JUNE 11, 2022

15 min Read

African Tech Weekly Recap: June 6 to June 10, 2022

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

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Nigeria’s Indicina raises $3m for its credit infrastructure play

Indicina
Image from TechCrunch

Highlights

  • Indicina, an infrastructural platform that provides credit underwriting processes for businesses in Nigeria, has announced its seed round of $3 million.
  • Berlin-headquartered and pan-European venture capital firm Target Global led the round, adding to its long list of investments in Nigerian startups, including Kuda, Kippa, and Edukoya. Greycroft and RV Ventures also participated in the round.
  • Present in Nigeria and Kenya, this new funding will kickstart Indicina’s expansion into other African markets and also enable the company to reinforce its key product offerings, build more products for consumer credit recommendation, and bolster its infrastructure.

Source: TechCrunch


Our Takeaway

Over the past few years, there has been an increase in credit infrastructure builders in Africa, where only 11% of the population has their credit information recorded by private credit bureaus and just 17% of banked adults have accessed loans. Like Kenya-based CARMA and Pngme, Indicina is positioning to fill the credit bureau gap on the continent starting with Nigeria, where formal sector credit penetration as a ratio of the adult population in Nigeria was below 5.3% as of 2017. 


MIC backs SA rentals marketplace Rentoza in a $1.3m round

Image from Disrupt Africa

Highlights

  • South African startup Rentoza, an online electronics, and appliances retailer operating on a subscription-based model, has raised $1.3 million in funding from Khulisani Ventures, the early-stage investment vehicle of the Mineworkers Investment Company (MIC).
  • Last July, the Johannesburg-based MIC announced the launch of MIC Khulisani Ventures, a $10 million early-stage investment vehicle targeting black-owned innovative, high-growth businesses in South Africa. 
  • The MIC is a 100% black-owned investment company established in 1995 by the Mineworkers Investment Trust (MIT) to create a sustainable asset base for the benefit of mine, energy, and construction workers and their dependents. 

Source: Disrupt Africa


Our Takeaway

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. At least six such Africa-focused firms have launched in the past year, including the Mineworkers Investment Company (MIC). The fund will provide financing to startups at the early stages of development, and should particularly be a relief for young founders struggling to raise external capital.


Moroccan fintech WafR raises $455,000

Moroccan fintech WafR raises $455,000 
Image from Wamda

Highlights

  • Morocco-based fintech and rewards startup WafR, has raised $455,00 in a round led by Launch Africa Ventures, First Circle Capital, WeLoveBuzz, with participation from angel investors. 
  • This round brings the startup’s valuation to $9 million and marks its third round of funding this year, taking the total funds raised to $1.08 million.
  • Founded in 2018, WafR helps customers find deals and discounts on a variety of products sourced from local shops. With the fresh funding, WafR aims to increase its network of retailers to 50,000 as well as hire new talent.

Source: Wamda


Our Takeaway

WafR is one of an increasing number of technology startups across Africa that are reinventing the way traditional corporates in the fast-moving consumer goods sector offer discounts and rewards to end consumers. In Africa, startups that play in this space have a big market opportunity as the FMCG sector is one of the largest in the continent’s leading economies. There’s also a growing appetite for technology-enabled solutions, especially by organizations that wish to digitize their workplaces.

MFS Africa buys US fintech GTP for $34m

FinTech news in online payments category | AwesomeFinTech Blog
Image from Awesome FinTech

Highlights

  • Pan-African digital payments company MFS Africa is acquiring U.S.-based Global Technology Partners (GTP) in a cash-and-shares deal worth $34 million.
  • The Africa-focused and London-based MFS Africa connects more than 320 million mobile money wallets across 35+ African countries and 700 corridors.
  • But despite these connections across borders, millions of Africans can’t still use their mobile money accounts to pay for subscription-based services run by international companies such as Netflix and Amazon. The acquisition gives MFS Africa an avenue to issue prepaid cards to its customers so they can perform these tasks.

