Afridigest Week in Review: Millions for Moniepoint
+11 other fundraises +A poll on 2022 Africa Tech unicorns +AfricaDAO arrives +13 successful VC decks +Layoffs at Marketforce & Brimore too? +Lessons to learn from Tyler Perry
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! The most clicked link last week was the Reforge piece on churn rate myths. And in case you missed it, I published Week 31’s Week in Review over the weekend.
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Week 32 2022: August 7-13
📰 Deal of the Week
DIGITIZING AFRICA VIA OFFLINE DISTRIBUTION
TeamApt, a Nigerian fintech platform offering agency banking, business banking, and payments solutions, raised a ~$50M round led by QED, with participation from Lightrock, Novastar Ventures, and BII (formerly CDC Group).
About TeamApt: The company provides payment, credit, agency banking, enterprise software, and digital banking solutions to over 400,000 small and medium-sized businesses across Nigeria via two units: Moniepoint, an all-in-one business bank leveraging a nationwide offline distribution network, and Monnify, a payments gateway.
The company’s Series B round was the deal of the week in Week 26 2021 and here’s what I wrote at the time:
I shared more about TeamApt’s hybrid digital+analog model months later in an October 2021 write-up for The Generalist:
Now, according to the CEO, “[TeamApt is among the few] cash-flow-positive hyper-growth companies [on the continent]— even as we continue growing at triple digits year-on-year, while at the same time expanding our margins.” Furthermore, media houses report that the company processes “a $100 billion annualized run-rate transaction value.”
About QED: QED is a leading global VC firm focused on the fintech sector. The firm currently has ~$5B in assets under management and has a portfolio of over 180 companies across 14 countries, including investments in 25+ unicorns. In January, the globally renowned investor announced two Africa-focused hires and it now plants its flag firmly on the continent with the TeamApt investment.
About the fundraise: In November last year, Bloomberg reported that “Nigerian tech startup TeamApt Ltd. is in the market raising its third round of funding at a value of more than a $1 billion, which will result in the fintech firm joining a spate of Africa-tech companies to become so-called unicorns.”
But as they say, man makes plans and God laughs.
Since the Bloomberg piece was published, TeamApt raised, in Week 5 2021, what I was told at the time was best called a “Series B2” round. And now, according to TechCrunch, this round “can perhaps be described as a pre-Series C round because sources say the company is still in the market to raise a Series C next year.”
The CEO added a bit of context here: “We always approach our fundraising effort opportunistically and want to make sure the market context, cash needs of the business and investor profile match our strategic growth views…As a profitable company, we did not need the cash, but we were happy to take an opportunity to add a new high-profile investor.”
For what it’s worth, I’m told that TeamApt’s current valuation with this round is just under $1B. And for those keeping score at home, despite rosy predictions around the end of 2021, we’re now seven and a half months into 2022 and so far not a single unicorn has been newly minted across the ecosystem.
What does the rest of the year hold in your view?
In the CEO’s words: “With this financing round, TeamApt is widening our credit offerings. QED’s investment proves TeamApt’s opportunity for exponential growth as a world-class financial institution at the forefront of Africa’s economic revolution…With QED’s [fintech & credit] expertise, TeamApt will continue digitizing Africa’s economy and enabling growth, inclusion, and access to financial services.” — Tosin Eniolorunda
In the Investor’s words: “I am proud to bring Africa to QED and QED to Africa. I could not think of a better way to enter the continent than with our investment in TeamApt. Tosin and his team have steadily built an impressive payment and distribution network across Nigeria over the past five years. Their strong and positive unit economics, coupled with a deep customer focus, will enable them to continue to build out an even more expansive network.” — Gbenga Ajayi
Hear more from the CEO about bootstrapping, growing efficiently, and solving real problems in this video filmed just after TeamApt’s 2019 Series A:
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
🇿🇦 DataProphet, a South African firm providing artificial intelligence solutions for smart manufacturing, announced a $4M Series A extension round led by Knife Capital’s Knife Fund III — The firm previously raised a $6M Series A in Week 35 2020 co-led by the Industrial Development Corporation of South Africa (IDC) and Norican Group, with Knife Capital’s KNF participating
