African Tech Weekly Recap: October 17 to October 21, 2022

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

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Peter Thiel’s VC firm backs Nigerian fintech Maplerad in $6m round

Highlights

• Maplerad, a fintech described by its founders Miracle Anywanwu and Obinna Chukwujioke as a global BaaS player targeting Africa, has raised $6 million in seed funding from Valar Ventures and other investors.
• According to sources cited by TechCrunch, the US-based startup, which is coming out of stealth, raised the round at a $30 million valuation. 
• While in stealth, Maplerad processed millions of dollars monthly for over 100 businesses acquired onto its platform. It plans to use the investment to reach more customers, get additional licenses, build its team and solidify its presence across Africa.

Source: TechCrunch

Our Takeaway

Across Africa, it reportedly takes an average of $500,000 and 18 months to build and go to market with financial products; companies need to go through the hurdles of rigorous licensing and compliance processes, multiple integration layers, complex banking and third-party relationships, and invest in complicated core-banking infrastructure. Banking-as-a-service platforms like Maplerad help reduce the time and financial costs of building through their API infrastructure. We believe this is the next phase of fintech innovation and should aid providers in capturing the sizeable financial inclusion opportunity in Africa. Meanwhile, this is Peter Thiel-founded Valar’s third investment in Africa after Kuda and Yellow Card.

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Investors in Nigeria’s largest public banks gained $100m last week

Highlights

• The market capitalization of the top five publicly listed banks in Nigeria surged as of the market close on Friday, 14th of October, 2022, with investors in these banks gaining a total of ₦43.58 billion (around $100 million) during the trading week.
• After four trading days of the week, four of the five banks enjoyed positive market sentiments, with GTCO leading the gainers while only FBNH suffered negative sentiment.
• According to data from the Nigerian Exchange (NGX), the market capitalization of the top five banks rose to reach ₦2.00 trillion to appreciate by 2.23% during the week.

Source: Nairametrics

Our Takeaway

The five largest public banks make up over 70% of the NSE Banking sector index, hence, strongly influencing the growth or otherwise of the index. Last week, the index grew by 0.65% from 375.48 to close at 371.07 points. Meanwhile, the Nigerian bourse closed positive week-on-week as the benchmark all-share index (ASI) appreciated by 0.46% to close at 47,569.04. On a year-to-date basis, the Nigerian market has returned +11.36%, making it one of the best-performing bourses in Africa.

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Egyptian B2B trucking startup Trella secures further $6m debt funding

Highlights

• Egyptian B2B trucking marketplace Trella has secured another debt facility from ALMA Sustainable Finance (ALMA) and the US International Development Finance Corporation (DFC) to grow its operations.
• Founded in 2018, Trella is a technology platform and trucking marketplace connecting shippers with carriers in real time. Active across the Middle East and Pakistan, the startup has over 350 shipper partners including blue-chip brands and over 30,000 carrier partners.
• In June last year, the startup completed a $42 million Series A funding round, comprising $30 million in equity and $12 million in debt facilities, to help it expand, and last month it followed that up with undisclosed debt capital from Contact Financial Holding. 

Source: Disrupt Africa

Our Takeaway

Transport touches on almost every sector of the African economy and is crucial to its development. Within the industry, the trucking and logistics market 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, venture-backed startups such as Trella solve this problem while tapping into the lucrative industry. More so, Trella is one of the most funded startups in Egypt, having received over $50 million in funding since its launch.

Airtel expends $29m on spectrum for 5G rollout in Zambia



Highlights

• Airtel Zambia has purchased 60MHz of additional spectrum spread across the 800MHz and 2600MHz bands from the Zambia Information and Communications Technology Authority (ZICTA), for a gross consideration of $29 million.
• The additional spectrum will support the expansion of the telco’s capability in providing mobile data and fixed wireless home broadband services and help accelerate the 5G rollout.
• In August, ZICTA said it had revised the 5G Spectrum Roadmap for the release of spectrum in the 700MHz and 2600MHz bands, due to high demand, reflecting the country might soon see its first commercial 5G rollout. 