Source: Financial Times


Our Takeaway

MFS Africa is known for its acquisition-led expansions. The GTP deal is the fourth of its kind in five years and comes after the purchase of Baxi, an agent banking platform in Nigeria as well as a $100 million equity and debt raise last November. But buying GTS—a very rare deal that sees an African tech company buy up a US-based one—is its first acquisition beyond the continent. The acquisition also marks a further evolution of Africa’s rapidly growing fintech scene.


Nigerian cross-border e-commerce startup Klasha raises $2.1m

Klasha
Image from TechCrunch

Highlights

  • Lagos and San Francisco-based Klasha has received an additional $2.1 million to complete its $4.5 million seed round. 
  • The startup, which provides multiple products for the cross-border commerce space in Africa, raised this new financing from a group of international investors co-led by American Express (AMEX) Ventures, the strategic investment group of American Express.
  • This investment is AMEX Ventures’ first in an African startup. The firm co-led the round with Global Ventures, the MENA-focused VC that has backed the likes of Tabby, Helium Health and Paymob.

Source: TechCrunch


Our Takeaway

Founded three years ago and launched in 2021, Klasha is tapping into Africa’s cross-border space in a vast e-commerce market worth over $25 billion. The startup is solving payment issues African merchants and consumers face when they pay for products online via different payment methods. Africa’s e-commerce opportunity is estimated to be $19.8 billion, and in terms of general e-commerce activities on the continent, McKinsey & Company estimates consumer spending to reach $2.1 trillion by 2025.


Egypt’s valU expands to Saudi Arabia via Alhokair partnership

valU expands to Saudi market through partnership with Alhokair
Image from Wamda

Highlights

  • Egypt-based fintech valU, has extended its services to Saudi Arabia through a partnership with FAS Labs, owned by Fawaz Abdulaziz Alhokair Co. (Alhokair) and Arabian Centres Company (ACC).
  • FAS Labs and valU will own 65% and 35% of FAS Finance respectively.
  • valU, founded in 2017, is a subsidiary of EFG Hermes Holding that provides a buy now pay later (BNPL) service. FAS Finance will offer its products and services under valU’s brand name.

Source: Wamda


Our Takeaway

With more than 3,500 points of sale, valU offers customizable consumer financing plans, such as buy now and pay later, and access to a wide network of retail and e-commerce providers across diverse sectors. In 2020, BNPL accounted for 2.1% of global e-commerce transactions. That figure is expected to double by 2024 when it will make up 4.2% of global e-commerce sales. While buy now pay later has found its feet quickly in other regions, Africa is well-placed to follow suit and a flurry of recent activity is a valid reason for this belief.

Egypt’s Nice Deer closes $1 million pre-seed round

Egypt’s Nice Deer raises $1 million pre-Seed round
Image from Wamda

Highlights

  • Egypt-based insurtech Nice Deer has raised a $1 million pre-seed funding round led by DisrupTech Ventures.
  • Founded in early 2022, Nice Deer, one of IT-Fusion’s sister companies, facilitates insurance and repayment of insurance claims between healthcare providers, health insurance companies, and beneficiaries.
  • Nice Deer will use the funds to expand its services such as providing health insurance solutions for SMEs, such as health savings accounts.

Source: Wamda


Our Takeaway

Africa has an ever-growing need for innovative insurance solutions to address the significant lack of coverage on the continent. As of 2018, the insurance penetration rate in Africa stood at a meager 1.12% or 3% with South Africa. The Middle East and North Africa (MENA) remain largely untapped with regards to insurance as much of the region remains low on penetration: less than 1% in Egypt and around under 4% in Morocco.


Nigerian teleshopping startup ShopEX raises $635k pre-seed

DEAL: Nigerian startup, ShopEx raises $635,000 pre-seed funding led by HAVAìC
Image from Niarametrics

Highlights

  • Nigeria-based multi-channel retailer, ShopEX, has announced its pre-seed round of $635,000, which saw HAVAIC join Echo VC and Expert Media Partners as investors in the startup. This brings the total amount raised by the company to $885,000.
  • Founded in 2018, the teleshopping startup offers a different shopping experience from existing eCommerce players. It uses video ads across television and other channels to provide an immersive experience for its customers. 
  • This funding round will enable ShopEx to continue growing its team, brand, product agreements, inventory, and operations into new markets, with Ghanaian expansion already underway. 