🇪🇬 Convertedin, an Egyptian marketing platform for e-commerce brands, announced a $3M seed co-led by Merak Capital, with participation from 500 Global and MSAS
🇸🇳 Socium Job, a Senegalese HR platform connecting African firms and jobseekers from local communities & across the diaspora, announced a ~$1.02M (€1M) venture round from Breega, Teranga Capital, Kima Ventures, Techmind, Evolem Start, and others
🇰🇪 FinAccess, a Kenyan software solutions provider helping community banks and farming co-ops digitize their operations and access financial services, announced a $500K pre-Series A from HAVAÍC’s Universum Core African Fund
🇪🇬 Bonbell, an Egyptian foodtech provider of digital solutions for table/meal reservations and food ordering, announced a $350K pre-seed round — it’s also targeting a $10M seed round by the end of the year
🇿🇦 Droppa, a South African on-demand logistics platform, announced an undisclosed Series A led by SkyNet Worldwide Express
🇺🇬 Tripesa, a Ugandan tourism-tech platform digitizing the African tourism sector, announced an undisclosed pre-seed from Future Africa, Consonance Investment Managers, and LTNT Investments in June
🇿🇦 SodaWorld, a South African blockchain platform that enables artists to earn from within the metaverse, announced an undisclosed amount from Crypto Valley VC (CV VC)
In addition to the four YC S22 startups mentioned in Week 27’s Week in Review, the following Africa-oriented startups announced their acceptance into Y Combinator’s Summer 22 batch:
Zeepay, a Ghanaian remittance & cross-border payments platform, secured $10M in medium-term debt capital from South Africa’s Verdant Capital in what it says is part of its Series “A.5” round — the company announced a $7.9M Series A round in Week 26 2021
OneOrder, an Egyptian B2B food supply chain platform serving restaurants, hotels, and cafes, secured a ~$6.5M (EGP 125M) working capital facility from Contact Factoring, a subsidiary of leading Egyptian non-banking financial services company Contact Financial Holding
Egypt-born mobility tech platform Swvl (NASDAQ: SWVL) announced a $20M private placement at a price of $1.65 per share
Float (formerly Swipe), a Ghanaian cash flow management and digital lending platform for SMEs, acquired Accounteer, a Nigerian cloud-based SME-focused accounting platform, for an undisclosed amount — the acquisition of Accounteer’s bookkeeping & accounting capabilities moves Float further down the path of becoming a full-service “financial operating system” for SMEs
Elloe, a Kenyan AI-powered conversational commerce platform, acquired Flo by Saada, a Kenyan SME-focused no-code customer engagement platform, for an undisclosed amount — the acquisition brings Elloe a strong technological complement to its existing portfolio of messaging services
Indian IT company Tech Mahindra announced that its planned acquisition of the shares of Falcorp Technologies, its joint venture partner in South Africa, for ~$3.8M (62 million rands) — it will acquire Falcorp’s 49% stake in Tech Mahindra South Africa and its 4% stake inTech Mahindra Holdco
Toyota Tsusho Corporation announced its commitment to invest an undisclosed amount in Verod-Kepple Africa Ventures, a joint venture between Kepple Africa Ventures and PE firm Verod Capital Management — VKAV plans to invest $100M from 2022 to 2026 in scalable, tech-enabled, post-revenue startups across the continent
BitDAO announced its approval of AfricaDAO’s $20M proposal to invest in Africa-focused web3 ventures — more on this in the next section
🔎 More on AfricaDAO
Here’s the news: BitDAO to fund AfricaDAO with $20M for web3 adoption in Africa
Who/what is BitDAO? BitDAO says it’s one of the world’s largest DAOs. When the BitDAO introduction was published in August 2021, backers included Peter Thiel, Founders Fund, Pantera, Dragonfly Capital, and others. BitDAO’s vision includes “open finance and a decentralized tokenized economy.”
Who/what is AfricaDAO? According to its website, AfricaDAO is an investment fund whose aim is to accelerate Africa into a hub for web3 innovation by connecting entrepreneurs with access to financial capital, global social capital, business-building acumen & best practices, and educational resources needed to bootstrap successful web3 startups.
Its “proposers” include Jambo, the Congolese “Web3 super app” for Africa, and Alice & Jamez Zhang, Jambo co-founders. In Jambo’s $30M Series A announcement, James Zhang, Jambo CEO, wrote that “because we’re passionate about true Web3 transformation in Africa and can’t do it alone, we’ll partner with others to launch the AfricaDAO investment fund to empower and invest in startups,” and here it is.
Read the BitDAO-AfricaDAO proposal here.
