Afridigest Week in Review: Open checkbooks for open banking

+A Sudanese Series A +USSD is a public utility +Nigeria's CBDC +Pro rata is bad +Non-monolithic markets +Videos from CEOs of Paystack, MFS Africa, & InstaDeep +Flutterwave at $3B valuation?

Emeka Ajene

Oct 18, 2021

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! This week sees multiple Francophone Africa-focused deals & it’s the first time (at least in a while) with multiple deals in the region in back-to-back weeks. Ça devient intéressant… In other news, don’t hesitate to reach out if you have something to share in the new Community Corner section here & thanks to those that have done so.

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Week 41 2021

📰 Deal of the Week

OPEN BANKING & FINANCE

Mono, an open banking infrastructure provider sometimes described as ‘Plaid for Africa,’ raised a $15M Series A at a valuation “north of $100M.” Tiger Global led the round, with participation from new investors: Target Global, General Catalyst, and SBI Investments; and existing investors: Entrée Capital, Acuity VC, Ingressive Capital, Lateral Capital, and Golden Palm Investments Corporation.

💡 Why it’s the deal of the week: The Series A round comes just months after its $3M seed round in May and, according to Mono’s CEO, revenue has grown 10x since then. Notably, Mono didn’t initially set out to raise additional capital this year until Tiger Global came calling. The startup has processed over 200M financial data transactions and has ~200+ customers & partners across sub-Saharan Africa.

⛏️ Go deeper:

A tiger roars: Mono is Tiger Global’s third investment in Africa this year, alongside Flutterwave and FairMoney
The landscape: Other players in the Plaid for Africa space include Pngme ($15M Series A in August), Okra ($3.5M seed in April), Stitch ($4M seed in February), and OnePipe (~$1M pre-seed in Dec. 2020); among other differentiators, Mono’s platform allows businesses to access customer financial data with no need for a developer, a functionality that it claims is the first of its kind on the continent
Related read: Open banking in Africa after COVID-19
Hear from Mono’s Co-Founders in this short video: “Our mission at Mono is to power the internet economy in Africa”

🔦 Other deals

SUDAN + CAMEROON + NIGERIA + SOUTH AFRICA + EGYPT

Alsoug, a Sudanese online classifieds platform, raised a $5M Series A co-led by Egypt’s Fawry and a consortium of unnamed ‘Western venture capital firms’ — alsoug facilitated hundreds of million dollars worth of sales in 2020, but the round may not have been successful without the de-risking role Fawry played due to dynamics in Sudan, according to alsoug’s CEO Nina Saeed; proceeds will be used to establish a national payments network called Cashi
Sparkle, a Nigerian neobank for consumers & SMEs, raised a $3.1M seed round led by Leadway Assurance, with Trium Network and others participating — Sparkle has acquired 40,000+ consumer clients and 2,000+ business clients since its launch last year
- See also: Why Sparkle had only Nigerian investors
Kappa Pay, a Cameroonian/US payments startup initially targeting the CEMAC (Francophone Central Africa)-US corridor, raised a $2.1M pre-seed round led by Morningside with participation from Lake Partners — Founded in 2020, Kappa is building infrastructure for “ultra-low cost, near-instant local & cross-border” bidirectional payments
Wicrypt, a Nigerian blockchain-based platform that allows users to get paid for sharing Wi-Fi, raised a $1.5M round led by AU21 Capital, with participation from Polygon founder Sandeep Nailwal, Inclusion Capital, Outlier Ventures, Chain Capital, Pluto Digital Assets, Onega Ventures, N7 Labs, Cardano, and PolkaFoundary
Eden Life, a Nigerian platform for home services, raised a $1.4M seed round, led by LocalGlobe, with participation from Samurai Incubate, Future Africa, Village Global, Rising Tide Africa, and Enza Capital — Since launching two years ago, Eden Life has delivered over 60,000 services in Lagos alone
- See also: This Linkedin comment from Brett Remus, GeneralPartner at LocalGlobe
Talabeyah, an Egyptian B2B marketplace, raised a $1.1M pre-seed round from strategic angel investors — the startup achieved $6M in GMV with an initial investment of only $180K
BioCODE, a South African provider of point-of-care smart disease sensing solutions, raised a ~$473K venture round from the University Technology Fund and Stellenbosch University
PaySika, a Cameroonian/French neobank targeting Francophone Africa, raised a ~$350K pre-seed round from notable angel investors in France, England, and Nigeria — PaySika has ~20,000 pre-registered users across Cameroon and Gabon
- See also: This French-language interview of Co-Founder & CEO Roger Nengwe
GBarena, an Egyptian esports platform, raised a ‘six-figure’ bridge Pre-Series A round led by key angel investors Ahmed Aboudoma & Kushal Shah, and HIM Angels VC network — the company is targeting a series A round in 2022
d6, a South African school management & communication platform, raised an undisclosed amount from Knife Capital, Hlayisani Capital, and NuState Ventures — Over 2,800 schools in South Africa & elsewhere use d6’s products and it reaches ~1M parents
Nawah Scientific, an Egyptian platform offering on-demand scientific, research, and analytical services to the life sciences community, announced that Dr. Essam Abdelhadi invested an undisclosed amount in its upcoming Series A — Dr. Abdelhadi is a former executive of Abbott, the multinational medical devices and health care company, and he joins Nawah’s advisory board

