Afridigest Week in Review: Three weeks in one

+Deal coverage of Weeks 19, 18, & 17 +The Helios heist +4 Key insights for startup success in Africa +VC is slowing globally, should African startups worry? +How to navigate down markets +More

The Afridigest Week in Review is a must-read weekly recap for Africa-focused founders, executives, and investors, as well as interested observers. Glad to have you here. 😊

Welcome back, friends! After two weeks off to hold my dad’s traditional burial ceremony in Southeastern Nigeria, we’re back.

Let’s get right into it — we pick up here where we left off a couple of weeks ago, so today’s newsletter covers weeks 17, 18, and 19. (We’ll be back to the regular schedule and format as of next Monday.)

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.

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Credit: Lauren Konig

Week 19 2022: May 8-14

📰 Deal of the Week

THIS WEEK IN AFRICAN UNICORN NEWS

Interswitch, the Nigerian electronic payments and financial infrastructure unicorn, raised a reported $110M from LeapFrog Investments and Tana Africa Capital.

⛏️ Go deeper:

• The Helios heist: In 2010, Helios, the leading Africa-focused private equity firm, reportedly acquired a majority stake in Interswitch (perhaps up to 66%) in a deal that valued the company at roughly $200M.
  
  In 2017, it sold a minority interest to TA Associates while remaining Interswitch’s majority shareholder. And two years later in 2019, it sold another partial stake to Visa in a deal that valued Interswitch at $1B.
  
  Helios now further monetizes its Interswitch investment with this week’s partial exit to LeapFrog Investments and Tana Africa Capital — presumably at a valuation higher than $1B.
  
  What’s more, Ignite Holdco, a joint vehicle of Helios and TA Associates, remains the largest Interswitch shareholder after the transaction.

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🔦 Other Week 19 deals

OTHER WEEK 19 FUNDRAISES ACROSS THE CONTINENT

• Paymob, an Egyptian digital payment service provider, raised a $50M Series B co-led by PayPal Ventures, Kora Capital and ClayPoint with participation from new investors Helios Digital Ventures, British International Investment, and Nclude, and existing investors A15, FMO, and Global Ventures — Over the last year, Paymob tripled the number of local and international merchants using its payment gateways to over 100,000; the investment is PayPal’s first in the MENA region and second in Africa after Stitch’s February Series A

• Jambo, a Congolese (DRC) platform focused on onboarding Africans onto web3 via play-to-earn games and educational incentives, raised a $30M Series A led by Paradigm, with participation from ParaFi Capital, Pantera Capital, Delphi Ventures, Kingsway Capital, Gemini Frontier Fund, BH Digital, Graticule Asset Management Asia, Shima Capital, Morningstar Ventures, and others — This comes after Jambo announced its $7.5M seed round in Week 8 earlier this year

• MARA, a pan-African crypto exchange platform, raised a $23M seed round (equity and token sale) from Coinbase Ventures, Alameda Research (FTX), Distributed Global, TQ Ventures, DIGITAL, Nexo, Huobi Ventures, Day One Ventures, Infinite Capital, and others

• Mylerz, an Egyptian e-commerce fulfillment platform, raised a $9.6M growth round led by Lorax Capital with participation from Fawry — Launched in 2019, Mylerz has delivered over two million packages to date via a fleet of over 350 vehicles and 21 local fulfillment hubs across Egypt

• Kaltani, a Nigerian tech-enabled plastic waste recycling platform, raised a $4M seed round from undisclosed investors

• IdentityPass, a Nigerian digital identity verification and compliance platform, raised a $2.8M seed round led by MaC Venture Capital, with participation from Y Combinator, Soma Capital, True Capital Fund, and Sherwani Capital — Since its 2020 launch, the startup has processed over 1 million unique user verifications and it currently serves 200 active business clients across Nigeria, the UK, Kenya, the US, and India

• TopUp Mama (formerly Kibanda TopUp), a Kenyan B2B food supply chain platform, raiseded a $1.7M seed round co-led by Ventures Platform and JAM fund, with participation from Next Billion Ventures, Future Africa, Jedar Capital, HoaQ Fund, First Check Africa, and DFS Labs — The company has ~1,000 active merchants making orders on its platform every month

• TooMuchWifi, a South African internet service provider, raised a $1M pre-series A round, led by BLOC Smart Africa, with participation from Connectivity Capital, Atreyu Investments and others

• Badili, a Kenyan used smartphone buy-back ‘re-commerce’ platform, announced that it raised $850K of a targeted $3.5M pre-seed from Artha India Ventures, SOSV, Uncovered Fund, Grenfell Holdings and others

