African Tech Weekly Recap: November 14 to November 18, 2022 -
8 min Read November 18, 2022 at 12:18 PM UTC
Welcome to our weekly recap where we share the most important news of the African Tech Ecosystem 🌍
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Bitcoin rebounds as Binance announces industry recovery fund
- The price of Bitcoin soared in the early hours of Monday to almost $17,000, following reports that Binance is set to establish an industry recovery fund in the wake of the FTX crisis.
- The most recent tweets from Changpeng Zhao, the chief executive of Binance, caused dramatic price jumps across the cryptocurrency market.
- Zhao revealed that an industry recovery group will be set up to assist projects that are “otherwise solid” but are experiencing a cash issue, to lessen the negative consequences of the impact of FTX.
Over the past week, Bitcoin lost over 20% of its value in what was its worst weekly decline since May. This was triggered by the collapse of FTX, the second-largest cryptocurrency exchange in the world, which filed for bankruptcy on Friday. The ongoing saga has sent the digital currency markets into a downward spiral, contagion risk is high and there’s a chance the industry’s highest-profile collapse may serve as a deterrent for investors everywhere, including Africa, the third fastest-growing crypto economy with some of the highest grassroots adoptions globally.
Africa-focused Yaga raises $2.3m for its used clothes marketplace
- Yaga, an e-commerce startup offering second-hand clothing, has raised $2.3 million from investors in the Baltics to grow its platform.
- Launched in 2019, Yaga is one of South Africa’s most popular online fashion platforms, with over 5 million monthly visits. More than 5,000 new items are listed daily, with 750,000 items currently on sale in the country.
- With the latest investment, Yaga aims to continue its rapid growth over the next year, further developing its platform, growing its team, and attracting new customers, having recently expanded to Kenya and India.
There is a huge future for pre-loved fashion, also known as used or second-hand fashion, especially in emerging markets like Africa and Asia. The trend is becoming a global phenomenon, with estimates suggesting the market will grow up to 127% by 2026. In Africa, the industry has experienced growth four times higher than in the rest of the world. Yaga is positioning itself for this projected boom and its fundraising demonstrates strong investor confidence in the growth of the market.
IFC to invest $225m in startups across Africa and others
- The International Finance Corporation (IFC) has launched a $225 million platform to back early-stage startups in Africa, the Middle East, Central Asia, and Pakistan.
- The IFC will through the platform make equity and “equity-like” investments in tech startups to “grow them into scalable ventures that can attract mainstream equity and debt financing.”
- The institution will also use the sector-agnostic platform to work closely with other members of the World Bank to champion regulatory reforms, sector analyses, and other changes that can grow the venture capital ecosystems in these regions.
The new platform adds to IFC’s Startup Catalyst Program, which is also part of its investments and efforts to tap tech ecosystems in Africa and other emerging and frontier markets. Like Africa, most of these regions get a small portion of the global venture funding. The IFC intervention should help bridge this gap, and it couldn’t have come at a better time given the ongoing funding slowdown.
Modus launches $75m Africa-focused AI & Blockchain fund
- US-based and MENA-focused VC firm Modus has launched a $75 million Modus Africa VC fund to invest in African startups.
- The fund is sector agnostic but will focus primarily on investing in early-stage startups powered by AI and blockchain solutions.
- Modus Africa plans to nurture the growth and development of the continent’s local tech talent and early-stage impact-driven ventures. The new fund will close in Q1 2023 and will invest in 45 startups at the seed+ stage with a follow-on investment allocation.
In Africa, the emerging blockchain technology is being used in many innovative ways and in essential industries from tech, agriculture, mining, and remittances to inclusion, identity, and property, to name a few. Yet, the continent has only a 0.5% share of global blockchain venture funding, which stands at $25.2 billion. Last year, African blockchain funding was estimated at $127 million, similar in size to a single blockchain ‘mega-deal’ of which there were 59 globally, indicating a massive gap in funding. This underlines the importance of the Modus Africa VC fund.
