This week in Africa: Everything you need to know - Microsoft brings Xbox Studios Game Camp to Africa...
15 min Read May 12, 2023 at 1:01 PM UTC
Welcome to our weekly recap where we share the most important news from the African Tech Ecosystem 🌍.
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Microsoft is bringing its Xbox Studios Game Camp to Africa
- Microsoft, through its Africa Transformation Office (ATO), has confirmed that its Xbox Studios Game Camp will be hosted in Africa.
- Game Camp is an initiative that unifies various Xbox initiatives under one umbrella where talent is celebrated, and game developers are empowered to pursue their dreams.
- The two-day conference, which started in 2014 in Sweden before it was later shaped into a global program, seeks to recognize and celebrate all game creators across more than 50 diverse countries and regions. The conference will run from July 15th – 16th, 2023, and is open for applications.
Having a combination of the world’s fastest-growing youth population and an exponential increase in digital skills and connectivity amongst the youth puts Africa in a pole position to be both the leading consumers and creators of content in the video gaming world by 2030. Many startups are emerging to tap into the huge market hence it is unsurprising to see Microsoft bring its flagship Xbox event to the continent. Sub-Saharan Africa is the fastest-growing region worldwide for mobile gamers; its gamers increased to 186 million in 2021 from 77 million in 2015, with 95% on mobile phones.
Egypt-based VC DisrupTech raises $5m investment from Proparco
- Egypt-based VC fund DisrupTech Ventures has received a $5 million investment from Proparco.
- Founded in 2021, DisrupTech is an early-stage VC fund that aims to provide seed capital to up to 28 startups with a prime focus on fintech. The fund has raised $36 million from several investors, including DFIs, Funds-of-funds, and family offices.
- Proparc is a subsidiary of the French Development Agency which has invested over $134 million in early-stage companies and venture capital funds in Africa since 2020.
Over the past few years, new fintech startups trying to take on legacy banks in Africa have sprung up as the digital banking wave takes shape. In Egypt, the need is glaring. Only 33% of people have a bank account. Expanding access to financial services is thus primal, and startups leading such efforts stand to gain significantly from increasing amounts of early-stage venture capital available in the country, such as DisrupTech, which was launched 24 months ago and has invested 40% of its fund size in technology startups to date.
Vodacom rolls out country-first 5G network in Mozambique
- Vodacom has launched Mozambique’s first 5G network with plans to deploy the new services at selected sites across the country.
- The network operator is the country’s biggest with over 11.3 million customers in the first quarter of 2023. It has achieved a 75% coverage rate on its 2G network and 80% coverage on its 4G network.
- 5G is expected to help to expand financial inclusion in Mozambique, and Vodacom’s target is to cover 75% of the adult population by 2025.
With Vodacom’s 5G rollout, Mozambique joins Nigeria, South Africa, Kenya, Zambia, Botswana, and a few other African countries where commercial 5G services have been launched while testing/pilot is ongoing in more than 10 others. The potential benefits of this next-generation network for the continent, such as the optimization of service delivery and end-user experience, are well-published. But adoption faces hurdles due to the high cost of 5G-enabled handsets as well as mobile data. That hasn’t discouraged and shouldn’t stop Africa’s leading telcos from investing in the technology, however.
Tanzania’s coal exports hit a record $224m amid Europe’s energy crisis
- Europe’s energy crisis caused by the invasion of Ukraine by Russia has seen Tanzania coal exports record a seven-fold jump in the year to March due to high demand, the latest central bank data show.
- Tanzania, which has 1.9 billion coal reserves of which 25% are proven, saw its exports of fossil fuel surge to $223.8 million from $31.9 million in April.
- Exports of coal edged up, induced by rising demand for alternative energy, amid supply challenges caused by the war in Ukraine, per Bank of Tanzania’s April Economic Review.
The exponential increase in Tanzania’s coal exports indicates a significant economic opportunity for not just the country but Africa at large. This increase in demand could result in a boost in Tanzania’s economy, particularly in the coal industry. Additionally, it could signal an opportunity for other African countries to expand their energy exports and potentially benefit from the European energy crisis. But, it is essential to consider the environmental impact of increased coal production and consumption, as it could hinder efforts to transition towards cleaner sources of energy.
Network operators in Africa are still developing their models around 4G
- Despite the recent successive 5G rollouts by mobile network operators across African countries, the recently released Nokia MEA Mobile Broadband Index finds that the Middle East is far ahead of Africa in terms of 5G adoption.
- In Africa, many operators are still developing their business models around 4G while voice traffic still relies on 2G and 3G networks in many parts of the region.
- In both regions, however, 4G networks account for 79% of overall data traffic currently, and by 2027, 4G and 5G will together account for 90% of data traffic.
Source: Nokia report
Reliable 4G and 5G networks are critical for bridging the digital divide in MEA, in addition to supporting data-intensive applications for communities and businesses. However, the region is a diverse one with many countries at different stages of development, which is reflected in the Nokia report. An important finding to note, regardless, is that data consumption with high-speed networks is increasing exponentially across the MEA market in both urban and rural areas, translating to more revenue for operators. By 2027, annual revenue per user (ARPU) is estimated to increase to $3.4.
