Afridigest Week in Review: NowNow is NextNext
+Africa smartphone shipments by price +Building for niche communities +Lessons learned building in African markets +The history of venture investments +Boost Africa's London Venture Program 👀
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 Stephen Muriithi’s 'Africa’s hidden growth opportunity: venture debt.' And in case you missed it, yesterday’s Fintech Review was rather well received.
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Week 36 2022: September 4-10
📰 Deal of the Week🇳🇬 NowNow, a Nigerian digital banking platform offering solutions for agents, individual consumers, and small businesses, raised a $13M seed round (which appears to be a mix of equity and debt) from NeoVision Ventures, India-based DLF Family Office, and others.
About NowNow: Founded in 2016, the company has its hands in many pots. It’s main vertical is agency banking where it controls a network of ~50,000 agents across Nigeria, but it also offers consumer-facing services accessible via smartphones and feature phones, integrated business-in-a-box solutions for SMEs, and BaaS, embedded finance, and white-label digital banking solutions for fintechs and financial institutions.
NowNow claims to serve ~200,000 B2C customers and claims to also be on pace to process $5 billion in GMV across all its solutions by the end of the year.
Proceeds from the seed round will be used to grow the team, improve the platform, develop and deploy new products, and acquire customers at scale. The company also plans to launch operations in Angola and Liberia.
Key personalities:
Sahir Berry, CEO & Co-Founder, NowNow
Gary Peters, Managing Partner of Capital V Limited
In the CEO’s words: “Today we announce that we have moved to the next stage of our commitment to drive financial access and empowerment for Africans at the last mile. With the secured funding, we look to not only provide services that include everyone financially but also upscale our agile ecosystem which ensures that our multidimensional offering remains a market leader … [and] grow our world-class team as we will be unveiling innovative products and services.” — Sahir Berry
In the Investor’s words: “One of the key elements that propelled us to invest in NowNow through one of our funds is … the founders’ tenacity to grow the company to a viable level, as well as overcoming many challenges and market cycles since its inception... Its core business and vision of digitizing the African region through facilitating daily payment services is also another important element.” — Gary Peters
🔦 Other dealsOTHER FUNDRAISES ACROSS THE CONTINENT
🇳🇬 Metaverse Magna, a blockchain gaming platform incubated by Nigeria’s Nestcoin (in partnership with Old Fashion Research), completed a seed sale token round of $3.2M at a $30M valuation with Wemade, Tess Ventures, LD Capital, Taureon, Gumi Cryptos Capital, HashKey, AFF, Polygon Studios, Casper Johansen (Spartan), IndiGG, and others participating.
🇳🇬 Bitmama, a Nigerian blockchain payments platform, raised a $1.65M pre-seed extension round co-led by Unicorn Growth Capital and Launch Africa, with participation from Adaverse, Flori Ventures, Tekedia Capital, GreenHouse Capital, ODBA, Five35 Ventures, Chrysalis Capital, Enrich Africa, Thrive Africa, Angellist Ventures and others.
🇪🇬 El-Dokan, an Egyptian API-first headless e-commerce platform primarily targeting large retailers and chain stores, raised a $550K pre-seed from EFG EV, Flat6Labs, 500 Global, Hala Ventures, and others.
🇪🇬 Carzami, an Egyptian online used car & vehicle financing marketplace, raised an undisclosed amount of equity and debt in a pre-seed round led by Contact Financial Holding.
🇪🇬 3atlana, an Egyptian automotive maintenance, inspection, and spare parts platform, raised a ‘six-figure’ seed round from Ghabbour Auto.
🇿🇦 BusyMed, a South African healthtech platform connecting patients and pharmacies, raised an undisclosed venture round from E4E Africa.
🇿🇦 De Novo Dairy, a South African deeptech/foodtech ‘precision fermentation’ company that produces animal-free dairy proteins raised an undisclosed amount in a venture round from UM6P Ventures.
WEEK 36 EQUITY FUNDRAISING TABLE:
ADJACENT/M&A
UK-based power company Bboxx acquired West African solar home systems & distributed energy provider PEG Africa for an undisclosed amount. The acquisition gives Bboxx access to new markets in Senegal, Ivory Coast, Ghana, and Mali and consolidates Bboxx's position within the African clean energy solutions market.
ZA Online, owner of the only authorized distributor for Apple products in South Africa, acquired an undisclosed “additional shareholding” in Shock Proof, South Africa’s only official iStore franchisee
VC FUNDRAISING
🇪🇬 Egypt’s Endure Capital announced the first close of its targeted $50M second fund, Endure 21. Endure’s first fund was an early investor in Careem which was acquired by Uber for $3.1B and also invested in MaxAB and Breadfast. The second fund’s investments include Brimore, Cassbana, and Pylon. LPs include British International Investment (BII) and Egypt’s MSMEDA.
British International Investment (BII) announced an undisclosed new commitment into Algebra Ventures’ targeted $90M second fund, Algebra Fund II — Algebra Ventures’ portfolio includes Trella, Halan, and elmenus, and Fund II will have the mandate to invest into East and West Africa as well.
