This week in Africa: Everything you need to know
15 min Read May 19, 2023 at 1:15 PM UTC
Welcome to our weekly recap where we share the most important news from the African Tech Ecosystem 🌍.
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M-Kopa raises $250m to scale its consumer financing fintech across Africa
- M-Kopa, the asset financing platform that offers underbanked African customers access to “productive assets” and the ability to pay for them via digital micropayments, has secured over $250 million in new funding.
- The capital injection includes $55 million in equity and over $200 million in debt. Following the $75 million in equity the Kenyan-based fintech announced last March, M-KOPA has raised $245 million in equity funding since its inception in 2011.
- Given its success in East and West Africa, where it has sold over a million solar home systems, M-KOPA now sets its sights on South Africa.
Most Africans face purchasing challenges due to low-income, limited credit histories, and lack of collateral. Strong identity and credit scoring infrastructure in developed markets enables credit access but in Africa, where 85% of the population lives on barely $5.50 daily, making major purchases without credit is difficult while access remains limited. M-Kopa uses debt to finance customers’ purchases on its platform, such as smartphones, solar power systems, loans, and health insurance across Kenya, Uganda, Ghana, and Nigeria. The huge fundraising sums testify to its strong fundamentals, key for any growth-stage company looking to raise in this current subdued VC climate.
Figorr bags $1.5m to expand insurance for perishable goods in Africa
- Nigerian-based cold chain startup Figorr has raised $1.5 million in a seed funding round led by Atlantica Ventures, with participation from VestedWorld, Jaza Rift Ventures, and Katapult VC.
- Figorr (previously Gricd) runs IoT-powered solutions that provide businesses, especially those in healthcare and agriculture, with key data such as location, humidity, and temperature of highly-perishable products.
- With the funding, the startup is currently on an expansion bid. Outside Nigeria, Figorr’s solutions are currently used in Ethiopia, Ghana, Kenya, South Africa, Tanzania, and Uganda.
In sub-Saharan Africa, a significant portion of food production, accounting for approximately 37%, equivalent to 120-170 kg per capita per year, goes to waste or is lost due to inadequate storage and handling practices. However, these losses can be prevented by ensuring safe storage and real-time monitoring of food to mitigate wastage. Additionally, the global vaccine wastage problem is alarming, with an estimated 50% of vaccines being rendered unusable due to breaches in the cold-chain system. To address these challenges caused by substandard storage and monitoring, innovative startups like Figorr are playing a crucial role in preventing unnecessary losses.
Angola’s energy sector sees a new wave of global investments
- Angola’s oil and gas sector is witnessing an accelerated pace of new investments over the past few months thanks to the rising oil prices, per Deutsche Bank.
- The new wave of investments supports the government in its ESG objectives and energy security, the bank said, citing Azule Energy’s seven-year $2.5 billion pre-export financing signed in August 2022.
- The company was formed as a 50/50 joint venture between industry leaders BP and EN and holds two billion barrels equivalent of net resources, expected to grow to ~250,000 barrels equivalent a day (boe/d) of equity oil and gas production by 2028.
Angola, Africa’s second-biggest oil producer, holds the continent’s second-greatest oil reserves, estimated at nearly nine billion barrels of proven crude oil reserves and 1.6 trillion cubic feet of proven natural gas reserves. Last week, the Organization of Petroleum Exporting Countries (OPEC) monthly oil market said Angola recorded 1.06 million barrels per day (bpd) of crude production in April, becoming the top African crude oil producer for the month.
Africa’s leading telcos to invest over $1bn in fiber cable
- MTN Group, Africa’s biggest mobile-phone operator, plans to build a $320 million inland fiber cable to connect ten countries, as telecommunications companies push to expand service to the continent’s growing population.
- Similarly, Vodacom plans to expand its fiber business, pending the Competition Commission’s approval of its $693 million deal with Remgro. Through the deal, Vodacom plans to expand its fiber offering into some of its other operating countries, including Tanzania and the Congo.