Egypt-based remittance fintech Balad gets funding from Acasia and others
- Egypt-based fintech Balad has raised a seven-figure pre-seed round led by Acasia Ventures. Other investors in the round included Launch Africa, Future Africa, V&R, Magic Fund, First Circle, Sunny Side, and several family offices.
- Founded in 2022, Balad is a remittance-driven financial service provider that offers reduced transfer fees and instant delivery of inward remittances via its prepaid cards.
- The investment will be used to launch Balad’s remittance platform, develop its technology, hire new team members, obtain required licenses, and complete integrations with its banking partner.
Egypt is the fifth-largest country in terms of remittance inflows, and many of its underbanked population rely on these transfers as their primary income source. However, transfer fees can be as high as 11% and funds may take over a week to reach recipients. In addition, migrants and families often lack access to basic financial services like credit, savings, and insurance. Like many other startups looking to tap into the $700 billion global remittance market, Balad aims to make it simpler for people to access remittance funds with lower fees while also providing access to basic financial services.
Egypt to get $250m data center via Khazna, Benya partnership
- Khazna Data Centers, the largest network of hyper-scale data centers in the Middle East and North Africa is entering Egypt with Benya Group, a provider of integrated solution, digital transformation, and ICT infrastructure in the region.
- The new $250 million facility will be the country’s first hyper-scale data center, to be built at the Maadi Technology Park, Egypt’s first specialized investment zone.
- With an expected capacity of 25MW of IT load, the data center is expected to unlock opportunities for businesses in Egypt aiming to expand internationally, and targeting multinational corporations in MENA markets.
The planned data center marks the first in a series of hyper-scale facilities that Benya and Khazna plan to introduce to Egypt in the future. The construction of the new data center is expected to commence later this year, with completion targeted for within the coming three years. Beyond Egypt, Africa’s cloud computing and data center market is seeing significant investments poured by operators with the hope of bridging a demand gap while tapping into the market revenue potential. The market was valued at $2 billion in 2020 and is expected to grow to $5 billion by 2026.
SA healthtech startup Quro Medical raises $1.3m funding
- South African startup Quro Medical has raised $1.3 million in funding from the Mineworkers Investment Company (MIC).
- Founded in 2018, Quro Medical offers a hospital-at-home solution that combines hardware and software with clinical experience to manage acutely ill patients in the comfort of their homes.
- With the support of MIC, Quro Medical will be able to further develop its technology and expand its reach, improving healthcare outcomes and reducing costs for patients and providers.
Source: Disrupt Africa
Since the outbreak of the coronavirus pandemic, the popularity of telemedicine—an innovative way of getting access to and delivering healthcare using digital devices such as mobile devices and computers—has risen significantly. Per a McKinsey study, telemedicine grew 78x in April 2020. In Africa, where fewer than 50% of Africans have access to modern health facilities and the doctor-to-patient ratio stands at 1:5,000, the budding healthcare tool is equally making new, significant inroads.
Inua Capital launches impact-focused $8m fund for Ugandan SMSEs
- Inua Capital has unveiled its flagship fund, Inua Impact Fund, with over $8 million of commitments.
- The fund is reportedly the first resident impact investment equity fund in Uganda that is investing, with a gender lens, in high-potential entrepreneurs and small- and medium-sized enterprises (SMEs) with financing needs of $100,000 to $500,000.
- Inua Impact Fund is backed by renowned impact investors including IPDEV (a member of the I&P Group) and the EU-funded Agriculture Financing Initiative (EDFI AgriFI).
The increasingly diversified capital pool available in Africa could play a potentially important role in supporting the growth of small and mid-size businesses that would otherwise struggle to access capital from banks. Access to capital remains a significant barrier to the growth of many SMEs, with available data shows a $330 billion financing deficit for the small enterprises that make up 90% of businesses on the continent. It’s a problem several startups and foreign investors are particularly keen to address as it promises attractive returns.
Egypt-focused retailer gets $165m investment from DPI-led group
- DPI has led a $165 million equity investment in Kazyon Ltd, the UK parent of the largest discount retailer in Egypt “Kazyon” alongside co-investors, including British International Investment (BII), South Suez, and others.
- Founded in 2014, Kazyon provides access to affordable products to the underserved market in Egypt and the surrounding region.
- The investment will help Kazyon accelerate its ambitious expansion strategy, progressing its stores’ rollout across Egypt and entering new markets.
The investment demonstrates continued confidence in the Egyptian retail sector, which is one of the greatest contributors to GDP and has recently attracted the likes of Amazon. A rising population, affluent middle class, and emerging secondary cities have led to rising sales growth in shopping malls, convenience stores, supermarket chains, and e-commerce platforms. Recent government legislation supporting commercial retail spaces has also encouraged the private sector to make significant investments in the space. The market is projected to grow at a compounded annual growth rate (CAGR) of 5% to hit $254 billion in 2025.
Safaricom granted a license to operate M-Pesa mobile money in Ethiopia
- Safaricom Ethiopia has been granted the license to operate mobile money services in Ethiopia, seven months after the commercial launch of GSM services in the Horn of African nation.
