two years, AIM has captured the voice of 300,000 research customers across the MENA region; it’s the first investment for Sequence Ventures, a newly announced Egyptian VC firm targeting a ~$32M fund size
TapTap Send, an NYC-based fintech startup focused on remittances to Africa and Asia, raised a $65M Series B led by Spark Capital with participation from previous Series A co-leads Reid Hoffman and Canaan Partners, along with Unbound, Slow Ventures, Breyer Capital, Wamda Capital, Flourish Ventures, and others — This comes after the startup’s $13.4M Series A in Week 26; Since the Series A, TapTap Send has expanded to serve an additional 13 ‘receive’ markets including Bangladesh, Cameroon, DRC, Ethiopia, Kenya, Madagascar, Morocco, Nepal, Nigeria, Pakistan, Republic of the Congo, Sri Lanka, and Vietnam beyond those previously offered: Côte d'Ivoire, Ghana, Guinea, Mali, Senegal, and Zambia
LAFAAAC (The Franco-Anglophone Academy of Arts and Culture), a French digital learning platform targeting professionals in film, fashion, music, publishing, and other creative/cultural industries, raised an undisclosed amount from Greentec and INCO Ventures (via Abeille Impact Investing France) — LAFAAAC offers more than 100 training courses and works with over 20 operational partners and schools in Europe and Africa. The platform actively targets users in France, Benin, Cote d’Ivoire, Ghana, Nigeria, and Senegal and plans to expand to other Anglophone markets beyond Nigeria in February 2022
Tugende, a Ugandan asset finance lender that primarily provides lease-to-own motorcycle packages for informal drivers, raised $17M in debt capital including a $5M facility from Nordic Microfinance Initiative, $5M from Goldfinch, $6M from Symbiotics, and $1M from crowdfunding platform Lendahand — Tugende has over 800 employees across 23 branches in Uganda and 5 branches in Kenya, and has served over 54,000 customers with financing packages
Janngo Capital, a woman-led VC firm focused primarily on West Africa, announced that the African Development Bank Group approved ~$12M toward the first close of the Janngo Start-Up Fund — Janngo previously announced a ~$68M (€60M) target for the fund; the Janngo portfolio includes Senegalese/French fleet management platform Fleeti and Nigerian informal sector B2B platform Sabi
Disruptech Fund, an Egyptian fintech-focused VC firm, is under IFC consideration to receive a $5M investment towards its $25M target — The Disruptech portfolio includes fintech-focused Egyptian super app MNT-Halan, Egyptian social-commerce & agent distribution platform Brimore, Egyptian mobile banking platform Khazna, and Egyptian financial identity & credit scoring platform Cassbana
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📚 Quick Hits
FOR YOUR READING PLEASURE
The power of defaults: are network effects overrated? — On network effects, stacks, base layers, and default states. “If you want to understand the power dynamics between different platforms, aggregators and other players in a tech ecosystem, it’s better to look at them as a vertical stack with different layers”
When and how to take big swings — A framework on how growth teams should navigate between optimization and big bets. “Both big swings and optimizations can be viable methods to achieving growth goals. The key is to find which offers outsized leverage”
Indispensable growth frameworks from Facebook, Twitter, and Wealthfront — A quick look at company growth and building effective growth teams. “Three key abilities for growth teams are building growth models, developing experimentation models, and building customer acquisition channels”
The big ideas that fintech will tackle in 2022 — Some Andreessen Horowitz partners share predictions on the future of fintech,w with opportunities living at the intersection of fintech and crypto/social/healthcare/emerging markets/sustainability
A former LP’s advice for emerging managers preparing to raise VC funds (PDF) — “Thinking carefully about the whole picture, with the help of the six Ps [People, Philosophy, Process, Portfolio Construction, Performance, Pricing] can
ensure that a GP is prepared to enter into discussions with investors and is less
likely to provide reasons for a prospective LP to say no”
Why it’s too early to get excited about web3 — A measured critique of the current web3 hype from the person who defined web2: “Cryptocurrencies may well be the future of finance, but at the moment it’s hard to see what’s really working... [and] the failure to think through and build interfaces to existing legal and commercial mechanisms is in stark contrast to previous generations of the web”
🙈 Visual of the week
A LOOK AT LAST-MILE DELIVERY IN NORTH AFRICA
“The majority of last-mile delivery startups in North Africa (and the Levant) operate as couriers. The rest include fulfillment and delivery startups, on-demand delivery, fleet and delivery management software, and delivery service aggregators.”
🕵️♀️ In case you missed it
Cellulant Group CEO Akshay Grover writes ‘Elevating digital payments for a cashless future in Africa’
Terragon Founder & CEO Elo Umeh writes in HBR that ‘Digital transformation in Africa requires homegrown solutions’
Eversend Founder & CEO Stone Atwine writes ‘Why stablecoins are the future of business payments’
Researcher Peter Kisadha and the Future Africa team write ‘The bull and bear case for Web3 in Africa’
The Wimbart team writes ‘How Africa’s tech innovators are attracting Chinese investment on their own terms’
African start-ups offer new lease of life for home and car ownership (Financial Times $)
How a Lagos bike-hailing ban boosted food delivery apps (Rest of World)
2021 was the year African startups normalized raising $100 million (Quartz Africa)
Ghana’s answer to Silicon Valley is inside refurbished government buildings (Techcabal)
Nigerian Startup Bill to unlock tech sector potential (African Business)
🗣️ Community Corner
I see you, friends!
Not much this week, so here’s a plug: if you’re on Twitter, join us in playing with Twitter’s new community feature here — Tech & startups - Africa 🗣
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