📚 Quick hits
FOR YOUR READING PLEASURE
Missfresh expires — “Missfresh, a Chinese instant delivery business, went belly up a few days ago. Because it was public, it offers a glimpse into what financials at unicorns like Getir and GoPuff might look like. It’s not pretty.”
Bridge loans — Union Square Ventures’ Fred Wilson: “When fundraising gets tougher for startups, the existing investors (insiders) will often provide a bridge loan…[but] bridge loans are a bridge to something else. Most commonly they are a bridge to a round of financing with new investors (outsiders). They can also be a bridge to the sale of the company. Occasionally, but not often, they can be a bridge to getting cash flow positive. If none of those things is going to happen in a relatively short period of time, then it is a bridge to nowhere and you really want to avoid that.”
Valuing early-stage companies — Bessemer’s Talia Goldberg lists a few common valuation frameworks and why her favorite by far is Scenario Analysis: “When presenting a term sheet, I am often asked, how did you come up with this valuation?”
VC fund decks that close LPs — 13 pitch decks that successfully raised over $500M from LPs in aggregate
Bill Gurley on surviving downturns [Video] — Benchmark's GP on making hard decisions and focusing
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🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
MarketForce is the latest on the list of startups across Africa that have publicly announced layoffs, alongside Egypt-born Swvl, Egypt’s Vezeeta, Senegal’s Wave, and South Africa-born 2U
There are also quite a number of whispers & unconfirmed layoffs — perhaps most notably, Egyptian social commerce & agent distribution platform Brimore’s purported 50% staff cut
ESSAYS & REPORTS
Andrew Obuoforibo, Product Lead at Founders Factory Africa, writes “Is Africa doing product wrong?”
Murage June, startup analyst at Pariti, writes “Africa’s dead capital problem: why cows aren’t assets”
Eddy Vaisberg, former C-suite executive at Fuzu turned CFO at stealth startup, writes “Lessons from my first 18 months of angel investing”
Olumide Fayankin, Co-Founder/ COO at Vendease, writes “Making Africa’s food supply chain work”
Fisayo Balogun, Head of Fulfillment Operations at TradeDepot, writes “5 ways technology is helping Africa’s neighborhood retailers to manage rising food prices”
Sona Mahendra, Associate Program Manager at Founders Factory Africa, writes “Africa's biotech industry can deliver social and economic returns”
The Africa Blockchain Institute writes “Financial Inclusion in Africa with Blockchain Technology: The Truth”
Talking Drum Communications & Survey54 published the “Africa Innovation Impact Report”
US to foster digital ecosystem in Sub-Saharan Africa (IT Web)
The long, slow death of mobile competition in selected African markets (Balancing Act Africa)
Huge rise in demand for data services drives MTN's growth in SA and Nigeria (Business Insider SA)
Africa’s $3 billion startup battles allegations as it plans IPO (Bloomberg)
Kenya becomes the first African country to teach coding as a subject in schools (TechCabal)
In Africa, Kenyan startups have so far recorded the highest funding growth this year (TechCrunch)
Jumia pins hopes on diversified revenue streams, cost savings to reach profitability (Pymnts)
Pair with: Jumia shares rise as the company’s e-commerce business revs up in Q2 (TechCrunch)
The most curious nation about crypto is Nigeria, study shows (Bloomberg)
Fraud, ponzi schemes, and terror financing: A story about banking in Nigeria (West Africa Weekly)
🐤 Tweets of the Week
A tweet offering great advice on fundraising intros:
A marketing-focused thread with some solid examples on turning bugs into features:
And last, but not least, an interesting thread about Tyler Perry with some implicit lessons on customer focus, distribution, and scalability for builders of all stripes:
Bonus: this thread on business metrics worth tracking
🗣️ Community Corner & Opportunities
Applications are now being accepted for the Luxembourg House of Financial Technology (LHoFT)’s Catapult: Inclusion Africa Program, an all-expenses-paid, week-long boot camp in October for African fintechs focused on financial inclusion that want to forge connections between Africa and Europe
The MFS Africa team is hiring an Abidjan-based Francophone Africa Regional VP for their Mobile Network Operator team
The African Private Equity and Venture Capital Association (AVCA) team is hiring a London-based Research Associate
Amazon is hiring a Lagos-based Startup Business Development Manager for Sub-Saharan Africa
Congrats to David van Dijk and team on the kickoff of the sixth cohort of the African Angel Academy — the largest so far
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