Afridigest Week in Review: A sizeable seed for infrastructure interoperability
+New YC & ODX companies +The myth of hypergrowth +Yoco next up on the unicorn list? +Building in a bear market +30 million Kenyan M-PESA users +Lorecraft +Embedded B2B lending in Africa +Much 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! The most clicked link from last week was the piece from Equal Ventures on startup moats and why they matter. And this week, our inaugural sponsor is outsourced thought leadership firm intellence. With that said, let’s get into Week 10.
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Week 10 2022: March 6 - 12
📰 Deal of the Week
INFRASTRUCTURE FOR MOBILE WALLET INTEROPERABILITY
Dash, a Ghanaian digital wallet & unified payments network allowing interoperability between and among mobile money wallets and bank accounts across Africa, raised a $32.8M seed round led by Insight Partners, with participation from Global Founders Capital, 4DX, Techstars, ASK Capital, Zinal Growth Partners, and others.
💡 Why it’s the deal of the week: The ~$33M ‘seed’ round is one of the largest across the continent historically. The company closed a previous ~$8M seed round in September/October, but due to increased investor interest, the round was apparently re-opened — resulting in this second seed round.
Despite seed vs. Series A nomenclature concerns, the opportunity Dash is pursuing, as per the press release, is a real one: “In Africa however, where most payments are made using telco-led mobile wallets, aptly called mobile money, there are over 200 different kinds of mobile money wallets, none of which work with each other. Until Dash, there was no unified payment network that had made significant progress in the continent’s payment landscape. Dash has perfected a connected wallet for a connected Africa.”
Recall 1) Boku’s report last year that showed mobile wallets overtook credit cards to become the most widely used payment type globally, and 2) the information from Week 36 last year indicating that Africa accounts for approximately half of the world’s 1.2 billion mobile money accounts and ~65% of the global mobile money transaction value. There’s a large market facing significant friction.
⛏️ Go deeper:
Traction: Per the press release, since launching in 2020, Dash has acquired over 1 million customers across Ghana, Kenya and Nigeria who have processed over $1 billion. Worth noting though is that according to its Google Play listing, Dash’s Android app has not yet crossed the bar of 100,000 app installs.
Use of funds: According to the company, “This capital will allow us to expand into new markets such as Tanzania and South Africa as we cement partnerships with relevant regulating authorities. We intend to grow our team…, invest in robust technology…, [and] continue to launch new features.”
Landscape: Other multi-currency/cross-border wallets across Africa include Eversend, Bitsika, Honeycoin, Changera, and Flutterwave’s Barter.
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
Naqla, an Egypt trucking technology platform, raised a $10.5M pre-Series A led by El Sewedy Capital Holding (SCH), Hassan Allam Holding (HAH), and the Sallam Family — Founded in 2017, Naqla works with over 10,500 and 400 shippers and has delivered of over 4.6 million tonnes of cargo
Rocket Health, a Ugandan telemedicine and last-mile healthcare provision platform, raised a $5M Series A led by Creadev, with participation from existing investors Grenfell Holdings and LoftyInc Capital — Founded in 2012, Rocket Health provides telemedicine consultations, medicine delivery, home sample collection, and clinic consultations to over 25,000 individual patients; The company performs ~400,000 virtual consultations a year
Nexta, an Egyptian neobank platform, raised a $2.2M pre-seed led by Disruptech — Founded in 2021, Nexta has secured partnerships with the Central Bank of Egypt and Visa
OkHi, a Kenyan digital address verification platform, raised a $1.5M seed extension round from new investors including Chapel Hill Denham and EXFI, and existing investors Founders Factory Africa, Betatron, Interswitch Group, and others — Founded in 2014, OkHi previously raised a ~$1.5M seed round; the company has “hundreds of thousands” of users and plans to reach 1 million users in Nigeria within the next six months
