Afridigest Week in Review: Autotech's ascent
+Africa's Total Adressable Markets +Cash as a moat +Flutterwave's fresh fiasco +Amazon in Africa +Lessons for African from Southeast Asia +2022 Nigeria Fintech Fortum
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, friends! Eid Mubarak to those celebrating. ✨ The most clicked link last week was BCG’s 'The future of traditional retail in Africa'
If you’re new, welcome 🙌🏽 — you’ll receive a weekly digest like this on Mondays usually and, sometimes (but far from always), an original essay/article on Saturdays. For past essays and digests, visit the archive.
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Week 27 2022: July 3 - 9
📰 Deal of the Week
Having spent a significant amount of time in Francophone Africa over the last five years, I’m familiar enough with CoinAfrique and its strengths in the automotive vertical but nonetheless, the acquisition came as a bit of a surprise.
About Autochek: The automotive company was arguably equally focused on three distinct prongs in the past: transactions and trading; maintenance; and financing; but based on recent announcements, Autochek seems to have a particular, renewed vision around automotive finance across the continent.
Quick history: We’ve covered Autochek somewhat extensively, or at least repeatedly here at Afridigest, dating back to Week 37 2020’s Week in Review. The company then seemed to have been formed out of a Q3 2020 spat between Ikpe and Cars45. We wrote at the time:
Since then, Autochek raised a $3.4M pre-seed co-led by TLcom Capital and 4DX Ventures that was announced in Q4 2020 (with participation from Golden Palm Investments, Lateral Capital/Frontiers, MSA, and Kepple Africa Ventures), and a $13.1M seed round announced in Q4 2021 co-led again by TLcom Capital and 4DX Ventures (with participation from Golden Palm, Enza, Lateral, ASK Capital and Mobility 54).
Notably, between Autochek’s pre-seed and seed announcements, Car45 announced its sale to Jiji, a significant player in Africa’s horizontal classifieds space, for an undisclosed amount.
The CoinAfrique caper: Roughly 50% of CoinAfrique transactions take place in the automotive vertical and the deal further accelerates Autochek’s push into French-speaking Africa following its May acquisition of Morocco’s Kifal.
In the Autochek Founders’ words: “Matthias and Eric are pioneers of the classifieds model in Africa and they have built an outstanding platform with many significant partnerships with car dealers, fintech platforms and other stakeholders in the Francophone automotive sector. They are joining the Autochek family with many years of business and infrastructure development experience across Europe and Africa and we are looking forward to leveraging their expertise to improve the automotive finance value proposition across the continent.” — Etop Ikpe
Etop Ikpe, Autochek Founder/CEO
Matthias Papet, CoinAfrique Co-Founder & CEO
Eric Genetre, CoinAfrique CO-Founder & MD
Dive deeper: Watch this 2021 discussion where Renaissance Capital’s Adesoji Solanke pushes Etop Ikpe to discuss, among other things, his career transitions between Cars45 to Autochek:
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
🇰🇪 Duhqa, a Kenyan B2B retail distribution platform for FMCG, pharmaceutical, and cold chain goods, raised a $2M seed round from new investors CrossFund, Roselake Ventures, and Mo Angels, and existing investor Techstars and others
🇳🇬 Winich Farms, a Nigerian foodtech platform connecting farmers directly to off-takers (small retailers and factories), raised a $790K seed round from Founders Factory Africa and others
🇳🇬 CreditChek, a Nigerian provider of customer identity, verification, and creditworthiness solutions for financial services providers, raised a $240K pre-seed led by Atom Capital with participation from Aidi Ventures,and others
🇹🇳 Paymee, a Tunisian online payment gateway, raised a ‘six-figure’ funding round led by P1 Ventures
🇬🇭 SolarTaxi, a Ghanaian e-mobility platform that designs, assembles, and distributes electric two-wheel and four-wheel vehicles raised an undisclosed amount from Persistent
The following Africa-oriented startups announced their acceptance into Y Combinator Summer 22 batch:
🇫🇷 🇸🇳 🇧🇯 Moneco, a French/Francophone African neobank for the African diaspora in Europe
🇳🇬 Pivo, a Nigerian supply chain credit & financial services platform
🇬🇭 Garage Mobility, a Ghanaian auto parts distribution platform
🇰🇪 Patika, a Kenyan SME-focused receivable automation & payments reconciliation platform
🇰🇪 Solar Panda, a Canadian provider of pay-as-you-go solar home systems to rural households in Kenya, raised an $8M Series A from EU-funded Electrification Finance Initiative (EDFI ElectriFI) and impact investor Oikocredit
