Weekly Investor Update (September-WeekFour-2024)

9 min Read September 27, 2024 at 5:00 PM UTC

Monday

Algerian Edtech Startup LabLabee Secures $3.4M Seed Funding

LabLabee, an Algerian edtech startup focused on 5G, cloud, and AI technologies, has raised $3.4 million in seed funding to accelerate adoption across the telecommunications and industrial sectors.The round was led byReach Capital, with support fromClassera,Brighteye Ventures, ande& capital. Prominent business angels Cedric Sellin and Mohammed Husamaddin also participated.Founded in 2021, LabLabee provides hands-on learning experiences in network technologies. The startup plans to expand its footprint in the EMEA region and enter the U.S. market through partnerships with major cloud providers like AWS, Azure, and GCP

LabLabee’s seed round underscores the rising demand for practical, skills-based training in 5G and cloud technologies. By offering hands-on labs for telecom professionals, the startup addresses critical skill gaps in cloud-native technologies like 5G, AI, and Kubernetes. With expansion plans targeting the U.S. market and partnerships with top cloud providers, LabLabee is positioned to play a pivotal role in advancing education and technology in the telecommunications sector globally.

Startup-Led Group Launches $42M Education Initiative in Egypt

A coalition comprisingEYouthand prominent Egyptian businessmen, including Mohamed Farouk, Ahmed Tarek, Mustafa Abd Ellatif, and Mokhtar Ahmed, has launched NextEra Education, an initiative to modernize Egypt’s educational system with a $42 million (EGP 2 billion) investment.NextEra Educationaims to transform traditional learning by integrating advanced AI technologies and overhauling outdated curricula. The initiative will collaborate with prestigious international universities to introduce world-class education in Egypt.The programs offered will focus on specialized fields such as programming systems, cybersecurity, artificial intelligence, business administration, data science, and analytics. This marks a significant step toward aligning Egypt’s education system with global standards and preparing students for the digital economy.

Investors are increasingly backing education-focused technology startups in Africa, as they move to capitalize on an obvious market and economic opportunity while driving tangible educational impact in the fast-growing region. The past few years have seen a rise in the adoption of edtech innovation on the continent. Available projections indicate that the market will grow into a multibillion-dollar industry, driven by increasing demand for online learning solutions, e-books, and educational apps. However, significant challenges remain for players in the space, such as access to funding and route-to-market which investors can help address.

US VC Firm Sultan Ventures Acquires Egypt’s Acasia Group

US-based venture capital firmSultan Ventureshas acquired Egyptian angel investment syndicate and incubatorAcasia Groupfor an undisclosed amount.Founded in 2011 as Cairo Angels, Acasia Group became one of the most active early-stage investors in the Middle East and Africa. Acasia’s portfolio includes angel investments and impact-driven programs for startups.The acquisition includes Acasia Impact and Acasia Angels but excludes Acasia Ventures, which will remain independent under the leadership of Aly El Shalakany and Biola Alabi. Sultan Ventures, founded in 2009, specializes in early-stage investments and startup ecosystem building. The acquisition expands Sultan Ventures’ presence in the Middle East and Africa.

Sultan Ventures’ acquisition of Acasia Group marks a strategic expansion into the Middle East and Africa, leveraging Acasia’s deep-rooted presence in these regions. The partnership enhances support for early-stage startups, offering a bridge between the US and MENA markets. Acasia’s reputation in empowering entrepreneurs will complement Sultan Ventures’ venture acceleration expertise, providing increased opportunities for founders in emerging markets to scale innovative businesses.

Shell-Backed Ghanaian Startup Kofa Expands Battery-Swapping Network

Ghanaian battery network startupKofais expanding its battery-swapping infrastructure with an $8 million special purpose vehicle (SPV), supported by a $3 million commitment fromShell Foundationand the UK Government’sTransforming Energy Access(TEA) platform.Kofa aims to build an affordable, customer-centric electricity network powered by renewable energy and its high-capacity Kore2 battery system. Partnering with impact investor PASH Global, it will deploy 6,000 batteries and up to 100 swap stations across Ghana.This initiative will provide clean energy for electric two-wheelers and small businesses, helping to reduce reliance on petrol generators and promote renewable energy adoption. The SPV will focus on battery network management and operational support, allowing users to access fully charged batteries on demand. Kofa also plans to expand into Kenya and Togo soon.

A wave of innovators—local and foreign startups and more mature companies—have emerged in recent years to bring EVs to African roads.They provide services that include local assembly and sales of vehicles, asset financing, battery-as-a-service, etc. across two, three, and four-wheelers in a market projected to grow from $12bn in 2021 to $21bn by 2027.There is no readily available data to track progress but as EV numbers grow, so does the need for charging infrastructure.On that front, companies likeKofain Ghana are working to build networks of charging and battery swap stations across urban areas.

Early-Stage Investor Uncap Launches $33M Fund for African SMEs

Uncap has launched Unconventional Capital, a $33 million fund to provide non-dilutive, revenue-based financing to small and medium-sized enterprises (SMEs) across Africa. Its alternative financing model, established in 2019, focuses on supporting early-stage businesses without equity dilution.The fund, backed by institutions such as theBill & Melinda Gates Foundationand theBayer Foundation, aims to unlock growth for African SMEs in high-impact sectors. Partners includeSAIS, a German-funded agri-tech initiative, andO-Farms, a circular agriculture program.Uncap’s proprietary SaaS platform, Level, has been separated to allow the firm to concentrate on providing tailored financing solutions. Unconventional Capital seeks to overcome capital-raising challenges for African SMEs, which account for 90% of businesses on the continent.

