FEBRUARY 03, 2023

13 min Read

African Tech Weekly Recap: January 30 to February 3, 2023

Welcome to our weekly recap where we share the most important news of the African Tech Ecosystem ūüĆć

To get access to our Daily investor updates check us out https://dabafinance.com/investors-update

Convergence Partners raises $296m Africa tech fund

Highlights

  • Buyout firm Convergence Partners has raised $296 million to buy African technology assets, Chairman Andile Ngcaba was quoted as saying by Bloomberg.
  • The capital raise, one of the first private equity funds secured for sub-Saharan Africa this year, will bring the total funds under management at Convergence to about $600 million. 
  • The new money, which surpassed the firm‚Äôs initial target by over 18%, is mainly from previous investors, development agencies, and pension funds in the US, UK, Europe, and Africa.

Source: Bloomberg


Our Takeaway

Internet broadband penetration in sub-Saharan Africa has grown exponentially over the past two decades, mainly as a result of investments in enabling infrastructure. Still, there is more work to be done to close an existing digital divide on the continent‚ÄĒonly 28% of the sub-Saharan African population was connected to the internet as of 2020‚ÄĒand ensure that Africa is able to reap the benefits from the current and subsequent iteration of the technologies. 


Yebo Fresh raises $4.5m to deliver fresh food in SA

Highlights

  • South African e-commerce startup Yebo Fresh has secured a ~$4.5 million pre-Series A equity investment and a Jobs Fund grant to expand further, build on its physical and systems infrastructure, and attract new talent.
  • Yebo Fresh makes it easy for independent businesses to purchase groceries and other essential items. Orders are placed via WhatsApp or through a team of field sales agents. 
  • A dark store-based fulfillment model delivers orders within 24 hours, eliminating the cost and hassle of shopping trips to wholesalers while offering a buy-now-pay-later option.

Source: TechCabal


Our Takeaway

While the South African upper market is well-served by quick commerce delivery services such as Checkers Sixty60 and PicknPay ASAP, Yebo Fresh claims to be the only player exclusively focused on the township market. The startup now delivers to more than 25 townships in the greater Cape Town and Johannesburg areas, working with a rapidly growing network of spaza shops, prepared food outlets, and other township businesses.


SA private equity firm partners with Irish-based fund

Highlights

  • South African private equity firm Innov8 Group Holdings, which provides funding for medical technologies to the African medical industry, has partnered with an Ireland-based fund and family office.
  • The deal values the company at about $14.5 million, with initial seed investors seeing a 60% return on a partial exit, as well as significant capital appreciation.
  • Innov8 Group Holdings‚Äôs portfolio companies include MyPocketHealth, Innohealth Clinics, AI Biologics Africa, and Social Medical.

Source: TechCabal


Our Takeaway

Africa’s healthcare technology and biotechnology industry is a vast and untapped market, with a rapidly growing population and increasing demand for access to quality healthcare. The continent’s population is projected to reach 1.7 billion by 2050, and current infrastructure challenges affect the ability to meet an equally growing demand for healthcare services. This presents a significant investment opportunity in this space, as new and innovative solutions are needed to address the continent’s healthcare challenges.


Adenia Partners reaches $300m first close for fund V

Highlights

  • Adenia Partners, a private markets investment firm focused on Africa, has announced the first close of its fifth flagship fund, Adenia Capital (V) L.P. with $300 million commitments from investors.
  • The Fund exceeded its first close minimum threshold, achieving 75% of its target size, and attracting returning institutional and commercial investors as well as new investors. 
  • Adenia V has a target size of $400 million and will continue the firm‚Äôs long-term investment strategy of making control investments in medium-sized, ESG-focused companies across Africa.

Source: ABC


Our Takeaway

Africa is a diverse investment destination with significant potential opportunities in not only public markets but also private markets, for which local expertise and experience are paramount to achieving successful outcomes. Adenia has expanded its geographic footprint over the lives of its previous funds. This fifth fund is its first fully pan-African, leveraging the firm’s extensive on-the-ground presence across the continent to source and manage investments. Adenia V will target between 10 and 12 investments, with a median deal size between $30 million and $50 million.


Amazon launches new AWS Local Zones in Nigeria

Highlights

  • Amazon has launched a new Amazon Web Services (AWS) Local Zones in Lagos, one of only 15 outside the United States. 
  • The new facility is a type of infrastructure deployment that places AWS computing, storage, databases, and other services near large populations, industries, and information technology (IT) centers.
  • The proximity of AWS Local Zones to the Lagos metropolis is expected to help improve the development and performance of applications that Lagosians and Nigerians‚ÄĒin the broader sense‚ÄĒuse to access these services.

