Afridigest Week in Review: Even in Namibia, informal retail is king
+Neobank models in Africa +Great read on company culture +Deep-dives on B2B payments, fintech, and running a board +Why MTN Nigeria's MoMo matters +Contact Intellence for impactful content marketing
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 PDF presentation on new stable points in venture capital by QED’s Frank Rotman. And this week, your trusted, most comprehensive #AfricaTech newsletter is jam-packed with a variety of great content — one quick ask though: take a second and share it with your networks? Thank you kindly 🙏🏽
With that said, let’s get into Week 21.
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. And as always, feel free to reach out via Whatsapp, email, etc — special thanks to Veit, Victor, Christoph, Malik, and Amaka for the interesting convos last week 🙏🏽
Week 21 2022: May 22 - 28
📰 Deal of the Week
DIGITIZING INFORMAL RETAIL IN NAMIBIA & SOUTHERN AFRICA
Jabu, a Namibian B2B e-commerce platform connecting FMCG brands and informal retailers in Southern Africa, announced that it raised a $15M Series A led by Tiger Global, with participation from new investors Box Group, Knollwood, and D Global Ventures, and existing investors Afore Capital, Oldslip, and FJ Labs.
The round which apparently closed in March comes after Jabu’s Week 1 2022 announcement of its $3.2M seed round.
How it works: Founded in mid-2020, Jabu’s platform connects informal retailers to local and multinational brands, while digitizing orders, payments, and logistics. Retailers can browse the catalog, place orders, pay via the digital Jwallet and receive same-day delivery, often at no additional cost.
Jabu utilizes a proprietary fleet of vehicles and distribution centers to facilitate last-mile delivery. It offers brands on its platform real-time dashboards to not only track products offered and KPIs, but also to effectuate advertising and marketing campaigns.
JABU’s revenue largely comes from first and third-party distribution, but merchandising and marketing/advertising campaigns are another significant revenue source; Jabu also believes commissions from wallet transactions will grow significantly.
⛏️ Go deeper:
Traction: Jabu has ~9,000 merchants using its platform across Namibia, South Africa, and Zambia, up 50% from 6,000 in January. FMCG brands working with Jabu include Coca-Cola, ABInBev. Namibia Breweries Limited, Bokomo, and Namibmills.
Everything is fintech, but bearish on BNPL: Jabu’s aspirations include providing asset finance via its Jabu Drivers Program and building a B2B2C fintech product via its digital wallet offering, Jwallet.
According to Founder/CEO David Akinin:
“We’re entering the B2B2C space through the merchants that we work with…
Jabu is launching Jwallet in several markets, allowing merchants to use their physical flows to offer cash withdrawals and deposit services for their customers. But that’s just the first step of Jabu Finance…
Partnering with banks across the region, the Jwallet [will also facilitate] digital payments, accumulat[ion of] savings and…transaction history.
Unlike others in the sector that are focusing on Buy Now, Pay Later financing, we’re focused instead on building sustainable merchant credit profiles. Our fundraising experience showed us that the industry is being pushed in the BNPL direction, but our thesis is that it won't be sustainable to create indebtedness in a market that is not yet properly digitized.”
A look back. Watch this interview of Founder & CEO David Akinin in Feb 2021, well before Jabu’s institutional fundraising:
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
Sylndr, an Egyptian online marketplace for used cars, raised a $12.6M pre-seed led by RAED Ventures, with participation from Algebra Ventures, Nuwa Capital, 1984 Ventures, Global Founders Capital, and others — This is the largest pre-seed round in Africa to date; Sylndr has not yet launched to the public
Untapped Global, a Kenyan investment platform connecting global investors with investment opportunities in Africa and other emerging markets, announced that it raised a $10.3M (debt & equity) pre-seed in March — The company also announced the launch of its public beta platform; it claims an annual revenue run rate of $2.5M ‘with a consistent profitable return on capital’
Cassava, a Nigerian blockchain infrastructure network focused on DeFi and NFT solutions, raised $8M from Adaverse, Decentraland, Formless Capital, and a variety of other investors — The announcement was made public earlier this month
FoondaMate, a South African messaging-based learning platform, raised a $2M seed round led by LocalGlobe, with participation from Emerge Education, FirstCheck Africa, Future Africa, LoftyInc, Base Capital, and others — Since its 2020 launch, FoondaMate has been used the world over by more than 400,000 students in over 30 countries, including Colombia, Mexico, Brazil, and Indonesia
Pair with: 'Our investment in FoondaMate’ by LocalGlobe's Ziv Reichert
