Afridigest Week in Review: The proof is in the patent

+USV's first African investment +Egyptian M&A activity +Product virality +Internet affordability in Africa +Didi exits South Africa +Flutterwave's media blitz after bullying allegations +More

Emeka Ajene

Apr 11

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 Jared Hecht’s piece on optimizing for luck as an entrepreneur. With that said, let’s get into Week 14. And thanks in advance for sharing this with your networks. 🙏🏽

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.

» ⭐ Click here to read this email in your browser

Week 14 2022: April 3-9

📰 Deal of the Week

OFFLINE CARD PAYMENTS

ZirooPay, a Nigerian/Finnish provider of offline-first mobile POS solutions and bookkeeping/business management software, raised an $11.4M Series A led by Zrosk Investment Management with participation from Inventure, Fedha Capital, Exotix Advisory, and others.

💡 Why it’s the deal of the week: One of the longstanding issues with retail card payments in Nigeria and other markets is unreliability. In years past especially, but still today, there’s an unusually high rate of transaction failures due to poor internet connection and other challenges; ZirooPay solves for this.

The company has been awarded a patent for the secure transmission of large amounts of encrypted payments data through limited channels such as GSM. And this technology powers the company’s POS/card-reader solutions, allowing it to process card payments in real-time without an internet connection.

As a result, according to Founder/CEO Omoniyi Olawale, “[ZirooPay] can provide a 95% transaction success rate against the less than 50% that you find in the market.”

⛏️ Go deeper:

Traction: Over 15,000 merchants use ZirooPay’s payments infrastructure (POS and mobile apps) and they’ve processed ~$500M across 10M transactions with a significant uptick in recent years
Beyond in-store retail payments: “While the mPOS solution is our first product built on the platform, it can also process payments for wallet applications, cryptocurrencies, in-app payment processing, and even micro-lending services for small businesses in developing countries. We decided to start with the strongest business case (retail payments), prove the platform and market demand, then scale from there” — Founder/CEO Omoniyi Olawale
Digitizing offline retailers: In addition to payment processing, ZirooPay’s platform offers other business management tools, such as the generation of (digital) customer receipts, sales analytics, accounting, inventory management, CRM, loyalty management, and payroll support — this, coupled with its card reader, makes it a potentially formidable competitor to the various bookkeeping platforms digitizing informal retail
A look back: Watch Founder/CEO Omoniyi Olawale’s 2014 pitch of what was then called IroFit at Slush 100 Helsinki — ZirooPay is IroFit’s parent company:

🔦 Other deals

OTHER FUNDRAISES ACROSS THE CONTINENT

Leatherback, a Nigerian/British cross-border payments & remittance platform, raised a $10M pre-seed from Zedcrest Capital
Shift EV, an Egyptian electric mobility batteries-as-a-service platform, raised a $9M Series A from Union Square Ventures, Algebra Ventures, Wamda, and Oman Technology Fund — this appears to be USV’s first investment in Africa
ImaliPay, a Kenyan financial services platform focused on gig economy workers, raised a $3M (mixed debt and equity round) seed round from participation from Leonnis Investments, Ten 13, Uncovered Fund, MyAsia VC, Jedar Capital, Logos Ventures, Plug and Play, Untapped Global, Chandaria Capital, and others — Over 200,000 transactions have been carried out on ImaliPay’s platform since it began operations ~15 months ago; it has “tens of thousands” of gig workers on its platform
O7 Therapy, an Egyptian mental wellness platform, raised a $2.1M seed round led by Hikma Ventures, with participation from C-Ventures, Lotus Ventures, and others
SmartWage, a South African HR & communications tech platform, raised a $2M (R29M) seed round from LoftyInc Capital, Creator Collective Capital, Penrose Capital, and others — SmartWage has grown monthly active users 14x in the past 12 months; clients include KFC, Debonairs, and Seattle Coffee
Elloe, a Kenyan/American AI-powered social commerce platform, raised an undisclosed ‘seven-figure’ pre-seed from the Philippines’ Mad Ventures — Elloe plans to expand to the Philippines and other Southeast Asian markets in 2023
WafR, a Moroccan loyalty platform that allows users to earn phone recharges when they use the app to pay at retail outlets raised $278K at a $7.5M valuation from UM6P Ventures, Plug and Play, and others — This is separate from the ~$372K WafR previously announced in Week 7; WafR has ~12,000 grocery stores in its network
Ladda, a Nigerian all-in-one investment platform offering portfolio management, global stock investment, gift cards, and payment solutions, announced its participation in the On Deck ODX1 Accelerator
Locstat, a South African advanced analytics platform, raised an undisclosed amount from Grindstone Ventures — Locstat is an alumnus of Grindstone’s entrepreneurship development program
Sycamore, a Nigerian peer-to-peer lending platform, raised an undisclosed seed round led by White Hibiscus Capital — Founded in 2019, Sycamore has already disbursed “millions of dollars to thousands of small businesses” in Nigeria
ShapShap, a Nigerian on-demand logistics & last-mile delivery platform, raised an undisclosed ‘seed extension’ from V8 Capital (Growth Labs Fund I) — Founded in 2019, ShapShap has completed over 40,000 deliveries in Lagos and Abuja

