Afridigest Week in Review: The most relevant B2C e-commerce model for Africa
Afridigest Week in Review: The most relevant B2C e-commerce model for Africa
+Lots of deals this week +Africa Tech revelations from the FT's FTX article +Layoffs at Chipper Cash & Moove +Do they suck at running businesses? +Kaoshi +Thanks for coming to the Lagos Meetup +More
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 'The hierarchy of venture opportunities in emerging markets.' And if you missed yesterday’s Fintech Review, it’s available here.
📌 First things first: thank you. Many thanks to everyone who came to the Afridigest Lagos Meetup last week 🙏🏽 Thanks also to the founders from across the continent who participated in the Thought Circle piece on earned wage access published over the weekend. And thank you, kind reader, for sharing a piece of your attention with us every week. 🙏🏽 That said, we’re doing our darnedest to reach 5,000 followers on LinkedIn this year & if you (yes, you) throw us a follow right now, we’ll get there before 2023. Final thing: we've brought back the feedback forms. After you read through today’s edition, be sure to share your anonymous feedback via the links at the end — whether you 😡 hated it, 😃 loved it, or found it 😑 meh, we want to know 🙏🏽
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 temporary 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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» Today’s WIR is a long one. Go ahead & click this to read it in your browser.
Week 49 2022: December 4-10
📰 Deal of the WeekIn Week 47 2021’s Community Corner last December, I wrote:
Well, that exciting “something entrepreneurial” is here:
🇰🇪 Kapu, a Kenyan B2C e-commerce platform focused on groceries & essentials, officially came out of stealth with an $8M seed round co-led by Giant Ventures and Firstminute Capital, with participation from Founder Collective, Base Capital, Norrsken VC (distinct from Norrsken 22 to be clear), Raven One, and others.
About Kapu: Founded & led by former Jumia executives, Kapu launched a stealth pilot at the start of this year and currently highlights on its homepage that it operates “the most relevant B2C e-commerce model for the urban majority in Africa.” It's a phrase that some could perceive as a dig at the Amazon-style model Jumia employs.
It harkens back to Els Boerhof (Managing Partner at Goodwell Investments) proclaiming in Week 3 that Copia Global’s e-commerce model “is built for the unique requirements of the African market.”
Like Kenya’s Copia (and Egypt’s Brimore), Kapu’s model is agent-driven. The company currently has ~1,500 agents across Nairobi who place orders on behalf of end-customers which are then sourced directly from manufacturers and producers. And in the near future, the company will allow customers to order directly themselves via Whatsapp. Kapu also seems well positioned to build a product around end-user group-buying similar to Nigeria’s PricePally and others.
According to Kapu, it is or will be “on track to deliver 1 million orders annually” by the end of its first year of operations.
Key personalities:
Sam Chappatte, Co-Founder & CEO (ex-Jumia Kenya CEO)
Cyrus Onyiego, COO (ex-Jumia Travel MD and Jumia Food COO)
Sam Endacott, Partner at Firstminute Capital
In the founder’s words: “We think it’s unfair that consumers in Kenya spend 40% percent of their income on food when Americans spend 6%. This is a huge blocker to social mobility. Our goal at Kapu is to build the most relevant model of e-commerce for the majority of urban consumers in Africa. By working with existing community groups & local entrepreneurs, we believe we can play a part in reducing the costs of goods, and unlocking opportunities for millions of people… If by using technology we can bring efficiency then we can have a tremendous impact on society for consumers and businesses.” — Sam Chappatte
Pair with: Offline agent networks are driving Africa’s digital development
🕺🏻 THANKS TO EVERYONE WHO MADE THE AFRIDIGEST LAGOS MEETUP A SUCCESS LAST WEEK 💃
🔦 Other dealsOTHER FUNDRAISES ACROSS THE CONTINENT
🇪🇬 OneOrder, an Egyptian B2B food supply chain platform serving restaurants, hotels, and cafes, raised a $3M seed round led by Nclude, with participation from A15 and Delivery Hero Ventures.
🇿🇦 Synatic, a South African data integration, automation, and aggregation platform, raised a $2.5M seed extension round co-led by Allan Gray E-Squared Ventures and UW Ventures, with participation from Adansonia PE Opportunities VCC and the Endeavor Harvest Fund.
🇿🇦 Fin (formerly Finclusion Group), a South African/pan-African credit-led neobanking platform, raised $2M led by individual investors Leonard Stiegeler, Sudeep Ramnani, and Jai Mahtani.
🇰🇪 Gridless, a Kenyan designer, builder, and operator of hydroelectric bitcoin mining sites co-located with renewable energy providers, raised a $2M seed round co-led by Stillmark and Jack Dorsey’s Block.
🇰🇪 Zeraki, a Kenyan edtech platform digitizing school administration processes, raised a $1.8M seed round led by Acumen Fund, with participation from Save the Children Impact Investment Fund, Verdant Frontiers Fintech, Logos Ventures, the Nairobi Business Angels Network, and others.
🇪🇬 Brito, an Egyptian cloud kitchen platform, raised a $1.25M pre-seed round from undisclosed investors.
