African Tech Weekly Recap: April 10 to April 14, 2023
12 min Read April 14, 2023 at 12:31 PM UTC
Welcome to our weekly recap where we share the most important news from the African Tech Ecosystem 🌍.
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Emirati telco e& acquires stake in Careem for $400m
- UAE-headquartered e& (formerly Etisalat) has acquired a 50.03% stake in Careem’s Super App spinout for $400 million.
- Founded in 2012, Careem started as a ride-hailing app and then launched its super app in April 2020, which offers a variety of services on its platform and serves customers in 10 countries across the Middle East, North Africa, and South Asia.
- The investment will support Careem’s super app expansion plans. Meanwhile, Careem’s ride-hailing business will remain fully owned by the US mobility firm Uber and continue to be available with all other Careem services on the existing app for customers.
For e&, the acquisition deal represents a significant investment in the technology and services that Careem has developed, as well as a strategic move to expand its portfolio of digital offerings. For Careem, the sale of a majority stake in its Super App spinout is likely to provide the company with a significant injection of capital, which could be used to fund further expansion and growth. Investors in Careem may also benefit from the sale, as it could help to increase the overall valuation of the company and provide a return on their investment.
World Bank provides $390m to boost Kenya’s digital economy
- The World Bank Group Board of Directors approved $390 million in financing for the first phase of a program that aims to further develop Kenya’s digital economy.
- Via the project, Kenya plans to increase access to broadband through an expansion of the fiber optic backbone and last-mile connectivity to government and learning institutions, as well as along national borders.
- The project will also boost digital skills to support the uptake of digital services and the development of a competitive labor force for the digital economy and enhance access to regional and global markets.
While Kenya has made impressive gains over the years, becoming one of Africa’s four leading hubs for technology innovation (along with Nigeria, South Africa, and Egypt), there remains a persistent digital divide in access to broadband, digital public services, and the skills needed for individuals and businesses to thrive in an increasingly digitized economy and society. Broadly, the World Bank-backed initiative has the potential to increase access to affordable broadband services and digital platforms, which could help to spur innovation, create jobs, and improve productivity in the country.
Bitcoin rallies past $30,000 for first time since June 2022
- Bitcoin climbed above $30,000 for the first time since June 2022 on Tuesday, bolstered by bets on easier monetary policies that have made cryptocurrencies standout performers this year.
- The coin is now up 82% since December 31, handily beating the Nasdaq 100 tech index’s 19% gain. Gold, another investor favorite this year, has climbed 9.6%.
- Crypto’s rapid ascent has seen Bitcoin vault past where it stood when hedge fund Three Arrows Capital imploded last summer — yet it remains more than 50% below its all-time high in November 2021.
Although Bitcoin has shown a consistent recovery in its prices this year, it is still significantly lower than its record high of $68,000 in November 2021 and has not yet reached its pre-crypto winter levels following the Terra stablecoin failure. Nonetheless, the recent price surge has prompted speculation of a new cryptocurrency boom, as a result of the ripple effects of the Silicon Valley Bank collapse and the widespread contagion it triggered across financial markets. This has led some cryptocurrency enthusiasts to seek refuge in Bitcoin as a means of safeguarding against the possibility of a complete collapse of the traditional “fiat” economy.
Kenya’s Victory Farms raises $35m for East Africa expansion
- Victory Farms, a Kenya-based aquaculture startup, has raised $35 million in a Series B round.
- The Series B round was led by Creadev and saw participation from the Acumen Resilient Agriculture Fund (ARAF), DOB Equity, Endeavor Catalyst Fund, and Hesabu Capital.
- The startup says it will use the funding to finance the expansion of its operations in Kenya and Rwanda and potential entry into Ethiopia, Uganda, and Tanzania.
The East African fish supply deficit is one of the greatest supply-demand imbalances in the global food system today. Regional governments estimate a supply gap of 1 million tonnes of fish per annum. The aquaculture industry supplies meet a mere 3% of the deficit. Victory Farms presents a scalable solution to East Africa’s nutritional security challenge and also claims to mitigate East Africa’s climate change problem. The startup estimates that, at its current capacity, it is preventing at least 160 thousand metric tons of carbon dioxide emissions by shifting consumers to fish.
