Afridigest Week in Review: Cash for conversational commerce
+African tech M&A is heating up +Brand building from day one +Privacy vs. secrecy +Lessons to learn from Wordle +DFIs in Africa +Impact of pay on delivery +More
The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers. Share it liberally. 😊
Welcome back, friends! The most clicked link from last week was ‘A potent way to compete in Africa's fragmented markets is by deploying platforms.' And this week, African tech startups reached $1B in disclosed funding raised from announced deals for the year. With that said, let’s get into Week 8.
If you’re new, welcome 🙌 — you’ll receive a weekly digest like this one every Monday and, generally (but not always), an original essay/article on Saturdays. For past essays and digests, visit the archive.
Week 8 2022: Feb 20 - 26
📰 Deal of the Week
OLDIE BUT GOODIE
Clickatell, a South African mobile engagement & conversational commerce platform with US headquarters, raised a $91M Series C led by Arrowroot Capital, with participation from Kennedy Lewis Investment Management, Endeavor Global, and Harvest.
💡 Why it’s the deal of the week: Founded in 2000, Clickatell predates most of the shiny names in the African startup ecosystem today. While it’s from a different era, it’s a pioneer in an attractive global segment and, per its founders, it’s delivered profitable double-digit growth for more than a decade.
The platform serves over 10,000 customers worldwide including Coca-Cola, Visa, IKEA, Deloitte, and Telegram; since 2020 alone, it’s processed over 30 billion mobile interactions between consumers and businesses via SMS, USSD, & WhatsApp, and ~2 billion chat commerce transactions.
Looking at Nigeria specifically, it reaches ~17M end customers and processes up to 1.3 million payment transactions daily in the country.
⛏️ Go deeper:
Ahead of its time: “In many ways, we’ve kind of had to wait for the market to come to us… We believe that chat commerce has the potential to be larger than e-commerce for the simple reason that already today, there are more people on chat than the internet, in fact almost twice as many.” — Pieter de Villiers, Founder & CEO
On track for IPO: After some flirting with public markets in 2018/2019, the company is now likely to seek to go public in the near future.
Use of funds:
Product development: Among Clickatell’s immediate priorities is the further development of its Chat Commerce offering.
Geographic expansion: After launching Chat2Pay in the US in partnership with Visa in September 2018, the company now seeks to expand its footprint in the country and broaden its US coverage.
Talents & Ops: Another priority in advance of any potential IPO is growing and strengthening its sales & marketing function in particular.
Early days: Watch this 3-minute pitch from Llew Claasen (then Clickatell VP of Marketing and now Managing Partner of South African VC firm Newtown Partners) from 2012:
🔦 Other deals
MarketForce, a Kenyan B2B retail distribution platform, raised a $40M Series A ($20M equity, $20M debt) led by V8 Capital Partners, with participation from Ten13 VC, SOSV Select Fund, Vu Ventures, Vastly Valuable Ventures, Uncovered Fund, existing investors Reflect Ventures, Greenhouse Capital, Century Oak Capital, Remapped Ventures, and others — MarketForce serves ~100,000 merchants across Kenya, Nigeria, Uganda, Tanzania, and Rwanda; since the 2020 launch of its RejaReja inventory sourcing platform more than 87,000 orders with an AOV of $151 have been made through the platform. The company plans to now introduce BNPL solutions for merchants.
Jambo, a Congolese (DRC) platform focused on onboarding Africans onto web3 via play-to-earn games and educational incentives, raised a $7.5M seed round from Coinbase Ventures, Three Arrows Capital, Alameda Research, Tiger Global, Delphi Ventures, AllianceDAO, DeFiance Capital, Yield Guild Games, Polygon Studios, and others — So far this year, 12,000 students across 15 countries have registered to take 10-week web3 courses curated by Jambo; it aims to release a beta version of its incentive & play-to-earn products in Q2 and a full version in Q3
Canza Finance, a Nigerian neobank for emerging markets utilizing decentralized finance (DeFi), raised a $3.27M seed round led by Fenbushi Capital, with participation from Dominance Ventures, Bixin Ventures, Consensys, Protocol Labs, Emergo Ventures, MEXC Global, NGC Ventures, XanPool, Hashkey, and others — Launched in 2020, Canza has over 7,000 Celo wallets created via USSD DApp and averages over $200K in weekly transactions
CredRails, a Kenyan open finance infrastructure provider, announced a $2.5M seed round from SoftBank (Emerge), Unicorn Growth Capital, Samos Investments Advisory, and Precursor — Launched in 2020, CredRails says it already has access to 250 million accounts in 33 countries via its API; alongside Kenyan SACCO-focused neobank Kwara, Credrails participated in the Softbank Emerge accelerator program
OneOrder, an Egyptian B2B supply chain platform for restaurants, raised a $1M seed round led by A15 — Led by the founder of two of Egypt’s most successful restaurant chains, OneOrder announced its official public launch along with this fundraise
FloatPays, a South African pay-on-demand/earned wage access platform, raised ~$985K from Nasper Foundry — This comes one month after the startup announced a $4M seed round from Global Founders Capital, Base Capital, Finca Ventures, Raba, 4DX Ventures, and others
Avidea, a Tunisian vehicle-focused digital insurance platform, raised a ~$696K pre-Series A led by Capsa Capital Partners and 216 Capital — Avidea was founded in 2017 and this is its first institutional investment round