Essal, an Egyptian platform connecting users to doctors and other healthcare professionals, raised a $1.7M seed round from A15 — Since its 2018 launch, Esaal has onboarded over 350 consultants whose expertise includes anxiety, physiotherapy, pediatrics, and nutrition
Cloudfret, a Moroccan B2B SaaS trucking & logistics platform, raised $1.08M at a valuation of $21.5M from Plug and Play, PRC Ventures ICAV, Azur Innovation Fund, AfriMobility, and others — Cloudfret reached ~4,000 active trucks and ~60 active freight customers across Europe & Africa in 2021; it’s targeting 10,000 active trucks by the end of 2022
Natrify, an Egyptian biotech firm producing sustainable bioplastics, raised a ‘six-figure’ pre-seed from Ambo ventures — in addition to preparing its MENA launch, Natrify is also targeting the US and the UK
Gigmile, a Nigerian lender and solutions provider focused on informal drivers in the mobility sector, is participating in Techstars Toronto Spring 2022 class — Techstars offers an initial investment of $20K in exchange for 6% equity and an optional $100K in exchange for an additional 1-3%
FlexID (formerly FlexFinTx), a Zimbabwean decentralized digital identity platform, raised an undisclosed amount from the Algorand Foundation
Monolith, a pan-African venture studio and fund-of-funds DAO, raised an undisclosed amount from Audacity Fund and others
Gooo Delivery, an Egyptian on-demand delivery platform, raised an undisclosed pre-seed
AMP Global Technologies, a blockchain-based video entertainment platform that allows African users to earn digital currency by engaging with content, raised a $5.6M seed round, from MaC Venture Capital and others
Egyptian customer experience platform Tactful was acquired by Belgian business communications specialist Dstny for an undisclosed amount
Crypto Valley Venture Capital announced that it’s launching a $10-$50M fund targeting Africa-focused blockchain startups — CV VC’s existing portfolio includes Nigerian blockchain land registration platform Leading House Africa and Ghanaian mobile payments platform Mazzuma
Helios Digital Ventures, the new venture capital arm of leading Africa-focused private equity firm Helios Investment Partners, has been publicly announced for the first time — Led by former IFC Head of VC investments Wale Ayeni, Helios Digital Ventures has already invested in Egypt’s Paymob; the target size of the fund is unknown, but rumored to be between $5 and $20M, according to Techcrunch
Tunisian VC firm 216 Capital Ventures announced the first $9.6M (€9M) close of its 216 Capital Fund — The fund will invest average ticket sizes of $108K in Tunisian startups primarily at the pre-seed and seed stages
Gender lens African investment network, ShEquity, announced that it received a $1.2M co-investment grant from the USAID-funded West Africa Trade & Investment Hub to support women-led or -owned businesses across Africa — As part of the grant, ShEquity will provide support services to 120 businesses and select 12 high-growth businesses to receive at least $50K each in VC funding; ShEquity’s current portfolio includes Ghanaian B2B Data Analytics and AI Platform Superfluid Labs and Nigerian bus sharing platform Shuttlers
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📚 Quick Hits
FOR YOUR READING PLEASURE
What is company culture & why is it important — Taylor Pearson writes: “Culture is created through visible costly actions… In 2020, Jeff Bezos said he still read customer complaints sent to firstname.lastname@example.org… This was, in opportunity cost terms, a massive waste of Bezos’s time. But given that Amazon’s entire model is strongly influenced by being customer-centric, it’s a visible and costly signal to everyone else in the company that being responsive to customers really is important… If it helps to create that cultural value, then these sorts of seemingly useless actions are not a waste, they are one of the most valuable things a leader does.”
Related: My favorite Taylor Pearson essay — Why history’s greatest innovators optimized for interesting
Crawl before you run: The search for problem market fit — “Problem-market fit is a prerequisite to product-market fit…The holy grail of startup success at the pre-seed and seed stage is finding problem-market fit. Everything else is superfluous. While problem-market fit is all about discovery, product-market fit is all about execution. In fact, there is a large chasm between problem-market fit and product-market fit.”
Time-to-money as a competitive advantage — “In general, if you’re building a fintech product, a good starting edge is finding places where incumbent time to money flows are slow, and making them faster. One reason a lot of US p2p players have struggled to grow organically overseas is that…in many countries, instant money movement has been available [for a long time.] … As a result, they couldn’t really offer any material financial benefit to non-US customers just by being fast.”
The rise of Cash App — “Cash App isn’t only one of the most underrated fintechs in the world, but also one of the most underrated social networks. Cash App saw something that most financial services companies hadn’t: money is inherently social.”