Yep!, a Nigerian neobank, raised a $1.5M pre-seed led by Greenhouse Capital — The company is affiliated with E-Settlement’s PayCentre Africa, an agent banking platform with ~100,000 agents across Nigeria, Niger, Burkina Faso, Ivory Coast, and Togo; Yep’s goal is to serve these agents and their end customers with payments, credit, remittance and other digital financial services
Wattnow, a Tunisian internet-of-things energy management platform, raised a $1.3M pre-series A co-led by Katapult Climate and 216 Capital, with participation from Launch Africa Venture, CrossBoundary, Oman Technology Fund (OTF), and others — Founded in 2018, Wattnow helps companies optimize their energy usage and reduce their carbon footprint
Shatablee, an Egyptian digital interior design platform, raised $1.2M — Founded in 2021, the company offers a digital platform where users can build and customize and order 3D home finishing designs
Klump, a Nigerian Buy-Now-Pay-Later payment platform, raised a $780k pre-seed led by Seedcamp, with participation from Kesho VC, Magic Fund, Voltron Capital, Kickoff Africa, Assembly Investors, and others — Founded in 2021, Klump allows customers to buy products with a 25% deposit while spreading the balance over four installments in three months
Chefaa, an Egyptian online pharmacy and pharmacy benefits platform, raised an undisclosed amount from Newtown Partners, Global Brain, and GMS Capital Partners — This is the first Egyptian investment for the three named investors
Allawee, a Nigerian open credit API infrastructure platform, raised an undisclosed pre-seed from Voltron Capital, RallyCap, PiggyVest and ODX — Launched in December 2021, the platform allows users to access credit checks across multiple credit bureaus in one call; Allawee has already passed 100,000 API calls from a list of customers that includes Carbon, Renmoney, LipaLater, Autochek, FintechFarm, Shara, and others
Atarec, a Moroccan clean energy startup, raised an undisclosed amount from UM6P Ventures — Atarec’s solution, WaveBeat, converts energy from ocean waves into electricity
Insights By Experts, a South African on-demand expert network, raised an undisclosed amount from Launch Africa — The platform is an initiative from Africa-focused executive search firm Homecoming Revolution
The following companies announced their participation in Y Combinator’s W22 batch — Including the 17 mentioned last week, this takes the number of African startups in the batch to 21 so far
Sudanese savings-focused digital bank Bloom — Launched out of stealth just last week, Bloom previously raised a 2021 pre-seed from Global Founders Capital, Goodwater Capital, and others; it’s Y Combinator’s first startup from the country
Nigerian API insurance infrastructure and embedded insurtech provider Curacel
Nigerian cross-border payments platform Plumter
Nigerian on-demand meat delivery service SendMe
The following companies announced their participation in OnDeck accelerators — they join Tanel Health, Fidia, Sendchamp, Sendstack, and OnePort365 mentioned in week 2
Antler East Africa, the Nairobi arm of venture builder and VC firm Antler, closed a $13.5M fund — It’s existing portfolio includes AIfluence, Digiduka, Honeycoin, and Vybe, and LPs for the fund include Baillie Gifford, the IFC, and family office Canica; the East Africa fund plans to make 35 investments of up to $100K in pre-seed to Series A rounds over the next three years with the $300M global Antler fund being able to follow up through Series C
249 Startups, a Sudanese innovation hub, raised over $500K in capital commitments for The Rhino Impact Fund 1 — The capital will be used to fund Sudanese seed-stage startups via an accelerator model
A MESSAGE FROM INTELLENCE
People want to be educated, not sold to.
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📚 Quick Hits
FOR YOUR READING PLEASURE
The Elephant in the room: The myth of exponential hypergrowth — Solid read on growth, marketing, and the elephant curve. “This article suggests an alternate model for how fast-growing companies actually grow.”
Building startups in a bear market — “Nothing has felt quite as uncertain and potentially bearish as the state of the market now. The macro-environment is heavily impacted by geopolitical uncertainty, from impending rate hikes to foreign conflicts, and the stock market is beginning to bleed in response… For those startups that want to be prepared, here are some things to keep in mind.”
