Afridigest Week in Review: A promising pivot to payments

+Sequoia Capital’s Doug Leone on building an enduring company +Mobile money for some, not all +Different kinds of bullsh*t +SWVL's layoffs +Sachetization in African tech +VC4A is hiring a CEO +More

Emeka Ajene

Jun 6

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 last week was the FXC Intelligence piece on The growth of African neobanks (from which we sourced last week’s visual of the week). With that said, let’s get into Week 22.

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Week 22 2022: May 29 - June 4

📰 Deal of the Week

INTERNATIONAL CALLING AND PAYMENTS

Talk360, a South African international calling platform, raised a $4M seed round from HAVAÍC, 4Di Capital, and others.

How it works: Talk360 enables users to make international & local calls via Voice over Internet Protocol (VoIP) for a fee — only the call initiator needs the app, the recipient receives the call as usual.

So far, the Talk360 app has over 1 million Play Store downloads and paying users in 170+ countries; in 2021, the platform connected ~2 million people via VoIP.

But while Talk360 plans to expand its international calling operations across Africa, the raise is linked primarily to fintech; a significant chunk of the funding will be used to build a unified payments platform for the African continent.

⛏️ Go deeper:

On the pivot to payments: “While rolling out Talk360’s mobile calling app in South Africa, we identified another big challenge which we believe we can solve. Over 70% of all African consumers are unable to purchase international digital services, like call credit for Talk360. The problem is that the African payment culture is diverse and scattered with cash and different wallets & cards. Each African country has its unique card or wallet solution. Many international payment providers do not support these local wallets or cards, nor all 54 local African currencies.
To bridge this distance, we are creating a unique distribution network of digital & physical locations, as well as continuing to build our extensive agent referral program. Building upon this, [we’re launching] the world's first single checkout payment platform combining all local currencies & payment methods for all Africans. This platform will enable Africans to purchase services they never had access to before.”
A look back. Watch this 2016 explainer from Co-Founder & CEO Hans Osnabrugge:

🔦 Other deals

OTHER FUNDRAISES ACROSS THE CONTINENT

LifeCheq, a South African AI-powered financial advisory platform, raised a ~$3.3M (ZAR53M) Series A led by Naspers Foundry — Since its launch in 2018, LifeCheq has served over 45,000 South African users
Betastore, a Nigerian B2B marketplace connecting informal retailers directly with FCMG manufacturers & distributors, raised a $2.5M pre-series A from 500 Global, VestedWorld, and Loyal VC
Ayoken, a Nigerian/British NFT marketplace for creatives with a particular focus on facilitating transactions of users across Africa and other emerging markets, raised a $1.4M pre-seed from Founders Factory Africa, Kon Ventures, Crypto League, R9C Ventures, Maximus Ventures, and others
HumanSquad, a Nigerian/Canadian immigration tech platform connecting immigrants to various resources, raised a ‘six-figure’ pre-seed led by Calm Fund
Finclusion, a South African/pan-African financial services group & neobanking platform, raised an undisclosed amount from The Cairo Angels Syndicate Fund (CASF) — The startup previously announced a pre-Series A funding round and a new neobanking strategy in Week 3 2022
DriveMe, a Nigerian mobility tech platform that connects drivers with vehicle owners and fleet operators, raised an undisclosed pre-seed from Niche Capital, FM Capital, and others — Founded in 2019, it has a pool of over 3,000 drivers and has matched over 1,000 drivers with businesses and individuals
Shopstar, a South African cloud-based e-commerce platform that helps businesses & entrepreneurs sell online, raised an undisclosed amount from Launch Africa
M Auto, a ‘mobility as a service’ platform that offers electric vehicles to drivers in Togo and Benin via a pay-as-you-go model, raised an undisclosed amount from Africa Transformation and Industrialisation Fund (ATIF) — One of the ATIF’s associates is a former senior advisor to Togolese President Faure Gnassingbé; M Auto currently has ~300 motorcycles are in circulation in Togo and is targeting a manufacturing plant in the country
Alongside Nigeria’s Bongalow and Gigmile, the following startups are also participating in the Techstars Toronto Accelerator 2022 Spring class:
- Blackcopper, a Nigerian small business lending platform
- Emergency Response Africa (ERA), a Nigerian emergency medical response platform
- Glade, a Nigerian neobank for businesses
- TruQ, a Nigerian on-demand logistics platform

M&A

Egyptian quick-commerce platform Appetito acquired Tunisian quick-commerce & last-mile delivery platform Lamma for $10-$15M — According to Appetito, it becomes the largest q-commerce player in Africa with this deal

VC FUNDS

Nigeria’s Constant Ventures is raising a $100M fund to invest in West African startups — Its existing portfolio includes Appzone, Omnibiz, Gokada, and CreditClan
Old Fashion Research (OFR), a Web3 fund focused on the metaverse and bringing greater crypto adoption to Africa, Latin America, and other emerging markets announced a $100M fund anchored by an investment from global gaming platform WEMIX — OFR has invested in over 50 blockchain projects to date, including gaming community Metaverse Magna and web3 builder/investor NestCoin