• Bridgecard, a Nigerian platform allowing users to manage multiple bank accounts via one app, raised a $440K pre-seed from ABV Funds, Ingressive Capital, Voltron Capital, Ventures Platform, Velocity Digital, Berrywood Capital, and others — In two months of private beta involving 120 users, Bridgecard processed over $70K in transaction volume

• Teegara, an Egyptian B2B e-commece marketplace, raised an undisclosed bridge round led by Alexandria Angel Network

• Bongalow, a Nigerian real estate marketplace and loan & mortgage origination platform, is participating in the Techstars Toronto Spring ‘22 accelerator program

ADJACENT

• Manara, a San Francisco-based training platform focused on growing the tech talent pool in the MENA region, raised a $3M pre-seed led by Stripe, with participation from LinkedIn founder Reid Hoffman, Y Combinator founder Paul Graham, Lean Startup founder Eric Ries, and Mudassir Sheikha, founder and CEO of Careem

M&A

• Radar, a South African HR and payroll platform, is being acquired by Firepay, the parent company of leading mobile payments provider SnapScan for an undisclosed amount

• The Automobile Association of South Africa (AA) announced that it acquired a 30% equity stake in South African mobile security platform and personalized security app CASi

VC FUNDRAISING

• Algeria-based accelerator Algeria Venture (A-Venture) and the Algeria Investment Fund (AIF) have signed a partnership to launch a $10M VC fund targeting early-stage Algerian startups

Week 18 2022: May 1-7

📰 Week 18 Deal Review

• Masa Finance, a DeFi credit protocol and decentralized credit bureau users whose users are predominantly based in sub-Saharan Africa, raised a $3.5M pre-seed from Unshackled Ventures, Lateral Frontiers, Decentranet Intersect VC, Peer VC, Alves Ventures, and others

• Norebase, a Nigerian platform facilitating pan-African company incorporation, admin, and trade, raised a $1M pre-seed co-led by Samurai Incubate and Consonance Investment with participation from Kinfolk VC, Future Africa, Ventures Platform, Microtraction, Boleh Venture, Voltron Capital, Wuri Ventures, and others

• Hello Tractor, a Nigerian Uber-like platform that allows farmers to book tractors, raised $1M from Heifer International

• GoMetro, a South African mobility management platform for transport/logistics operators, raised a $1M (ZAR16.3M) seed extension round from Kalon Venture Partners, Hlayisani Capital, Tritech Global, 4Decades Capital, and E Squared Investments

• Kenyan accelerator The Baobob Network invested $25K each in five startups:

  • Opus Analytics, an Egyptian provider of HR and people analytics software

  • Lendha, a Nigerian lending platform targeting SMEs

  • GoodTalent, a Nigerian platform that matches companeis with engineering talent globally

  • Sidebrief, a Nigerian platform facilitating pan-African company incorporation, admin, and trade

  • Mighty Finance, a Zambian lending platform targeting SMEs

• Kwaba, a Nigerian rent and mortaging finance platform, raised an undisclosed pre-seed from Co-Creation Hub (CcHub) and others

• Hadada, a Nigerian open finance API infrastructure platform, raised an undisclosed pre-seed from venture studio Cf2 and others

VC FUNDRAISING

• Rali_cap (formerly Rally Cap Ventures) reached its initial target of $20M and is now targeting a $30M close due to strong LP interest — Rali_cap invests at the pre-seed and seed stages in B2B and API-first fintechs across Africa, Latin America and South Asia and its African portfolio includes Mono, Stitch, and Union54; LPs include include Breyer Capital, Propel VC, Better Tomorrow Ventures, FT Partners, Bain Capital, Lateral Frontiers, and others

• South African VC firm HAVAÍC announced the final close of its $20M Universum Core African Fund that will invest in early-stage tech companies in South, East, and West Africa — The fund’s current portfolio includes Kuda, Crowdforce, Mobiz, Tanda, and RecoMed

• AAIC announced the first close of its Africa Innovation & Healthcare Fund 2 (AHF2) targeting $150M — AAIC’s first fund raised ~$47M and portfolio companies include Chipper Cash, Kobo, and RelianceHMO

  • Pair with ‘The bridge to Japan: How AAIC went from macadamias to medicine’

Week 17 2022: April 24-30

📰 Week 17 Deal Review

• Sun King (formerly Greenlight Planet), an off grid solar energy solutions provider operational in Kenya, Zambia, Uganda, Tanzania, and Nigeria, raised a $260M Series D led by BeyondNetZero, the climate investing arm of General Atlantic, with participation from M&G Investments’ Catalyst and Arch Emerging Markets Partners