Source: TechCabal

Our Takeaway

The rollout of the 5G network is accelerating in Africa. Recently, Nigeria joined South Africa and Kenya as the three African nations to have launched commercial 5G services. South Africa received the network in 2019 through provider Rain, while Kenya saw Safaricom launch its first 5G services in 2021. In the rest of the continent, Ghana and Egypt are hot on the heels of these three nations, expecting a rollout sooner rather than later. For the African tech industry, 5G could potentially unlock a broad range of opportunities, including optimizing service delivery, decision-making, and end-user experience.

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Egyptian e-commerce Kenzz closes $3.5m seed round

Highlights

• Kenzz, an e-commerce platform bringing shopping to the mass market in Egypt and MENA, is announcing that it has raised $3.5 million in seed funding. 
• U.S.-based and MENA-focused venture capital firm Outliers Ventures led the round. Other participating investors include HOF Capital, Foundation Ventures, and Samurai Incubate.
• The company, founded this February by Ahmed Atef, Mahmoud Al Silk, and Moataz Sami, said it would use the seed round to grow its product categories, widen the product categories on its platform, hire talent and invest in tech as it launches its app.

Source: TechCrunch

Our Takeaway

E-commerce in Egypt is as massive as fintech in the rest of Africa. Available data suggest that up to 20% of tech startups in the country are in the e-commerce and retail sectors, and about 40% of Egyptians purchase consumer goods online weekly. But most of these shoppers patronize big e-commerce platforms such as Amazon, Jumia, and Noon, which primarily focus on Egypt’s largest cities Cairo, Alexandria, and Giza. It’s the neglected mass market in untapped cities Kenzz was launched to address and the optics are favorable, given a projected boom in e-commerce adoption in the region. 

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Lagos state government to launch a venture capital fund

Highlights

• The government of Lagos State, where Nigeria’s commercial and startup capital city is located, is planning to launch its own venture capital fund that would “write bigger equity cheques for Nigerian startups than most privately-owned VC.”
• TechCabal reported this, citing the special advisor to the state governor on innovation and technology, Olatunbosun Alake, who was speaking on the sideline of the GITEX event in Dubai.
• Alake revealed the cross-sectoral fund would be launched “a few weeks from now” and the state is already in conversations with some local and foreign investors that would join as limited partners (LP).

Source: TechCabal

Our Takeaway

Lagos is Nigeria’s, and very much, Africa’s startup capital. The state hosts most of the country’s startups; attracts the majority of venture capital investment, and is home to the bulk of Africa’s seven unicorns. The intent to launch a state-backed VC fund thus represents an attempt by the government to both join and support the state’s tech startup boom, especially at a challenging time for global VC funding. But it’s not unusual, the governments of Dubai and Senegal for example have recently set up respective funds to catalyze entrepreneurship in their jurisdictions through equity and debt funding. 

Africa’s insurance industry to reach $116bn by 2027

Highlights

• The African insurance market reached a value of $75.3 billion in 2021. Looking forward, IMARC Group expects the market to reach $115.9 billion by 2027, recording a compound annual growth rate of 7.4% during 2022-2027.
• Due to the availability of affordable insurance across Africa, this is gaining widespread prominence among the masses, the report says, citing other reasons such as increasing awareness regarding the benefits of insurance among individuals. 
• Other factors reportedly driving the insurance market growth include the use of digital technologies in the industry, the growing working population, easy access to insurance through wider distribution channels, and increasing partnership activities.

Source: OpenPR

Our Takeaway

Despite projected growth, insurance in Africa remains a marginal product. As of 2018, the insurance penetration rate in Africa stood at a meager 1.12% or 3% including South Africa. The low uptake is largely due to the traditional distribution of insurance policies, which rely on brick-and-mortar channels to sell and process policies. While this is a major problem, it also leaves room for innovation. The rapid expansion of digital and mobile services is set to change all that with African insurtech (insurance + technology) startups actively overcoming the historically low penetration rates of insurance products across the continent.