Source: Nairametrics


Our Takeaway

Unlike popular e-commerce models, teleshopping involves retailing exclusive products from several brands by running ads, which demonstrate how the products work as well as customer testimonials, on TV or social media channels. Orders are taken and processed via phone calls or social platforms while the company handles the delivery to the customer. Africa needs a certain level of infrastructural maturity to make teleshopping work and ShopEx’s ascent coincides with rising e-commerce adoption and maturing logistics and payment platforms across Africa.


Egyptian CX startup Tactul AI acquired by Dstny

Image from Disrupt Africa

Highlights

  • Egyptian startup Tactful AI, which provides an intelligent customer experience platform, has been acquired by Dstny, a Belgium-based business communications company.
  • Tactful is a unified customer experience platform that provides businesses with a single dashboard through which to manage, engage, augment, and understand customers’ journeys across various touch points.
  • Dstny, meanwhile, offers a series of interactive communication tools that bring employees and customers closer together, and the acquisition of Tactful AI extends its product portfolio and helps companies enhance customer engagement operations across modern digital and traditional voice channels.

Source: Disrupt Africa


Our Takeaway

Going by the number of mergers and acquisitions involving African startups announced so far this year, all signs point to a significant surge in the total number of exits and buyouts the region’s ecosystem will record by the end of 2022. This trend is spread across the continent, with a number of acquisition deals reported outside leading tech hubs such as South Africa, Kenya, and Nigeria. The recent surge in consolidation activity in different parts of the continent is an indication of a maturing ecosystem.

Tunisia’s GOMYCODE secures $8m in Series A round 

Image from Ripples Nigeria

Highlights

  • GOMYCODE, a Tunisian-based ed-tech startup founded in 2017 with a presence in Bahrain, Morocco, Egypt, Algeria, Ivory Coast, Senegal, and Nigeria, has raised $8 million in a Series A round.
  • The early-growth round was co-led by AfricInvest’s Cathay AfricInvest Innovation Fund (CAIF) and Proparco, a French-based development financing firm. GOMYCODE’s total funding now stands at $8.85 million after it secured $850,000 in October 2020.
  • The Series A funding will help the firm expand its footprint in 12 countries, such as South Africa, Kenya, Ghana, and Saudi Arabia, and existing countries, including Egypt and Nigeria.

Source: Techbuild Africa


Our Takeaway

Upskilling the majority of Africa’s population remains a pressing challenge, even more so when one considers how high unemployment rates are in some of the countries coupled with an expected 42% increase in the number of youths by 2030. In addition, there is a shortage of talent in the booming tech industry, which venture-backed startups like GOMYCODE, Andela, AltSchool, Gebeya, Decagon, and Semicolon, are addressing with their online-only or hybrid training/education models.


Kenya-based Virridy raises $5.5m to expand its sensor catalog

Virridy raises $5.5M to grow its sensor monitoring solutions
Image from TechCrunch

Highlights

  • Kenya and US-based Virridy, dedicated to improving the management of environmental resources through technology, has closed $5.5 million in a Series A funding round led by Accord Capital.
  • Other investors who participated in the round included FHI 360, Cleo Capital, Reverent Rock, Save Earth, and VertueLab. In addition to the funding, Virridy has rebranded from SweetSense to reflect its commitment to enabling high-quality environmental commodities.
  • The fund will enable Virridy to accelerate the development and adoption of its satellite-connected sensors for managing water, energy, and agricultural resources.

Source: TechCrunch


Our Takeaway

As climate change continues to accelerate global environmental damage and economic stress, Virridy was founded to address some of these challenges and drive action toward global environmental resilience. It currently monitors the water supply of over 4 million people to help maintain consistent supplies and has partnerships with organizations including the National Science Foundation (NSF), USAID, the World Bank, NASA, the Millennium Water Alliance, and Swarm Technologies. Virridy’s funding indicates venture investors are ready to back climate-focused startups, a good sign for the continent.