Source: Nairametrics


Our Takeaway

Africa still grapples with the lack of continent-wide digital infrastructure like data centers and fiber optic networks crucial for a digitally included region. Over the past few years, significant investments have been poured into the space with the hope of bridging this gap and setting Africa on the path to becoming a truly digital economy. Africa Data Centres recently launched two new centers in Kenya and South Africa. The Africa data center market was valued at $2 billion in 2020 and is expected to grow to $5 billion by 2026, at a CAGR of 15%.


Nigerian fintech Trade Lenda raises $520m pre-seed round

Highlights

  • Fintech startup Trade Lenda, which helps Nigeria-based micro, small and informal retailers with affordable financing, has raised $520,000 in pre-seed funding.
  • Founded in 2021, the Lagos-based startup‚Äôs data-driven credit-scoring platform evaluates character and capacity to bridge access to quick and efficient finance gaps for small retailers and suppliers.
  • It grew 5x between 2021 and 2022, per the company‚Äôs statement, and now plans to grow revenues 10x in 2023.

Source: Disrupt Africa


Our Takeaway

Access to capital remains a significant barrier to the growth of many small businesses in Africa‚ÄĒavailable data shows a $330 billion financing deficit for the small enterprises that make up 90% of businesses on the continent‚ÄĒand it‚Äôs a problem several startups and foreign investors are particularly keen to address as it promises attractive returns. Trade Lenda claims to have provided credit to over 1,500 businesses with over $2 million in disbursements, with an average disbursement time of around six hours.


Egypt’s MNT Halan clinches $1bn valuation after raising $400m

Highlights

  • Egyptian fintech and e-commerce ecosystem MNT-Halan has raised up to $400 million in equity and debt financing from local and global investors as it continues to serve underbanked and unbanked customers in the North African country.
  • The round includes $260 million in equity financing and $140 million through two securitized bond issuances secured within the past year, investments that will now see MNT-Halan command a post-money valuation of about $1 billion.
  • The company plans to expand internationally after solid growth in Egypt and progress on a swap agreement between super app Halan and Netherlands-based microlending platform MNT Investments.

Source: Disrupt Africa


Our Takeaway

Having begun life as a ride-hailing app back in 2018, MNT-Halan has morphed into a super app of sorts and has now become Egypt‚Äôs most funded and valued startup after its latest mega funding round. The $400 million deal‚ÄĒthe single-largest funding secured by an Africa-focused startup alongside Opay‚Äôs round in 2021‚ÄĒshould ensure its continued growth even as it becomes Egypt‚Äôs only unicorn startup at the moment. The startup is also reportedly in the advanced stages of raising $60 million in additional capital in the coming weeks.


SA-based Lulalend raises $35m to scale its lending business

Highlights

  • Lulalend has raised $35 million in a Series B round led by international impact investor Lightrock, with participation from new investors.
  • The Cape Town-based startup uses an online application process and internal credit metrics to provide short-term loans to small and medium-sized businesses that are often unable to obtain working capital.
  • The capital raised will enable Lulalend to increase the size of its loan book, launch new solutions, and invest in the technology and talent to accelerate the rollout of its new digital business banking platform.

Source: TechCrunch


Our Takeaway

Access to capital remains a significant barrier to the growth of many small businesses in Africa‚ÄĒavailable data shows a $330 billion financing deficit for the small enterprises that make up 90% of businesses on the continent. In South Africa, the annual SME credit gap is estimated at about $20 billion, according to the International Finance Corporation. It‚Äôs a problem several startups and foreign investors are particularly keen to address as it promises attractive returns, which explains the recent increase in funding activity within the space.


MTN Nigeria hits N2trn ($4.3bn) revenue mark

Highlights

  • Nigeria‚Äôs largest telecommunications company MTN became the first publicly listed company to hit the N2 trillion (around $4.3 billion) mark in revenues.
  • MTN first cross N1 trillion in revenues in 2019 meaning it has taken the company just three years to surpass N2 trillion in revenues.
  • The company released its 2022 audited financial statements posting a 21.6% rise in revenues from the N1.6 trillion reported in 2021 (which was also record-breaking) and a blistering N358.8 billion in profit after tax.

Source: Nairametrics


Our Takeaway

Never in the history of Nigeria has a quoted company reported revenues of N2 trillion in a financial year. More so, MTN’s profits delivered a whopping return on average equity of 119.5%, one of the highest ever. The company, one of the largest listed on the Nigerian exchange, plans to pay a dividend of N10 per share, taking its total dividends to N15.5 per share, delivering an indicative dividend yield of 6.68%.


Mawingu gets $9m to expand rural internet services

Highlights

  • Rural Internet Service Provider (ISP), Mawingu has raised $9 million in Series B funding to scale its operations across Kenya.
  • The funding was led by InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), and joined by Mawingu‚Äôs institutional investors E3 Capital and Dutch Entrepreneurial Development Bank FMO.
  • Mawingu currently operates in 15 counties and has more than 7,500 active customers. The new funding will enable it to expand to an additional 25 counties in Kenya, focusing on rural markets.