Adapting to endure (PDF) — Sequoia Capital’s presentation to founders about the current crucible moment and how to adapt in this changing market environment: “This is not a time to panic. It is a time to pause and reassess.”
Bonus — 2 reports and 1 guide worth reading:
B2B Payments: The last major bastion of paper-based payments and processes — FT Partners' latest report covering “the workflows and processes behind B2B payments … thus providing a roadmap for investors and companies in understanding and targeting this massive space”
Fintech and the future of finance — a thorough World Bank report on the implications of fintech and the digital transformation of financial services
The definitive guide on how to run a startup board of directors — an open-source library for running a world-class board
🙈 Visual of the week
A LOOK AT NEOBANKS ON THE CONTINENT
There are “four notable business models used by neobanks in Africa,” according to FXC intelligence:
Card-based model: offering debit cards and getting paid an amount from the processing fees that merchants are charged
Credit-based model: providing credit and earning revenue from the interest rates applied
Asset-based model: offering investments and digital trading services and earning revenue from transaction fees and/or float
Ecosystem-based model: Creating a unified platform or financial super-app that offers several different revenue streams
Source: The growth of African neobanks, FXC Intelligence
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The Afridigest Week in Review is designed to inform Africa-interested founders, executives, investors, and observers. Share it with those interested in innovation across the continent. 🙏🏽
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Tobi Amira, COO/Vice President of Loans at TeamApt, writes 'How Moniepoint became king’
Pair with: my write-up on TeamApt in the Generalist's essay, ‘Frontier giants: companies to watch in emerging markets’
Tochukwu Ironsi, Market Intelligence Specialist at Paystack, and the DecodeFintech team write ‘Understanding MTN Nigeria's Payment Service Bank (PSB) license’
Fred Swaniker, founder of the African Leadership Group, writes ‘The secret to solving the world’s shortage of technology talent’
Celina Lee, CEO at Zindi, writes ‘Ignore at your peril: How Africa’s AI and startup scene is getting ready to change the world’
Crypto Valley VC, in collaboration with Standard Bank, published the African Blockchain Report
TechCabal Insights, in collaboration with Klasha, published the report, ‘International e-commerce in Africa’
Nigerian billionaire businessman Tony Elumelu joins Stanford GSB’s Grit & Growth podcast
Babacar Seck, a senior investment professional at Proparco, discusses the role of LPs in African venture ecosystems on The Trajectory: Africa podcast
Eerik Oja, Co-Founder & CEO of South African car subscription platform Planet42 joins the Chini ya Maji podcast
How e-commerce looks different in Africa (The Economist $)
Mobile money taxes drives poor out of digital economy (Ventureburn)
African entrepreneurs call for more investment in local energy startups (Devex)
Million-dollar blockchain projects have finally come to Africa (Quartz)
From Argentina to Nigeria, people saw Terra as more stable than local currency. They lost everything (Rest of World)
Cross-border payment in Africa is a big frustration and a huge opportunity. Can stablecoins help? (TechCabal)
How has Nigeria’s digital currency fared since its launch? (Al Jazeera)
The pain of selling furniture online in Egypt (Wamda)
Ex-Uber executive reveals how driver earnings were slashed in Kenya (TechCrunch)
GetEquity's game of fast and loose makes founders and funders jittery (Weetracker)
Central African Republic’s adoption of bitcoin is mostly about geopolitics (Financial Times $)
Lagos government warns against using Russia’s inDriver and Armenia’s Rida (Rest of World)
🐤 Tweets of the Week
One recurring subject of discussion this week was the idea of neobanks banking the unbankedBanking the unbanked has become more like Overbanking the banked. Same set of people using the several Fintech apps. And more Fintechs are springing forth for this same pool.Why do many African founders want to build neobanks so badly? Anytime I discuss strategy, they all want to end up as neobanks. Why are you looking to be part a regulated industry so much when you can innovate ahead of it? Strange for a continent with huge infrastructure deficits.
🗣️ Community Corner & Opportunities
Join the Paystack team. They’re hiring a Chief of Staff (based in either Nigeria, Ghana, South Africa, or Kenya) to report directly to CEO Shola Akinlade — investors interested in transitioning to an operational role are encouraged to apply
Join the VC4A team. They’re hiring a CEO to lead the organization’s next phase of growth — MBA holders are invited to apply for the location-agnostic role
The Toyota Group’s Africa-focused corporate venture capital arm, Mobility 54, is holding a pitch contest for early-stage transport, logistics, and mobility-focused startups: 2022 Digital Transformation Challenge
Congrats to Wale Ayeni on the new role with Helios Digital Ventures
And well done to the Google Africa team for this year’s Africa Day concert 🎶
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