BasiGo secures $6.6m to kick off EV assembly in Kenya
- BasiGo will begin assembling electric buses in Kenya next month, ramping up its production of public transport vehicles (PSVs).
- The startup plans to deliver 15 of 100 buses, manufactured using parts from China’s EV maker BYD Automotive, in January next year, having completed its six months pilot program in Nairobi. It also plans to expand its charging infrastructure network, with an initial focus on Nairobi.
- The plans come after a new $6.6 million round co-led by Novastar, Mobility54, and Trucks.vc. This brings the total amount raised by BasiGo since its launch last year to $10.9 million.
The acceptance of electric vehicles is gaining momentum. In 2020, there were more than 11 million registered EVs globally, and the number is expected to hit 145 million by 2030. Things are going at a much slower pace in Africa, however. In Kenya, EV adoption is currently at 5% of the total vehicles and for the most part, are private vehicles. But the latest developments suggest that might change soon, with the recent launch of the new Bus Rapid Transit (BRT) network in Nairobi to be traversed only by green vehicles and initiatives by EV startups like Opibus and BasiGo.
EU announces $1bn program for climate adaptation in Africa
- The European Commission has announced a program worth roughly $1 billion to help fund climate change adaptation and resilience in Africa.
- As part of the EU-Africa Global Gateway Investment Package, the program aims to improve cooperation between the EU and the African Union. It will “bring together existing and new” climate change adaptation programs.
- The four pillars of the project will be improving early-warning systems; developing and implementing climate “risk finance and insurance” systems; improving public sector readiness and international funding of climate adaptation projects, and more funding for data-driven risk assessment projects designed to improve responses.
Africa sees huge impacts of climate change, despite not being responsible for the current level of CO2 emissions in the atmosphere. In Nigeria, for instance, up to 34 out of its 36 states have experienced floods this year, affecting households, businesses, farmlands, as well as oil and gas facilities. More than 3 million people have been affected and over 1.4 million are displaced per the UN Office for the Coordination of Humanitarian Affairs. In light of this, nowhere promises bigger business opportunities than in Africa given the need to reinvent all sectors.
Tunisia-based agritech Beekeeper raises $640k in new round
- Tunisia-based agritech Beekeeper Tech has raised $640,000 in a round led by 216 Capital Ventures, with participation from business angels including Ibrahim Al-Rashid, co-founder of Saudi Arabia-based Resorts Holding, and Bridging Angels.
- Founded in 2021 by Khaled Bouchoucha, Beekeeper helps beekeepers increase the production of their hives through its tech-enabled equipment.
- These funds will allow Beekeeper to accelerate its deployment in new regions and expand its position in the Middle East and North Africa.
The global agritech sector is expected to reach nearly $200 billion by 2025 and Africa is well-positioned to play a vital role in advancing this market. With the strides made by startups like Beekeeper, the continent is fast becoming a global leader in the agritech space, having registered the highest number of agric-focused tech services in the developing world reaching over 30 million smallholder farmers as of 2021. Between 2016 and 2019, the local industry grew by 44% year-on-year.
Kenyan agritech startup Stable Foods raises $600k funding
- Kenya’s Stable Foods has raised $600,000 in funding to build out its climate-smart smallholder food production system.
- Stable Foods offers an integrated solution that includes Irrigation-as-a-service (IaaS), provision of inputs and offtake contracts, and training on regenerative agriculture best practices to smallholder farmers.
- The funding comes from Acumen Resilient Agriculture Fund (ARAF) and Mercy Corps Ventures and will be used to scale up Stable Foods’ proof of concept to 500 farmers by the end of 2023.
Source: Disrupt Africa
Nearly 20% of the world population lives in Africa, and yet the continent accounted for less than 2% of the global agrifood tech investment in 2021, leading to missed untapped opportunities by a lack of early-stage seed capital. That underlines the importance of Stable Food’s fundraising, which should help the startup scale its solution to a crucial continental problem. 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.
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