FROM AFRICA TO THE WORLD

Tala, a digital lender to consumers and SMEs in emerging markets, raised a $145M Series E led by US lending platform Upstart, with participation from the Stellar Development Foundation’s Enterprise Fund, Kindred Ventures, the J. Safra Group, IVP, Revolution Growth, and Lowercase Capital — Tala first launched in Kenya in 2014, but has since expanded to the Philippines, Mexico, and India; it has lent ~$2.7 billion to ~6 million customers, with ~12,000 new users signing up daily
- See also: The Rise, Fall, and Resurrection of Tala — a Twitter thread from Michael Kimani

ACQUISITIONS

Alerzo, a Nigerian B2B e-commerce platform focused on informal retail (featured in Week 33’s Week in Review), disclosed that it acquired Shago Payments ‘over the summer’ — With Shago’s integration into AlerzoPay, Alerzo now provides informal retail stores with a portfolio of new digital services such as mobile airtime top-up; bill payments and peer-to-peer transfers

📚 Reads of the Week

OPEN VS. CLOSED PLATFORMS

Firas Ahmad, Group CEO and Co-Founder, AzamPay, (& Afridigest Thought Circle member) writes on the importance of the questions: Who has the right to access telco USSD menus? And via what commercial arrangements and service level guarantees?

“The overwhelming prevalence of USSD menus in facilitating daily life for hundreds of millions of consumers across Africa make them fundamental to the basic financial infrastructure of mobile money dominant countries. … Legitimate, licensed businesses offering services that require access to USSD menus must be ensured that right as any other public utility.”

🥇 “USSD Menus are a Public Utility” by Firas Ahmad
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FINTECH AT THE FRONTIER

Friend of Afridigest and Frontier Fintech writer, Samora Kariuki explores Nigeria’s central bank digital currency and its potential implications

“A lot of people have dismissed the eNaira system from the get go. … However there are potential benefits. … [T]he eNaira is a claim on the government and not a private entity; it can thus notionally engender more trust by citizens than any other payment system. … If well executed, you can in principle drive financial inclusion and payments innovation.”

“The eNaira Project” by Samora Kariuki
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COMMONLY HELD BELIEFS CAN BE WRONG

A contrarian look at revenue concentration in a specific segment.

“Revenue concentration should be seen as a positive feature, and not a bug, of B2B fintech infrastructure... leaning into revenue concentration as a private company is a legitimate strategy”

“Rethinking Concentration Risk in B2B Fintech Infrastructure” by Akash Bajwa

📢 Today’s a good day to be helpful. Share this with a colleague.

The Afridigest Week in Review is a must-read weekly recap for Africa-interested founders, executives, investors, and observers. Send it to someone who should be reading it.

