African Tech Weekly Recap: November 28 to December 2, 2022

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

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US-based VC firm 500 Global opens an office in Egypt

Highlights

• US-based venture capital firm 500 Global is set to open an office in Egypt. It has already partnered with Information Technology Industry Development Agency (ITIDA) to launch a range of investment and startup-focused support programs.
• 500 Global has appointed Amal Enan, based in Cairo, as a partner to oversee deal-related activities in the country.
• The VC firm has been investing in Egypt for a decade and has backed more than 60 Egyptian startups, including MaxAB, Homzmart, and Breadfast.

Source: Wamda

Our Takeaway

Egypt has the fourth largest startup ecosystem in Africa, after South Africa, Nigeria, and Kenya. Its startups have attracted nearly $500 million in venture capital funding in 2021– more than twice the amount in 2020. The 500 Global-ITIDA partnership seeks to provide promising Egyptian-based startups with the tools they need to succeed and to train aspiring accelerator managers, thus creating the conditions to foster a regional community of innovators.

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Africa-focused VC LoftyInc closes $14.3m fund

Highlights

• LoftyInc Capital Management, an early-stage African-focused venture capital firm, has reached the final close of its LoftyInc Afropreneurs Fund 3 (LAF3).
• Founded in 2017, LoftyInc is based in Lagos and invests in sectors such as logistics, printing services, commercial services, educational and training services, cybersecurity, ed-tech, fintech, e-health tech, and e-commerce.
• Coming off its first unicorn exit via its LoftyInc Afropreneurs Fund 2 (LAF2) investment in Flutterwave, it launched LAF3 in 2021 as a $10 million fund. However, it closed 40% oversubscribed at $14.2 million. 

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. Uncovered Fund, LoftyInc Capital, Savannah Fund, and Ventures Platform are some of such Africa-focused firms that have launched in the past year. With the close of the third fund, LoftyInc plans to significantly deepen its focus on investing in the most promising early to growth-stage startups improving African lives with disruptive tech-enabled products and services.

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Cameroonian crypto platform Ejara bags $8m

Highlights

• Ejara, a Cameroonian fintech offering an investment app that allows users to buy crypto and save through decentralized wallets, has raised $8 million in Series A investment. 
• London-based VC firm Anthemis co-led the growth round alongside crypto-focused fund Dragonfly Capital. Anthemis is a follow-on investor in Ejara, having also led the fintech’s $2 million seed round announced last October. 
• The startup has the ambition to become a financial super app for users in French-speaking Africa and even those in the diaspora who send and invest money back home.

Source: TechCrunch

Our Takeaway

It is impressive to see successive significant fundraising rounds by fintech startups based in francophone Africa, a region where mobile money is prominent but often overlooked when financial innovation on the continent is discussed. Just last week, Ivorian fintech Djamo announced what seemed to be the largest equity round in the country. Ejara is one of Cameroon’s most-funded companies and boasts more than 70,000 users across nine French-speaking African countries. 

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Nigerian restaurant SaaS Orda raises $3.4m seed

Highlights

• Orda, a Nigerian food tech platform that provides a cloud-based restaurant operating system to small, independent restaurants, has secured a $3.4 million seed investment. 
• The two-year-old startup raised $1.1 million in pre-seed funding this January, bringing its total funding raised this year to $4.5 million. 
• With the fresh funding, Orda intends to add more functionalities to its platform, particularly around financial products as it looks to power lending and payments for its customers.

Source: TechNext

Our Takeaway

Like most SMEs in Africa, restaurants largely rely on pen and paper or ledgers for bookkeeping and recording important business data. But across the continent, technology startups are moving to bring these businesses online via cloud-based business management tools. Orda is one such, targeting small and medium restaurants. The global cloud-based restaurant software market is currently valued at over $70 billion and is expected to reach $116 billion in the next four years. Meanwhile, Africa’s food tech platforms, despite playing in a

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Pan-African Solarise Africa raises $33.4m debt funding

Highlights

• Pan-African energy leasing company Solarise Africa has raised $33.4 million in debt funding.
• Founded by Patrik Huber, Jan Albert Valk, and Sakkie van Wijk, Solarise Africa is an energy leasing company for solar and other energy assets focusing on commercial and industrial clients (C&I).
• The company, which provides smart financing via a selected group of partners, is already well-capitalized and has now secured fresh funding to help it grow. It plans to expand its portfolio in Kenya and other selected African countries. 

Source: Disrupt Africa

Our Takeaway

The significance of Solarise’s funding lies in two major points. Firstly, an increasing number of African startups are turning to debt financing after more than $700 million in debt was raised last year. And secondly, financiers, who were skeptical about funding ventures in the renewable energy space, are increasingly funding the continent’s leading solar providers. Similar companies like CrossBoundary, Sun King, Daystar Power, and Havenhill have attracted significant funding in the past year, suggesting the perception toward the renewable energy opportunity in Africa could be changing.