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MaxAB raises $40m to fuel growth, regional expansion

Highlights

• MaxAB, a B2B e-commerce and distribution platform serving a network of traditional retailers across Egypt and Morocco, has closed a $40 million pre-series B equity round to fuel its expansion across the MENAP region.
• MaxAB connects suppliers with underserved traditional retailers and offers a wide range of embedded finance solutions. Since launching in 2018, it has served approximately 150,000 unique traditional retailers, delivering 2.5 million orders.
• The new capital will also be deployed to finance further growth in the e-commerce arm of the business, expand technology and product teams, and further scale the fintech arm.

Source: TechCrunch

Our Takeaway

Across Africa, digitizing informal markets is proving to be a gold mine. In Egypt, small traditional retailers serve as the backbone of the grocery industry with a similar dynamic existing in many other markets across the MENA region. MaxAB estimates that there are more than 750,000 mom-and-pop businesses requiring its services in Egypt and Morocco alone. Having gained unprecedented success in both markets, the startup has established a proven playbook that can be leveraged for launch into new geographies and is looking to replicate the same success across the region.

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Eswatini’s central bank plans to issue digital currency

Highlights

• The kingdom of Eswatini is considering the introduction of a central bank digital currency (CBDC), joining the growing list of African countries exploring the viability of an e-currency.
• The Central Bank of Eswatini (CBE) has appointed the German technology group Giesecke+Devrient (G+D) to research and explore the possibilities of a digital Lilangeni (the country’s currency) to complement banknotes.
• The CBDC project will involve a design concept, and other considerations such as governance, accessibility, interoperability, security, and programmability of the potential digital currency.

Source: TechCrunch

Our Takeaway

CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by central banks and are pegged on countries’ fiat currencies. G+D recently helped Ghana to pilot a retail CBDC, making it the second country after Nigeria to run such a trial. Nigeria’s eNaira was introduced in October last year and had by August 2022 been used to carry out transactions worth ₦4 billion ($9.2 million). Kenya, Namibia, Tanzania, Uganda, and Zambia are some of the other African countries eyeing digital currencies to enhance their access to financial services, cost reductions, interoperability, and enhanced cross-border payments.

Highlights

• The African insurance market reached a value of $75.3 billion in 2021. Looking forward, IMARC Group expects the market to reach $115.9 billion by 2027, recording a compound annual growth rate of 7.4% during 2022-2027.
• Due to the availability of affordable insurance across Africa, this is gaining widespread prominence among the masses, the report says, citing other reasons such as increasing awareness regarding the benefits of insurance among individuals. 
• Other factors reportedly driving the insurance market growth include the use of digital technologies in the industry, the growing working population, easy access to insurance through wider distribution channels, and increasing partnership activities.

Source: OpenPR

Our Takeaway

Despite projected growth, insurance in Africa remains a marginal product. As of 2018, the insurance penetration rate in Africa stood at a meager 1.12% or 3% including South Africa. The low uptake is largely due to the traditional distribution of insurance policies, which rely on brick-and-mortar channels to sell and process policies. While this is a major problem, it also leaves room for innovation. The rapid expansion of digital and mobile services is set to change all that with African insurtech (insurance + technology) startups actively overcoming the historically low penetration rates of insurance products across the continent.

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MaxAB raises $40m to fuel growth, regional expansion

Highlights

• MaxAB, a B2B e-commerce and distribution platform serving a network of traditional retailers across Egypt and Morocco, has closed a $40 million pre-series B equity round to fuel its expansion across the MENAP region.
• MaxAB connects suppliers with underserved traditional retailers and offers a wide range of embedded finance solutions. Since launching in 2018, it has served approximately 150,000 unique traditional retailers, delivering 2.5 million orders.
• The new capital will also be deployed to finance further growth in the e-commerce arm of the business, expand technology and product teams, and further scale the fintech arm.

