Afridigest Week in Review: Embedded lending enchants investors
+Another 5G Launch +Silicon Zanzibar +Jumia's drone deliveries +Mobile data pricing in sub-Saharan Africa +Find the fast-moving water
The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors.
Welcome back, friends! The most clicked link last week was Weekend Fund’s 'Questions VCs ask founders.' Apologies for the delay with this week’s newsletter. We’ll be back to the regular publishing schedule shortly. With that said, let’s jump right into it.
If you’re new, welcome 🙌🏽 — you’ll usually receive a weekly Africa Tech digest like this one every Monday, the Afridigest Fintech Review on Sundays, and, generally (but not always), an original essay/article on Saturdays. For past essays and digests, visit the archive.
💡 “When you change the position of the drum, the tone changes.” — Bakossi proverb
Week 35 2022: August 28 - September 3
📰 Deal of the Week
🇰🇪 Pezesha, a Kenyan embedded lending platform & infrastructure provider raised an $11M ($6M equity, $5M debt) pre-Series A round led by Women’s World Banking Capital Partners II, with participation from Verdant Frontiers Fintech Fund, cFund, and IOG. The debt portion was from Talanton and Verdant Capital Specialist Funds.
About Pezesha: Founded in 2017, Pezesha is an API-driven credit scoring platform that helps MSMEs in Kenya, Uganda, and Ghana access business loans. The company works with a variety of partner companies that embed its credit-scoring APIs on their platforms, enabling MSMEs to receive loan offers in real-time.
Pezesha currently works with ~20 partner companies including Jumia, Twiga, Copia, and MarketForce, and has extended loans to over 100,000 businesses to date. It lends up to $10,000 per loan at single-digit interest rates with a maximum loan term of one year.
Following the round, the company plans to expand into Nigeria, Rwanda and Francophone Africa.
Hilda Moraa, Founder & CEO, Pezesha
Christina “CJ” Juhasz, Chief Investment Officer, Women’s World Banking Asset Management
In the CEO’s words: “The opportunity and impact in solving working capital problems for SMEs is huge. [We’re] solving the root cause, which is information asymmetry issues, to ensure quality and responsible borrowing…through our robust API-driven credit scoring technology…We have the right business model [and] are profitable.” — Hilda Moraa
In the Investor’s words: “Pezesha is dedicated to solving Africa’s working capital problem through its robust lending infrastructure, and this investment will allow them to deepen the range of financial products offering especially to women-owned MSMEs.” — Christina Juhasz
🔦 Other deals
OTHER FUNDRAISES ACROSS THE CONTINENT
🇳🇬 Duplo, a Nigerian B2B payments platform, raised a $4.3M seed round from 40+ investors including Liquid2 Ventures, Soma Capital, Tribe Capital, Commerce Ventures, Basecamp Fund, Y Combinator, and existing investor Oui Capital.
🇳🇬 Grey (formerly Aboki Africa), a Nigerian cross-border payments & virtual international bank accounts platform, raised a $2M seed round from Y Combinator, Soma Capital, Heirloom Fund, True Culture Fund, and others.
🇳🇬 Anchor, a Nigerian banking-as-a-service and embedded finance platform, raised a $1M pre-seed from Y Combinator, Byld Ventures, Niche Capital, Mountain Peak Capital, Luno Expeditions, and others — As mentioned in Week 32’s Week in Review, Anchor is among the companies participating in Y Combinator’s S22 batch
🇿🇦 Octiv, a South African gym management software platform, raised an ‘eight-figure’ Series A round led by Knife Capital
🇪🇬 Emonovo (formerly Marj3), an Egyptian university and student matching edtech platform, raised an undisclosed amount in a bridge round from Flat6Labs and others
WEEK 35 EQUITY FUNDRAISING TABLE: BIG WEEK FOR FINTECH
🇪🇬 KarmSolar, an Egyptian power and solar energy company that provides smart, connected utility platforms, has hired Synergy Consulting as an advisor as it seeks to sell a minority stake
📚 Quick hits
FOR YOUR READING PLEASURE
Find the fast-moving water — NFX’s James Currier: “Tech & markets are like a river. Some parts run faster, some slower... Fast moving water is the mental model that helps you understand which spaces to play in... You want to read the river for leading indicators, not lagging ones”
The mechanics of unbundling — “Years have passed since the last great unbundling of eBay and Craigslist began… With historically inaccurate predictions, continued incumbent growth, and a slew of failed unbundlers, it raises a few questions: 1) How do incumbent platforms maintain their authority? 2) When does a vertical solution make sense, and what increases its chances of success? 3) If poor UX / UI isn’t the actual issue, what is? Do we understand the principles of unbundling platforms?”