- Despite the major investments by the two South African telco giants Telkom currently dominates the fiber industry in the country through its subsidiary, Openserve.
Africa’s telecommunications industry has witnessed rapid growth over the past two decades while playing a key role in shaping the continent’s economy. Much of this growth is driven by some deregulation of the sector, a large young population increasingly adopting mobile voice and data services, and massive investments in network infrastructure by dominant multinational operators. By 2025, the contribution of the mobile industry to Africa’s GDP will grow to almost $155 billion from $138 billion in 2021 while the region will add nearly 100 million new subscribers, with industry leaders like MTN set to rake in huge revenues.
Morocco’s Chari secures second investment from Plug & Play
- Morocco-based B2B e-commerce platform Chari has secured a second round of investment from Plug and Play. The amount invested was not disclosed.
- Plug and Play’s investment in Chari is part of its inaugural cohort in Morocco in partnership with the Mohammed VI Polytechnic University and Startgate.
- Founded in 2020 by Ismael Belkhayat and Sophia Alj, Chari, an e-commerce platform for FMCG products, lets retailers purchase large quantities of inventory items directly from suppliers. Last February, Chari raised $1 million from Orange Ventures.
African markets, though diverse, have some common themes, one of which is the largely fragmented FMCG space. 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. Chari, like many startups in the B2B e-commerce space in Africa such as Nigeria’s TradeDepot and Egypt’s Capiter, has built digital products to address these bottlenecks in the crucial sector.
Dangote Industries readies to open Africa’s largest $14bn refinery
- Following years of delays and regulatory hurdles, Dangote Industries Limited is preparing for a ceremonial opening this month at its Lekki Refinery in Lekki, Nigeria, which will be the biggest refinery in Africa.
- The company expects the facility’s crude distillation unit (CDU) will begin commercial operations by the end of June.
- More than $14 billion worth of active projects are reportedly ongoing at the Lekki Refinery, which accounts for just less than half of the total investment in all active refining projects across Nigeria.
The Dangote refinery holds immense relevance to Nigeria’s economy as it signifies a major shift towards self-sufficiency in petroleum products for the nation. By refining crude oil locally, Nigeria can reduce its reliance on costly fuel imports, preserve foreign exchange reserves, and bolsters growth while potentially becoming a key exporter of refined petroleum products. The Lekki facility is expected to increase Nigeria’s refining capacity to 3.24 million barrels per day (BBL/d). More so, its single, 650,000-BBL/d CDU will be the biggest in the world, by capacity.
Egypt sells 9.5% stake in state-owned telecom firm for $121 million
- Egypt sold a 9.5% stake in state-run Telecom Egypt Co., raising more than 3.7 billion Egyptian pounds ($121 million) in a signal to investors that the country is serious about implementing a sweeping economic reform program.
- The government sold 162 million shares in the telecommunications company, representing about a 9.5% stake in the firm, according to a filing to the Egyptian stock exchange reported by Bloomberg.
- The shares were priced at 23.11 Egyptian pounds each, according to a separate filing. Egypt plans to offer a further 0.5% for company employees to buy.
Egypt is urgently seeking revenue by privatizing state-owned companies to fulfill upcoming foreign debt obligations that are due in a matter of months. This initiative is a component of a 46-month financial support package worth $3 billion, which was agreed upon in December – Egypt made a commitment to the IMF to reduce its presence in the economy and grant private enterprises a significantly larger role. Broadly, this move signals the North African country’s commitment to reducing government involvement and promoting private-sector participation, which could attract potential investors.
Tiger Global-backed Axis launches digital payments platform for Egypt SMEs
- Egyptian fintech Axis has launched its digital payments platform to the North African market after securing a license from the apex bank, the Central Bank of Egypt (CBE).
- The startup offers an open-loop mobile wallet, axisPay, which offers a digital banking alternative for small businesses and their employees.
- This is coming almost 18 months after the startup received an $8.25 million seed investment co-led by Tiger Global, Sawari Ventures, and Raba, with participation from Firstminute Capital and RaliCap; founders of Venmo, Rho Banking and Cred; and executives from Revolut and Plaid.