Lipa Payments, a South African provider of contactless payments solutions for the informal sector, raised ~$660K from Capitec-backed Imvelo Ventures — Lipa Payments, not to be confused with Lipa Later, is preparing to launch its solutions across South Africa and Nigeria this year
Voyance, a Nigerian B2B no-code data science platform, raised a $500K pre-seed led by Beta.Ventures with participation from Zedcrest, HoaQ, Assembly Investors, and others — Voyance’s customers include Ejara, Bitnob, and Dojah
SAmAS Gamify, an Egyptian provider of gamified psychometric assessments for new hires and employees, raised a $125K pre-seed led by SoftEQ Venture Studio — SAmAS has so far pre-registered 28 companies for an expected June 2022 launch
Week 8 Deal Recap
TradeDepot, a Nigerian B2B e-commerce supply chain and fintech platform, acquired Ghanaian B2B e-commerce supply chain platform Green Lion for an undisclosed amount — Green Lion has a customer base of over 4,400 making it one of the largest B2B e-commerce platforms in Ghana
PayJustNow, a South African buy-now-pay-later payment platform, sold an 85% stake to Weaver Fintech, a division of investment holding company Homechoice International (HiL), for an undisclosed amount — Weaver Fintech’s strategy is to build a portfolio of synergistic consumer fintech businesses
UCOOK, a South African meal kit delivery platform, has been acquired in a deal worth $12.3M by Silvertree Brands (formerly Silvertree Holdings) — UCOOK is the fastest-growing web-based food brand in South Africa; Silvertree previously acquired a minority stake in the startup in 2016
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The Afridigest Week in Review is designed to inform Africa-interested founders, executives, investors, and observers. Share it with those interested in innovation across the continent. 🙏🏽
📚 Quick Hits
FOR YOUR READING PLEASURE
Effective teams don’t keep secrets — “There’s a difference between privacy, which is based on trust, and secrecy, which isn’t… As a leader in whatever space you’re in, you need to understand whether you have created a privacy- or secrecy-based culture… Cultivating an atmosphere of trust is essential for success.”
Building a legendary brand starts from day one — Sequoia India marketers discuss their 3Ps of brand building: Purpose, Positioning, and Pursuit. “The ultimate goal is to build a brand that delivers a point of difference based on why you do what you do, responds to a clear customer insight, and garners love and respect from customers, investors, and other stakeholders because it has a clear purpose, position, and pursuit.”
Startups and macro risk — USV’s Albert Wenger: “I find it difficult to think of another time with as much macro risk as the present at least since the financial crisis and likely much longer than that. … So how should you approach this as a startup founder/CEO? If you have raised a round at a really extended valuation in the last 6-12 months I would strongly advise making this cash last a lot longer than you had originally planned.”
Apple: Thief — Good longread from NYU Stern’s Professor Galloway on Apple’s strategic path to $1T in revenue by 2030. “A trillion in revenue will require stealing markets from incumbents... One company is best poised to ascend to the Iron Throne of theft.”
Consumer Technology Trends 2022 — Fantastic deck on consumer tech trends from European early-stage VC firm Heartcore Capital; Interesting to see a quick call-out of Kuda & emerging market neobanks.
Wordle is pretty damn smart in many subtle ways — A quick deconstruction of the game you can’t avoid: “On a superficial level, there’s nothing special about Wordle, … [but] what makes it special is not the core mechanic itself, but the series of very intelligent decisions that were made…”
🙈 Visual of the week
AFRICAN TECH M&A IS HEATING UP
At the start of the year, I put forth that an increase in strategic bolt-on & tuck-in acquisitions is among five major trends to expect across Africa's startup ecosystem in 2022. And so far, this seems prescient given the uptick in acquisitions during the first two months of the year:
Source: Afridigest analysis. Earlier version first published on LinkedIn.
🕵️♀️ In case you missed it
NEWS & ANNOUNCEMENTS
Temi Giwa writes ‘Why pay on delivery is the worst thing to happen to e-commerce in Nigeria’
The Mercy Corps team explores insights from their Kenyan stablecoin pilot in ‘Addressing unemployment and generating stable incomes for Kenyan youth through crypto’
Various McKinsey partners explore the viability of electric vehicles across Africa in ‘Accelerating the electric transport transition in sub-Saharan Africa’
Google and Accenture published their Africa Developer Ecosystem Report 2021 (PDF)
The Central Bank of Kenya published its National Payments Strategy 2022-2025 report (PDF)
The Central Bank of Egypt released its Fintech Egypt 2021 report (PDF)
Idris Ayodeji Bello, Founding Partner at LoftyInc Capital appeared on the Chini ya Maji podcast
SweepSouth Founders Aisha R. Pandor and Alen Ribić appeared on the Mashstartup podcast
Nigerian podcast hosts 'Laolu, Furo, and Nosa discuss Earnipay, Reliance, and Flutterwave on the Open Africa podcast
Development finance institutions are looking to Africa’s digital frontier for impact and returns (TechCabal)
Jumia Technologies eyes free shipping, logistics service to boost income (Reuters)
Solving Africa’s tech talent problem: All hands on deck (TechCabal)
Four ways that gig work is changing life in Nigeria (Rest of world)
Payroll tech heats up in Africa (TechCabal)
Game studios come together to grow industry in Africa (Techcrunch)
🗣️ Community Corner
I see you, friends!
Join Stone Atwine and the Eversend team — they’re hiring a General Manager for Eversend Business to be based in Lagos, London or Nairobi
Congrats to Andrew Fassnidge & team for a successful 2022 Africa Tech Summit 🥳