Afridigest Week in Review: Israel comes to Africa
+Curtains close for Kenya's Kune +10 things I learned while building Gozem +African startups are solving real challenges despite the downturn +More
The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers.
Welcome back, old and friends! Apologies for the delay here. The most clicked link last week was Sam Gerstenzang’s 'What I learned at Stripe.' And if case you missed it, I published a new piece, '10 lessons I learned while building Africa's super app.'
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Week 25 2022: June 19-25
📰 Deal of the Week
ISRAEL IN AFRICA
Fido, a Ghana-first, credit-led Israeli neobank targeting African markets, announced that it raised a $30M Series A led by Fortissimo Capital, with participation from Yard Ventures, and others. Along with the $30M raised in equity, Fido also announced that it raised an undisclosed amount in debt.
About Fido: Founded in 2016 by Nadav Topolski, Tomer Edry, and Nir Zepkowitz (Israeli entrepreneurs with MBAs from American business schools), Fido extends short-term microloans, via mobile app or USSD, of up to $250 repayable through single or multiple installments with a maximum term of six months.
Traction: According to the company, Fido has so far underwritten ~$150 million worth of loans to ~340,000 Ghanaians and now has ‘low-single-digit default rates.’ And according to Israeli business media platform Globes, “market sources believe that the company will generate revenue of $10 million in 2022 and end the year with double the number of customers than it has at present.”
Future plans: Fido has historically been not just Ghana-first, but Ghana-only. But the company recently hired a Kampala-based East Africa Director as it ramps up operations across Uganda. The company also has a license to operate in the Philippines and is closely evaluating several markets across the African continent & elsewhere. In terms of product offerings, while the company has been credit-focused to date, it plans to roll out new savings and payments features later this year.
Fido Co-Founder & President Nadav Topolski
Fido CEO Alon Eitan
Fido CTO Guy Shaked
Fido CCO Kelvin Abdallah
Fortissimo Capital Partner Yochai Hacohen
In the CEO’s words: “We are building a new culture of money in Africa by making financial services instant and accessible… This is not only about making financial services accessible, but also about making them better: instant, simple, and transparent.” — Alon Eitan
In the investor’s words: “We are truly impressed by the team’s ability to underwrite people instantly while delivering sustainable economics. This differentiates them from the other players in the space.” — Yochai Hacohen
Trivia: We first hinted at this fundraise in our coverage of January key trends & developments.
Go back in time: Read Forbes’ March 2017 Fido coverage, ‘This startup is giving customers credit where it's due, on their smartphones’
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
mTek, a Kenyan digital insurance platform, raised $3M (debt and equity) from South Africa’s Finclusion Group
Afropolitan, a Nigerian web3 community super app for the African diaspora , raised a $2.1M pre-seed from Hashed, Atlantica Ventures, Microtraction, Cultur3 Capital, Shima Capital, Savannah Fund, Ingressive Capital, Audacity Fund, RaliCap, and others
Thepeer, a Nigerian fintech infrastructure API provider that enables digital wallet integrations, raised a $2.1 million seed round led by the Raba Partnership, with participation from Chipper Cash, Stitch, rali_cap, Timon Capital, BYLD Ventures, Musha Ventures, Sunu, Uncovered Fund, and others
Synapse Analytics, an Egyptian B2B AI platform helping businesses adopt machine learning solutions, raised a $2M pre-Series A funding led by Egypt Ventures
XENO, a Ugandan goal-based savings & investment platform, raised a $2M seed round led by Beyond Capital Ventures
Kibo, a Nigerian online school offering STEM training programs, raised a $2M seed round led by Neo (a VC firm founded by the co-founder of Code.org), with participation from Future Africa, Pledges, Brooklyn Bridge Ventures, Transcend Network, and others
Healthtracka, a Nigerian provider of home-based health services, raised a $1.5M seed round from Ingressive Capital, Hustle Fund, Alumni Angels Alliance, Flying Doctors, and others
Koolboks, a Nigerian tech-enabled provider of solar-powered cold storage & smart refrigeration solutions, raised $500K from All On
Greenage Technologies, a Nigerian manufacturer of indigenously produced solar energy equipment, raised $500K from All On
Moringa School, a Kenyan tech training & upskilling platform, raised an undisclosed amount in a pre-Series A round led by Proparco, the private sector financing arm of Agence Française de Développement Group (AFD Group)
Yellow, a South African pay-as-you-go asset-backed financing platform, announced the conclusion of a $23M debt raise from Lion’s Head Global Partners, Triple Jump, SunFunder, SIMA, Trine, and others
Zenysis Technologies, an American on-demand public health analytics & big data platform, raised a $13.3M Series B led by the Steele Foundation for Hope, with participation from 500 Startups, Peter Thiel, and others — Zenysis clients include governments and partners in nine countries across Africa, South America, and Asia; five of the nine countries are in Africa
Egyptian fintech-led super app MNT-Halan acquired Egyptian B2B e-commerce platform Talabeyah for an undisclosed amount — “The acquisition is another step in [MNT-Halan’s] strategy of building a comprehensive digital ecosystem,” according to MNT-Halan CEO, Mounir Nakhla
valU, an Egyptian buy now, pay later platform, sold a 4.99% stake in valU valued at $12.4M to the Saudi Alhokair family — The transaction follows valU’s entry into the Saudi market last week via its minority 35% ownership of FAS Finance, a joint venture (with FAS Labs
Phoenix Court Group (formerly LocalGlobe), a British venture capital firm announced a $500M first close for four new funds — The four funds are: a core pre/seed & seed fund, a fund to participate in Series B and C stages, a fund for pre-IPO companies, and a basecamp fund to back first-time fund managers in Africa, Latin America, Europe, and Asia
🔎 Curtains close for Kenya's Kune
S IS FOR SCHADENFREUDE
Grand opening, grand closing: As many readers likely know by now, Kune, the ‘foreign-founded’ Kenyan foodtech startup that was discussed in Week 23’s Week in Review, shut down last week — to a noticeable level of cheers and jeers in certain circles.