Across Africa, merchant acquisition is proving to be the “new” scramble for digital payments and services on the continent, which has an estimated $800 billion informal trade economy comprising more than 56 million micro, small, and medium-sized businesses. In Egypt, there are 8 million of those and they contribute to 80% of the nation’s $400 billion+ GDP, employing over 20 million people. These small businesses are heavily cash-based, with little access to online banking services, payroll processing, and working capital financing. To address this, a number of startups have sprung up, the latest in the news being Axis.
Jia raises $4.3m seed to boost small businesses financing in emerging markets
- Jia has raised $4.3 million in seed funding, and an additional $1 million commitment for on-chain liquidity, in a round led by early-stage backer TCG Crypto.
- A blockchain-based fintech providing loans to micro and small businesses in emerging markets, the startup offers loans to borrowers, who receive tokens after repayment, that they can later redeem at a rate agreed upon based on Jia’s profits.
- The fintech plans to use the funding to double down on its operations in Kenya, and the Philippines, before exploring new markets in West Africa, Latin America, and Asia.
Jia, along with other fintech companies, is dedicated to addressing the access-to-finance gap that hinders business growth in markets such as Africa. Current data reveals that small enterprises constitute 90% of Africa’s businesses, yet they encounter a significant financing deficit of $330 billion. These businesses are burdened with the need for collateral and must fulfill various time-consuming requirements to secure loans from traditional lenders. Fintech startups like Jia are taking proactive measures to fill this financial void and provide the necessary support.
Ghana secures $3bn IMF package for economic recovery
- The International Monetary Fund has approved Ghana’s request for a $3 billion bailout over three years to support the debt-ridden nation’s recovery.
- The West African economy will receive an immediate disbursement of about $600 million, the IMF said in a statement Wednesday following an Executive Board meeting.
- The new loan is expected to help mobilize additional external financing from development partners and provides a framework for completing Ghana’s debt restructuring.
Ghana faces a debt overhaul after its already strained finances buckled under economic fallout from the pandemic and Russia’s invasion of Ukraine. The West African nation is negotiating its international debt rework under the Group of 20’s Common Framework platform and completed a domestic debt exchange this year. According to government data, some $5.4 billion of debt to official creditors has been earmarked for restructuring, as well as $14.6 billion owed to private overseas creditors. Analysts expect Ghana’s process to be faster and smoother than Zambia’s, the first African country to default in the Covid-19 era.
Amini raises $2m pre-seed to solve Africa’s climate data scarcity
- Amini, a Nairobi-based climate tech startup focused on solving Africa’s environmental data gap through artificial intelligence and satellite technology, has raised $2 million in a pre-seed funding round.
- The startup owns a data aggregation platform that pulls in different sources of data down to a square meter, then unifies and processes this data before providing them via APIs to local and international companies that need them.
- Pale Blue Dot, the European climate-focused VC firm that announced a $100 million fund last week, led the oversubscribed round. Superorganism, RaliCap, W3i, Emurgo Kepple Ventures, and a network of angel investors participated.
Africa is home to abundant land and mineral resources but only accounts for 3% of global GDP while grappling with frequent food and water scarcity. One reason for this is the lack of reliable and trustworthy data, hampering business decisions, capital allocation, and climate change impact measurement. Amini aims to address this and is part of a slew of climate-focused African startups that have attracted VC dollars. African climate tech startups secured over $860 million in 2022, and this year, firms such as Novastar Ventures, Catalyst Fund, and Equator are raising or have raised climate-tech funds for Africa.
Tizeti inks Microsoft partnership to bring broadband to Côte d’Ivoire
- Tizeti, a Nigerian internet service provider, has partnered with Microsoft to bring its broadband solution to Cote d’Ivoire.
- The partnership, Tizeti’s second international partnership after partnering with Eutelsat, makes Cote d’Ivoire the third country that Tizeti is present in after Ghana and Nigeria. It has plans to expand to Togo.
