Afridigest Week in Review: Marketforce's misfortune
LPs failed to meet obligations to some investors in Kenya's Marketforce and the company is left holding the bag. What lessons can be learned?
This Afridigest Week in Review is a recap of what happened across Africa's tech ecosystem for Africa-focused founders, executives, and investors.
Welcome back, old & new friends 👋🏽! The most clicked link from last Monday’s newsletter was the article on customer willingness to pay.
📌 It’s June and the promised experiments are finally here. Here’s what’s in store:
1) A condensed, executive version of the Week in Review with no chart of the week, no reads of the week, and deal details moved behind the paywall.
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If you’re new here: welcome — this Week in Review is sent on Mondays, the Fintech Review goes out on Sundays, and an original essay occasionally goes out on Saturdays. And as mentioned above, we’re changing things up a bit this month. For past essays and digests, visit the archive & Afridigest.com.
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Week 22 2023: May 28 - June 3
🔦 Equity & Debt Fundraises
If you’d like us to know about a fundraise, please submit it here:
🤝🏽 Mergers & AcquisitionsCloud Invest, a Moroccan provider of digital payment technology, was acquired for an undisclosed amount by Emirati trading tech firm Equiti Group.
💰 Investor ActivityTotalEnergies Ventures, the corporate venture capital arm of oil & gas major TotalEnergies, sold its climate tech portfolio to French VC firm Aster. Africa-focused companies in its portfolio include Zola Electric and Ampersand. The wind down of Total’s CVC arm was previously reported.
Goodwell Investments announced the ~$61M first close of its ~$160M-target uMunthu II fund. Portfolio companies include Copia and Sendy.
Egyptian fintech VC DisrupTech announced plans to invest $4-5M in four Egyptian fintechs before the end of the year. Its investments include lending-led super app MNT-Halan,social-commerce & agent distribution platform Brimore, and mobile banking platform Khazna.
🕵️♀️ In case you missed itNEWS
Atlas E-Mobility Group announced plans to launch what it says is the first electric car designed and engineered in Africa. Development & production will happen in Morocco and the firm is targeting 2026 for the release of its first vehicles.
Co-Creation Hub announced the 12 startups in the first Nigerian cohort of its Mastercard Foundation EdTech Fellowship Program. The startups will receive up to $100K in equity-free grant funding.
Amazon Web Services (AWS) announced the 25 startups selected for its inaugural FinTech Africa Accelerator cohort. The startups will receive up to $25K in AWS technical credits.
OTHER ARTICLES
Boda boda riders in Kenya accuse BNPL companies of exploitation and theft (Rest of World)
Why pay ghostwriters in Kenya when AI can do your essays? (Context)
6 ways Google is working with AI in Africa (Google Africa Blog)
🐤 Tweet of the WeekThis is how Nigeria’s apex bank, the Central Bank of Nigeria, responded to reports that it devalued the country’s currency:
They followed up with this to be fair.
🗣️ Community Corner and Opportunities (feel free to send yours in)🎰 OPPORTUNITIES
Cleantech startups across Africa are invited to apply before June 12th to the Energy Investment Village’s Green Energy Africa Summit pitch event for a chance to win ~$250K.
Seed to Series A healthtechs in Africa using AI are invited to apply before July 10th to the Google for Startups Growth Academy: AI for Health program.
Early-stage African fintech founders are invited to apply to the 2023 ARM Labs Lagos Techstars Accelerator program. The program offers $20K in exchange for 6% equity and an optional $100K convertible note.
Early-stage African B2B SaaS founders are invited to apply to the Startup Wise Guys SaaS Accelerator Africa program. The program offers up to €65K (45K cash + 20K program fees) for up to 12% equity.
🙊 The last wordJUST MY THOUGHTS
This week, I was reminded of an old tweet about VCs being glorified managers of other people’s money.
What brought it to mind?
Well, on Wednesday Techcrunch published a revealing interview with Tesh Mbaabu, Co-Founder & CEO of Kenyan B2B e-commerce platform Marketforce, which garnered a lot of attention.
In it, Tesh revealed that the company’s “runway was cut short by over 18 months” as a result of certain investors failing to wire $8M out of a committed $20M “due to failed capital calls.”
In other words, other people with money (i.e. limited partners) failed to keep promises meet binding obligations they made to transfer funds to VCs on request. As a result, certain VCs who committed to invest in Marketforce were unable to.
Some lessons on this from the Twittersphere:
For founders, don’t make announcements until the money hits your account.
And more importantly, don’t make budgeting/spending decisions until the money hits your account.
And for VCs, don’t make investment commitments unless the money is in your account.
I had heard some murmurings about Marketforce and found this to be a shrewd and well-timed interview to own the situation.
And, in addition to the failed capital call revelation, Tesh was refreshingly honest about other aspects of the business — from poor unit economics last year to a weak liquidity position & more.
Here are some lessons for founders directly from Tesh:
Avoid unsustainable growth.
Be deliberate & discerning about who you allow to invest.
Always confront the current reality head-on.
Thanks for reading Afridigest 💌 You’ll find details & links to the startups & investors involved in the week’s fundraises behind the paywall below. And be sure to provide feedback on this new condensed version 🙏🏽