🇪🇬 SideUp (formerly Voo), an Egyptian logistics marketplace turned all-in-one SaaS platform for e-commerce retailers, raised a $1.2M seed round from Launch Africa, Riyadh Angels, 500 Global, Riyadh Angels, Alex Angels, Al Tuwaijri Fund, and others.
🇳🇬 Venco, a Nigerian proptech providing community management software solutions for multi-unit residential and commercial communities, raised a $670K pre-seed round led by Zrosk Investment Management, with participation from Voltron Capital, Decimal Point Ventures, Fast Forward Fund, Dakar Network Angels, Viktoria Business Angel Network, and others.
🇲🇦 Justyol, a Moroccan fashion-focused e-commerce platform, raised a $350K pre-seed extension round from Earn Rocket Investment Holding.
🇿🇦 Ukheshe, a South African fintech-as-a-service provider, raised an undisclosed amount from DPI’s ADP III and Fireball Capital.
🇿🇦 ScarabTech, an American/South African cleantech platform transforming unrecyclable waste plastics into energy, raised an undisclosed amount from GIIG Africa Fund in a seed round.
The following startups were selected for Batch 4 of the Sanabil 500 MENA Seed Accelerator Program 2022 and will received $100K in equity investment:
🇪🇬 AMWAL, an Egyptian sharia-compliant crowdlending platform.
🇪🇬 Deben, an Egyptian financial SaaS platform that automates cash flow management and facilitates financial reporting, analysis, and forecasting.
🇪🇬 Egab, an Egyptian media platform connecting journalists in hard-to-reach areas and reputable media outlets.
🇪🇬 Neqabty, an Egyptian, community-based fintech platform targeting labor unions.
DEBT
🇳🇬 Moove, a Nigerian ‘mobility fintech’ platform offering vehicle financing solutions primarily to ride-hailing drivers, raised $30M from a sukuk (Sharia-compliant bond) issuance arranged by Franklin Templeton Investments.
Sun King (formerly Greenlight Planet), an American/pan-African off grid solar energy solutions provider operational in Kenya, Zambia, Uganda, Tanzania, and Nigeria, raised a $10M green bond from Proparco.
M&A
South African digital bank TymeBank announced that its acquisition of Retail Capital is now complete after receiving all necessary regulatory approvals. The deal, which is worth ~$86M (ZAR 1.5B) was initially announced in Week 31.
INVESTOR ACTIVITY
Beyond Capital Ventures, a women-led VC firm focused on healthtech, climate-tech, and fintech companies across India and East Africa announced its final close.
VC firm Future Africa and credit fund TLG Capital announced a $25M venture debt fund for Future Africa portfolio companies.
MFS Africa's @dokoudjou said last yr, "As [#AfricaTech] matures, more companies will do a combination of debt & equity [rounds]" And while Iyin Aboyeji is no longer on Twitter, he'd been a proponent — his firm @anafricanfuture even wrote about it So this is very interesting...
As VC equity funding slows and starts to ask tougher questions of founders, @anafricanfuture and TLG Capital have created a $25 million venture debt pipeline for African startups https://t.co/mUvcIaaMoZ
Semafor Africa @SemaforAfrica
📚 Quick hitsFOR YOUR READING PLEASURE
Ideas that changed my life — Gem-dropper Morgan Housel: “The only truly sustainable sources of competitive advantage I know of are: Learn faster than your competition. Empathize with customers more... Communicate more effectively... Be willing to fail more... Wait longer than your competition.”
How to... use AI to generate ideas — Wharton entrepreneurship & innovation professor Ethan Mollick gives great examples of how AI/ChatGPT can help with idea generation.
Living through the revenge of capital — Precursor Ventures’ Charles Hudson: “We are living through what I call the revenge of capital. I don’t know a better way to describe what I’m hearing in my conversations with GPs and LPs — it’s an abrupt, violent rebalancing back toward the preferences of capital providers up and down the stack [that] isn’t purely rational…”
FROM AFRIDIGEST
The rise of earned wage access across Africa, explained by leading founders — The latest Afridigest Thought Circle offers insights from founders pioneering the EWA model across Africa. Thanks again to Albert, Chikodi, Emmanuel, Nonso, Paul, Raeesa, and Simon 🙏🏽
PUBLIC BOOKMARKING
Startup restructuring 101 — Professional angel investor Cyril Grislain writes a practical read for founders
Bear market blitzscaling — Reid Hoffmann & one-time Afridigest commenter Chris Yeh discuss blitzscaling when capital becomes much more precious.
Investing in internal documentation: A brick-by-brick guide for startups — a playbook for establishing good internal documentation habits from David Nunez, early hire at Stripe and Uber.
👀 Visual of the WeekFT Alphaville published ‘Revealed: the Alameda venture capital portfolio’ last week, which contained screenshots of the FTX/Alameda private equity portfolio.