French-African Fund closes at over $53m to back SMEs
- AfricInvest has reached a final close of the French African Fund II (FFA II), the successor fund to the French African Fund (FFA), having raised over $53 million in subscriptions.
- Backed by French and international institutional investors, including private investors, as well as family offices, the FFAs are dedicated to French small and medium-sized enterprises (SMEs) that aim to invest and grow in Africa.
- The fund, managed by AfricInvest Europe, part of AfricInvest Group, aims to accelerate the growth of these SMEs through development projects on the continent and beyond.
Africa-based small and medium-sized enterprises continue to face significant challenges in accessing credit, with an unmet financing need of $140 billion to $170 billion. Financial institutions are often constrained by regulatory requirements, limited appetite for a segment that is perceived to be higher risk, a lack of adequate collateral available from SMEs, knowledge gaps by lenders, and skill gaps demonstrated by borrowers. Tailored facilities such as the FFAs help to address this by broadening the capital pool available to SMEs while mitigating risk for traditional financial institutions to boost lending to the sector.
Farmerline expands to Francophone Africa with Ivorian office
- Ghanaian agritech startup Farmerline has expanded into Francophone Africa with a launch in the Ivory Coast, deepening partnerships across West Africa to support small-scale farmers.
- This year marks a decade since Farmerline was launched, delivering daily voice and SMS agronomic messages to 800 farmers in Ghana’s Ashanti region in their own language through its Mergdata platform.
- It has so far collaborated with over 3,000 partners across 48 countries, including government institutions, local agribusinesses, NGOs, and food companies, which have licensed Mergdata to support and improve the lives of 1.7 million farmers.
Source: Disrupt Africa
Sub-Saharan Africa has the potential to increase its agricultural output and overall contribution to the economy, however, the sector remains untapped largely due to a lack of access to quality farm inputs and infrastructures like warehousing and market access. Startups like Farmerline address some of these issues while also contributing to Africa’s rise as a global leader in agritech. Between 2016 and 2019, the industry grew by 44% year-on-year, and the continent has registered the highest number of agritech services in the developing world reaching more than 30 million smallholder farmers as of 2021.
Evolution Fund secures $199m for clean energy in Africa
- Finnfund, a Finnish development financier and impact investor, has announced a $20 million commitment to Evolution III Fund, a Pan-African equity fund aiming to foster the availability and accessibility of clean energy.
- The commitment is part of the first closing of the fund, which is managed by Inspired Evolution Managers and aims to make between 10 to 15 investments over five years.
- Evolution III closed at $199.4 million in conditional commitments from seven international investors, including several DFIs, allowing a further 12–18 months window to reach its target close of $400 million in capital commitments.
In Africa, access to reliable and clean electricity remains far behind most other parts of the world. With an electrification rate of 46%, 590 million people are still without access to electricity. At the same time, the region has tremendous solar and wind potential and vast hydropower resources. The funding needed to facilitate Africa’s energy transition to a net-zero energy mix by 2050 is estimated to be around $2.8 trillion. For the continent to achieve its climate action and energy SDGs, its generation capacity must be doubled by 2030 and multiplied five-fold by 2050.
Agritech FarmTrace gets funding to scale cloud-based solution
- South African agritech startup FarmTrace, a cloud-based farm management tool, has raised undisclosed funding to help it expand operations.
- FarmTrace offers diverse tools to help farmers manage their operations, including a cloud-based agricultural ERP system to complement their operational requirements.
- With the new equity investment from Secha Capital and Hassium Capital, the startup aims to serve more farms, add more products, and expand to more geographies.
Source: Disrupt Africa
Modern farming is evolving rapidly, through increased demand, changes in best practices, or regulation – all of which require keeping up to date with the latest data on their farm. FarmTrace, working to address this need, is one of Africa’s exciting tech startups that have emerged in the agriculture sector. As of 2020, the emerging global agritech industry was valued at $7.8 trillion with investments reaching $2.6 billion. In Africa, between 2016 and 2019, over $19 million was invested in agritech, with the number of startups operating in the market increasing by 110%.