Customer experience in the age of AI — HBS Sr. Lecturer David Edelman and BCG MD & Sr. Partner Mark Abraham write for HBR that “brands can win by tapping a deep store of customer information to transform and personalize user experiences… We are now at the point where competitive advantage will derive from the ability to capture, analyze, and utilize personalized customer data at scale and from the use of AI to understand, shape, customize, and optimize the customer journey.”
Cryptocurrencies: The power of memes — “Undoubtedly, the blockchain technology that underpins cryptocurrencies has been innovative—but simply being innovative does not mean it will be disruptive… Will cryptocurrencies ever grow out of their speculative phase and actually disrupt traditional finance?”
Lands of lorecraft: A millennial management science is being born — “This school of thought will likely start taking over senior management and leadership cultures within a decade. Arguably, lorecraft is the first truly internet-native school of management and organizational thinking.”
How Black America fell out of love with Africa — “The rise of Afro-pessimism in the 1990s has helped to freeze in place a view of the continent as ‘hopeless,’ as the cover of The Economist announced in May 2000. In the process, Americans — particularly Black Americans, who for decades were at the vanguard of cultivating links between the U.S. and Africa — have lost a chance to build genuine solidarities with the continent.”
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
More than half of Kenya’s entire GDP is now transacted on M-PESA — There are over more than 30 million active M-PESA users in Kenya alone, nearly 60% of the service’s 51 million active customers across Kenya, Tanzania, the Democratic Republic of Congo, Mozambique, Lesotho, Ghana, and Egypt
South African fintech Yoco in talks to raise $150 million — According to the reporter, Yoco is “now looking to be valued at between $700 million and $1 billion”
Samora Kariuki of Frontier Fintech writes ‘Embedded B2B vendor lending in Africa: Can it scale?’
Aubrey Hruby writes in The Africa Report, “Africa’s next wave of tech unicorns are digitizing informal trade”
Bohani Hlungwane, Managing Principal at Absa writes in the Independent Online about ‘Digitisation and frictionless commerce on the African continent’
Ralph Mupita, CEO at MTN Group, discussed the impact of MTN’s fintech drive on the company’s financial results on The Money Show with Bruce Whitfield
Dr. Ikpeme Neto, CEO & Founder of WellaHealth, discussed healthcare financing for the next billion on the Aid, Evolved podcast.
Iyin Aboyeji, Future Africa Founder, discussed investing in and building African tech businesses on Vishal Agarwal and Raj Kulasingam’s WeAreVR podcast.
Francophone Africa offers best value for venture-capital investors (Disruption Banking)
Why e-commerce is king in Egypt (TechCabal)
Subscription model will replace buying cars in South Africa: CEO (BusinessTech)
Sudan’s first YC-backed startup is helping consumers protect and grow their wealth (TechCrunch)
Drivers on Uber found a hack to dodge commission fees in South Africa (Rest of World)
Do we need more fintechs in Africa? (TechCabal)
4 Blockchain use cases solving Africa’s biggest problems (BitcoinKenya)
Fintech innovations on the rise in DR Congo’s nascent startup landscape (TechCabal)
The 10 most innovative companies in Europe, the Middle East, and Africa in 2022 (Fast Company)
African startup CEOs that study abroad raise more VC money than those at home (Quartz)
INTERVIEWS & PROFILES
🗣️ Community Corner
I see you, friends!
Our friends at Kesho VC have launched a project to better understand how VCs in Africa can create non-capital value for the companies they invest in — please fill out this survey and share with your founder friends across the continent
The Eversend team is looking for a Chief of Staff reporting directly to CEO Stone Atwine
The VC4Africa team is looking for business mentors with strong ties to Nigeria to spend ~4 hours a month for 4 months as a business mentor to promising entrepreneurs
The BFA Global/Catalyst Fund team is looking for teams who have raised less than $1M and are building fintech-enabled solutions serving climate-vulnerable communities to participate in the Fintech x Resilience Startup Challenge