Afridigest Week in Review: The trouble with Tingo

The Nigerian agrifintech claims it has 12M customers & made ~$400M in gross profits on $850M+ in total revenue last quarter. But is it an 'exceptionally obvious scam?'

Emeka Ajene

Jun 12, 2023

∙ Paid

Welcome back, old & new friends 👋🏽! And happy Democracy day to readers in Nigeria. ICYMI, the first Intelligence Brief email came out last Wednesday & feedback is still very much welcome. (The correct answer to the pop quiz is A. 70-80 million by the way. 73.4M to be exact.)

📌 Expect to receive the Curated Content email this week, and we’ll continue to experiment a bit over the next few weeks.

Reminder: On June 22nd, subscription prices will go up — subscribe to get grandfathered in before then.

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. And with that said, let’s get into it!

A MESSAGE FROM AFRICREATE

Intelligence you can trust.

Africreate is a trusted research & advisory firm that offers customized intelligence-led solutions including:

Custom Research, Analysis, & Advisory for Bespoke Projects
Training, Executive Education, & Corporate Innovation Solutions
Strategic Communication & Thought Leadership Services

Learn more. Download the overview.

Week 23 2023: June 4-10

🔦 Equity & Debt Fundraises

If you’d like us to know about a fundraise, please submit it here:

Submit fundraise info to Afridigest

🤝🏽 Mergers & Acquisitions

Dubai-headquartered, London Stock Exchange-listed Network International, the largest payment processing firm across the Middle East & Africa (and the parent company of African payments service provider DPO Group), accepted a cash buyout offer from Canada's Brookfield Asset Management for $2.76B. The company’s Board of Directors intends to unanimously recommend that shareholders vote for the deal; Network International acquired DPO Group in Week 31 2020.
Rology, an Egyptian on-demand teleradiology platform, acquired Saudi Arabian teleradiology provider Arkan United for an undisclosed amount.
Expensya, a Franco-Tunisian expense management platform, was acquired by Medius, a Swedish provider of accounts payable automation solutions for an undisclosed amount. The rumored ‘nine-figure’ transaction is said to be “one of the largest in the MENA region.” Expensya last announced a $20M Series B in 2021.
The South African Competition Tribunal approved the acquisition of third-party payment processor Switchone and airtime VAS provider Virtual Payment Solutions by PE-backed special purpose vehicle VCAP1.
Australian Securities Exchange-listed BNPL platform Zip signed agreements (at the end of Q1 2023) to divest South African BNPL platform Payflex. Zip acquired Payflex in 2021.

💰 Investor Activity

Antler, the global VC firm and venture builder with an East African subsidiary, closed a $285M Antler Elevate fund to invest in Series A+ companies across the world. The company says it will leverage its localized footprint, including its Kenya office and 24 other regional offices, to source investment opportunities at scale.

🕵️‍♀️ In case you missed it

NEWS

Senegal cut mobile internet access in certain areas of the country at certain times, following violent protests.
- Pair with: Senegal, one of Africa's bastions of stability, faces its gravest threat of unrest in decades
Libya launched youth entrepreneurship initiative Deraya in conjunction with the United Nations Development Programme, the EU and the African Development Bank.
The IFC announced a $157.4M investment in the parent company of Safaricom Ethiopia
The African Union and a Temasek subsidiary are considering backing a $150B Africa123 plan to develop 123 new cities across Africa.
iHub announced the 12 startups in the first Kenyan cohort of its Mastercard Foundation EdTech Fellowship Program. The startups will receive up to $100K in equity-free grant funding
Layoff news:
- Fintech unicorn Chipper Cash trimmed its workforce and let go of a number of senior staff members.
- Crypto platform Mara laid off its marketing team after laying off ~50% of its workforce last December.
- B2B e-commerce food distribution platform Twiga Foods ended its relationship with a number of independent sales agents; this follows the company’s elimination of its in-house sales team last November.

🎰 OPPORTUNITIES

Founders of early-stage startups in Nigeria are invited to apply to the 3rd edition of TechCircle’s startup competition PITCH2WIN. $20,000 total in equity-free cash will be won by the top three participants.
Seed to Series A African startups tackling climate change with tech are invited to apply before July 7th to the Google for Startups Accelerator: Climate Change.
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.

🙊 The last word

JUST MY THOUGHTS

Nigerian ‘agrifintech’ Tingo was the talk of the town this week.

The company first went public in August 2021 via a reverse IPO with iWeb that created the entity Tingo, Inc (OTC:TNMA). And in December 2022, the company joined Nasdaq via what was in effect another reverse IPO with MICT, creating the entity Tingo Group (NASDAQ:TIO).

Last quarter, according to its Q1 2023 earnings call presentation (PDF), Tingo made $387M in gross profits on $851M in total revenue from 12M customers.

But questions and suspicion have long surrounded the firm.

How, pray tell, can a company with those financial results and that number of customers be basically unknown & unheard of in fintech and agribusiness circles?

This week, Hindenburg Research seemingly answered those questions.

Who’s Hindenburg Research? An American short-selling investment research firm that’s perhaps best known for exposing the fraud at American electric truck maker Nikola. It publishes investigative reports on public companies and profits if/when those companies’ share prices decline.

And this week Tingo got the Hindenburg treatment in an explosive report that alleges fabricated financials and much more. (See also: The Twitter thread version)

It’s a compelling read, and the press statement Tingo issued in response didn’t exactly inspire confidence. Neither did subsequent reporting from the FT & others.

Tingo has since hired white-shoe law firm White & Case to conduct an independent review and said it will make no further comment until the review is complete.

Meanwhile, I expect the few Tingo puts I bought when I first heard this news to continue to do well.

The more you look, the less you see.

Thanks for reading Afridigest 💌

Tell me what you thought of today’s newsletter:

😡 Hated it • 😑 Meh • 😃 Loved it

You’ll find details & links to the startups & investors involved in the week’s fundraises below.

Afridigest