- The partnership is expected to bring internet access to almost five million people by addressing the significant broadband gap in Côte d’Ivoire, where the internet penetration rate is estimated at 45%, with ~13 million internet users.
For many countries in Africa, there is still a huge digital divide. This boundary between connected and unconnected translates into clear consequences for employment, education, family and social life, and access to information. Partnerships such as this play a significant role in addressing the digital infrastructure deficits in emerging economies, leveraging innovative technology and capabilities, to improve development outcomes for millions of people. Tizeti plans to leverage its low-cost wireless technologies to roll out high-speed internet infrastructure with Microsoft’s Airband Initiative, which is focused on advancing digital equity—access to affordable internet, affordable devices, and digital skills.
African B2B e-commerce Sabi valued at $300m in new $38m round
- Sabi, a Lagos-based B2B e-commerce startup providing digital commerce infrastructure to Africa’s informal economy, has raised $38 million in Series B funding at a valuation of $300 million.
- Frankfurt-based specialist fintech investor CommerzVentures, Stockholm-based but Africa-focused growth-stage investor Norrsken22, U.S.-based growth-stage funds Fluent Ventures and Proof VC and pan-African early-stage investors CRE Ventures and Jaango are some of the investors in this round.
- The investment signals revived investor interest in a B2B e-commerce market going through some reckoning, with reports of significant layoffs and down rounds involving some of its key players.
Across Africa, merchant acquisition is proving to be the “new” scramble for digital services on the continent. In an estimated $800 billion informal trade economy comprising more than 56 million micro, small, and medium-sized businesses, most merchants operate offline with little or no exposure to the formalized, digital economy. These account for up to 90% of businesses on the continent and like Sabi, many startups in the B2B e-commerce space in Africa, such as Nigeria’s TradeDepot and Egypt’s Capiter, have built digital products to address these bottlenecks in the informal business sector, with sufficient venture capital backing.
Kenyan agritech startup iProcure expands to Tanzania
- Kenya’s iProcure has launched in Tanzania through its partnership with the Farm to Market Alliance (FtMA), 10 months after it raised a $10.2 million Series B funding round to support its expansion into new markets.
- Launched in 2013, iProcure provides a distribution infrastructure, connecting major agricultural input suppliers directly to local agro-dealers, cutting out the multiple levels of middlemen in the traditional agricultural supply chain.
- This way, the startup provides technology-driven insights on supply levels and prices, ensuring the availability, quality, and delivery of critical agricultural inputs like fertilizers and seeds at a discount from prevailing market prices.
Source: Disrupt Africa
iProcure is one of many new agritech startups that have sprung up across Africa, and are finding business opportunities in addressing the lack of infrastructure and other farming challenges. Africa is fast becoming a global leader in the agritech space, with the continent boasting the highest number of agritech services in the developing world, reaching over 30 million smallholder farmers, as of 2021. The startup’s expansion is even more relevant considering Tanzania’s agriculture sector contributes nearly one-third of the country’s GDP and employs 75%cof the population.
Non-bank stocks expected to sustain ghana stock exchange rally
- The Ghana Stock Exchange (GSE) is expected to see a continued upward trend, mainly driven by non-bank stocks, per a report by DatabBank.
- The report suggests that investors can expect sustained growth in non-bank stocks due to various factors, including favorable economic conditions, increased investor confidence, and the resilience of non-bank sectors amidst the challenges faced by the banking industry.
- Market analysts believe that non-bank stocks offer significant investment opportunities and can contribute to the overall growth of the Ghanaian stock market.
Source: African Markets
Ghana’s benchmark stock index, the GSE-CI, has witnessed a marked recovery since the middle of March this year, rising from 2,391.8 points on March 8, to 2,721.17 points on May 12 – with a market capitalization of GH¢68.1 billion ($6.3 billion). Broadly, investors are tipped to continue to seek solace in the stock market, specifically in telecommunications, oil marketing, and agricultural stocks, as they remain cautious of the debt market and shy away from banking stocks due to the broad downturn caused by the Domestic Debt Exchange Programme (DDEP).
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