Why fintech startups from Brazil to Sudan use Visa and Mastercard — "How is it that fintech startups, vowing to disrupt the legacy financial establishment, are powered by two of the most ancient players in the market, Visa and Mastercard?"
Pair with: Can the Visa-Mastercard duopoly be broken? — “So far new entrants to the payments market have benefited Visa and Mastercard, by making it easier for consumers to use their cards online. But as the new fintechs have gained clout, their decisions about the sorts of payments they offer could influence how much money travels along the card networks.”
The Long Tail: The internet and the business of niche — “Nearly two decades after Chris Anderson wrote that piece in WIRED—nearly 20 years after YouTube, Spotify, and Shopify came to life—the long tail framework remains one of the best frameworks through which to evaluate technology businesses.”
Pair with: Where did the ‘long tail’ go? — “The Long Tail was sold to us as an economic law… But it never happened. More to the point, it was never going to happen because the story was a fairy tale… We live in a Short Tail society. And it’s getting shorter all the time.”
The 5 phases of Figma’s community-led growth: From stealth to enterprise — from Claire Butler, Senior Director of Marketing, Figma
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Vodacom launches first 5G service in Tanzania. Tanzania now joins a number of African countries with partially or fully launched 5G networks. Just last week, MTN launched a 5G pilot in seven cities across Nigeria; other 5G countries include Zambia (MTN), South Africa (Rain/Vodacom/MTN), Kenya (Safaricom); Zimbabwe (Econet), Madagascar (Telma), Botswana (Mascom), Lesotho (Vodacom).
Jumia officially launches drone deliveries of household items to remote areas in Ghana in partnership with Zipline. After a successful pilot, Jumia will integrate its existing distribution network with Zipline’s on-demand delivery system for rapid home deliveries in Ghana, especially to remote areas. Next up for the partnership are Ivory Coast and Nigeria.
ESSAYS & REPORTS
Chukwuemeka Afigbo, former Google sub-Saharan Africa Program Manager, writes ‘What if the internet was invented in Africa by Africans?’
Stephen K. Muriithi of GreenHouse Capital writes ‘Africa’s hidden growth opportunity: betting on venture debt’
Luke Mostert, Head of Investments at Future Africa, writes ‘Why we invested in construction-tech Jumba's $1M pre-seed’
Nigerian undergraduates are pivoting to tech amidst extended strikes in universities (TechCabal)
How Egypt’s COP27 will position Africa as a climate tech destination (Egyptian Streets)
How startup investments fail to ease Nigeria’s forex crisis (Punch)
Why Ethiopia has moved from banning crypto to regulating it (Quartz)
After 10 years, Jumia is more than an eCommerce company (TechCabal)
Nigerian VC firms are still willing to invest—but they’re asking harder questions (Quartz)
Flutterwave store and the people who made it (Vistanium)
Tech winter: more layoffs rock Africa’s startup ecosystem (Ventures Africa)
Meet the Founder: Waleed Sadek, CEO & Co-Founder of PaySky
Meet the Founder: Lanre Ogungbe, CEO & Co-Founder, Identitypass
Meet the Executive: Nicole Dunn, COO, Revio
Meet the Executive: Sadiq Abu, CEO of Absa Nigeria
Meet the Executive: Olusola Lawson, MD & Co-Head, AAIM
👀 Visual of the Week
Did you know? Sub-Saharan Africa is home to some of the world’s most expensive data prices, according to a new report. While smartphone penetration may be on the rise, internet affordability continues to be a significant challenge.
🐤 Tweets of the Week
Product managers are the CEOs of their products?
An unpopular opinion that’s not so unpopular:
An interesting thread from a former a16z partner that’s probably very relevant to Africa Tech:
🗣️ Community Corner and Opportunities
Congrats to Nobuhiko Uchiyama and the AAIC team on a successful meetup in Lagos, Nigeria
Thanks for reading Afridigest 🙌🏽
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