Source: TechCrunch

Our Takeaway

Across Africa, digitizing informal markets is proving to be a gold mine. In Egypt, small traditional retailers serve as the backbone of the grocery industry with a similar dynamic existing in many other markets across the MENA region. MaxAB estimates that there are more than 750,000 mom-and-pop businesses requiring its services in Egypt and Morocco alone. Having gained unprecedented success in both markets, the startup has established a proven playbook that can be leveraged for launch into new geographies and is looking to replicate the same success across the region.

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Eswatini’s central bank plans to issue digital currency

Highlights

• The kingdom of Eswatini is considering the introduction of a central bank digital currency (CBDC), joining the growing list of African countries exploring the viability of an e-currency.
• The Central Bank of Eswatini (CBE) has appointed the German technology group Giesecke+Devrient (G+D) to research and explore the possibilities of a digital Lilangeni (the country’s currency) to complement banknotes.
• The CBDC project will involve a design concept, and other considerations such as governance, accessibility, interoperability, security, and programmability of the potential digital currency.

Source: TechCrunch

Our Takeaway

CBDCs, unlike cryptocurrencies like Bitcoin and Ethereum, are developed by central banks and are pegged on countries’ fiat currencies. G+D recently helped Ghana to pilot a retail CBDC, making it the second country after Nigeria to run such a trial. Nigeria’s eNaira was introduced in October last year and had by August 2022 been used to carry out transactions worth ₦4 billion ($9.2 million). Kenya, Namibia, Tanzania, Uganda, and Zambia are some of the other African countries eyeing digital currencies to enhance their access to financial services, cost reductions, interoperability, and enhanced cross-border payments.

President Muhammadu Buhari signs Nigeria Startup Bill into law

Highlights

• Nigeria has become the latest country to pass a Startup Bill, giving a more formal approach to how the startup ecosystem is governed.
• The Bill which has been in the making since May was accented to by President Muhammadu Buhari earlier this week, and the news was made public via Twitter by the country’s Minister for Communications and Digital Economy Isa Pantami.
• Now known as the Nigeria Startup Act, the law will be an important anchor in the country’s technology developments while creating a thriving sector.

Source: ABC

Our Takeaway

Nigeria’s tech stakeholders have had several clashes with government officials in the past due to a lack of clearly defined rules and regulations guiding the ecosystem. However, the Nigeria Startup Bill (NSB) is expected to provide an enabling environment for startups in the country. We believe this Bill could play a catalyst role for the ecosystem, especially because of its Big Tent approach—the involvement of relevant parties in the Nigerian startup ecosystem and the government during its development and passing. Specifically, architects of the startup bill expect it to effect change in four aspects: capital, regulation, infrastructure, and talent.

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Bumpa bags $4m seed round to scale its retail automation platform

Highlights

• Bumpa, a Nigerian startup that claims to be building the infrastructure to power online commerce has raised a $4 million seed round. 
• Founded by Kelvin Umechukwu and Adetunji Opayele, the startup enables African small business owners to start, manage and grow their businesses from their mobile devices.
• The company, which announced a $200,000 pre-seed last September, said it intends to use the investment to hire talent, build up its processes, structure, and scale into new African markets.

Source: TechCrunch

Our Takeaway

Even as tens of millions of Africans have come online in the past decade, most merchants in Nigeria still run their businesses offline—from managing money to keeping track of inventory, business records, staff, and suppliers. These manual processes can be time-consuming and error-prone. Bumpa provides a suite of services that enable small-sized business owners to incorporate digital tools in day-to-day operations. Although it’s just one of the many platforms offering such services in sub-Saharan Africa. Similar providers include Pastel, Bamba, OZÉ, and Kippa.

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Egypt’s Nexta raises $3 million to launch its neobanking service

Highlights

• Egyptian neobank Nexta has raised $3 million in investment from digital financial services provider e-finance, bringing the total amount raised to $5.2 million since its inception last year. 
• Founded by Ahmed Hisham in 2021, Nexta wants to disrupt the Egyptian fintech scene with its “next-generation banking” app and card. In March this year, Nexta raised a $2.2 million pre-seed round led by Egypt-based fintech fund Disruptech, with participation from global investors. 
• The newly acquired funds are expected to tidy the startup up until its official launch, expected to take place within the coming few weeks. 