Fonbnk and Tanda partner to offer DeFi applications to Africa
- Kenyan web3 platform Fonbnk has partnered with Tanda to launch a first-of-its-kind airtime trading marketplace across Tanda’s network of 40,000 agents.
- Fonbnk is a web3 on-ramp that allows Africans to easily obtain cryptocurrency assets by exchanging their airtime credits while Tanda is a merchant network platform in East Africa with 40,000 agents.
- Through the partnership, Tanda agents and vendors can act as airtime ‘market makers’ and access new revenue streams by buying and selling prepaid airtime for profit on Fonbnk’s distributed exchange.
The DeFi opportunity in Africa is significant and has the potential to positively impact millions of lives by empowering individuals to take control of their financial futures. With a largely unbanked population and limited access to traditional financial services, DeFi offers an opportunity to bridge this gap and provide individuals with access to financial services without requiring a bank account or traditional credit history. Moreover, DeFi offers lower transaction costs, faster processing times, and transparent systems, which can increase financial literacy and reduce the risk of fraud.
Amazon doubles down on South Africa with $1.8bn investment
- A newly-released economic impact study report shows that Amazon, via its cloud infrastructure arm Amazon Web Services (AWS), aims to invest $1.8 billion in South Africa by 2029.
- The investment will be made towards cloud infrastructure in the region. From 2018 to 2022, the company says it has invested $885 million, which has resulted in an estimated $657,000 approximately in local GDP contributed by this AWS Region.
- In addition, the marketplace arm of Amazon is also planning to open up shop in South Africa by the end of 2023.
South Africa still hosts AWS’s only regional data center in Africa. Last year, the service opened up a new Local Zone in Lagos, Nigeria, one of the only 15 Local Zones outside of the US. The decision to double down on its presence in Africa further underlines the huge untapped potential in the continent’s cloud computing market, which has pulled other big operators like Microsoft, Google, Huawei, Equinix Inc, and Teraco, with huge investments being poured into data centers and cloud infrastructure on the continent.
IMF cuts global growth forecast after banking crisis
- The IMF expects global growth will slow to 2.7% next year, 0.2 percentage points lower than its July forecast, and anticipates 2023 will feel like a recession for millions around the world.
- Aside from the global financial crisis and the peak of the Covid-19 pandemic, this is the weakest growth profile since 2001. Meanwhile, its GDP estimate for this year remained steady at 3.2%, which was down from the 6% seen in 2021.
- More than a third of the global economy will see two consecutive quarters of negative growth, while the three largest economies — the United States, the European Union, and China — will continue to slow.
After recovering from the Covid-19 pandemic and suffering setbacks from high inflation and spillovers from the war in Ukraine, policymakers globally are faced with the challenge of fighting persistent inflation and safeguarding financial stability. Both have become more complex due to banking pressures from the failures of two US regional banks and the forced sale of global lender Credit Suisse. As a result of this, this is the IMF’s lowest five-year global growth projection since it started issuing such forecasts in 1990.
Seven Kenyan startups bag upstart capital from Mozilla
- Seven startups from Kenya have received early-stage investments each from Mozilla and the Gladys Boss Foundation to improve their products and push them to the next level.
- This is part of Mozilla’s Mashinani Initiative, through which the company hopes to spark innovation by forging new, closer connections with regional partners to understand how African product demands and capacity shortages overlap.
- Beneficiary startups are building various solutions and will take part in the Mozilla Africa Mradi Innovation Challenge in Nairobi this June, which will be the culmination of the Mashinani Initiative.
As Africa catches up with the developed world in terms of technological progress, accelerators, incubators, and pitch competitions help to bridge this gap by providing crucial access to capital and mentorship to startups. Mozilla’s efforts, yet another notable player in an active early-stage support ecosystem for African startups, are even more crucial considering the need to address several major challenges across education, agriculture, and healthcare in rural Kenya, where most of the population resides.
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