The five boldest African tech business moves of 2023
Afridigest is your intelligent guide to tech in Africa. We provide ideas, analysis, and insights for startup founders, executives, and investors across Africa and beyond.
This Saturday essay highlights five of the boldest business moves of 2023 across Africa’s tech ecosystem.
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“Boldness is not reckless. If you’re living on the side of a volcano and it starts erupting, running extremely fast is actually the safest thing you can do. And our evidence shows most companies are living on the side of a volcano.”
— Chris Bradley, Director of McKinsey Global Institute
Slow and steady has its place. It’s hard to argue against consistent, continuous, incremental improvements — in our personal lives at least.
But in the business world, to make major leaps forward, companies generally have to make big, bold moves: actions that are daring, unconventional, and often hard to reverse.
Here are five of the boldest business moves of 2023 in Africa Tech.
1. Jumia exits the food business
In November 2022, after half a decade of successive losses, the board of pan-African e-commerce player Jumia Technologies AG (NYSE:JMIA) decided enough was enough — co-founders & co-CEOs Jeremy Hodara and Sacha Poignonnec were out.
Francis Dufay, former EVP and former CEO of Jumia Ivory Coast, was appointed CEO with a mandate to strengthen Jumia’s core e-commerce business, reduce its operating losses, and set the business on a clear path to profitability.
With this carte blanche, he laid off 900 employees (20% of staff), shut down offices in Dubai, slashed marketing spend, discontinued Jumia Prime, and scaled down Jumia’s logistics-as-a-service offerings.
And perhaps most surprisingly, a month ago he announced the shutdown of Jumia Food in all seven countries in which the food delivery business still operated.
While the unit had never been profitable, it contributed ~11% of GMV and was viewed by his predecessors as an important driver of transaction volume that was key to “meet[ing] the everyday needs” of Jumia’s customers. No sacred cows.
2. MultiChoice gets into the payments business
In May 2023, South African video entertainment platform Multichoice (JSE:MCG), one of Africa's top fifty companies by market cap, announced plans to launch a payment platform called Moment.
According to MultiChoice Group CEO Calvo Mawela, “Investing in this venture is a logical progression for us, as we already process payments every month from 22 million households across 50 countries in Africa.”
While MultiChoice indeed processes roughly $3.5 billion annually via payment partners, fintech nonetheless lies beyond its core competencies.
So to derisk the move, Moment is structured as a joint venture with Israeli fintech-as-a-service unicorn Rapyd and American VC firm General Catalyst (an investor in Rapyd, American fintech unicorn Stripe, Mexican fintech unicorn Stori, European fintech unicorn Monzo, and others).
MultiChoice has invested $3 million in Moment so far and this payments play is part of Mawela’s push for sizeable new revenue streams amidst significant weakness in the company’s core video entertainment business.