MAY 10, 2022
7 min Read
African Tech Weekly Recap: April 18 to April 22, 2022
Welcome to our weekly recap where we share the most important news of the week in the African Tech Ecosystem 🌍
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🇿🇲 Tiger Global leads $12m seed extension in Zambia’s Union54
- Zambian card issuing fintech Union54 has raised $12 million in a seed extension round led by Tiger Global six months after raising its seed round of $3 million, also led by Tiger Global.
- The startup’s API allows African software companies to issue and manage their debit cards without needing a bank or third-party processor.
- Since its launch in October and participation in Y Combinator’s summer batch 2021, Union54 has issued slightly over 500,000 virtual debit cards to its customers and claims to have processed volumes in millions of dollars.
Issuing debit cards is traditionally very expensive, slow, and inflexible, which makes the process out of the reach of most small companies. With the emergence of card-issuing API fintech startups, however, smaller businesses and startups have relatively easy access to issuing cards for their customers. More so, card-issuing API fintech players in Africa are increasingly attracting the attention of investors and their venture capital dollars.
🇪🇬 The Food Lab raises $4.5m pre-seed round
- Egypt-based cloud kitchen operator The Food Lab, has raised $4.5 million in a pre-seed round, co-led by Nuwa Capital, Shorooq Partners and 4DX Ventures.
- Founded in 2020 by Kareem El Daly, Ahmed Osman, and Wesam Masoud, The Food Lab offers shared kitchen spaces to brick and mortar restaurants alongside a technology platform that provides end-to-end services including procurement, cooking, delivery and marketing.
- It currently works with over 50 local and international brands. With The Food Lab, existing restaurant owners can grow exponentially, while new brands can go from concept to launch within just 10 days.
The restaurant industry across Egypt has witnessed robust growth with an estimated size of $17 billion annually while Egyptians reportedly spend about 30% of their income on food. The adoption of new technologies, like the TFL platform, should allow restaurateurs to scale growth rapidly.
🇸🇳 BGFA provides Oolu with $2.5m to power rural Burkina Faso
- Oolu has signed an agreement with the Beyond the Grid Fund for Africa (BGFA) to support the scale-up of high-quality solar home systems for people living in rural areas of Burkina Faso.
- Launched in 2015, Oolu aims to provide affordable energy access to rural and peri-urban customers in West Africa. So far, it has sold thousands of solar home systems to customers across 6 markets.
- The Burkina Faso subsidiary of Oolu was established in 2018 and will now scale its operations there in partnership with BGFA, a facility that aims to kick-start markets for clean, off-grid energy in African countries.
The total value of the BGFA contract is $2.7 million, with a total project budget of at least $5.4 million. With the support of BGFA, Oolu will scale up its current business activities in Burkina Faso, aiming to establish over 28,000 additional subscriptions over a four-year period by providing solar home systems for lighting, mobile phone charging, TVs, fridges and freezers as well as power sources for commercial customers.
🇳🇬 Nigeria’s ETAP gets $1.5m to boost car insurance uptake
- ETAP, a startup that makes it easier to buy and claim insurance, has secured $1.5 million in pre-seed funding to grow its team and drive the adoption of car insurance across Africa.
- Starting in Nigeria, ETAP will leverage the new funding to roll out its app which allows drivers to buy insurance in 90 seconds, complete claims in 3 minutes and get rewarded for good driving and avoiding accidents.
- This round was led by Mobility 54 (the Venture Capital arm of Toyota Tsusho and CFAO Group), with participation from Tangerine Insurance, Graph Ventures, Newmont and other angel investors.
Africa has an ever-growing need for innovative insurance solutions to address the significant lack of coverage in the continent. As of 2018, insurance penetration rate in Africa stood at a meager 1.12% or 3% with South Africa. Since launching in beta in November 2021, ETAP has insured more than 130,000 individual trips and over 500,000 kilometres in car journeys.
🇰🇪 Kenyan e-commerce startup Elloe raises $1m pre-seed
- Kenya’s Elloe, a conversational e-commerce startup, has raised $1 million in pre-seed capital as it bids to expand across emerging markets.
- Founded by Owen Sakawa, Elloe is an AI-powered, conversational commerce platform that allows SMEs to buy and sell products online across any messaging platform.
- The funding round is led by the Philippines-based Mad Ventures and will help Elloe expand across Kenya and other emerging markets.
Source: Disrupt Africa
In Africa, e-commerce is gradually evolving to become social selling. Across the continent, startups are springing up with different e-commerce business models built around social networking and messaging sites like Facebook and WhatsApp that consumers already use. Facebook and Instagram are used for online shopping more than e-commerce marketplaces by Africans, per a 2019 GeoPoll survey. This emerging social commerce sub-sector is set to witness exponential growth in the coming years as more startups emerge and consumers make purchases via social media platforms.
🚀 EM-focused Tofino Capital closes first round of $10M fund
- Tofino Capital has launched its $10 million Fund and has announced the first close of this fund at $5 million, with a goal to reach the final close in nine months.
- Founded by Eliot Pence and Aubrey Hruby, Tofino Capital invests in early-stage companies in venture scalable markets, faced with a lack or inadequate venture capital.
- With the current fund, Tofino Capital seeks to back startups in emerging markets across Africa, Asia, Latin America, and the Middle East, including countries such as Bangladesh, Egypt, Nigeria, Pakistan, Philippines, and Mexico.
An increasing number of small- to medium-sized funds with $10 million to $50 million of capital to deploy are targeting opportunities in Africa and other frontier markets. Uncovered Fund, LoftyInc Capital, Savannah Fund, and Ventures Platform are some of such Africa-focused firms that have launched in the past year. The Tofino fund will focus on B2B-focused startups in fintech, logistics, and marketplaces themes. Between $50,000 and $500,000 will be invested in these early-stage companies, particularly pre-seed and seed stages.
🇸🇳 Senegalese unicorn Wave gets e-money license in the WAEMU region
- Wave, a Senegal-based fintech unicorn, has received an e-money license from the Central Bank of West African States (BCEAO), which serves 8 francophone West African countries — Benin, Guinea Bissau, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal, and Togo — that form the West African Economic and Monetary Union (WAEMU).
- Since its inception in 2018, Wave has had to rely on third-party banks like the United Bank of Africa (UBA) and Ecobank to power its mobile money business model.
- With this e-money license, the Sequoia- and Y Combinator-backed company can now independently and directly offer its current suite of financial products to customers without the support of third-party banks.
Wave reached unicorn status last September after closing a $200 million Series A funding round. The startup offers free bill payments, cash-in, and cash-out, and charges only a 1% fee on money transfers, about 70% cheaper than what its competitors offer. The license enables Wave to offer a wider variety of financial services like merchant payments, savings, credit, and remittances, and more importantly, signifies that francophone Africa, known for its regulatory conservativeness, is becoming more friendly to innovative fintech startups.
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