Investors update: Safaricom sets up two new units to back startups

Safaricom sets up two new units to back startups

Highlights

• Safaricom shareholders have approved two new subsidiaries, one dedicated to investing in seed-stage and another in growth-stage start-ups.
• These developments, approved at Safaricom’s 15th Annual General Meeting (AGM), represent a major step towards supporting tech entrepreneurs and fortifying Safaricom’s role as a key enabler of the Kenyan tech community.
• The incorporation of a company limited by guarantee to invest in seed-stage startups builds on the Spark Fund—an investment entity by Safaricom governed by a Board of Trustees—to support seed-stage startups across Kenya.

Source: TechCabal

Our Takeaway

Safaricom’s move to double down on venture capital, which comes a few months after Naspers shut down its Foundry—one of the most notable corporate venture capital (CVC) units in Africa with one of the biggest indigenous investment funds—reflects a growing interest among investors, even corporate organizations, in backing African startups. It also signifies a changing VC terrain, with an evident influx of corporate-facilitated funds in the space (the majority in South Africa), led by multinational giants Naspers, Standard Bank, Nedbank, and Multichoice.

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Cloud analytics startup Terragon closes $9m Series B

Highlights

• Terragon, the Nigerian cloud analytics and marketing platform that provides data about the continent’s booming customer markets to businesses, has raised $9 million in a Series B round. 
• Previous funding raises include $5 million from TLcom Capital in 2018 and an undisclosed investment from VestedWorld, an Africa-focused early-stage investment fund manager in 2021.
• The round, led by Orange Ventures, with participation from TLcom Capital, LoftyInc, Sango Capital, VestedWorld, and Western Technology Investment (WTI), will help enhance the platform’s cloud-native capabilities and kickstart its pan-African expansion.

Source: TechCrunch

Our Takeaway

In Africa, about half a billion people utilize mobile services, and mobile phone numbers continue to be the primary identifier for digital services because many people do not have email addresses. Terragon has thus developed a framework in conjunction with data from online sources such as Datadog and Databricks to enable local and foreign advertisers and marketers on the continent to continue acquiring the data needed to keep their businesses alive. The increasing investment, as well as interest from French telecom heavyweights and cooperation with AWS and Microsoft, validates Africa’s market maturity in cloud and martech.

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Alerzo bags Mastercard deal to digitize Nigerian SMEs

Highlights

• Mastercard has joined forces with Alerzo to address the challenges faced by small and medium-sized enterprises (SMEs) in Nigeria’s Fast-Moving Consumer Goods (FMCG) sector.
• The partnership aims to empower businesses by offering digital payment solutions, financial training, and access to credit, ultimately leading to increased sustainability and success in the market.
• Both parties plan to leverage Alerzo’s expertise in B2B e-commerce and Mastercard’s global infrastructure and network to make digital payments more accessible to businesses of all sizes.

Source: ABC

Our Takeaway

African markets, though diverse, have some common themes, one of which is the largely fragmented FMCG sector. 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. For small informal retailers, much of their time is spent on fulfilling orders and struggling without sufficient capital. Like Alerzo, 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 sector.