Small and Medium Enterprises (SMEs) are vital for Africa’s economic growth, yet face significant financing challenges. A study by Investisseurs & Partenaires revealed that 40% of African SMEs cite access to finance as their primary growth constraint. The current funding gap is estimated at over US$140 billion, severely impacting SME sustainability and expansion. This financial shortfall forces millions of SMEs to cease operations within months of starting, drastically limiting their potential to become future economic powerhouses. The lack of adequate funding not only hinders individual businesses but also impedes the overall economic development of African nations. By addressing this financing gap, SMEs could better contribute to job creation, innovation, and economic diversification across the continent. Improving access to capital for SMEs is crucial for fostering a robust and dynamic business environment in Africa and unlocking the full potential of these enterprises.

Ecobank CI Sees Net Profit Rise 6.2% in First-Half 2024

BRVM-listed Ecobank Côte d’Ivoire (ECOC), the Ivorian subsidiary of the Ecobank Group, reported a net profit of 25.39 billion FCFA ($43 million) in the first half of 2024, marking a 6.2% increase from the 23.92 billion FCFA recorded at the end of June 2023.This growth was largely driven by a 24.1% reduction in the net cost of risk, reflecting strong credit risk monitoring and improved recovery efforts. While customer receivables grew by 7.7% to 1,014.59 billion FCFA, deposits contracted by 2.7%, reaching 1,282.96 billion FCFA.The bank’s net banking income increased by 10.6%, from 53.16 billion FCFA in the first half of 2023 to 58.79 billion FCFA in 2024, due to a 3.2 billion FCFA rise in net interest margin and a 2.4 billion FCFA increase in commissions.

Ecobank CI’s solid financial performance, marked by rising net profits and improved credit risk management, continues to drive investor confidence. Despite a 5.62% stock price correction, the stock has achieved a year-to-date performance of 23.53%. The bank is poised to benefit from Côte d’Ivoire’s projected 6.8% economic growth, which could stimulate demand for banking services, particularly credit. Investors remain optimistic about the bank’s future outlook given its continued financial resilience and market potential.

Bitcoin Climbs Above $64,000 as Crypto Market Rises on Fed Easing

Cryptocurrencies have surged in the past week, driven by improved sentiments on rate cut announcements in the US and China. Bitcoin saw a 1.74% increase, trading above $64,000 at $64,232.75, while Ethereum climbed 0.83% to $2,643.93. Dogecoin also experienced a 2.23% rise to $0.11, according to data from Binance.China’s rate cut announcement has fueled optimism in the crypto market, supporting the upward trend across major cryptocurrencies. Binance Coin (BNB) is also trading above $600, signaling further potential gains. However, resistance levels could slow momentum.The Federal Reserve’s recent50 basis point rate cut, lowering the federal funds rate to 4.75%-5.00%, also sparked debate about the potential for an impending recession, given historical patterns from 2001 and 2008. Despite these concerns, the crypto market remains optimistic, with key targets for Bitcoin at $65,000 and Ethereum at $2,700.

Cryptocurrencies are benefiting from global monetary easing, with bullish trends pushing Bitcoin and Ethereum higher. While concerns over economic downturns persist, optimism in the crypto market remains strong, supported by favorable macroeconomic developments such as rate cuts in both China and the U.S. Investors are watching closely for further gains as key resistance levels are tested.

Nigeria Raises Interest Rates to Record 27.25% to Combat Inflation

The Central Bank of Nigeria raised its benchmark interest rate to a record 27.25%, the 13th consecutive hike, as part of efforts to control inflation and stabilize the naira.The move, announced byCBNGovernor Olayemi Cardoso on Tuesday, surprised financial markets, with only one of 12 economists in a Bloomberg survey predicting the increase. Themonetary policy ratewas previously 26.75%.The central bank has raised rates by 15.75 percentage points since May 2022 to combat soaring inflation, which slowed to 32.2% in August but remains high. New inflationary pressures have emerged from a 45% increase in gasoline prices and flooding in Nigeria’s food-producing regions.

The decision comes amid growing public discontent over the high cost of living. Protests in August, sparked by rising fuel prices, saw demonstrators demanding the reinstatement of fuel subsidies, lower electricity tariffs, and reduced import duties. Security forces cracked down on protests, resulting in 21 deaths and over 100 arrests. The CBN’s aggressive rate hike reflects its ongoing battle with inflation and economic instability. While the move aims to stabilize prices and the naira, it is likely to deepen public frustration over living costs, amid calls for economic relief measures, including reinstating fuel subsidies and lowering tariffs.

Helios Leads $100M Round in M2P to Support Its Africa Expansion

Helios Investment Partners, one of the largest Africa-focused private investment firms, has led a $100 million Series D funding round in M2P Fintech, a Banking as a Service (BaaS) and Infrastructure API provider. The funding, comprising both primary and secondary share capital, will fuel M2P’s global expansion, with a strong focus on Africa.Founded in 2014 and headquartered in Chennai, India,M2P Fintechprovides financial technology services to over 200 banks, 300 lenders, and 800 fintechs, serving more than 50 million users across 30 markets in Asia Pacific, MENA, and Oceania.With the investment fromHelios, M2P will leverage the firm’s expertise, regulatory guidance, andvast networkin Africa to deepen its presence in the continent’s underdeveloped BaaS market.Helioshas a strong trackrecordin African fintech.

Africa’s fintech market is booming, fueled by rapid innovation and financial inclusion. The African Banking as a Service (BaaS) and infrastructure API market, however, remains underdeveloped, with limited modern providers. M2P, with its broad product offering and growing geographic presence, has a significant opportunity for market penetration. Helios, a 20-year-old firm, has backed high-growth financial services and fintech businesses across the continent, capitalizing on the unprecedented African development and innovation, including Fawry, Interswitch, Tpay, and Thunes.

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