African Tech Weekly Recap: November 20 to November 25, 2022

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

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Nigerian real estate firm Purple launches its $22.5m IPO

Highlights

• Purple Real Estate Income, a real estate investment firm, today launched its Initial Public Offer, which will be open for 25 working days till December 23. 
• The group’s ₦10 billion ($22.5 million) Equity Offer represents an IPO of up to 2 billion new ordinary shares at ₦5 per share. Following completion, the shares will be listed on the Nigerian Exchange (NGX).
• Proceeds from the Offer will be used to expand the group’s existing portfolio by diversifying its lines of business and geographies to create more inclusive homeownership opportunities for Nigerians.

Source: Nairametrics

Our Takeaway

Nigeria’s real estate sector offers many prospects for investors, particularly for consumers increasingly demanding all-inclusive living, blending high-quality lifestyle offerings with residential and commercial assets. Perhaps more significantly, Purple’s IPO represents the country’s second share issuance available to retail investors via a digital platform—after MTN Nigeria’s IPO in 2021—and also comes at a time when African bourses are experiencing a dearth of listings and a spate of delistings. 

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Fintech lender Pivo raises $2m seed round for expansion

Highlights

• Nigerian fintech startup Pivo has closed a $2 million seed funding round to upgrade existing products and build new ones to improve supply chain transaction management and payment reconciliation.
• Formed in 2021, Pivo provides financial services to small and medium enterprises (SMEs) in the supply chain sector, offering them access to banking, lending, and insurance solutions.
• The funding comes from Precursor Ventures, Vested World, Y Combinator, FoundersX, and Mercy Corp Ventures. It will also be used to establish its presence outside its Lagos office, expand operations to East Africa, and grow its team. 

Source: Disrupt Africa

Our Takeaway

Across Africa, there is a clear supply chain finance gap for SMEs that is not being met by traditional banking institutions and other lending services companies. As such, businesses miss out on significant business opportunities without the requisite capital to support their transactions. Pivo’s business is yet another example in Africa’s alternative lending market focused on SMEs, which is gathering momentum thanks to the emergence of financial technology (fintech) on the continent. 

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Egypt-based pharma marketplace Grinta secures $8m seed

Highlights

• Egypt-based B2B marketplace Grinta has raised $8 million in seed funding co-led by Raed Ventures and Nclude, alongside other investors including Endeavor Catalyst and 500 Global, bringing its total investments to date to $9.5 million.
• Founded in 2021, Grinta gives pharmacies access to the full spectrum of traceable pharmaceutical and medical products from multiple vendors and provides fulfillment, demand planning, and inventory financing. 
• The funds will be invested to scale Grinta’s full-stack tech platform, expand its team and accelerate its growth across the Egyptian market.

Source: Wamda

Our Takeaway

Egypt has local solid manufacturers, large distributors, and more than 3,000 wholesalers all targeting 60,000 fragmented retail pharmacies that are yet to be digitized, which makes it the largest pharmaceuticals market in Africa with a size surpassing $6 billion. Across Africa, the market is estimated at $50 billion. Beyond tapping into the lucrative market, Grinta empowers pharmacies to be more efficient at running their business, fixing a broken supply chain that often prevents the average African from getting life-saving drugs when needed.

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Goodwell Investments launches $154m uMunthu II fund

Highlights

• Social impact investment firm Goodwell Investments has launched its $154 million uMunthu II fund, aimed at igniting the growth of inclusive businesses in Africa and India. 
• Goodwell is an impact investment firm focused on inclusive growth in sectors providing basic goods and services and income generation opportunities to underserved communities. 
• The firm provides early-stage equity to high-growth, high-impact businesses, with teams in Kenya, Nigeria, South Africa, and the Netherlands and a track record of over 15 years. The fund will be co-managed by Alithea Capital, Goodwell’s long-term investment partner based in Lagos, Nigeria. 

Source: Disrupt Africa

Our Takeaway

Along with other kinds of investments such as FDI, FPI, and venture capital, impact investing—providing financing for companies with the intention to generate social and environmental impact alongside a financial return—is a growing phenomenon in Africa. The Global Impact Investing Network (GIIN) now estimates the size of the worldwide impact investing market to be $1.2 trillion. With African countries requiring billions annually to deliver on the SDGs & the AU’s Agenda 2063, impact investment can complement domestic resources to

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Tanzanian supply chain startup Ramani raises $32m 

Highlights

• Ramani, a Tanzanian startup focused on consumer-packaged goods supply chains, plans to introduce new financial services as it expands its operations in the East African country after raising $32 million in Series A debt-equity funding.
• The YC-backed startup provides inventory management systems, procurement, and point-of-sale software to its network of micro-distribution centers (MDCs), enabling them to enhance their inventory management and operations.
• The latest round, which follows an undisclosed seed funding round last year, was led by Flexcap Ventures, and serial entrepreneur Jared Schreiber, while debt was raised from undisclosed investors.

