Afridigest Week in Review: Supply chain startups are (still) sexy
+A deal deluge +Tech-enabled B2B e-commerce +Brand aggregators +Digital marketing in Africa +Spotlight on PayPecker +Fintech-focused podcasts +Pivots vs. jumps +MENASSA
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! Good news: I published an article on Saturday. (It’s been a while.) The bad news is that it’s not yet 100% finished. 🥴 If you read version 1, it’s been updated FYI. But the final version should be complete by EOD Wednesday, if not sooner. Anyhow, let’s get into it — this digest is long enough as is.
If you’re new, welcome 🙌 — you’ll (generally) receive 2 weekly Afridigest emails: the weekly digest (every Monday) and either an original essay/article (generally on Saturdays). For past essays and digests, visit the archive.
Week 27 2021
📰 Deal of the week
TECH-ENABLED B2B E-COMMERCE
MaxAB, an Egyptian B2B food & grocery platform, raised a $40M Series A round. RMBV led the round, with participation from the IFC, Flourish Ventures, Crystal Stream Capital, Rise Capital, Endeavor Catalyst, Beco Capital, and 4DX Ventures.
Founded in 2018, MaxAB helps small Egyptian retailers procure inventory via the MaxAB mobile app.
💡 Why it’s the deal of the week: Tech-enabled food & grocery B2B e-commerce is another space that’s been attracting investor interest on the continent. Nigeria’s TradeDepot, Kenya’s Sokowatch, Kenya’s Twiga Foods, Kenya’s MarketForce, and Nigeria’s Suplias are among the other firms in the space. The opportunity to leverage technology to optimize informal economy supply chains remains large.
😠 Haters will say: “Another Egyptian/MENA deal of the week? They aren’t relevant to ‘real’ African founders.”
OK. Well, no region is fully representative; market fragmentation is real. There are dots to be connected everywhere though and folks are doing just that. In fact, MaxAB is Flourish Ventures’ first North African investment — it had been SSA-focused prior to this. And startups originating in SSA are also adding MENA to their expansion plans. (E.g., OPay Egypt is now a thing; and Kobo360’s Founder & CEO recently described the firm as “a digital supply chain platform across Africa & the Middle East.”
MENASSA (Middle East North Africa + sub-Saharan Africa) is coming.
⛏️ Go deeper:
“We started off completely offline out of a small warehouse on the outskirts of Egypt’s sprawling capital. It was so remote many people didn’t know how to get there. We began by selling bits and pieces of [grocery] cases to these faraway neighborhoods that don't have access.” — Belal El-Megharbel, CEO and Co-Founder, MaxAB
Read more about MaxAB’s origin story here.
🔦 Other deals
A DEAL DELUGE
Lidya, a Nigerian provider of B2B credit that also operates in Europe, raised an $8.3 million pre-Series B round. Alitheia Capital led the round, with Bamboo Capital Partners, Accion Venture Lab, Flourish Ventures, and others participating. (Personnel moves: Co-Founder Ercin Eksin left the firm.)
Smile Identity, an Africa-focused identity verification & digital KYC platform, raised a $7 million Series A round. Costanoa Ventures & CRE VC co-led the investment, with LocalGlobe, Intercept Ventures, Future Africa, Khosla Impact, ValueStream Ventures, Beta Ventures, 500 Startups, Story Ventures, and others also participating.
MarketForce, a Kenyan B2B retail distribution platform, raised a $2 million pre-Series A round. Participating were V8 Capital, Future Africa, GreenHouse Capital, Launch Africa, Rebel Fund, Remapped Ventures, P1 Ventures, and others.
Omnisient, a South African data-security start-up, raised $1.4 million from Technova, Grand Bay Ventures, Tahseen Consulting, Kepple Africa Ventures, and others.
InTouch, a Senegalese/French digital payments aggregator, raised an undisclosed amount from Toyota Tsusho Group (via CFAO and Mobility 54, TTG’s Africa-focused corporate venture capital arm). Existing investors Worldline and TotalEnergies also participated.
Tix.Africa, a Nigerian events ticketing startup, raised an undisclosed ‘six-figure’ pre-seed round led by HoaQ investment club.
Ada Animation, a Kenyan entertainment company, raised an undisclosed pre-seed round from Platform Capital (via its technology vehicle, Unicorn Group).