Source: ABC


Our Takeaway

One of the major causes of the slow rate of digitization in Africa is the need for more accessible and affordable internet. As of December 2020, only 29% of Africans had access to the internet (per A4AI report), which often comes at a high price and further broadens the existing digital divide between Africa and developed regions. The bulk of Africa’s internet-excluded populations resides in remote areas. Mawingu’s business model allows the startup effectively capture areas where giant telcos are often reluctant to reach.


Audi doubles down on South Africa’s EV market

Highlights

  • Audi South Africa, in partnership with Rubicon, has brought 43 additional electric vehicle charging stations online across the African country. 
  • The chargers can accommodate a total of 57 EV cars simultaneously, at varying capacities, regardless of model or brand ownership. 
  • This is in addition to the brand‚Äôs contribution of 70 EV charging connection points nationwide a year ago when Audi was the first to bring ultra-fast chargers to South Africa.

Source: TechCabal


Our Takeaway

The global adoption of artificial intelligence, smart devices, greener technologies, and carbon reduction initiatives has highlighted and accelerated the adoption of electric vehicles. In 2020, there were more than 11 million registered EVs globally, and the number is expected to hit 145 million by 2030. Things are going at a much slower pace in Africa, however. But local availability of more and more EVs, coupled with the increase in investments by global automakers with a local presence, will be a major catalyst for EV adoption in the continent. 


Nigeria ranks top in crypto usage, ownership globally

Highlights

  • A new study by Trading Browser has ranked Nigeria first by the number of users and owners of cryptocurrencies in the world.
  • The study ranks countries based on the proportion of the population that reported that they used or owned cryptocurrency each year from 2019 to 2022.
  • Nigeria tops the list with 45% of the population‚ÄĒover 90 million people‚ÄĒusing or owning cryptocurrency in 2022. That‚Äôs almost 1.5x the population of the United Kingdom.

Source: Nairametrics


Our Takeaway

Despite African governments‚Äô mostly hostile stance on cryptocurrencies, Africa has been the world‚Äôs third fastest-growing crypto market‚ÄĒadoption increased by over 1,200% between 2020 and 2022‚ÄĒand is home to a large number of crypto and blockchain startups; (from new upstarts in the web3 space to exchanges and remittance platforms). With the time under review, Nigeria saw a 17% total increase in ownership and use from 28% to 45%, equating to over 34 million people adopting cryptocurrency over the three years.


SunFi gets $2.3m seed for its solar financing service

Highlights

  • SunFi, a Nigerian clean tech startup that connects people and businesses who want solar energy access to payment plans that match their needs, has raised $2.325 million in seed funding.
  • The platform received backing from lead investors Factor[e] and SCM Capital Asset Management with participating investors such as Voltron Capital, Norrsken Impact Accelerator, Ventures Platform, and Sovereign Capital.
  • The investment will help SunFi grow its operations and improve its capabilities to recommend the best systems at the lowest cost to customers. 

Source: TechCrunch


Our Takeaway

Most households and businesses in Africa are without access to electricity and those who do grapple with expensive electricity tariffs, frequent power outages, and load shedding. But the decreasing costs of solar systems, relative to either grid or diesel generators, have helped solar solutions‚ÄĒprovided by companies like SunFi‚ÄĒbecome economically viable alternatives for commercial and industrial use. Since its official launch last February, the startup claims to have onboarded over 40 solar system vendors to its platform while deploying more than $600,000 to its customers via its partnerships with financial institutions.  


Ghana’s Zeepay expands remittance business to Zambia

Highlights

  • Ghanaian remittance fintech company, Zeepay, has been granted a license by the Central Bank of Zambia to operate in the country. 
  • The company will operate a new remittance outbound service directly from its Zeepay Mobile Money Wallet, allowing Zambians to transfer money from their mobile money wallets to over 150 countries around the world.
  • The new service by the cross-border payment platform was made possible by its partnership with MoneyGram International.

Source: ABC


Our Takeaway

In Africa, there’s a major market opportunity in the massive diaspora remittances business. For context, remittances accounted for nearly 4% of Nigeria’s GDP as of 2020. Yet, sending money from places like the US and the UK to the continent remains invariably expensive. Although most of the traditional players that charge high commission rates still dominate the space, fintech startups like NALA, Zeepay, Chipper Cash, and Sendwave, hope to wrestle market share from incumbents with lower rates.

Adenia Partners
africa
African Crypto
Audi EV
AWS Lagos
convergence partners
daba
dabafinance
Egypt
Ghana
invest in africa
investing in africa
Lulalend
Mawingu
MNT Halan
MTN Nigeria
Nigeria
Remittance
South Africa
Startups
SunFi
Trade Lenda
Yebo Fresh
Zeepay

This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.

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