The main African tech strikes from September 2022

3 OCTOBER, 2022

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Pleased new month 🚀

This month began off on a bitter observe with information of one more coup d’etat in Burkina Faso.

Eight months after Lt-Col Paul-Henri Damiba overthrew the democratically-elected Burkinabe authorities and put in himself as (navy) president of Burkina Faso, one more military official has overthrown Damiba.

Final Friday, military captain Ibrahim Traore led a coup and introduced on nationwide tv that the army had seized power and ousted navy chief Paul Henri Damiba.

Counting the alleged tried coup in Mali, that is the third coup in Africa this yr.

CRYPTO MARKET


Bitcoin	$19,278	– 0.16%
Ether	$1,304	– 0.87%
BNB	$286	+ 1.09%
Solana	$32.76	+ 0.14%
Cardano	$0.42	– 0.93%
Identify of the coin Worth of the coin 24-hour share change		Supply: CoinMarketCap

* Information as of 20:30 PM WAT, October 3, 2022.

THE LEADING TECH MOVES FROM SEPTEMBER

Since February 2022, we’ve reviewed the main tech strikes from international locations throughout Africa.

Whereas some months like June are stuffed with information of tech layoffs, others like July include fraud allegations.

September was, by all accounts, a chill month. So what have been the main tech strikes introduced in it?

Let’s discover out!

1. FUNDING: ENERGY TAKES THE LEAD

In September 2022, African startups made 36 totally disclosed* raises totalling $383,465,000. To this point, this whole is the very best quantity raised in a month by African startups since June 2022, a 75.9 % improve from August’s $218,000,000. This month’s increase was led by Bboxx’s $200 million acquisition of PEG Africa.

Per sector, the highest three sectors in September are power, fintech and e-commerce. Power startups raised $201,000,000 (52.4%), fintech startups raised $87,945,000 (22.9%), and e-commerce/retail startups raised $35,550,000 (9.3%).

Per area, West Africa led with $313,045,000 of the funding. Subsequent is East Africa with $27,220,000, whereas South African startups got here an in depth third with $26,650,000. North Africa introduced within the lowest funding from September with $16,650,000 in disclosed funding.

The highest 5 disclosed offers of September 2022 are

Bboxx’s $200 million acquisition of Ghana-based cleantech PEG Africa.
Nigerian crypto alternate startup Yellowcard’s $40 million Series B raise.
Nigerian digital procurement platform Vendease’s $30 million raise.
South African biometrics platform iiDENTIFii’s $15 million raise.
Nigerian fintech NowNow’s $13 million seed round.

Observe: This information compiles solely funding offers introduced in September 2022. Raises are sometimes introduced later than when the offers are literally made.

This information is unique of estimated grants from accelerators like Techstars or Y Combinator.

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2. LAGOS SUSPENDED ITS TECH HUB AUDITS

The Lagos State Security Fee (LASG Security) in Nigeria guarded its phrases fastidiously in September.

First, LASG Security planned annual safety audits that may price tech hubs and co-working areas in Lagos ₦150,000 ($347) per yr.

The information of the charges was acquired with damaging suggestions on and offline, and the Fee promptly introduced that it will suspend the safety audits and, as an alternative, work to coach stakeholders.

3. UBER FACED REGULATORY HURDLES IN KENYA

Months after comparable regulatory hurdles compelled it to exit in Tanzania, September noticed Uber combating in Kenya.

Kenya’s Nationwide Transport and Security Authority (NTSA) deliberate to implement a regulation that caps fee for all ride-hailing firms within the nation at 18%. Uber is appealing to the Supreme Courtroom to nullify the regulation.

Uber may be for the laws however its drivers are usually not. In September, ride-hailing drivers staged another protest towards excessive fee charges in Kenya.

4. SAFARICOM ANNOUNCED ITS PLANNED SEPARATION FROM M-PESA

In September, telco Safaricom introduced that it will be splitting from its cellular cash service M-Pesa by January 2023.

The announcement comes two years after the enactment of Kenya’s Data and Communications (Modification) Invoice, which sought to separate all telcos from their cellular cash companies.

5. CBK LICENSED 10 DIGITAL LENDERS

In September, the 6-month ultimatum the Central Financial institution of Kenya (CBK) gave for all digital lenders to use for operational licences lapsed.

Solely 10 digital lenders, though the CBK did observe that it acquired over 228 purposes and remains to be reviewing many different purposes.

6. CELLULANT AND ORANGE PARTNERED WITH 8 BATSWANA BANKS

Final month, Orange Cash, the cellular cash service of Orange and pan-African funds firm, Cellulant, launched a partnership to allow card-to-wallet transfers for 8 banks in Botswana.

The partnership will allow prospects to switch cash on-line from any checking account to an Orange Cash pockets, even when they don’t have Orange Cash accounts.

7. SIXTY AFRICAN STARTUPS RECEIVED $4 MILLION FROM GOOGLE

September additionally noticed 60 African startups receiving equity-free funding from Google.

As a part of Google for Startups Black Founders Fund, startups like Eversend, Zuberi and Norebase will likely be a part of a 6-month coaching programme and obtain equity-free funding between $50,000 and $100,000.