- The M-Pesa license will open the country to perhaps the world’s largest mobile payment system and Africa’s first mobile money transfer system.
- M-Pesa helps over 30 million customers to transact, save or borrow money through their mobile phones. In Kenya, it catalyzed financial inclusion to 84% from a low of 26.7% in 2006 according to the 2021 FinAccess Survey and generated over $886 million in revenue last year.
The Ethiopia entry is Safaricom’s first GSM expansion outside Kenya, where it holds a monopoly in the telecoms and mobile money sectors, but its M-Pesa service serves multiple countries in East Africa. With the license comes a leeway to go after Ethiopia’s +100 million people. For the previously state-controlled economy, however, this represents a significant milestone in the government’s bid to open up major sectors (such as telecom and banking), a process that kicked off as far back as 2018.
Visa backs three funds to support female-owned businesses in Africa
- Three women fund managers SME.NG (Nigeria), Altree Capital (Kenya), and Maia Capital (South Africa) have been selected to receive Visa grant funding from the African Women Impact Fund Initiative (AWIF).
- The fund is a collaboration between Standard Bank and the United Nations Economic Commission for Africa (UNECA) announced last year.
- Visa announced a grant to the AWIF as an extension of the She’s Next program, a global advocacy program for women-owned businesses expanded to Sub-Saharan Africa. The grant seeks to champion and strengthen African women business owners as they build, sustain, and advance their businesses.
In Africa, women fund managers are confronted with various obstacles in establishing long-lasting enterprises. Studies indicate that advancements in the representation and integration of women fund managers are sluggish, owing to institutional barriers and bias among investors. The fact that African women constitute a mere 7.6% of private equity and that women-led businesses receive only 7% of Private Equity (PE) and Venture Capital (VC) in emerging markets, underscores the potential for narrowing the existing gender disparities.
Raxio Group draws $33m debt facility from EAIF for data centers
- The Emerging Africa Infrastructure Fund (EAIF), a Private Infrastructure Development Group (PIDG) company, has committed a $33 million sustainability-linked debt facility to Raxio Group, a leading pan-African data center developer and operator.
- The funding enables the design, construction, operation, and management of a series of high-impact data centers in seven countries—Uganda, Ethiopia, the Democratic Republic of Congo, Mozambique, Angola, Cote D’Ivoire, and Tanzania—across sub-Saharan Africa.
- EAIF is acting as co-arranger on the transaction alongside Proparco, with whom it will mobilize a $110 million debt package to Raxio to further develop digital infrastructure – responding to the urgent demand for affordable internet connectivity in the region.
The investment marks a significant step towards supporting connectivity and innovation and stimulates the growth of digital economies in Africa’s nascent but fast-growing data center markets. Africa’s data center market is among the fastest growing in the world and is a key pillar of the continent’s burgeoning digital economy, which is expected to grow 57% to reach $180 billion by 2025 and $712 billion by 2050. The new Tier III quality data centers are expected to be some of the first-ever independent, enterprise-standard data centers in the target countries.
SA housing startup DigsConnect secures funding from Intaba
- South African digital student accommodation platform DigsConnect has secured an undisclosed amount of funding from Intaba Capital as part of its ongoing Series A round.
- Launched in 2018, the DigsConnect platform allows landlords, estate agents, and property managers to post their property listings, with students then searching and filtering through these listings to find accommodation that suits their needs.
- The startup closed a pre-Series A round of funding last year to spearhead its international growth, with a focus on helping African students in the UK and the US secure more affordable, convenient, and safe housing.
Source: Disrupt Africa
Unlike many other traditional industries, the real estate and property space has not changed very much over the decades. But in recent times, the ongoing technology wave has seen a number of African startups emerge with a vision to give the sector a face-lift. DigsConnect is one such and has expanded quickly since its founding. The startup raised $830,000 in March 2019 and last year a $200,000 grant from the Michael & Susan Dell Foundation. DigsConnect currently has over 1.3 million beds and recently entered into an agreement with Student.com to expand its presence to approximately 30 new countries and 400 new cities.
Mobile app usage is growing in Africa with over 270m users
- As of December 2022, the total number of monthly active users of mobile apps in Africa exceeded 270 million, a 14% increase compared to the beginning of the year per a DataSparkle report.
- The study finds that a total of 575 apps already boasted over one million monthly active users in Africa while the average user spent more than four hours per day on mobile devices.
- Games, tools, and pan-entertainment were the most active categories, accounting for more than 56% of the top 500 apps in Africa in 2022 by active users.
Africa’s mobile application market is experiencing exponential growth, driven by several key factors. Rising smartphone penetration, expanding internet connectivity, and a growing tech-savvy population have created a fertile ground for app development. The continent’s diverse industries, such as fintech, e-commerce, and healthcare, are embracing mobile apps to enhance efficiency and accessibility. Moreover, the increasing investment in tech startups, supportive government policies, and collaborations with international tech giants are fueling the expansion of Africa’s mobile application market, ushering in a new era of innovation and economic growth.
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