Source: TechCrunch

Our Takeaway

Startups that solve the supply chain and operational challenges of players in the fast-moving consumer goods industry keep attracting venture capital from investors due to the large and stable market. The FMCG sector is one of the largest in the continent’s leading economies; per GeoPoll, two-thirds of Africa’s $1.4 trillion retail spending in 2016 was on FMCG goods, which dominate almost all of Africa’s household expenses. There’s also a growing appetite for technology-enabled solutions, especially by organizations that wish to boost operational efficiency.

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Startup acquisitions in African tech grew by 41% in Q3

Highlights

• African tech startups are resorting to acquisitions to weather the ongoing drought in venture capital funding this year.
• In 2021, TechCabal Insights tracked 32 acquisition deals on the continent and per its State of Tech in Africa Q3 report, there have been 43 such deals as of the end of September 2022. 
• The surge in acquisition deals on the continent—the Q3 deal count represents a 41% increase on the previous quarter—signals stronger consolidation within the space.

Source: TechCabal Insights

Our Takeaway

Going by the number of mergers and acquisitions involving African startups announced so far this year, the ecosystem will see a significant surge in the total number of exits recorded by the end of 2022. Before this year, there weren’t many startup acquisitions but with VC funding becoming harder to come by amid global macroeconomic headwinds, founders either have to shut down or consolidate with bigger players. This trend, consolidation, is spread across the continent, with a number of acquisition deals reported outside leading tech hubs.

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Kenya’s Leta raises $3M to expand to West Africa in 2023

Highlights

• Leta, a Kenyan B2B supply chain and logistics SaaS provider, has raised $3 million in a pre-seed funding round.
• Founded by Nick Joshi, Leta uses its route and load optimization technology to boost efficiency in the delivery of goods to customers, and reduce the number of vehicles needed for distribution, leading to cost savings and increased competitiveness.
• The startup plans to expand its operations in its existing operating countries – Kenya, Tanzania, Uganda, Zambia, and Zimbabwe and in new markets in West Africa, specifically Ghana and Nigeria.

Source: TechNext

Our Takeaway

Transportation touches on almost every sector of the African economy and, along with logistics, accounts for almost 80% of transported goods. But players in this space often grapple with challenges caused by fragmentation and lack of transparency. With digitization, startups like Leta try to solve this problem while tapping into the lucrative industry. Leta claims it has optimized over 500,000 deliveries, delivered more than 20,000 tons of goods, and managed 2,000 vehicles since inception.

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Côte d’Ivoire’s Djamo raises $14m for West Africa expansion

Highlights

• Djamo, an Ivorian fintech startup that offers financial services to the region’s unbanked and underbanked people, has just announced that it has raised $14 million in an equity round. 
• This is presumably the most significant equity investment ever for a startup in Côte d’Ivoire. However, this is not the first investment support Djamo has received since its launch in 2020. 
• The startup was the first from the region to get accepted into Y Combinator last year and also participated in the Visa Fintech Fast Track Program. It now plans to expand its services and presence to other new francophone African markets.

Source: TechCrunch

Our Takeaway

Riding the wave of the growing influence of online banking, Africa-focused neobanks have been attracting a significant share of fintech investment. In francophone Africa specifically, digital banks have enormous potential as fewer than 25% of adults have bank accounts but mobile money wallets reach more than 60% of the population. Also, Africa generally boasts a young and tech-savvy population. Startups like Djamo have thus moved to capture this opportunity with digital-first banking services, contributing to the booming fintech sector on the continent.

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SA fintech Revio bags $1.1m to tackle payment failures

Highlights

• Revio, a South African API payment and collections company that makes it easier for businesses across Africa to connect to multiple payment methods and manage payment failures has raised $1.1 million in seed funding.
• Fintech investor Speedinvest led the round, with participation from Ralicap Ventures, The Fund, and Two Culture Capital. Several angel investors also participated.
• With the new funding, the startup plans to launch new products and expand its team and presence across emerging markets.

Source: TechCrunch

Our Takeaway

In Africa, up to three out of every 10 payments fail—compared to the 0.7 global average—due to the fragmented payments landscape, higher dispute rates, invalid or expired card details, false-positive fraud checks, multiple or dormant accounts, and insufficient funds. The failure rate results in billions of dollars in lost revenue, estimated at $14 billion on the continent, which also has a 320% higher churn rate than mature markets. With digital payments growing at 20%+ year-on-year, this problem will only intensify and that’s where Revio has pitched its tent—helping companies recover lost transactions.