The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors.

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Week 44 2022: October 30 - November 5

📰 Deal of the Week

🇪🇬 Money Fellows, an Egyptian group lending and savings platform, raised $31M in the first close of a Series B round co-led by CommerzVentures, Middle East Venture Partners (MEVP), and Arzan Venture Capital, with participation from Partech, Sawari Ventures, Invenfin, National Investment Company (NIC), 4DX Ventures and P1 Ventures. The final close of the round is expected in the ‘coming months.’

About Money Fellows: Founded in 2016, Money Fellows is digitizing communal saving systems known as gam’eya in Egypt and other Arab countries. These informal rotating group savings/credit systems are widespread across the continent and various emerging markets; they’re known as susu, adashe, and ajo in parts of West Africa, chama in parts of East Africa, hagbad in Somalia, ekub in Ethiopia, tontines in parts of Francophone Africa, and stokvels in South Africa, for example.

In these systems, a group of people comes together and each person contributes a fixed monthly amount into a common pot. Every month, one participant takes the whole pot as a payout and when all participants have received a payout, the scheme ends. (But it’s usually restarted with the same group.)

Many have attempted to digitize this process over the years, but Money Fellows is among the first to successfully do so at scale.

The company charges a one-time service fee of ~6% to users receiving payouts first, and this service fee decreases with each subsequent payout. Users receiving payouts last get interest payments on top as an incentive.

Money Fellows has over 4.5M registered users, 7% of whom are active on a monthly basis, and the company says it grew 8x year-over-year. In addition to service fee revenues, the company also takes commissions from products sold by partner merchants within its app.

Key personalities:

Ahmed Wadi, Founder & CEO
Hangwi Muambadzi, Venture Partner, CommerzVentures
Jad El Boustani, Managing Director, MEVP
Stuart Gast, CEO, Invenfin
Laith Zraikat, Partner, Arzan Venture Capital

In the founder’s words: “The good thing with ROSCAs versus consumer finance is that not everyone has equal credit exposure. So if you’re slot number five, for instance, when you get $10,000, you only need to repay $5,000 because you historically paid $500 in the past five months… We also restrict [people] to specific slots because we know which slots carry more or less risk. That’s another [way] we control defaults versus the typical consumer and microfinance model.” — Ahmed Wadi

In the investor’s words: “The innovation and uniqueness of the technology developed by the team has resulted in a highly scalable and frictionless experience for its users who traditionally opted out of the ROSCA model due to the many barriers and risks involved. We are excited to be working with Ahmed… to bring Money Fellows to the rest of the world.” — Laith Zraikat

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🔦 Other deals

OTHER FUNDRAISES ACROSS THE CONTINENT

🇳🇬 Small Small, a Nigerian proptech platform allowing renters to pay for housing in flexible monthly payments, raised a $3M seed round from Oyster VC, Asymmetry Ventures, Vivaz, Niche Capital, and others
🇪🇬 Unlock, an Egyptian B2B marketplace for professional services, raised an undisclosed ‘six-figure round’
🇷🇼 Eden Care, a Rwandan digital health insurance platform, raised an undisclosed pre-seed round from DOB Equity, Seedstars International, Norrsken Foundation, and Bathurst Capital
- Pair with: Inside the first digital health insurer in Rwanda
🇪🇬 Hoods, an Egyptian live shopping platform, raised an undisclosed amount from Egyptian BNPL platform valU
The following startups also announced their participation in the Techstars Toronto Accelerator Winter ‘22 batch. (Techstars offers $20K in exchange for a 6% equity and an optional $100K convertible note.)
- 🇳🇬 Raenest, a Nigerian payments & payroll management platform focused on contractors & remote workers
- 🇳🇬 Simpu, a Nigerian unified customer data & communication platform
- 🇳🇬 Glover, a Nigerian marketplace for gift cards & digital assets
- 🇳🇬 Laborhack, a Nigerian marketplace & certification platform for artisans

ADJACENT

AfyaCare, Nigerian healthcare investment group focused on hospital care, health insurance, and healthtech services, raised a $6M Series A. While Afya has a few healthtech assets like Octosoft, its portfolio consists largely of hospitals; this deal is probably closer to PE than VC.

