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 from last week was Jumanne Mtambalike’s 'The African startup manifesto — systems or tech, what comes first?' And if you missed yesterday’s Fintech Review, it’s available here.

📌 The world’s population reached 8 billion this week, according to estimates from the United Nations. Eight nations, the bulk of whom are in sub-Saharan Africa, will account for the majority of a significant projected increase between now and 2050. While much has been written about The African Century™ and the potential for a demographic dividend, here’s an interesting long-read from Howard French that focuses on how a 600-mile stretch between Abidjan and Lagos is changing.

If you’re new, welcome 🙌🏽 — you're among thousands of readers who receive this Week in Review on Mondays, the Fintech Review on Sundays, and (for those who've opted in) the French-language Revue de la Semaine on Wednesdays (which is on a short hiatus right now). And from time to time, an original essay/article goes out on Saturdays. For past essays and digests, visit the archive.

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Week 46 2022: November 13-19

📰 Deal of the Week

🇿🇦 Adumo, a South African payments group, raised ~$11M (ZAR190M) in an undisclosed split of equity & debt. Existing investors Apis Partners, Crossfin Holdings, and the IFC’s fintech division backed the equity portion, and a debt facility was provided by Investec.

About Adumo: Adumo (formerly known as Crossfin Transactional Solutions prior to June 2020) is a leading payments processor in South Africa.

It was formed out of the 2019 acquisition of merchant acquirer Sureswipe by fintech investment vehicle Crossfin Technology Holdings and private equity fund Apis Growth Fund. That acquisition brought together three well-known South African payment service providers: merchant acquirers Sureswipe and iKhokha, and payment processor Innervation Pan African Payments.

Today, as a result of acquisitions, the portfolio of Adumo brands/subsidiaries also includes GAAP, the largest payment devices provider in SA's restaurant industry, alternative payments provider SwitchPay, cloud-based POS solution Humble, and leading e-commerce payment processor Wirecard. A portion of this fundraise will be used to consolidate some of these acquisitions: Adumo will increase its shareholding in Switchpay to 100% and increase its shareholding in GAAP to 80%.

Adumo’s core focus is on providing businesses of all types — informal traders, large retailers, franchises, etc. — with payments support. It claims to process over $5 billion in transaction value annually through more than 30,000 active clients and 50,000 active card machines across 14 African countries.

Key personalities:

Paul Kent, Co-Founder & CEO, Adumo
Udayan Goyal, Managing Partner, Apis
Sérgio Pimenta, Vice President for the Middle East and Africa, IFC

In the founder’s words: “Local consumers are following a global trend of demanding digital and flexible methods of making cashless payments, through alternative methods. Likewise, merchants require financial solutions to grow and streamline their businesses through the use of alternative payment options that are integrated into their businesses. The timing was therefore perfect for Adumo to further finance our assets in order to develop and provide our value-added financial products to our clients.” — Paul Kent

Additional reading: How iKhokha owner Adumo used its R225m IFC funding to dominate the payments sector

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🔦 Other deals

OTHER FUNDRAISES ACROSS THE CONTINENT

DEBT

The IFC is considering a debt investment in M-KOPA — up to $50M to M-KOPA Kenya and up to $15M to M-KOPA Uganda.

M&A

Pan-African payments unicorn Chipper Cash announced the acquisition, subject to regulatory approvals, of Zambian B2B payments fintech Zoona. The deal supports Chipper Cash’s overall growth & expansion strategy across Africa and offers complementary benefits such as Zoona’s API, disbursements, and transfer solutions. Zoona was founded in 2008 and has processed over $3B to date via its Tilt service. Zoona investors include Quona Capital, AHL Venture Partners, Flourish, Microvest, BlueHaven Initiative, Omidyar Network, and 4Di.

INVESTOR ACTIVITY

The IFC launched a $225M venture capital platform to support early-stage startups in Africa, the Middle East, Central Asia, and Pakistan. The platform will make equity and equity-like investments in tech startups; current portfolio companies include Twiga & TradeDepot.
American VC firm Modus launched Modus Africa, a fund with a $75M target dedicated to AI- and blockchain-enabled startups across sub-Saharan Africa.
LBank Labs, the investment arm of Asian crypto exchange LBank, announced a new Africa-focused crypto/blockchain/web3 investment fund.