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8. OVER 2,000 NIGERIAN INVESTORS SUED IN KENYA

In relation to the $59.2 million frozen by Kenya’s Asset Restoration Company (ARA) in fraud investigations levied towards Nigerian startups in Kenya, over 2,000 Nigerian traders have petitioned courts in Kenya to have their monies unfrozen.

The two,468 Nigerian traders declare they have been swindled to the tune of Ksh 1.44 billion ($11 million) by a doubtful individual through transactions on Flutterwave, one of many startups being investigated by the ARA. The traders now need their cash unfrozen.

9. FREE TRANSFERS IN TANZANIA

Final month, the Tanzanian authorities announced its new plan to encourage extra folks to make use of cellular cash.

Beginning in October, Tanzanians will now not need to pay switch charges on withdrawal of money by means of financial institution brokers and ATMs for Tsh30,000 ($12.81) and beneath.

10. SHELL ACQUIRED DAYSTAR

After three years of negotiation, world oil large, Shell, acquired Daystar Power, a West African solar energy firm for an undisclosed amount of cash in September.

The acquisition has been within the works since 2019 and Daystar Energy caved in as a result of rising demand for its providers.

11. EBANX EXPANDED INTO AFRICA

Final month additionally noticed multinational fintech firm EBANX announce plans to expand into Africa with a deal with Kenya, Nigeria and South Africa.

In South Africa, the fintech plans to implement web banking options whereas its foray into Nigeria and Kenya will see it providing cellular cash and USSD providers.

12. UGANDA PASSED THE COMPUTER MISUSE BILL

On the tech laws facet, the Ugandan parliament in September passed the Pc Misuse (Modification) Invoice, 2022 which many critics imagine will likely be used to suppress digital rights and free speech.

13. NIGERIA CANCELED COMMUNICATIONS TAX

Final month, the Nigerian authorities additionally shocked folks by halting a new telecommunications tax in its tracks.

The tax, a 5% levy, was supposed to enter impact this yr however communications and digital financial system minister, Isa Pantami, argued that the telecommunications sector is already overtaxed.

14. JUMIA PARTNERED WITH ZIPLINE FOR DRONE DELIVERY

Jumia, Africa’s main e-commerce participant, partnered with Zipline, a world prompt supply firm, to supply on-demand drone supply providers to the rising variety of e-commerce gamers on the continent.

This launch comes after a pilot section of this logistics service performed in Ghana a number of months in the past.

Observe: This record is in no explicit order.

TC INSIGHTS: A NEW ERA

Throughout the globe, the monetary providers business is confronted with competitors from fintech startups. They leverage expertise to extend entry to monetary providers to beforehand underbanked and unbanked segments of the inhabitants. Nigeria isn’t any exception to this rule. Buoyed by the profitable acquisition of native startup Paystack by fee large Stripe in 2020, fintech startups within the nation acquired over 60% of the $1.3 billion raised by Nigerian startups final yr.

The success achieved by these startups lies an awesome deal within the path created by industrial banks within the nation within the final twenty years.

“Nigerian banks have been the incubators or early supporters of Fintechs in Nigeria. For instance, Flutterwave grew out of Entry Financial institution. Teamapt grew out of Constancy Financial institution and Wema Financial institution. Paystack’s reference to banks was important for early success,” Adedeji Olowe, founding father of Lendsqr and a Trustee of Open Banking Nigeria, shared in a textual content with TechCabal

Unhappy by the background position, industrial banks have floated fintech verticals to rival the present fintech startups. Hydrogen, Squad, Alat, and PaywithSpecta are fintech merchandise fromAccess Financial institution, GT Holdings, Wema Financial institution and Sterling Financial institution respectively.

In 2020, Nigeria’s high 5 banks, generally often called FUGAZ made $1.56 billion in income, an enormous disparity in comparison with some fintechs who function at a loss regardless of their sky-high valuations. But, an enormous monetary struggle chest doesn’t all the time equate to market dominance in unfamiliar terrain.

“Frankly, the banks haven’t any likelihood of success. They might pump cash into these fintechs and most of them would fail abysmally. Banks would run the fintechs like a financial institution; gradual and filled with crimson tape. Nothing would transfer quick. Buyer expertise and assist can be poor. Retailers and different customers who’re used to a greater expertise with fintechs wouldn’t care. Banks wouldn’t have the ability to appeal to the kind of expertise that may make issues occur. Sensible abilities are frightened of banks,” Olowe additional shared

Versus competing with fintechs, banks might accomplice with them to maximise their comparative benefits and obtain their aims. But the results of earlier partnerships serves as a cautionary story. The distinction in organisational outlook and buildings reduces the success of those partnerships.“Banks and the fintechs don’t have the identical DNA, the distinction which might be papered over with easy partnerships however which might be disastrous with a more in-depth tie-in required for the kind of partnerships that banks need. For instance, fintechs are lax with processes and governance whereas banks are gradual, plodding, and bureaucratic,” Olowe concluded.

It’s nonetheless a bit early to foretell the result of banks’ foray into the fintech area however the established order is unlikely to face any type of disruption. Though, extra partnerships between banks and better-governed fintechs will spring up within the coming years.

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