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📚 Quick Hits

FOR YOUR READING PLEASURE

Different kinds of BS — “There are three important facts about bullshit: It’s everywhere, it’s influential, and it’s dangerous… Bullshit comes in countless forms, some harder to spot than others. False modesty, projecting, double standards, hypocrisy, tugging at heartstrings – these aren’t lies; they’re subtle forms of bullshit, which is why they’re so prevalent”
A quick start guide to building an enduring company; In conversation with Sequoia Capital’s Doug Leone — “First and foremost, you have to hire the right people for the culture you’re trying to achieve. If I am selling toothpaste, I know there’s no innovation. I’m looking for a different culture. It’s a market share, a penny of gross margin. But in a world of rapid change, of novelty, I need people that believe they can change the world. And we need people spiky, non-linear, sometimes injured people. Injured in life – I don’t mean physically – that are pissed off and have something to prove.”
A better model for valuing startup equity — “Startups have a few common end states — going public, getting acquired for talent or product, or going out of business… If you’re joining a startup and want a good financial outcome, there are two critical things to get right: Ensure that there is some probability of an IPO and that your stock won’t expire before it happens.”

Bonus:

Record labels dig their own grave. And the shovel is called TikTok. — “The shift is huge, and it’s arguably the biggest change in the record business in ages…{But] if you think this phenomenon only involves music and TikTok, think again. The same power shift is happening in almost every creative field. Or will soon.”
- Pair with: Should Africa-based label services and distribution companies adapt their model?
The pivot to Web3 is going to get people hurt — “Tack on Web3, and investors will throw money blindly and inflate valuations 2-3x.”

🙈 Visual of the week

MOBILE MONEY FOR SOME

Mobile money plays an increasingly significant role across sub-Saharan Africa. And it’s also growing rapidly in the South Asia and East Asia & Pacific regions.

But elsewhere, including MENA, Europe & Central Asia, and LatAm, mobile money plays a minor role. In these regions, bank accounts, card-based systems (most of which link to underlying bank accounts), and/or cash generally dominate.

Source: Fintech and the Future of Finance - Overview (PDF) - World Bank

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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

Egypt’s SWVL plans to lay off 32% of its team two months after going public — The first African startup to go public via SPAC, SWVL will now expand its B2B and B2G businesses while scaling back its B2C operations
- Pair with: The CEO letter announcing the SWVL ~~layoffs~~ ‘optimization’
Kenya’s M-Pesa, Visa offer virtual cards for global transactions
Guaranty Trust, Nigeria’s second-largest lender by market value, launched a fintech unit named SquadCo and received final approval for its payments unit HabariPay from the Central Bank of Nigeria
GreenHouse Capital announced the 13 start-ups from East & West Africa selected to participate in the Scale-Up accelerator program in collaboration with Microsoft

ESSAYS/REPORTS

Raymond Moodley, Middle East & Africa Senior Banking Director at Oracle Financial Services, writes ‘African banking evolution: From mobile banking to fueling fintechs, SME growth and expanding middle class’
Wesley Diphoko, Editor-In-Chief of Fast Company South Africa writes ‘There’s no such thing as township tech’
Dr. Rafiq Raji, Research Fellow at the NTU-SBF Centre for African Studies at Nanyang Business School in Singapore, writes ‘African genes are not well represented in research databases. Here’s why that’s a problem’
Tim Weiss & Markus Perkmann, Professors of Innovation & Entrepreneurship at Imperial Business School writes ‘What African tech startups can teach us about digital innovation’
Nyari Samushonga, CEO of the WeThinkCode_ academy, writes ‘Education must invest in technology to future-proof the workforce’
Secha Capital and Duke University’s Fuqua School of Business published the report, “Re-Pitching the African Consumer Opportunity: How to get U.S. corporations and PE funds excited about investing in the consumer growth story in Africa”

PODCASTS & VIDEO

Andy Jury, Group CEO of Mukuru, a leading online remittance platform in Southern Africa, joins the McKinsey Africa podcast
Uber Eats' sub-Saharan Africa Sr. Strategy & Planning Lead Thabang Sebata shared a presentation on Innovations in African Foodtech [VIDEO]
Aswath Damodaran, Professor of Finance at NYU’s Stern School of Business, appeared on the Invest Like the Best podcast

INTERVIEWS/PROFILES

🐤 Tweets of the Week

A tweet (& thread) from a seasoned founder on the current market environment and models that work in Africa
JasonNjoku @JasonNjoku
Most startups don't need to be alive. Transferring value from VCs to customers isn't a model that can work in Africa. Creating an experience worth paying for is the only way. As I've been saying for many years. You don't need capital you need customers. God speed.
June 1st 2022
11 Retweets43 Likes

Some interesting thoughts on growing organically via communities
Osaretin Victor Asemota @asemota
Can a Fintech product grow in Africa organically with zero marketing spend? I think so. It depends on how you tap into communities and what you can do for those communities. It is also important NOT to try to compete with others and choose a niche where you can dominate fully.
May 30th 2022
130 Retweets527 Likes
A tweet expressing frustration at the existing payments landscape in Nigeria and elsewhere across the continent
AMANi 🦄 @Amani_Art
Foreign SaaS founders are on twitter marketing their product. while Nigeria SaaS founders are still begging Stripe, Gumroad and PayPal for permission to earn. FUCK THIS WORLD!
June 2nd 2022
30 Retweets149 Likes

🗣️ Community Corner & Opportunities

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

✨ Have an offer or service that Afridigest readers should know about? See our sponsorship information here.

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. 🙏🏽

Thanks also to our sponsor intellence for today’s Week in Review. Click here or email hello@intellence.co to build your content strategy.

— Emeka

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