Afridigest Week in Review: Real cash for artificial intelligence

+SME lending in Nigeria +Utility of digital money in Africa today +Tanzania joins the fundraising party +B2B marketplaces to financial operation systems +Founders becoming funders +More

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

Welcome back, friends & happy Chinese new year! The most clicked link from last week was this Bloomberg article on Vishal and Raj’s foray into the world of SPACs. Also, if you’re interested in additional content like this, follow Afridigest on Linkedin. And if you missed it, yesterday I published the five African startup ecosystem predictions/themes I’ll be watching for in 2022. But let’s get into what happened in Week 4.

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 4 2022: January 23-29

Credit: Serhii Revva

📰 Deal of the Week

TREASURE IN TUNISIA

InstaDeep, a Tunisian enterprise AI startup now headquartered in London, raised a $100M Series B led by Alpha Intelligence Capital and CDIB, with participation from Google, BioNTech (the company behind Pfizer’s COVID-19 vaccine), Chimera Abu Dhabi, Deutsche Bahn’s DB Digital Ventures, G42, Synergie, and others.

Founded in Tunis in 2014, InstaDeep uses GPU-accelerated computing, machine learning, and reinforcement learning to build decision-making AI systems that help companies solve logistics, energy, biology, and electronic design problems.

💡 Why it’s the deal of the week: InstaDeep is among the few well-established AI startups on the continent and, alongside its teams in the UK, France and the UAE, it prides itself on having engineers and researchers in South Africa, Nigeria, and Tunisia — half of the InstaDeep team is based in its African offices. This is also the continent’s first $100M+ mega-round of 2022. (See the list of Africa’s 2021 mega-rounds here.)

⛏️ Go deeper:

• Use of funds: InstaDeep will now 1) accelerate the launch of new AI products across the biotech, logistics, transportation, and electronics manufacturing sectors, 2) improve its technical infrastructure, 3) expand into the US, and 4) hire additional talent

• History: InstaDeep previously raised a $7M Series A from AfricInvest and Endeavor Catalyst; the company was founded in 2014 by Karim Beguir and Zohra Slim in Tunis, with little more than two laptops and $2,000.

• A deeper look: Watch InstaDeep Co-Founder & CEO Karim Beguir’s hour-long 2020 discussion with Aniedi Udo-Obong on building an AI startup in Africa:

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🔦 Other deals

TANZANIA JOINS THE PARTY

• NALA, a Tanzanian international money transfer platform, raised a $10M seed round led by Amplo with participation from Accel, Bessemer Partners, DFS Lab, and others — NALA aspires to be a Revolut-style financial super app and currently operates in Tanzania, Kenya, Uganda, Rwanda, Ghana, and South Africa

• FloatPays, a South African earned wage access/on-demand pay platform, raised a $4M seed round from Global Founders Capital, Base Capital, Finca Ventures, Raba, 4DX Ventures, and others — FloatPays participated in Y Combinator’s S21 batch

• TallOrder, a South African provider of cloud-based POS solutions for SMES raised a ~$3M Series A from Investec Private Capital, a consortium led by Nurture Investment Management, and others — TallOrder offers integrations with popular payment platforms in South Africa including SnapScan, Zapper, MasterPass, Yoco, ThumbzUp, MTN MoMo, Innervation, African Resonance, NetCash, DPO and PayFast,

• Ozé, a Ghanaian digital bookkeeping & lending platform targeting SMEs, raised a $3M pre-Series A led by Speedinvest, with participation from Cathay AfricInvest Innovation Fund, Savannah Capital, and others — OZÉ has over 125K business owners on its platform across Ghana and Nigeria and offers an average loan of $5,000 at an up to to 36% APR

• CompariSure, a South African platform that distributes financial services products via chatbots, raised a ~$980K pre-Series A led by HAVAÍC, with participation from 4Di — Since its 2017 launch, CompariSure has chatted to over six million South Africans, processed over 120 million messages, and sold over 50,000 policies via chat

• Vesti, a Nigerian neobank targeting Africans migrating to North America, raised a $500K pre-seed from Oxygen Group, Microtraction, Prunedge Technologies, Terramax Ventures, GB Digitals, and Midlothian Angel Network— Launched in May 2021, the Vesti app crossed $1M in processed transactions in December 2021 and now has 32,000 active users organically; Vest plans to expand to Ghana and Rwanda by Q2