• Farmerline, a Ghanaian agritech marketplace that connects farmers with high-quality inputs, raised a $6.4M pre-Series A along with an additional $6.5M in debt; Acumen Resilient Agriculture Fund and FMO co-led the equity portion with participation from Greater Impact Foundation, while lenders include DEG, Rabobank, Ceniarth, Rippleworks, Mulago Foundation, Whole Planet Foundation, Netri Foundation, and Kiva

• Afriex, a Nigerian stablecoin-powered cross-border remittance platform, raised a $10M Series A at a $60M valuation co-led by Sequoia Capital China and Dragonfly Capital, with participation from Goldentree, Stellar Foundation, Exceptional Capital, and others

  • Pair with: The most exciting applications of cryptocurrency & blockchain in the African context

• OnePort 365, a Nigerian digital freight management platform, raised a $5M seed round led by Mobility 54, with participation from Samurai Incubate, SBI Investment, Flexport, ODX, and others

• Kwely, a Senegalese B2B wholesale marketplace for made in Africa goods, announced that it completed a $1M seed round from WIC Capital, Loftyinc Capital, Haskè Ventures and others

• SAYNA, a Malagasy gamified learning platform that connects individuals with income generating micro-tasks requested by international companies, raised a $600K round from Orange Ventures, Launch Africa Ventures, MAIC Investors Club, and others

• 9jacodekids, a Nigerian edtech platform that teaches kids aged 4-16 coding, robotics, artificial intelligence, and other technical skills, raised a $350K seed round from Bolaji Balogun, CEO of Nigerian investment bank Chapel Hill Denham

• Filmmakers Mart, a Nigerian film & entertainment marketplace, raised a $120K pre-seed from White Hibiscus Capital

• Laboremus Uganda, a Ugandan B2B provider of identity verification and onboardingsolutions for banks and fintechs, received an undisclosed amount from DOB Equity and FCA Investments

• DigsConnect.com, a South African student housing marketplace, raised an undisclosed amount from South African venture builder/launcher The Delta as part of an unspecified funding round

• roPay, a Nigerian HR-tech & payroll management platform, raised an undisclosed amount from Tekedia Capital

• Lafiya Telehealth, a Nigerian provider of telemedicine solutions, raised an undisclosed amount from Tekedia Capital

• OneIDTech, a Nigerian identity verification and authentication platform, raised an undisclosed amount from Tekedia Capital

• AjoMoney, a Nigerian fintech platform digitizing traditional offline collective/cooperative savings processes, raised an undisclosed amount from Tekedia Capital and Paga CEO Tayo Oviosu

ADJACENT

• Zenda, an Emirati payments platform focused on the education sector, raised a $9.4M seed round from STV, COTU Ventures, Global Founders Capital, and VentureSouq — Zenda (formerly nexopay) reached over $100M in annual contracted payment volumes at the end of 2021 and now plans to enter Egypt in the coming months

• Inseco, a South African tech-enabled company that transforms organic food waste into sustainable insect proteins using black soldier fly larvae, raised a $5.3M seed round led by Futuregrowth Asset Management, with participation from E4E Africa, Oak Drive Ventures, and others

M&A

• Bboxx, a British provider of clean energy solutions across Africa, acquired Ghana’s PEG Africa in a deal valued at over $300M

• Egypt’s Swvl announced an agreement to acquire British B2B smart bus operator startup Zeelo in a deal valued at $100M

• Egypt’s Swvl announced an agreement to acquire Turkish corporate mobility platform Volt Lines for an undisclosed amount

• Nigerian home services subscription platform Eden Life acquired Kenyan informal sector jobtech platform Lynk for an undisclosed amount — the deal accelerates Eden Life’s expansion into Nairobi via Lynk’s customer base

DEBT

• westa.solar, an OOLU-owned provider of solar power solutions to commercial and industrial companies in West Africa, announced that it secured a ~$1.6M mezzanine loan from the Development Bank of Austria (OeEB) early this year

• Aladdin, a Nigerian digital bank, announced the successful closing of a debt-financing deal up to $3.5M

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📚 Quick Hits

FOR YOUR READING PLEASURE

• A framework for navigating down markets — “The market has taken a downturn, and [everyone] seems to offer the same general advice: conserve cash, extend runway, shift from focusing on growth to focusing on efficiency… Here’s a diagnostic framework… [to] reevaluate your valuation, understand your burn multiples, and build scenario plans.”

• Cash: Kingmaker or killer? — “The advantage a business can get from having a huge amount of cash typically has more to do with the underlying market dynamics, maturity, and user economics, than it does with the cash itself. In other words? All cash-spending activities don't create equal results…Your attitude towards money will always have more impact than how much money you actually have.”