📚 Quick hits

FOR YOUR READING PLEASURE

In the next era of social, build rituals, not habits — Fascinating writeup from former Clubhouse Head of Community Anu Atluru on the rise & mechanics of ritual products like Wordle and BeReal: “In consumer social, rituals have been likened to just a feature, a mechanic, or a new entry strategy…. [but] the next era of social will be defined by products that create rituals rather than habits.”
Discounting belief — Enjoyed this piece from Packy on discount rates & belief rates: “My biggest lesson from investing over the past couple of years is to be more aware of the Belief Rate that I, and especially others, are applying to companies. … We’re now clearly in a low-belief environment.”
The world is run by people no smarter than you — Empowering read from Airbyte’s head of developer experience: “My overwhelming lesson from the past few weeks is that even these heroes of tech are just mortals as well who make very very dumb mistakes. And if they can make those mistakes, so can you.”

Public Bookmarking:

Mental models to help you cut your losses — Interesting excerpt from poker star turned author Annie Duke’s latest book
Demystifying financial leverage — Good explainer from Stripe’s Patrick Mckenzie

👀 Visual of the Week

“Climate tech is one of the hottest categories for European and US startups and scaleups, with more than $111 billion raised globally last year. Hundreds of companies are developing innovative ways to slash emissions and remove carbon from the atmosphere, accelerating rich nations towards net zero. But in the world’s poorest continent, green tech fulfills different needs.”

Source: The green tech startups fighting for Africa’s future. Raconteur.

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🕵️‍♀️ In case you missed it

NEWS

Kenyan B2B e-commerce platform Twiga laid off 21% of its workforce.
Future Africa is transitioning into a venture studio.
Wennovation Hub, an accelerator affiliated with LoftyInc, announced its expansion into the Caribbean with Wehub-Barbados.

ESSAYS, REPORTS, & LISTS

Sam Sturm, Chief Venture Architect, Founders Factory Africa writes ‘How will the economic downturn affect health investment in Africa?’
Abderrahmane Chaoui, startup ecosystem researcher, writes ‘Algeria - A two-part deep dive into a potential startup giant (Part 1)’
Joshua Raphael, Founder & CEO of Parket writes ‘The startup journey: Advice for tech entrepreneurs’
The Smollan Group published the report, “The new informal: How technology is unlocking informal sector growth in India and Africa” (PDF)

OTHER ARTICLES

Healthlane was meant to make hospitals obsolete. Now the startup is battling to stay in business (TechCabal)
- See also: Healthlane raised $2.4M, then went from a great workplace to owed salaries, layoffs, and diversion of funds (Techpoint)

Mr Eazzy @Dirdavidjohnson

This Healthlane’s story is crazy mehn, things like this is what will make investors pull back from investing in Africa.

The ‘Amazon of Africa’ is reducing staff and cutting premature products in its new era (Quartz)
- See also: Jumia to cut products and overhead as new management chases profits (TechCrunch)
  AH @WallStDoubter
  $JMIA is “the Amazon of Africa”- no, it’s just another money losing business When will they make money?
  5:42 PM ∙ Nov 17, 2022
The green tech startups fighting for Africa’s future (Raconteur)
Egypt launches Africa’s first carbon credit market (Al-Monitor)
4G remains the dominant technology in Africa, but 5G is set to gain momentum (Engineering News)
Nestcoin and its leaders do not deserve a pat on the back (Notadeepdive)
China’s tech outreach in the Middle East and North Africa (The Diplomat)

PROFILES/INTERVIEWS

Co-founder and CEO of Egypt’s Carzami Hussein Hosny on his journey
Future Africa’s Iyin Aboyeji on how to build a unicorn

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

Congrats to our friends at TechCabal for the kickoff of The Next Wave on CNBC Africa — watch Episode 1 here.
Congrats to Richard Aseme and Caleb Maru for successful events in Lagos last week.
Congrats to Brian Odhiambo on his promotion to Partner at Novastar Ventures.
500 Startups is hiring a Lagos-based Partner to lead pre-seed & seed investments.
Steward is hiring a Head of Operations.
Union54 is hiring a Product Manager.
Kuunda is hiring a Nairobi-based Product Manager, Africa.
African startups are invited to apply for the January 2023 cohort of the Techbridge accelerator which offers equity investments of up to $200K.
Applications for the Global Startup Awards Africa are open until January 31, 2023 — entrepreneurs, start-ups and innovation organizations at all stages of the growth cycle invited to apply.

FIN

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