📚 Quick Hits

FOR YOUR READING PLEASURE

Pro rata is a bad term — Pro-rata is actually a bad term for founders dressed up as a “business model” or “support” feature. Investors want pro ratas because they are essentially options on future financings, but the problem is that these options are: free, one-sided, unrelated to value, and ignored constantly
The customer-obsessed product manager's playbook — Expert insights from 50 product leaders to help focus on solving customer pain points
The next billion-dollar US startups — 25 venture-backed startups most likely to become unicorns as identified by Forbes & Truebridge Capital Partners
Index Ventures’ creator manifesto — The creator phenomenon isn't a vertical trend; rather, it cuts across social, gaming, crypto, media, commerce. It is both the future of work, with creators forming a new class of digitally-native entrepreneurs, and the future of leisure, and encompasses both enterprise and consumer
60 ideas to boost your growth — 60 examples of successful ‘turbo boosts,’ one-off events that temporarily accelerate growth for companies large and small

Bonus:

The State of AI report 2021 — A technical look at key developments in AI research, industry, talent, and politics, and predictions for what's next

🙈 Visual of the week

MARKETS AREN’T MONOLITHIC

For all the talk about Africa's startup ecosystem, it's worthwhile to keep in mind that different markets have different on-ground realities and disparate challenges/opportunities.

Source: What has Paystack done one year after joining Stripe? (Quartz Africa)

🕵️‍♀️ In case you missed it

NEWS & ANNOUNCEMENTS

Egyptian banks launch ~$63M fintech fund — The National Bank of Egypt, Banque Misr, and Banque du Caire will invest in local and international emerging fintech companies to transform Egypt into a regional center for the Arab and African fintech industry
The French government pledges a fresh ~$150M investment in Africa’s digital economy — Digital Africa will disburse the funding, with CEO Stéphan Eloïse Gras, suggesting that the initiative could become a factory for future African tech unicorns
Nigeria’s Flutterwave in talks to triple valuation to $3B — Flutterwave is rumored to be seeking new funding at a valuation roughly triple its last valuation, according to Bloomberg; Flutterwave declined to comment
Vodacom super app VodaPay goes live in South Africa — Developed in partnership with China’s Alipay, the app is available to all South Africans, and Vodacom subscribers will be able to access the app data-free
- Pair with: How Africa's super app landscape is evolving
Lendable is launching a $100M emerging market fintech fund — The fund provides credit to African and Asian fintech companies, who in turn offer credit to SMEs, and has soft closed a $49M investment from DFC, EMIIF (DFAT), Calvert Impact Capital, Ceniarth, BIO, FMO and FSD Africa (FSDAi), with another $20M is on track to close this quarter

ESSAYS

Papama Nyati, researcher at Uncovered Fund, writes ‘Organizing Digital Banks and Their Role in Emerging Markets’ (Medium blog)
Dauda Barry, Co-Founder & CEO of online coding school Alida, writes ‘When will African startups reach $10B in Venture Capital funding?’ (Vista newsletter)
Njavwa Mutambo, Co-Founder& CEO of Kenyan B2B food supply chain platform Kibanda Topup, writes ‘Reflections on Q3 and Building Africa’s Leading Restaurant Partner’ (Medium blog)
Douglas Kendyson, Founder & CEO of Nigerian creator economy platform Selar, writes ‘To Google for Startups, Love Douglas’ (Medium blog)

PODCASTS

Zachariah George, Managing Partner at Launch Africa Ventures, joins The Meb Faber Show
Willem Kitshoff, CEO of the d6 Group, and Keet van Zyl, a partner at Knife Capital join The Money Show
Stone Atwine, Eversend Co-Founder & CEO, Ham Serunjogi, Chipper Cash Co-Founder & CEO, Elizabeth Rossiello, Founder & CEO of AZA Finance/BitPesa, and others talk cross-border, intra-Africa payments on The Flip Africa
Wiza Jalakasi, VP of Global Developer Relations at Chipper Cash joins The Everyday Leader
Christiaan Steyn, head of South African insurtech MiWay Blink, joins African Tech Roundup

VIDEOS

Dare Okoudjou, Founder & CEO of MFS Africa discusses MFS Africa’s origins, growth journey, & future with FSD Africa Investment’s Chief Investment Officer Anne-Marie Chidzero
Shola Akinlade, Co-Founder and CEO of Paystack gives a fireside chat with Tomiwa Aladekomo - CEO, Big Cabal Media
Karim Beguir, Co-Founder & CEO of Tunisia’s InstaDeep discusses Deep Tech Innovation in Africa
Munya Chiura, Head of Rest of Africa Growth at Flutterwave; Amel Saidane, Co-Founder & CEO, BetaCube; Bram Fudzulani, Co-Founder & CCO, Angle Dimension; and Lewam Kefela, Investment Director, Village Capital discuss The Rise of Fin-Tech in Africa

LA FIN

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