🇰🇪 OFGEN, a Kenyan provider of solar power engineering, procurement, and construction solutions for commercial and industrial businesses raised an undisclosed amount from CFAO Kenya, an affiliate of the Toyota Tsusho Corporation
🇳🇬 [Deal of the Week above] Autochek, a Nigerian automotive finance solutions provider & marketplace, acquired CoinAfrique, the leading classifieds platform in Francophone Africa, for an undisclosed amount — 50% of CoinAfrique transactions take place in the automotive vertical and this deal further accelerates Autochek’s push into French-speaking Africa following its May acquisition of Morocco’s Kifal
🇿🇦 French media company Groupe Canal+ disclosed that it increased its stake in South Africa's JSE-listed pay-TV platform MultiChoice — Canal+ now owns a 20.1% stake in MultiChoice, up from 15.4% in November 2021
🇷🇼 Canal+ also announced its acquisition of Rwanda’s largest content production and distribution company Zacu Entertainment — The acquisition is the company’s third in sub-Saharan Africa. It also owns production companies Plan A in Ivory Coast and ROK Studios in Nigeria and plans to launch a new entertainment channel in the Kinyarwanda language shortly. Zacu was created by Wilson Misago who also founded the first Rwandan video-on-demand platform, Zacu TV. He commented on the deal: “It’s time to let the entire world know about Rwanda’s production.” 💪🏽
🇸🇳 Wave, a US/Senegalese mobile money provider, raised ~$91M (€90M) in debt financing arranged by the IFC — The IFC itself provided a ~$25M loan, while the balance was provided by Symbiotics, Blue Orchard, responsAbility, Lendable, Finnfund, and Norfund; the IFC previously invested $5M in Wave’s 2021 $200M Series A round
Nomanini and Baobab Group announce a strategic partnership to launch a supply chain finance solution in seven Francophone countries and Nigeria
African music streaming platform Mdundo and Universal Music Group announce a licensing deal that makes the UMG catalog available to Mdundo users
Endeavor announced the final close of its fourth fund, Endeavor Catalyst Fund IV, at $292M, surpassing the initial $200M-$250M target — Endeavor Catalyst is the co-investment fund of Endeavor that invests up to $2M ticket sizes exclusively in Endeavor Entrepreneur-led companies in emerging markets throughout Latin America, Europe, and Southeast Asia, and Africa; its Africa portfolio includes Flutterwave, TeamApt, MFS Africa, Cellulant, InstaDeep, Copia, and others
Celo announced that its new fund for African startups to transition into Web3 is live — The Fund will help provide financial investments through its VC partners which include Unicorn Growth Capital, Ape Unit, Echo VC, Uncovered Fund and Flori Ventures
📰 News of the week
There are only really two separate pieces of news worth calling out this week, and I happen to balk at both. But here’s a quick enough rundown:
THE FLUTTERWAVE FIASCO CONTINUES
There’s a lot to be said negatively around Flutterwave in recent weeks, especially with the latest news:
I have no inside info relative to this, but from what I know and can tell, Flutterwave folks in general (and where I sit specifically) need to take company culture much more seriously (See Lesson one)
Someone tell Benji that concerned criticism isn’t hate…
…and while his point is well taken, integrity still matters & people can have opposing views
AMAZON IN AFRICA
Aside from Flutterwave, Amazon’s new aggressiveness towards Africa hiring is worth noting. And it has serious implications.
Not much to add beyond noting this right now. More comments to come at a later date.
📚 Quick hits
FOR YOUR READING PLEASURE
Progress vs. categories — USV’s Albert Wenger: “As humans, we like to put things into categories…[but] if you are trying to invent the new (or fund it), it helps to let go of existing boxes, instead of trying to jam innovative ideas into them… Categories everywhere persist far past their usefulness because of vested interests. Anyone interested in inventing the future instead of clinging to the past will need to overcome that. The work of establishing new categories is hard and success in doing so a huge accomplishment that moves all of us forward.”
When cash becomes a moat — Energize Ventures’ Kevin Stevens: “For the better part of the last decade, capital has been a commodity… [but now it’s] more of a major source of competitive advantage for those who know where they can spend to create operating leverage… There are 4 reasons to leverage cash as a moat-creating, competitive differentiator: unit economics at scale; customer stickiness; customer expansion; and M&A.”