• SplendApp, an Egyptian SaaS platform that helps users create mobile apps in less than 48 hours, raised an undisclosed ‘six-figure’ pre-seed — The startups has so far served clients across three countries and plans expand further into the MENA region in the next six months

• Wamly, a South African video interview software platform, raised a undisclosed round from Knife Capital — Wamly is South Africa’s leading software application for recruiters and plans to expand throughout Africa and beyond

• AirStudent, a South African travel tech platform that connects students to air travel deals, raised an undisclosed amount impact investment fund E Squared Investments

M&A

• Weaveworks, an Egyptian/American policy-as-code platform, was acquired for an undisclosed amount by the UK’s Weaveworks

ADJACENT/DIASPORA

• Esusu, an American rent payment reporting and credit building platform focused on immigrant and minority groups, raised a $130M Series B led by SoftBank Vision Fund 2, with participation from new investors Jones Feliciano Family Office, Lauder Zinterhofer Family Office, Schusterman Foundation, SoftBank Opportunity Fund, Related Companies, and Wilshire Lane Capital, and existing investors Motley Fool Ventures, Concrete Rose Capital, The Equity Alliance, Impact America Fund, Next Play Ventures, Serena Ventures, Sinai Ventures, and TypeOne Ventures — Esusu was founded by Nigerian-born Abbey Wemimo and Indian American Samir Goel; the startup is growing 600% year-over-year with over 2.5 million homes using its service, representing over $3B in Gross Lease Volume (GLV) across the US

FUNDS

• TLcom Capital announced the $70M first close of a targeted $150M second fund — The firm invests from seed to Series B, and its portfolio includes Andela, Twiga Foods, Kobo360, Shara, and uLesson.

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The Afridigest Week in Review is designed to inform Africa-interested founders, executives, investors, and observers. Share it with those interested in innovation across the continent. 🙏

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📚 Quick Hits

FOR YOUR READING PLEASURE

• Stop brainstorming — An interesting history of brainstorming and the science behind it that argues: “Brainstorming is bad.”

• B2B marketplaces → Financial operating system — Sumeet Singh provides a great overview of B2B marketplace trends across emerging markets and the opportunity in informal commerce in this Andreessen Horowitz newsletter

• Fintech enters the era of distribution — The first couple generations of fintech companies focused on ‘manufacturing’ because they had to. The next couple generations of fintech companies will focus on distribution because that'll be the best way to win.

• 2022 is the year emerging markets VC comes of age, here’s why. — Catapult Founder & Managing Partner Jonathan Tower explains his belief that “VC investing in emerging markets is no longer a fringe activity practiced only by ‘true believer’ investors”

• If you were to build fintech products in an emerging market, would you build it on top of traditional rails or crypto rails? — Frontier Fintech’s Samora Kariuki and 11 other members of the Fintech Nerd Collective address an interesting question.

Bonus:

• What to watch in crypto in 2022 — The Generalist’s Mario Gabriele gathers leading investors and builders to discuss crypto projects and trends worth paying attention to this year

• FT Partners’ flagship 2021 Fintech Almanac — “The most comprehensive data on fintech deal activity globally”

• CB Insights’ 2021 State of Venture Report (PDF) — Poor/non-existent Africa coverage, but interesting nonetheless

• ICYMI: Key trends & themes to look for across Africa in 2022: What's old is new again

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🙈 Visual of the week

THE OPPORTUNITY FOR DIGITAL LENDING TO SMES IN NIGERIA

“Banks’ reluctance to lend to MSMEs arises due to costs associated with assessing and managing the credit risk of smaller borrowers [and] weaknesses in credit infrastructure.

These arise from (i) insufficiencies in credit information sharing … and the absence of coordinated information (a common database) shared among the bureaus; (ii) uncertain and unreliable loan foreclosure processes … and (iii) other institutional weaknesses, such as the ongoing, but as yet incomplete, establishment of a register for movable collateral and implementation of unique borrower identification.”