Y COMBINATOR’S NEWEST BATCH
Nine startups from across the continent were selected into Y Combinator’s S21 batch, receiving $125,000 each in seed funding:
Nigeria: Mecho Autotech, a platform connecting car owners with mechanics and car part vendors; Suplias, a B2B retail marketplace; and Lemonade Finance, a cross-border payments platform
South Africa: Floatpays, an on-demand wage access platform
Egypt: Amenli, an online insurance brokerage; Odiggo, a car parts marketplace; and ShipBlu, a last-mile e-commerce delivery & fulfillment platform
Morocco: Chari, an e-commerce + fintech app; and Freterium, a logistics SaaS platform
Daystar Power, a Nigerian off-grid power service provider, closed a $20M debt financing round from the IFC. It’s structured as a $10 million subordinated loan from the Canada-IFC Renewable Energy Program for Africa and a $10 million local currency IFC loan.
📚 Read of the Week
A PRIMER ON THE DIGITAL MARKETING OPPORTUNITY ACROSS AFRICA
VestedWorld published an insightful piece explaining their investment in Terragon. More of this from investors, please 🙏.
“The dominance of the [Facebook-Google] duopoly is not as profound in Africa. While Facebook has 2.6 billion users around the world, only 10% of those users reside in Africa and it earns less than $2.77 per user in Africa, as opposed to $53.56 per user in the US and Canada. Although Google has more users across Africa than Facebook (primarily due to the popularity of the Google Chrome browser), Google is unable to track and target mobile users in Africa as well because of data consumption habits (most African users limit their data usage because data is relatively expensive). Mobile network operators (MNOs) across Africa have a large user base and are sitting on a trove of user data but, to date, have not capitalized on that resource.”
🥇 “Goodbye Cookie Monsters — Why We Invested in Terragon” by Semir Mela, Vice President at VestedWorld, and Euler Bropleh, Founder and Managing Director.
🔮 Trend Watching
BRAND AGGREGATORS IN AFRICA?
Brand aggregators are arguably the hottest trend in the e-commerce industry. They buy up e-commerce companies, roll them up, and exploit tech, data, and other synergies to scale.
Just last week in India, six-month-old 10club raised a $40M seed round, joining other Indian brand aggregators who’ve raised recent rounds like Mensa Brands ($50M) and GOAT Brand Labs ($20M). In Singapore, there’s been Una Brands ($40M) and Rainforest ($6.5M); and in Latin America, there’s been Valoreo ($50M), Merama ($60M), and Wonder Brands ($20M).
Is Africa ripe for this right now? The big-brained folks at Opontia ($20M) think so…what about you? 🧠
📢 If you find this newsletter valuable, share it.
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Podcasts of the Week
LISTEN TO THIS: FINTECH FOCUS
Hosts Olumide Ogunsanwo & Bankole Makanju discuss lending across emerging markets, Africa’s credit landscape, and consumer loan platforms across Africa on the Afrobility podcast.
Hosts 'Laolu Oyedele, Furo, and Nosa Oyegun provide context into the Nigerian payments landscape, including regulatory & technical aspects, on the Open Africa podcast.
David Vélez, founder and CEO of Brazil’s Nubank, the world’s largest digital bank, discusses Nubank's unit economics, innovation and technology in emerging markets, and more on the Invest Like the Best podcast.
Job Opportunities of the Week
Quona Capital, the early-stage fintech-focused VC firm, is hiring an African Investment Analyst to be based in Cape Town, Lagos, Nairobi, Cairo, or Washington DC.
Twitter is hiring an Accra-based Senior Content Partnerships Manager.
DoubleGDP, a platform for new cities (e.g., Zambia’s Nkwashi), is hiring an Africa-based Head of Strategic Partnerships.
Founders Factory Africa, the venture development and investment company, is hiring a Johannesburg-based Commercial Partnerships Director.
FairMoney, the Nigerian lending startup turned neo-bank, is hiring a Lagos-based Head of Marketing & Growth. (Can also be based in Paris, Bengaluru, or Riga).
Fuzu, a jobs/career development platform for emerging markets, is hiring a Lagos- or Nairobi-based Head of Marketing.
Didi, the newly public ride-hailing company, is hiring a Johannesburg-based Brand Manager.
To submit a job opportunity to be featured here, email: email@example.com
Visual of the week (+ bonus interview)
COMMERCE INFRASTRUCTURE FOR AFRICA
PayPecker, an omni-commerce retail platform funded by Ventures Platform and others, launched publicly last week. This overview slide of their flagship product Omni is the visual of the week:
Founder and CEO, Olumide “D.O” Olusanya was generous enough to answer a few questions:
1) What is PayPecker?
PayPecker is infrastructure for commerce in Africa and we currently offer two products: GoDigital and Omni. GoDigital helps retailers digitalize and super-charge every aspect of their retail operations; and Omni helps retailers offer seamless experiences to shoppers across all sales channels, offline and online.
