Investors update: May 2 2023 - Nigeria’s Nomba raises $30m from Base10, Shopify, and others

Nigeria’s Nomba raises $30m from Base10, Shopify, and others

Highlights

• Nigerian payment service provider Nomba has raised $30 million in a pre-Series B investment to support the delivery of bespoke payment solutions for African businesses. 
• The round, which values the company at $150 million+ according to YCombinator data on its most valuable companies, was led by San Francisco-based Base 10 Partners. 
• Partech and Khosla Ventures, existing investors from its $5 million Series A round in 2019, participated, as well as new backers, including Helios Digital Ventures and Shopify, likely its first investment on the continent.

Source: TechCrunch

Our Takeaway

Across Africa, merchant acquisition is proving to be the “new” scramble for digital payments and services on the continent. In an estimated $800 billion informal trade economy comprising more than 56 million MSMEs, most merchants operate offline and with hard cash, with little or no exposure to the formalized, digital economy. These account for up to 90% of businesses on the continent and today, many startups such as Moniepoint, OPay, and FairMoney provide a range of digital business and management tools for different types of businesses.

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Kenyan women-only taxi service An Nisa plans Saudi expansion

Highlights

• Kenyan women-only taxi service An Nisa is planning expansion to Saudi Arabia after onboarding thousands of users in its home market.
• Founded by Mehnaz Sarwar in 2018, An Nisa Taxi went app-based last year and has more than 10,000 users.
• Self-funded to date, the startup has accumulated 10,000 users. It is now looking to raise external funding, as it works on an expansion to Saudi Arabia, where many of its partners are based.

Source: Disrupt Africa

Our Takeaway

Not often does an African firm—startup specifically—expand into countries outside the continent. But for An Nisa, there’s a significant opportunity in the Saudi market for a women-only taxi service. This is due to cultural norms and legal restrictions: a women-only taxi service would provide a safe and comfortable transportation option for female passengers, addressing a major concern for many Saudi women. Moreover, with the recent changes in regulations allowing women to drive, there is an increasing demand for female taxi drivers who can cater to the needs of other women.

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Global tensions put economic growth in sub-Saharan Africa at risk

Highlights

• Sub-Saharan Africa could stand to lose the most if the world were split into two isolated trading blocs centered around China or the United States and the European Union. 
• In this severe scenario, sub-Saharan African economies could experience a permanent decline of up to 4% of real gross domestic product after 10 years according to IMF estimates.
• Those losses are larger than what many countries experienced during the Global Financial Crisis, and to avoid them, Countries will need to build resilience to manage the inevitable shifts in trade and foreign direct investment.

Source: Bloomberg

Our Takeaway

Per the IMF, Africa’s economic prospects could be improved if the US and the EU ended their relationships with Russia, while sub-Saharan African nations continue to engage in free trade. This strategy, known as “strategic decoupling,” would redirect trade flows to other parts of the world, generating possibilities for new partnerships and potentially enhancing intra-regional commerce. As certain African countries derive advantages from access to new export markets and more affordable imports, the region as a whole would not suffer a decline in GDP. In fact, oil-exporting countries that supply energy to Europe may even experience a boost in their economies.