Source: TechCrunch

Our Takeaway

The demographics for the Middle East and North Africa region (MENA) offer a huge opportunity for fintech startups like Nexta. More than 60% of the population are under the age of 30 while also being extremely tech-savvy. In Egypt, there’s a population of over 103 million people, growing at approximately 2% a year with around half of its adults unbanked. The enormous growth in population has created a fast-growing retail market, with $250 billion in consumer spending up for grabs and while there’s been a surge in digital payments over the past few years, estimates suggest only 4% of consumer spending is cashless.

Nigeria, Ghana push for a regional capital markets integration

Highlights

• The Director General of Nigeria’s Securities and Exchange Commission, Lamido Yuguda, this week reiterated the need to create an enabling environment for cross-border securities transactions across West African capital markets.
• Yuguda spoke during a meeting with his Ghanaian counterpart in Accra, where they met to discuss the integration of all capital markets jurisdictions in the ECOWAS region.
• In 2013, the West African Capital Markets Integration Council (WACMIC) was inaugurated as the governing body for the integration of West African capital markets but progress has reportedly been stalled by the Francophone countries in the region.

Source: Nairametrics

Our Takeaway

Needless to say that West Africa, and the continent at large, stand to gain a lot from the potential regional capital markets, which would in no small measure deepen the capital pool available to both private and public sector players through the cross-border listing, issuance, and trading of financial securities across the region. However, none of these can be achieved without the readiness of all concerned—member states of ECOWAS. Meanwhile, Ghana and Nigeria, which both have the largest markets in West Africa, have decided to go on with the integration process with the hope their counterparts will join in the near future.

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Nigerian fintech Moove raises $17m debt to scale its operations

Highlights

• Moove, a mobility fintech and Uber’s largest vehicle supply partner in EMEA has raised $17 million from Emso Asset Management to expand in the UK, after launching there in August.
• Founded by British-born Nigerian entrepreneurs Ladi Delano and Jide Odunsi, Moove launched in Nigeria in 2020 to democratize access to vehicle ownership and now operates in nine markets across Africa and India.
• The startup offers a 100% EV rent-to-buy model that provides mobility entrepreneurs access to new zero-emissions vehicles for a flat weekly fee. The new funding will enable it to scale up to 10,000 vehicles in London by 2025.

Source: TechNext

Our Takeaway

In Africa, the market opportunity for vehicle financing is enormous. Despite having a population of more than 1 billion people, 43% of them urban dwellers, the continent recorded less than 1 million total new vehicle sales in 2019, a far cry compared to 17 million in the U.S. alone. In London, however, Moove has an opportunity to become the largest EV partner on Uber’s platform, which already has over 7,000 EVs under its electrification efforts, as it progresses towards its goal of becoming an all-electric platform in the capital by 2025.

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South Africa’s Primera joins MTN and Nedbank in the metaverse

Highlights

• South African media company Primedia, which offers outdoor advertising via billboards to clients, has purchased land in Africarare’s Ubuntuland metaverse.
• The move is in line with the group’s strategy of entering new spaces, diversifying its content offerings, and presenting advertisers with new and innovative platforms for maximum reach to forward-thinking audiences.
• By entering Ubuntuland, Primedia plans to create more meaningful engagement and connection with its audience.

Source: TechCabal

Our Takeaway

Africarare is Africa’s first metaverse and houses settlers such as MTN and Nedbank, which purchased land in the metaverse in February and September, respectively. It is highly sought-after by companies and individuals who wish to capitalize on the multiple opportunities presented by the metaverse. Meanwhile, Primera becomes the latest South African company to make a play in web 3.0 technologies, doing little to clear doubts that linger over the potential of Africans to participate in the “metaverse”.