Investor Updates: March 24 2022 - Nigeria-based Kwik raises $2m

Nigeria-based Kwik raises $2m to expand offerings

Highlights

• Kwik, a Nigeria and French-based startup that provides logistics services to B2B merchants, from social vendors to e-commerce platforms, has raised $2 million in Series A funding. The financing round was led by XBTO Ventures.
• The two-year-old company, which raised a $1.9 million seed round last March, takes an average commission of 20% for each delivery.
• Kwik plans to use the funding for customer acquisition and to finance operations across Nigerian cities beyond Lagos and Abuja, as well as launch financial services.

Source: TechEconomy

Our Takeaway

Kwik operates in a crowded logistics and delivery space with well-known providers in Nigeria such as Gokada, and recently Uber, but the company has recorded significant growth since launching in Lagos three years ago. Kwik has onboarded more than 100,000 merchants who use its site and mobile apps to run the logistical, commercial, and financial needs of their businesses with over 75% of those being weekly active users.

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Sequence Ventures targets Egyptian startups via an $8m fund

Highlights

• Egypt-based VC Sequence Ventures is planning to invest $8 million in 10 tech companies this year via its Egypt Deep-Tech fund.
• The fund is currently in talks with 22 startups with a view to deploying capital in 10 transactions starting as early as May.
• Launched in October 2021, Deep-Tech plans to reach its first close of $8 million by the end of April, with two more closes ahead(ranging from $8-11 million each). The aim is to reach its $27 million final closing target.

Source: Wamda

Our Takeaway

The venture funding ecosystem in Egypt has experienced exponential growth over the past few years, specifically at a 117% CAGR between 2017 and 2021. Last year was particularly a new height for the ecosystem: record amounts of investment and transactions were closed while unprecedented investor participation backed the local entrepreneurial scene. More than 147 transactions were recorded as startups in Egypt raised a record-breaking $491 million in 2021, a 176% year-on-year growth

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Kenya’s Central Bank moves to regulate digital lenders

Highlights

• Digital credit providers (DCPs) in Kenya will have to disclose their sources of funds and provide evidence of the same after a law meant to regulate the sector came into effect.
• The new regulations published Monday by the Central Bank of Kenya (CBK) also require digital lenders to get a license from the country’s monetary authority or wind down their operations by September 2022. 
• Before now, the digital lenders were only required to register the businesses to begin operations in the country.

Source: Business Daily

Our Takeaway

More than 100 lending apps—including renowned names like Tala, Branch, Okash, and Opesa—operate in Kenya, providing unsecured and instant loans through mobile phones. While these companies offer much-needed consumer financing, there are concerns over how most operate, including the use of exploitative interest rates and debt-shaming recovery tactics, hence the need for regulation. More so, disclosing the source of funds will ensure that lenders are not engaging in financial crimes like money laundering.