Sanari Capital announced a ~$28M (ZAR475M) first close of a targeted $100M for Sanari 3S Growth Fund. While the firm is more of a PE investor, it also focuses on the IoT, Big Data, and Healthtech sectors; its portfolio includes predictive analytics firm SensorNeworks and IoT sensor company LightWare LiDAR.
📚 Quick hitsFOR YOUR READING PLEASURE
Lessons learned from building in African markets — A bit of gentle self promotion that could still be useful/interesting 😊
How startups are building for underserved communities — Interesting read from Index Ventures’ Rex Woodbury on the riches in niches and how startups are finding success by targeting underserved communities. It’s interesting to think about what’s replicable in environments where markets aren’t as deep.
Liquid venture capital — Kai Wu’s latest. This time on replicating venture capital returns using liquid small-cap public equities. But it has a ton of interesting ideas and charts. Like this one:
Good product reads
Spotify: Building product to improve unit economics — “We’ll dig into the three main components of LTV — ARPU, Gross Margin and Churn — to show how Spotify’s product decisions help improve the profitability of their customer base.”
Extrapolating from a data set of one or fewer — “In the early days of PayPal…leaders debated whether to block transactions from eBay... Eventually, it became the best customer acquisition tool and PayPal’s largest business for many years… Often, your customers will show you what you are missing. Take the time to listen to them and discover what they are trying to tell you.”
Research twice, build once: How to know your users as you grow — “The key to building successful products is understanding who the users are and what they want. User research is the unsung hero of determining a product’s viability and the secret ingredient to its success.”
Public bookmarking
A framework for opportunity sizing — “In theory, Total Addressable Market is usually the easiest thing to size, but in practice, it can be incredibly deceiving. The largest TAM markets oftentimes have the lowest ROI because they are some of the hardest to enter, grow, and make a profit.”
🕵️♀️ In case you missed itNEWS & ANNOUNCEMENTS
TikTok partnered with ThinkWifi to pilot free WiFi hotspots across South Africa. According to Statistics South Africa, only 37% of households have access to the internet through cell phones or computers. It’s against this backdrop that TikTot is launching 50 free wi-fi hotspots across Soweto, Khayelitsha, Guguletu, and Bushbuckridge for a duration of up to six months.
Nigeria is in talks with Binance to establish a special economic zone aimed at supporting crypto and blockchain-related businesses. The Nigeria Export Processing Zones Authority (NEPZA), the government agency that regulates free trade zones, announced that it’s in discussions with Binance and Talent City to establish a crypto-friendly economic zone in a move that surprised many given Nigeria’s antagonistic stance towards crypto in the past.
Uber is launching a suite of new initiatives across Sub-Saharan Africa. These include new second-tier city launches in Nigeria, Kenya, and Ghana, a new ‘UberX Share’ shared ride option, more UberEats dark stores, and a variety of new safety features.
ESSAYS & REPORTS
Noel K. Tshiani, founder of the Congo Business Network, writes ‘Making tech a priority will boost economic development in Francophone Africa’
Afeez Ajigbotosho, Head of Product at Lemonade Finance, writes ‘Why Nigerian startups should hire platform product managers to unlock new growth levers’
Russell Southwood, CEO of Balancing Act, writes, ‘Africa's communications revolution has fundamentally changed the continent’
OTHER ARTICLES
Ethiopia is opening up. Here’s what you should know (TechCabal)
YC’s latest batch cuts African startup presence by more than half (TechCrunch)
Trump-Inspired game’s success galvanizes Africa’s developers (Bloomberg)
Africa does not need more development banks (TechCabal)
Why Africa should stop using the term 'brain drain' in tech (Quartz)
Chinese brands are in the lead as Africa's demand for 5G smartphones grows (Quartz)
👀 Visual of the WeekDid you know? 80% of smartphones shipped into Africa have an average selling price under $200. And nearly half of these are priced under $100.
Transsion brands (Tecno, Itel, and Infinix) lead the market with ~48% share of shipments, followed by Samsung at 26% and Xiaomi at 7%.
🐤 Tweets of the WeekThis week we focus on value-adding threads from outside the ecosystem.
Here’s how to move to sustainable growth:
Here’s an interesting thread on VC backchanneling:
And here’s a reminder that it’s not too late:
Bonus: This solid fundraising playbook from Alex Iskold.
🗣️ Community Corner and Opportunities (feel free to send yours in)E4E Africa is hiring a Capetown-based Investment Analyst.
The Africa Agtech Startup Showcase competition from UM6P and the International Fertilizer Association is now accepting applications; Startups developing innovative agtech solutions to address difficulties confronting African agriculture are encouraged to apply before November 30th for a chance to win a $20,000 award.
Congrats to our friends from Eversend, Stears, Eden, Wellahealth, Norebase, and elsewhere on being among the 60 African startups to receive the Google for Startups Black Founders Fund in Africa 2022 award.
Congrats to Nelly Chatue Diop & the Ejara team on the interesting media mention.
Congrats to David van Dijk and the Boost Africa team on bringing the Africa Venture Finance Program to fruition this week in London. And congrats to participating investors.
Congrats to BII for a successful Innovation for Impact summit last week in Cairo.
FIN
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