ADJACENT

Qureos, an Emirati edtech & remote work platform, raised a $3M pre-seed from Globivest, Plutus21 Capital, Dubai Angel Investors and AlZayani Venture Capital, and others — 32% of Qureos’ users are in Africa, primarily South Africa and across North Africa
The Folklore Group, an American fashion e-commerce startup raised a $1.7M pre-seed led by Los Angeles’ Slauson & Co., with participation from the Fearless Fund and others — The startup’s B2B wholesale platform sells products from African fashion brands including South Africa’s Rich Mnisi and Suki Suki Naturals and Nigeria’s Orange Culture to retailers in the US

M&A

Exits, an Egyptian online marketplace for buying and selling websites, apps, and traditional businesses, was acquired by Egyptian M&A advisory firm PIE for an undisclosed amount
Gallop Express, an Egyptian logistics platform, was acquired by Saudi Arabian logistics platform GLT Express for an undisclosed amount — The acquisition furthers GLT’s strategy of expanding beyond the GCC countries into the MENA region

FUNDRAISING

Endeavor South Africa announced that it raised double its initial target for Harvest Fund II — Since its first close in 2021, the fund has invested in 10 companies including Clickatell and Flexclub; ~$13M (R190M) was raised in the fund’s final close

📚 Quick Hits

FOR YOUR READING PLEASURE

Your guide to product virality — Kyle Poyar, OpenView Operating Partner: “Even if your product isn’t inherently viral, it pays to give product virality a second look. Consider that it’s far easier to generate growth from your existing product users than it is to acquire new ones. And this truism includes increasing the engagement and advocacy of the existing customers… After all, who would’ve expected a single-player product like Wordle to become a viral phenomenon?”
The art of product management — Ken Norton, executive coach and former Google PM on the six crucial soft skills in product management: Communication, Collaboration, Creativity, Critical thinking, Curiosity, and Consciousness
The tactical guide to making better decisions when starting and scaling companies — Annie Duke, retired poker player and Special Partner for Decision Science at First Round Capital, shares mental models for improving decision hygiene, frameworks for navigating hiring, firing, & bet-the-company decisions, and more

Bonus:

The scoop: Inside Fast’s rapid collapse — “On Tuesday, 5th April, Fast laid off all of its workforce of about 450 employees, of which about 150 were software engineers. In this issue, I look deeper into Fast - including some exclusive information never published before - and offer predictions on the market.”
How to raise a seed round? — Elizabeth Yin, General Partner at Hustle Fund, put together this thoughtful compilation of raising an early round

🙈 Visual of the week

INTERNET AFFORDABILITY REMAINS A CHALLENGE

The cost of internet data across Africa is among the highest in the world, especially when compared to income levels. According to the UN, internet access is considered affordable when the cost of 1 gigabyte is less than 2% of gross monthly income. However, across Africa, data prices are 5.7% of gross monthly income on average compared to 2.7% in South America and 1.6% in Asia-Pacific.

Source: Ecosystem Report - Nigeria’s Startup Scene (PDF)

🕵️‍♀️ In case you missed it

NEWS & ANNOUNCEMENTS

ESSAYS/REPORTS

Michael Kimani, Fonbnk Co-Founder, writes for CoinTelegraph, ‘Here's what's happening in Web3 across Africa’
Eva Yazhari, General Partner of Beyond Capital Ventures, writes for Entrepreneur Magazine, ‘This is the key to truly 'founder-friendly' venture capital’
Tayo Akinyemi writes ‘How Exit Value, Ownership Stake, and Valuation Affect Fund Outcomes’
Rufus Kamua writes for Forbes Crypto, ‘How Kenyan micro-task workers are using stablecoins to make affordable cross-border payments’
Andile Masuku, co-founder of African Tech Roundup and head of community at Founders Factory Africa, writes for Independent Online, ‘Taking art onto a global stage through digital technology’

PODCASTS (& VIDEO)

GB Agboola, Flutterwave founder & CEO, discussed payments and fintech across Africa on McKinsey’s Talking Banking Matters podcast
Hasan Luongo, Chipper Cash’s VP of Global Marketing, discussed Chipper Cash’s strategy and outlook on the African Startup Teardown Podcast
Why investors are piling into African startups [Video] — Bloomberg QuickTake
- Pair with: African Tech Sector Is Sprouting Unicorns and Raking in Billions (Bloomberg)

INTERVIEWS/PROFILES

🗣️ Community Corner and Opportunities

I see you, friends!

Congrats to Rayan Nait Mazi on the upcoming official launch of Development Hackers on April 13th — If you’re a tech enthusiast interested in social impact, consider joining the Development Hackers community
Work with Kola Aina. He’s looking for someone based in Lagos with interests in angel investing, managing communities & building ecosystems. Fill out this form to express your interest
Join the Acumen West Africa team — they’re hiring a Lagos-based Senior Portfolio Associate to help build and manage their investment portfolio
Congrats to Wale Ayeni on a successful tenure at IFC — we’re looking forward to the official announcement of what comes next

💥 Sponsor the Afridigest Newsletter

Afridigest helps smart readers around the world get smarter about Africa's innovation economy. We’re now selectively exploring partnerships with organizations that add value to our readers.

Put your brand in front of influential Africa-focused and Africa-interested decision-makers alongside a trusted source — our readers are generally founders, executives, venture capitalists, angel investors, media professionals, faculty members, and diverse service providers at leading organizations across Africa and the world.

LA FIN

Thanks for reading 🙌🏽 Send me your news, comments, questions, etc. via Whatsapp, Twitter DM, or email, and feel free to reach out if you just want to chat. 🙏🏽

— Emeka

Afridigest