Three interesting items — highlighted in the image above — caught my attention:
Chipper Cash quietly raised an additional $35M from FTX/Alameda at a $1.25B valuation, down ~38% from the $2B valuation it publicly announced last November. In Week 43’s Week in Review, I wrote about 54Gene’s ~70% reduction in valuation: “This is perhaps the first significant down round in Africa Tech made public this year.” Now, it appears that 54Gene has company.
It also appears that AZA Finance did take money from FTX/Alameda after all — $25M in the form of a promissory note. When the FTX story broke, AZA’s Founder/CEO took to Twitter to clarify some erroneous information being reported, saying, “FTX was a client of AZA Finance. Full stop. They were not shareholders and we are not affected by their bankruptcy or situation. They were very small clients.” Some might call the omission of the promissory note deception, others might not. Either way, whose burner account tweeted this last month?
@e_rossiello @FTX_Official @aza_africa 1) You lie like a cheap watch. @FTX_Official was a small client? What small client goes into partnership for the tune of £25m? What small client flies you out on a private jet to the Bahamas on closed door meetings? What small client funds a partnership offsite for your company?Thirdly, mobile money unicorn Wave also apparently received $10M from FTX/Alameda (at an unknown valuation). Not much to add here except that, to my knowledge, this hadn’t previously appeared anywhere. Outside of Wave, the rest of FTX/Alameda’s Africa portfolio (Jambo, Nestcoin, Ovex, VALR, MARA, and Bitnob) was pretty well known — I mentioned them myself in Week 45’s Fintech Review.
So what now? I suppose there are three issues (although perhaps ‘rumors’ or ‘whisperings’ are more appropriate terms) to keep in mind:
Some companies may not have received the amounts above as the funds may not have been disbursed in full prior to FTX’s collapse.
Funds received by portfolio companies may somehow be subject to clawbacks in the bankruptcy process.
There’s likely broader contagion beyond FTX/Alameda portcos. The general assumption is that at least a few currently unknown Africa Tech startups held significant funds on FTX.
🕵️♀️ In case you missed itNEWS
Saudi Arabia-based mobility solutions platform Morni is actively targeting acquisitions in the Egyptian mobility space
Etisalat is weighing the possible acquisition of Vodafone’s 60% stake in African carrier Vodacom
The IFC will provide six of Airtel Africa's subsidiaries with a mix of local currency and USD loans totaling $194M to support mobile internet connectivity expansion across Africa
Fintech unicorn Chipper Cash laid off ~12.5% of staff
Nigerian mobility fintech Moove laid off an undisclosed number of staff
ESSAYS, REPORTS, & LISTS
Malanee Hutton, Head of Venture Design at @ Founders Factory Africa writes ‘Platform businesses have taken over the world. What are they?’
Pair with: this Twitter thread on the book Platform Revolution
Jad El Boustani and Germine Bouchnack, investors at Middle East Venture Partners, write ‘Why we invested in Money Fellows?’
Opeyemi Awoyemi, Founding Partner at Fast Forward Venture Studio writes 'why we set on a mission to unlock prosperity for Africans'
The Kenya National Innovation Agency released the inaugural Kenya Innovation Outlook Report (PDF)
OTHER ARTICLES
Ventures and valuations: Africa’s billion-dollar startups (Forbes)
Opinion: Trends and predictions for African startups in 2023 (Techcabal)
Rising costs are leading to the rise of buy now pay later plans in Egypt (Quartz)
PROFILES/INTERVIEWS
Aderonke Ajose-Adeyemi, Founder and CEO of e-commerce platform Losode, on building the company
Nihal El-Chami, Head of Program and Marketing at Falak Startups, on the venture capital landscape in Egypt
Lexi Novitske, General Partner at Norrsken22, on her journey as an investor
Emmanuel Adegboye, Head of Madica, on Madica’s program
Burak Akinci, CEO of Simfy (MTN Ayoba), on Ayoba’s plans
🐤 Tweet of the WeekWith the recently announced layoffs at some companies that raised significant amounts not long ago, does the following tweet apply? Hmm.
🗣️ Community Corner and Opportunities (feel free to send yours in)Thanks again to the everyone who came to the Afridigest Lagos meetup on Thursday. ‘Twas very good vibes with very good people, and I’m looking forward to doing it again. It’s now open to event sponsors, too. 👀 (Oh, if you can, like and/or retweet this to give Tayo, who may be reading, an extra little push.)
Congrats to Chooki Arinze & the Kaoshi team on Kaoshi’s selection to Mastercard’s Start Path Open Banking program. Kaoshi was featured in Week 39 2021’s startup spotlight and is now legitimately pioneering cross-border open finance globally — fintechs, investors, and other parties interested in learning more should get in touch. 🚀
Congrats to OO Nwoye & the team that put together another successful Oya Make We Groove event in Lagos.
African startups are invited to apply before December 15th for the January 2023 cohort of the Techbridge accelerator which offers equity investments of up to $200K.
African startups working on climate solutions are invited to apply before January 2023 for up to $100K in equity-free investments from the UNICEF Venture Fund
The HBS Africa Business Club invites early-stage startups focused on Africa to apply for the New Venture Competition before January 2, 2023.
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