Activation: The product metric everyone thinks they need but can’t seem to define — OpenView VP of Growth Sam Richard: “Activation is a beautiful metric because it’s a leading indicator. The right activation metric empowers growth, marketing, and sales teams to understand the impact of experiments they’re running.”
3 Lessons from Southeast Asia for African startups digitizing the informal economy — 500 Startups’ COO/Managing Partner Courtney Powell writes “What do Africa and Southeast Asia have in common? Small enterprises–think mom-and-pop shops–still dominate their economies… There are three key lessons that African founders can learn from their counterparts in SEA: raise money fast; build partnerships; and tap fintech.”
Pair with the +2-year-old Afridigest piece: African innovators should look East, not West, for inspiration
Skyrocketing global fuel prices threaten livelihoods and social stability — The New York Times takes on an increasingly tangible topic from where I sit in Lagos: “The staggering increase in the price of fuel has the potential to rewire economic, political and social relations around the world. High energy costs have a cascading effect, feeding inflation, compelling central banks to raise interest rates, crimping economic growth, and hampering efforts to combat ruinous climate change…As is usually the case with crises, the poorest and most vulnerable will feel the harshest effects.”
Delivering the goods: Opportunities in vertical supply chain — The Menlo Ventures team on the opportunity for supply chain startups to innovate through verticalized solutions
Is AI generation the next platform shift? — The Bessemer team on generative AI and large language models as the foundation of a new, important paradigm shift in content creation, communication, and knowledge generation
Coatue May 2022 investor presentation (PDF) — Here’s the full Coatue presentation that’s been making the rounds in bits and pieces last week thanks in no small part to Eric Newcomer’s (paywalled) article
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🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
ESSAYS & REPORTS
Julian Duru, Product Manager at TeamApt, writes ‘My story at TeamApt: Here’s why I don’t plan on leaving anytime soon’
Judith Mwaya, Tech Policy Analyst at the Tony Blair Institute for Global Change writes ‘Fixing the Pan-African Payment System for start-ups’
Matias Gonzalez Orozco and the Catalyst Fund team write ‘Why we invested: Tulix is enhancing collaboration between African migrants and their beneficiaries back home’
Vanessa Waibel, Enrique Martinez Hausmann, Alvaro Perezcano and the Speedinvest team write ‘Fintech: The Foundation of Emerging Markets’
The Stears Data team published the report, ‘Will adopting the e-Naira threaten Nigeria’s banks?’ (PDF)
Are Africans ready for WhatsApp banking? (Quartz)
Afrobeats star Mr. Eazi blazes a new path: tech kingmaker (Rest of World)
How cybercriminals target Africa’s 500 million mobile subscribers (TechCabal)
Racist videos about Africans fuel a multimillion-dollar Chinese industry (Rest of World)
Fintech boom: African start-ups going from zero to hero (Ventureburn)
🐤 Tweets of the Week
This week we highlight tweets from within the African startup/tech ecosystem.
TLcom investor Ido Sum shared an interesting thread on thinking about TAM in Africa — “Where’s the margin and defendable model?”
Also, the Co-Founder & CTO of Hisa (a Kenyan Robinhood-like wealthtech app) shared some lessons and progress points on the journey) — “We are now raising $1M to help scale Hisa”
And Branch.co’s Co-Founder & CEO shared a tweet I thought for sure would be deleted by now. (I’m left wondering what spurred this tweet. And I think following this advice is a recipe for disaster btw in the current market context, but I’m sure Matt has his rationale.)
Moving right along, Binance Founder & CEO Changpeng Zhao completed a West African tour where he met with Presidents Ouattara 🇨🇮 and Sall 🇸🇳. He had this to say (it looks like Francophone Africa is on the menu):
In many ways, Paystack’s acquisition by Stripe is the singular event that whetted global appetites for the ongoing Africa opportunity, but many have since questioned the size of the deal. Here’s a differing viewpoint given the current environment":
And here, friends, is a funny & relatable tweet about how Nigeria(/certain African countries) will embarrass you:
🗣️ Community Corner, Opportunities, & Suggestions
⭐ Afridigest is a media partner of the 2022 Nigeria Fintech Forum being held on August 3rd in Lagos — Register here & hear from a number of Afridigest readers who’ll be speaking
The Lateral Frontiers team is hiring a Lagos-based Investment Principal
The Uncap team is hiring an East Africa Investment Analyst
Chris Maclay and the Jobtech Alliance are hiring Venture Building Managers and other roles in Lagos and Nairobi
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