In other words, Omni is to commerce what switches are to payments. Payment switches mutate physical cash into bits to facilitate real-time, massively scalable exchange of value (money) from Buyer to Seller. And the Omni commerce switching infrastructure mutates physical inventory into bits to facilitate real-time, massively scalable exchange and delivery of value (inventory) from Seller to Buyer.
Simply put, PayPecker is Shopify for African offline retailers. Or using Shopify’s own parlance: PayPecker is the retail Operating System for Africa.
2) What problem is it solving?
The first problem PayPecker’s OmniComSwitch infrastructure solves for African brick and mortar retailers is digital demand generation. We work with partners to aggregate demand from online channels to deliver increased sales to offline retailers, while maintaining a unified view of the customer across the various sales channels.
3) Why is PayPecker’s team the right one to build Africa’s retail OS, starting with you?
PayPecker sits at the intersection of commerce and fintech at scale and our entire team has deep, relevant expertise here; we’re well-positioned to build on the foundational rails for commerce flows at scale in Africa, as we’ve done for payments in Nigeria.
Personally, I have deep first-hand experience in African fintech, in e-commerce, and in supply-chain industries. The very first fintech license issued by the Central Bank of Nigeria was issued to a venture I built; it was also the first MasterCard-certified payment processing switch in the entire West African region. We used it to build out the foundational payment rails of virtually all Tier 1 banks that are being now ridden on by the current era of fintechs in Africa.
Frank Atashili, ex-Interswitch and ex-Visa, is a Co-Founder & CPO — he helped me to build out West Africa’s first Mastercard presence, the first international payment card in West Africa, and he’s helped me to build all my fintech platforms since.
David Umoh, is a Co-Founder & CTO — he’s helped me to build all my commerce platforms; we’ve been in the trenches together in the e-commerce and supply-chain space building Nigeria’s biggest online supermarket, Gloo.ng, as well as Africa’s premier eProcurement platform, Gloopro.
Mustapha Abokede, ex-KPMG, is our COO — he put in place the operational foundations that enabled Andela to hyper-scale as Country Lead/Director of Operations in its early days of starting up and expanding
“Gondy” or Godswill Okwara, ex-Flutterwave, is the Director of our flagship product, PayPecker Omni — he was also the EMEA Ops Manager for NASDAQ-listed payments platform, dLocal, and he joined us the same week they IPOed. Before dLocal he led technical integration functions at Flutterwave and PayWithCapture.
We (including the rest of the team not mentioned here) are not only experienced but energized to seize the opportunity to build something truly transformational.
This one checks a few boxes. Thanks again, DO — we’ll be cheering you & the team on. 🙏
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Briter Bridges released its 2021 Africa Investor Catalogue.
The African Private Equity and Venture Capital Association released the second edition of its Venture Capital in Africa report, covering 2014 through 2020.
Journalist Chikezie Omeje explores KuBitX in ‘The inside story of how an ambitious African cryptocurrency startup failed.’
“KuBitX’s journey is illustrative for African startups that are trying to grab opportunities in the global crypto ecosystem.”
More African crypto? Journalist Chris Jones writes an overview of Paychant, ‘the crypto payment gateway startup that strives to become the Stripe of Africa.’
“As digital currencies have shown to be the most reliable means for frictionless cross-border payments, facilitating fast transactions with low fees in Africa, Paychant is making it easier for businesses to accept crypto payments online or receive crypto donations with a single line of code.”
African media analyst David Adeleke explains ‘Why tech and business media must pay attention to Paystack’s media strategy’
“This is one more upside to the Internet. It allows [Paystack] to bypass traditional middlemen and go straight to customers. The advent of the Internet means they can now achieve the same scale of engagement previously attainable only by the media…‘Every company is a media company.’”
🕵️♂️🐤 In case you missed it - Twitter edition
JUMP IN THE CONVERSATION ON TWITTER
Eloho (Omame) Gihan-Mbelu, Co-Founder of angel fund First Check Africa and former Managing Director and CEO of Endeavor Nigeria, sheds light on the perils of too-high valuations in this thread:
Benji Fernandes, CEO & Co-Founder of cross-border money transfer service Nala discusses some tech-enabled opportunities for Tanzania (& beyond):
Al Kags, Co-Founder & CEO of the Open Institute, starts a discussion on the dearth of local capital for startups:
Entrepreneur and investor Naval Ravikant sparks an interesting discussion about startup pivots vs ‘jumps’ in this thread:
🗣️ A final word
WHAT I’M THINKING ABOUT
Recapping the first half of the year.
What, in your opinion, are among the best/most interesting things that happened in Africa’s tech/startup ecosystem in H1? Unicorns 🦄 ? I’m legit interested — send your thoughts my way. 🤝