SA fintech Franc raises $522k seed extension round

Image from DisruptAfrica

Highlights

  • South African investment app Franc has raised $522,000 in a seed extension round and rolled out a B2B offering that enables quick and easy adoption of savings and investment products by partner businesses.
  • Launched in 2017, Franc allows users to make investments via a mobile app, and its B2B offering – Franc Business – will enable companies to offer investment products to their customers using Franc’s technology and license.
  • After seeing a 400% growth in 2021, Franc plans to spend part of the new funding on the B2B initiative.

Source: Disrupt Africa


Our Takeaway

Retail investing in financial securities is relatively new in South Africa, and Africa at large, compared to developed markets such as the United States. As such, the continent’s wealth management market remains largely underdeveloped: Africans account for over 16% of the global population but own less than 1% of global wealth. That is expected to change over the next decade, with Africa’s private wealth expected to increase to reach $2.6 trillion by 2030. Robinhood-like platforms like Franc are expected to play a major role in realizing the projected growth.

Morocco’s Chari acquires Ivory Coast startup Diago

Moroccan Chari acquires Ivorian B2B e-commerce startup Diago
Image from TechCabal

Highlights

  • Morocco-based B2B e-commerce and fintech startup Chari has acquired Diago, an Ivorian app that connects local shops to FMCG producers and importers.
  • This marks Chari’s third acquisition to date after buying Axa Credit for $22 million back in March, and the fintech app Karny.ma last August. Earlier this year, Chari raised an undisclosed bridge round at a valuation of $100 million.
  • Founded in 2020 by Sophia Alj and Ismael Belkhayat, Chari aims to digitize the retail value chain in Francophone Africa, offering a marketplace and embedded finance platform that connects informal stores and retailers to FMCG suppliers.

Source: TechCabal


Our Takeaway

African markets, though diverse, have some common themes, one of which is the largely fragmented fast-moving consumer goods (FMCG) sector. Often, both local and multinational manufacturers do not have visibility and control over their own distribution channels while distributors have to deal with discrepancies in prices and inefficient logistics. For small informal retailers, much of their time is spent on fulfilling orders and struggling without sufficient capital. Chari is one of many startups in the B2B e-commerce space in Africa that have built digital products to address these bottlenecks and its acquisition-led expansion…


Mauritius-based VantagePay secures pre-Series A funding

Crossfin & VantagePay leaders - Disrupt Africa
Image from Disrupt Africa

Highlights

  • Mauritius-based payments technology company VantagePay has secured pre-Series A funding round of an undisclosed amount from Crossfin Holdings.
  • Headquartered in Mauritius, with offices in South Africa, Ghana, Nigeria, and London, VantagePay currently provides payment solutions to leading Ghanaian banks, telcos, and fintech with plans to expand into several African countries in the coming years.
  • Co-founder Paul Edwards is a former CEO of MTN and Multichoice, and more recently founding executive chairman of Emerging Markets Payments (EMP), the latter of which was launched in 2010 and in six years had become the leading pan-African and pan-Middle Eastern payments processor.

Source: Disrupt Africa


Our Takeaway

Africa represents a huge market for mobile payments given the relatively high mobile phone penetration coupled with relatively low penetration of financial services. Per GSMA, Africa now accounts for 70% of the world’s $1 trillion mobile money value after mobile money transactions on the continent rose 39% to $701.4 billion in 2021 from $495 billion in 2020.


Egypt’s ADVA secures seed round from Sawari Ventures

ADVA secures six-figure Seed round from Sawari Ventures
Image from Wamda

Highlights

  • Egypt-based fintech ADVA has raised an undisclosed “six-digit figure” seed round from Sawari Ventures.
  • Founded in 2020 by Rania Gaafar, ADVA is a consumer lending platform that allows customers to pay for a wide variety of services and products in installments.
  • The startup plans to use the funding to expand its product offering as well as the scope of its financial services to include wedding parties, car maintenance, insurance, and travel.

Source: Wamda


Our Takeaway

BNPL options are sweeping the global e-commerce sector. In 2020, they accounted for 2.1% of global e-commerce transactions. That figure is expected to double by 2024 when it will make up 4.2% of global e-commerce sales. But in Africa, where most people are credit-averse, activity is just beginning to pick up. However, there are signs that consumer perception is shifting on the continent, especially as more Africans take on loans to finance their needs coupled with the emergence of consumer lending startups.

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