Source: Nigeria Development Update, November 2021 — World Bank (PDF)

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🕵️‍♀️ In case you missed it

NEWS & ANNOUNCEMENTS

• DPO Group granted regulatory license to provide payments services in Nigeria

• MNT-Halan launches BNPL service

• Bolt, the Estonian ride-hailing platform that currently operates in South Africa, Kenya, Ghana, Nigeria, Tunisia, Tanzania, and Uganda, plans to onboard an additional 200,000 drivers in Africa this year

VIDEO

• Watch MTN Group CEO Ralph Mupita and MTN Nigeria’s CEO Karl Toriola discuss MTN’s strategy and key 2021 milestones on Arise TV

• Watch Babajide Duroshola, General Manager at M-KOPA & former Nigeria Country Director at SafeBoda join Peace Itimi’s Founders Connect

• Watch Vivian Nwakah, Medsaf CEO, and João Pinheiro, Medsaf CTO, discuss how to keep your startup afloat with little or no funding with TechCabal’s Koromone Koroye

• Watch Victor Asemota’s discussion on building and investing in Africa with Jacob Fohtung

PODCASTS & AUDIO

• Akshay Grover CEO of Cellulant discusses the African fintech landscape on the Africa Tech Summit Connects podcast

• David Adeleke, Jessica Hope, and Koromone Koroye held a Twitter Spaces discussion on what tech startups need to know about PR and storytelling

• The Open Africa podcast discusses Web3, why it exists, and what the fuss is about

• Edgar Mwambutsa, CEO of Uganda’s Medihub, joins the RareBirds Emerging Markets Podcast

• Maijid Moujaled, President & Co-founder of Chipper Cash, discussed building a unicorn in Africa on a Twitter Space with Ivy Barley

• BCCM Advisors Managing Director Fred Steiner discusses Africa’s tech potential on the Invest Africa Insights podcast

ESSAYS

• Timi Ajiboye, CEO at Helicarrier, writes ‘Utility Today, Part 1 — On Africa & Global Digital Money’

• Carbon Co-Founder Ngozi Dozie writes ‘Stablecoins - boring yet revolutionary’

• Osahon Akpata, Head of Consumer Payments at Ecobank, writes ‘Beyond Payments for African Businesses’

• Reuben Mwatosya, Country Head of Transactional Services at Ecobank Tanzania, writes ‘How to build a Super fintech in Africa’

• Zekarias Amsalu Dubale, Founder & MD at Ibex Frontier, writes ‘Africa Tech in 2022 - Setting the Expectations’

• Enrique Martínez-Hausmann, Senior Associate at Speedinvest writes ‘Micro-SMEs are the core of every emerging market: Our investment in Ozé’

• The future Africa team writes the “Future Africa Review 2021: A look at the defining themes for the startup ecosystem”

• Sim Shagaya and the uLesson team share the African Edtech 2022 Trends Report (PDF)

OTHER ARTICLES

• In Africa’s booming startup hubs, the founders have become the funders (Rest of World)

• How Facebook took over the internet in Africa – and changed everything (The Guardian)

• Inside Iyin Aboyeji’s plan to build charter cities for African tech (Techcrunch)

• What African founders think about the new $500,000 Y Combinator deal (TechCabal)

• Inside Rwanda’s efforts to capture Chinese online consumers (New Times)

• Crypto firms ignore Africa at their peril as continent set for major adoption (CoinTelegraph)

• Understanding Afreximbank’s Pan-African Payment And Settlement System (Parrot Nigeria)

• Airships could boost internet coverage and help close the digital divide in Africa and beyond — here’s how (World Economic Forum)

INTERVIEWS

• 3 Minutes with Alitheia IDF’s Polo Leteka (Rest of World)

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🗣️ Community Corner

I see you, friends!

• Thanks to Ido Sum for this insightful Twitter thread on the exit landscape in India & LatAm and what they mean for Africa & congrats on the 1st close

• Congrats to Bola Lawal and the rest of the 2022 Acumen West Africa Fellows

• Join the Acumen team — they’re hiring a Lagos-based West Africa Director to oversee their investment portfolio and Fellows Program

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LA FIN

Feedback, questions, notes for the community corner? Or just want to say hi? Message me on Whatsapp or Twitter (@eajene) or email me.

Thanks for reading 🙌