Context: Kune (pronounced koo-nay by the way) was marred with controversy ever since its founder made some ill-taken comments to Techcrunch that stirred up longstanding sentiments of investor bias across the Kenyan ecosystem. (See the section titled ‘the color of capital’ in Week 30 2020’s Week in Review as an example.)
From the horse’s mouth: While some spectators believe Kune’s demise was inevitable and linked to a failure to solve a real problem for Kenyans, founder Robin Reecht, in a LinkedIn post, pointed towards 1) rising food costs leading to deteriorating margins and 2) consequently, an inability to raise further funding.
Per a Kenyan media outlet, Reecht said earlier in an internal meeting, “Tomorrow we will have to close the company, we ran out of money completely. As you know we were supposed to receive an investment of about Sh30 million from a French investor. Yesterday, I learned from that investor that they will not invest that money. Why? On one side because we are already running out of money, [that] is not reassuring for them.”
Be smart: It’s incontrovertible that food (and fuel) prices have risen significantly across the African continent. Indeed, just last week, Ukrainian President Volodymyr Zelenskyy told African Union leaders that “Africa is actually taken hostage” in an address that blamed Russia for the continent’s food crisis. Relative to Kune, the company’s gross margin on meals reportedly fell from 48% to ~5%, suggesting an +80% increase in input costs.
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📚 Quick hits
FOR YOUR READING PLEASURE
Find the smartest technologist in the company and make them CEO — McKinsey interviews a16z’s Marc Andreessen on the next hills in tech: “We think [there are] three extremely promising new hills: Artificial intelligence - there are all these amazing technologies around deep learning, machine learning, GPT-3, DALL-E, … and so forth. Biotech - with genomics and now the mRNA revolution, and the revolution of bringing together the disciplines of biology and engineering. And the third…is crypto and Web3, which is a revolution around distributed consensus, building trusted networks on the internet, and all the things that follow from that.”
Product strategy is really about offense vs. defense — “In product, your offense is any investment that is … driving meaningful business returns now or moving your strategy forward to drive meaningful business returns in the future. Your defense is the investments you make in order to prevent potential downside.” The secret to better outcomes is identifying what’s offense, what’s defense, and — most importantly — what’s neither.
The end of the era of indifferent capital — Founder Collective’s Eric Paley writes: “The era of indifferent capital is coming to a close… Indifferent VCs are speculators and see each startup as part of a portfolio of lottery tickets. What’s the value of a single lottery ticket? If it’s a winner, you’ll guard it with your life. But if not a winner, it’s tossed in the trash without a second thought.”
10 lessons I learned while building Africa's super app — A transition and some reflections from your humble author
The NBA turns to Africa to fuel basketball’s next era of growth’— Interesting longread on the NBA’s Africa push: “The NBA wouldn’t say exactly how much money it’s put into its Africa venture, which was most recently valued at $1 billion … [It] now has an office in Lagos and wants to open one this year in Cairo, likely followed by Nairobi, though plans aren’t yet confirmed. Retail stores are coming, too, to sell apparel and footwear, starting in South Africa.”
The emergence of B2B SaaS super apps: Seven unified APIs to look out for — Seems extremely interesting to extrapolate from
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🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
ESSAYS & REPORTS
Tijan Watt and Wuri Ventures team write ‘startups in Africa are solving real challenges, downturn or not’
Dr. Sangu J. Delle, CarePoint CEO and Golden Palm Executive Chairman, writes ‘Why it is time to invest in African entrepreneurs'
Disrupt Africa published a case study on the diversity dividend: female fund managers in Africa
Nigerians are learning to buy now and pay later (Rest of World)
From B2C to B2B and back: how one of Africa’s oldest fintechs evolved (TechCabal)
Investors are keen to grow Africa’s online pharmacies despite slow consumer adoption (Quartz)
Charts showing African startups resilience amid global chaos (Bloomberg)
Africa is joining the global AI revolution (Quartz)
Africa’s off-grid solar sector seeks to rebuild after pandemic shock (African Business)
Influencer marketing: funding a booming creator economy in Africa (Guardian Nigeria)
PODCASTS & VIDEO
Knife Capital’s Keet van Zyl gave the AfricArena Keynote speech on The state of tech in Africa (Video)
Tracey Turner, Founder & Chairman at Copia Global appeared on the Chini ya Maji podcast
🐤 Tweets of the Week
MPharma’s CEO shared thoughts on investor mandates
Future Africa’s General Partner penned a 2-tweet thread about asset misallocation and an upcoming crisis
Y Combinator’s Co-Founder shared that, good times or bad times, it’s still time to build
🗣️ Community Corner & Opportunities
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Thanks to Peter Kisadha and the Future Africa team for a solid networking event in Lagos on Friday — good to see Ayòbámigbé briefly (looking fresh!) and meet Damilare, Maya, Yunus, Emeka, and others in person for the first time
The Partech Africa team is hiring for a six-month Investment Analyst internship starting in September 2022
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