  • Pair with: Funding simply shifts the bottleneck — “Abundant capital is not a panacea”

• Product-Market Fit in different capital environments — “As the market finds its new normal, … will companies need to redefine PMF in 2022 and 2023? Will businesses focus on shorter term milestones again in more capital efficient categories?”

• The marketplace retention metric most ignore — “[Here’s] what GMV retention is — including a spreadsheet template for how to calculate it — why you should care about it, and the benchmarks a16z uses to analyze marketplace performance.”

• Why NFTs will gain adoption through commerce — “It’s easy to look at the rise of Bored Apes and think that NFTs are about media, money, and (ugly) art … [B]ut … NFTs have utility beyond monetizing art and community. In fact, everything will be an NFT: concert tickets, apartment keys, work badges, digital media, loyalty cards”

• So, what makes a great COO? — “The COO ensures the processes and systems ladder up to mission, vision and values. The COO is uniquely responsible for this… The COO helps the CEO be more effective [and] should have a narrow set of responsibilities… A great COO understands the importance of inputs and the role that system design has in creating those inputs… The COO is a force for rigorous execution.”

Bonus:

• Dirty secret: Venture reserves are not always a good thing — “Allocating for follow-on dollars, also known as reserves, is an important tool in the arsenal of every fund manager… [but they] can significantly lower overall fund returns”

• The top ten lies GPs tell LPs — “‘We are Thesis Driven,’ [but] in reality, many VCs will follow the herd when there is a hot trend. Or write the thesis so that it is broad enough to accommodate many types of investments.”

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🕵️‍♀️ In case you missed it

NEWS & ANNOUNCEMENTS

• The Central African Republic becomes the first African country and second in the world to adopt Bitcoin - what you need to know

• The Bank of Uganda warns banks and fintechs against facilitating crypto trading

• Techstars and ARM Labs announce the launch of the ARM Labs Lagos Techstars Accelerator that will focus on fintech & proptech startups

ESSAYS/REPORTS

• Goldfinch’s Sam Eyob and Obinna Okwodu write for The Africa Playbook, ‘If we build it, will debt come?’

• Seni Suleyman, Founder of Black Ops and Ventures Platform Venture Partner writes ‘How exactly do Employee Stock Options work again?’

• Microsoft’s MD for Africa Development Centre in Nairobi, Jack Ngare, pens an op-ed in The Standard, ‘Yes, Africa, too, has a lot to teach the world about technology’

• Mbugua Njihia, head of business and partnerships at Sure Corporation, writes in Business Daily ‘USSD the unsung hero of financial services in Kenya’

• TechCabal Insights, in collaboration with Future Africa and The Baobab Network, publishes the report, ‘How investors are betting on Africa’s early-stage startups’

OTHER ARTICLES

• How market failures are holding Africa back (The Economist)

• Africa’s fastest growing companies 2022 (Financial Times)

• Why Nigeria’s biggest telecom companies are getting banking licenses (Quartz)

• Venture funding is slowing down globally, should African startups be concerned? (TechCabal)

• Stablecoins are gaining currency in Africa (Mail & Guardian)

VIDEO, PODCASTS & AUDIO

• Victor Asemota discussed 4 key insights for startup success in Africa

• Claudia Makadristo, Head of Africa Expansion at MetaMap, discussed operating in emerging markets on the Global Class podcast

• The Afrobility podcast covered Wave — how the mobile money unicorn is disrupting financial services Francophone Africa

INTERVIEWS/PROFILES

• Meet the Founder: Jay Alabraba, Paga Co-Founder and Director of Business Development

• Meet the Founder: Flexclub’s Co-Founder & CEO Tinashe Ruzane

• Meet the Founder: TeamApt’s Tosin Eniolorunda [Video]

• Meet the Executive: Wiza Jalakasi, VP of Global Developer Relations at Chipper Cash [Video]

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🗣️ Community Corner and Opportunities

I see you, friends!

• Join the AHL Venture Partners team — they’re hiring a Nairobi-based Investment Associate or Investment Manager

• Congrats to Hayden Simmons and Kyane Kassiri on the oversubscribed first close — join the rali_cap team, they’re also hiring

• Congrats to Chinedu Azodoh, Adetayo Bamiduro, and Guy-Bertrand Njoya (co-founders of Metro Africa Xpress (MAX)) on their selection as Endeavor entrepreneurs

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LA FIN

Thanks for reading 🙌🏽 Send me your news, comments, questions, etc. via Whatsapp, Twitter DM, or email, and feel free to reach out if you just want to chat. 🙏🏽

— Emeka