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Mastercard $200m Africa growth fund to derisk investments

Highlights

• The Mastercard Foundation Africa Growth Fund (MFAGF) – a “fund of funds” that works through African investment vehicles to support early-stage, growth-oriented SMEs on the continent – launched this week with a committed $200 million.
• The fund’s goal is to help to crowd in capital for African entrepreneurs by strengthening and de-risking African investment vehicles committed to advancing gender equity in entrepreneurship.
• In addition to providing capital for investment vehicles, the MFAGF will offer a business development facility for their portfolio companies.

Source: Ventureburn

Our Takeaway

Investment vehicles that are African-owned, led, and based are typically considered high-risk. At the same time, African SMEs struggle to access the financing they need to scale, inhibiting their potential. The Mastercard Foundation Africa Growth Fund tackles both challenges by investing in and strengthening African investment vehicles supporting African SMEs. So far, the fund has recruited two investment vehicles supporting entrepreneurial growth- one in East Africa and one in West Africa.

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Kenya’s Badili raises $2.1m for its used smartphone marketplace

Highlights

• Badili, a Kenya-based smartphone re-commerce startup, has raised $2.1 million in pre-seed funding to scale its operations within Africa.
• The Venture Catalysts, V&R Africa, Grenfell holdings, and SOSV, participated in the round, as did family offices and angel investors from Kenya, Nigeria, South Africa, and India.
• Buoyed by the new funding, Badili plans to explore new growth opportunities in West Africa. It hopes to tap an increasing demand for affordable second-hand smartphones, even as it scales its operations in Kenya, Uganda, and Tanzania.

Source: TechCrunch

Our Takeaway

Africa might be one of the fastest-growing mobile phone markets in the world but affordability remains a key barrier to smartphone penetration, which is key to powering Africa’s digital economy. In Kenya, the feature phones market share currently stands at 55.1% although smartphone penetration is deepening. With most consumers turning to second-hand devices, Badili is tapping the growing refurbished and used mobile phones market, which is expected to hit $146 billion by 2030, growing at a CAGR of 11%.

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TRG to acquire African asset manager Ethos Private Equity

Highlights

• Ethos Private Equity a leading alternative asset management firm in Africa is to be acquired by The Rohatyn Group (TRG), a specialized global asset management firm focused on investment solutions in emerging markets and real assets.
• Combining forces with Ethos positions TRG to deliver a larger array of investment solutions to the partners of both firms. Since 1984 Ethos has made over 150 investments supporting South African and sub-Saharan businesses. 
• With over 20 years of experience, investment teams at TRG offer capabilities across public equities, corporate and sovereign debt, private markets, forestry, agriculture, and infrastructure.

Source: ABC

Our Takeaway

Africa is a diverse investment destination with significant potential opportunities in private markets, real assets, and public markets, for which local expertise and experience are paramount to achieving successful outcomes. The acquisition of Ethos expands TRG’s capabilities and local presence during a volatile period in financial markets, giving investors access to one of the largest and fastest-growing regions in the world. 

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SA-based 4Di Capital reach second close of $25m seed fund

Highlights

• South African early-stage venture capital firm 4Di Capital has announced the second closing of its new $25 million seed fund – created in partnership with DotExe Ventures in Mauritius – with an undisclosed raise from Mauritian-based conglomerate IBL Group.
• 4Di Capital is an early-stage technology VC fund manager based in Cape Town, which specializes in the Southern and Eastern Africa region. 
• Led by a team of entrepreneurs with personal experience in building companies, 4Di is one of the most established and regarded brands in the local venture capital market, having been formed in 2009.

Source: Disrupt Africa

Our Takeaway

4Di Capital’s second closing of its fund follows an initial close of $8 million from the SA SME Fund, with capital targeting seed and post-seed stage startups in South Africa, East Africa, and the continent at large. In particular, the fund will focus on businesses exhibiting continental or global ambitions and will remain open to new investors until the final close in early 2023.

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Kenya’s beauty startup Uncover raises $1m for Africa expansion

Highlights

• Kenya-based Uncover Skincare, which offers tailored beauty and skin care products via data-led manufacturing aligned with the needs of the modern African woman, has raised $1 million in seed funding.
• The startup recently introduced a new range of skin products, with plans to launch more next year. Its products are sold through its online platform, on marketplaces, and in the stores of partner brands.
• Backed by the new funding, Uncover is scaling its operations in Kenya and expanding to Nigeria in January.

Source: TechCrunch

Our Takeaway

Africa’s beauty and personal care market is growing accelerated by its growing young and fashion-conscious population, increasing spending power, and urbanization. The market’s potential has in recent years attracted major brands, with Fenty Beauty by Rihanna and LVMH being the latest entrants. Niche local brands are also emerging to offer tailored beauty and skin care products like Uncover, which has raised a total of $1.225 million since its launch in 2020.