M&A

Nigerian SME financing platform PayHippo acquired Maritime Microfinance Bank for an undisclosed amount. The deal, which is awaiting approval from the Central Bank of Nigeria, will see PayHippo become a deposit-taking institution with direct access to Nigeria’s Interbank Settlement System (NIBSS), thus broadening the services available to PayHippo’s SME customers.
Egyptian B2B marketplace SPEED was acquired for an undisclosed amount by Emirati logistics platform X-ERA.

MEET ME AT THE UPCOMING LAGOS MEETUP — SENDING OUT EMAILS THIS WEEK 🤝🏼

⭐ The second meetup for Afridigest readers is happening in Lagos, Nigeria, in November. Sign up here for details. ⭐

📚 Quick hits

FOR YOUR READING PLEASURE

Finding product/market fit with network effects — Eventbrite’s former CPO on PMF for platforms: “Cross-side network effects can be painfully difficult to find product/market fit for because you are building out a product for two different types of customers that have to align… Fortunately, there are some easy ways to navigate this puzzle to make the journey to product/market fit less amorphous…”
Figma’s early days: How patience & discipline fostered a killer product — An early Figma employee shares insights: “We cut users in every way you could imagine: role, job title, geo, operating system, source, generation, etc… Having the discipline to understand your customer data and to invest in accurate reporting is what powers the GTM flywheel, drives efficiency in a sales org, and educates product decisions.”
The business of boxing — Random but informative breakdown of boxer pay: “At the end of the night, a boxer is lucky to take home 8 to 10% of the total dollars the fight generates, and 50% of his individual gross pay.”

Public Bookmarking:

🕵️‍♀️ In case you missed it

ESSAYS, REPORTS, & LISTS

Stephen Deng, Co-Founder & Partner at DFS Lab writes ‘Build cyborgs not androids in Africa’
Vikas Mehta, CEO, of Ogilvy Africa, writes ‘Africa and the Scale-Complexity paradox’
Medy Ract writes ‘A whole new world: An overview of the VC landscape in North Africa’
Emma Ruiters, Technology Policy Analyst at the Tony Blair Institute for Global Change writes ‘Japan offers nearly $60bn chance to Africa’s start-ups amid fierce competition’
Wesley Diphoko, Editor-In-Chief at Fast Company South Africa, writes ‘Why the Meta Quest Pro matters for Meta and South Africa’s young people’

OTHER ARTICLES

The calm after the storm in Nigeria's tech boom (Semafor)
Ethiopia’s ride-hailing startups face their toughest opponents: each other (Rest of World)
Inside 54gene’s series of debacles (TechCabal)
Hundreds of millions missing out on mobile Internet – GSMA (Connecting Africa)

PROFILES/INTERVIEWS

Meet the Entrepreneur: Moulaye Tabouré, Founder/CEO at Anka (video)
Meet the Investor: Lesego Tladinyane, Associate at Newtown Partners

👀 Visual of the Week

Did you know? After experiencing a record year for unicorns minted last year, no new companies have crossed the $1 billion valuation threshold across the African startup ecosystem so far in 2022.
Be smart: Some predict that the floodgates will open in 2023. But similar predictions were made for 2022.

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🐤 Tweet of the Week

Musk’s Twitter takeover means cuts on the continent?

Meistermind @mistameister

It’s been a year working at a place I never imagined I’ll ever get to work.I’m glad that I could represent for Africa & I didn’t let us down. My best career experience by far & it was beautiful whilst it lasted.Much love to all the amazing tweeps that made it worth it. #OneTeam

Bonus tweets: 21 principles from Y-Combinator's startup playbook.

🗣️ Community Corner and Opportunities (feel free to send yours in)

Catalyst Fund is hiring an Investment Principal, Africa, preferably based in Nairobi or Lagos.
Founders Factory Africa is hiring an Impact and Research Director to be based in Johannesburg, Nairobi, or Lagos.
Startups operating in Francophone African countries are invited to apply to Digital Africa’s Fuzé program and receive up to ~$48,000 (€50,000) in equity funding.
Congrats to Dalu Ajene on the new role. 🙌🏽
Congrats to our friends at Africa Fintech Summit for a successful Capetown event.
Africa Fintech Summit. Cape Town @AfriFintech
#AFTSCapeTown2022 was a massive success. The “Mother City” definitely lived up to expectations. Thank you to everyone who attended in person or virtually; you made the three days we spent in Cape Town special.
4:22 PM ∙ Nov 5, 2022
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