#22: January's African Tech Roundup.
Summary of January's tech news, opportunities and country specific startup news.
👋🏾 Hello, my peopleee!
Happy New Year! Welcome to the hundreds of people who have joined the #vizifam since our September issue. I am so glad to have every single one of you onboard! Please take this as my welcome to you.
It’s insane that I disappeared for three months. In my defense, life was happening. What matters is that we’re back and better.
I hope you had a great holiday season, and I hope the month of January treated you well. Most importantly, I hope your New Year’s resolutions have made it through the first month lol.
We have a lot to cover in today’s issue, so let’s get to it!
Interesting Product Finds:
Sandbox by PIP:
If you’ve ever had to hire someone, you can attest to how difficult it is to find good talent. So I was extremely excited when I stumbled upon this product launch.
Sandbox is like a tinder for product managers. They have a matchmaking service for product managers and the companies who need them. They also provide specialized services to product managers.
I think it’s pretty amazing for a couple of reasons, one being that it started with a community called People in Product, and another is that the co-founder is an OG reader of this newsletter [hi
I love the product management-as-a-service direction, and I think it holds a lot of potential. Somewhat unrelated, but I think talent collectives will become more popular in the coming months. If you’re a PM or a hiring one, I recommend you check them out!
Fez Safe Lockers:
Fez Delivery, a Nigerian logistics-tech startup, recently launched automated safe lockers that make it easier for people to safely and conveniently drop off and receive packages.
Personally, I think this is amazing and goes to show how tech is making the lives of Africans easier. Receiving and sending packages in Nigeria, especially Lagos is not an easy feat. The lack of a proper mailing system has kept the process manual and heavily dependent on dispatch riders for so long and it’s so amazing to see Fez disrupting the process.
AfriLabs Connect Deal Room:
AfriLabs recently launched the AfriLabs Connect Deal Room. The goal of the platform is to connect African startups with investors and vice-versa. They’re looking to invest in Seed to Series C stage startups.
If you're a startup in Africa or an investor who wants to invest in African startups, then the AfriLabs Connect Deal Room might be worth checking out.
Product News:
The Nigerian Buy-Now-Pay-Later startup, Zilla has paused their BNPL service to focus on Zillawire, their cross-border payment:
Some people have stated that their customers do not understand how credit works as their biggest challenge, which is somewhat understandable.
I have a hot take sha. I feel like the Nigerian ecosystem might not be mature enough for BNPL solutions. And when I say mature enough, I mean we’re not at the point where it can become mainstream [or cross the chasm, in technical speak]. I believe so for a lot of reasons; lack of proper credit infrastructure and education being key ones. Interestingly, the BNPL model seems to be thriving in South Africa, with the space enjoying a positive growth rate of 10-15% per month.
Zilla instead seems to be shifting its attention to Zillawire, a platform that allows Nigerians to pay international suppliers all over the world. It seems like they’re doubling down on their B2B products, which is very interesting. There’s still a lot we don’t know about this new product, but I’m hopeful about it.South-African Digital Bank, Tyme Bank breaks record as the first profitable African Digital Bank:
December 2023 was their first month of being profitable since their launch in February 2019.
They operate a hybrid model [a mix of digital channels and in-store kiosks]. I pointed this out because there have been a lot of conversations about the importance of hybrid strategies for customer acquisition in the African market.
Key Moves in the Market: Acquisitions, Fundraises & Expansions:
Health-Tech:
Ezdehar, an Egyptian private equity firm, has secured a $10 million minority stake in Yodawy, a healthtech startup that delivers prescriptions to patients in Egypt.
Artificial Intelligence:
DXwand, an Egyptian AI startup, has received $4 million in Series A funding to expand its customer service and employee assistance chatbot platform across MENA.
Vodafone and Microsoft have entered a $1.5 billion strategic partnership to introduce generative AI, digital services, and cloud solutions to over 300 million businesses and consumers across Africa and Europe.
E-Commerce:
Two of Africa’s biggest e-commerce companies are in early talks to merge into a single company. The companies in question are:
Egyptian B2B e-commerce startup MaxAB &
Wasoko, a Kenya-based e-commerce player with operations in Tanzania, Rwanda, Uganda and Zambia.
The deal would be the largest private tech deal in Africa, and would create a company with a combined valuation of over $600 million. The merger is expected to be completed in the first quarter of 2024.
Aerospace:
South African startup Cloudline has developed autonomous airships that can operate for 10 hours and cover more than 400 km. This is cheaper and more efficient than drones and helicopters, and it can reach areas that are difficult or expensive to reach by other means. The startup has raised $6 million in funding and is planning to expand into Namibia and Mozambique, and then into the global market.
Social Commerce:
African fashion and beauty e-commerce platform Maka raised $2.65 million in pre-seed funding to address trust issues in the buying process and help creators monetize their influence. The platform uses videos to connect users with trusted creators and allows customers to share their feedback through video reviews.
Fintech:
Swedish multinational, Ericsson, is partnering with MTN MoMo, Africa's largest mobile money platform, to expand financial inclusion in Africa and provide convenient, secure transactions to users.
Ed-Tech:
Egyptian Edtech startup Edura has successfully raised pre-seed funding to further develop its interactive learning platform and expand its reach.
Nigerian Edtech startup AltSchool Africa has expanded to Kenya to provide specialized courses to help Africans transition into global technology roles.
Egyptian Edtech startup iSchool has received $4.5 million in funding to expand its coding education programs to six more countries in the MENA region and Sub-Saharan Africa.
Kuwaiti EdTech company Baims acquires Egyptian EdTech company Orcas for $11 million, expanding its services to include personalized tutoring and test preparation.
Investment Funds:
Seedstars Africa Ventures, a pan-African venture capital fund, received a $30 million capital commitment from EIB Global to invest in Seed and Series A startups, bridging funding gaps in Francophone Africa and beyond the big four (Egypt, Kenya, Nigeria and South Africa).
E4E Africa, a South African venture capital firm, has successfully raised US$30 million for its second fund and is actively seeking new investors to expand its reach. The fund focuses on investing in high-potential startups in Sub-Saharan Africa, particularly in fintech, education and employment tech, e-health, and energy solutions.
The United Nations Development Programme (UNDP) has launched the Timbuktoo Initiative, a $1 billion innovation fund to invest in African startups. The fund will be focused on; fintech, trade, logistics, ecommerce, healthtech, cleantech, creative industry, smart city/mobility, edtech, traveltech, agritech, and will be invested across eight African cities [Lagos, Cairo, Kigali, Nairobi, Cape Town, Casablanca, Dakar, and Ghana].
Africa-wide updates:
Musings on Internet Penetration in Africa:
Africa's internet scene is seeing a lot of action these days. This is mostly due to the surge in mobile phone ownership, government initiatives, and the accessibility of satellite internet services.
Starlink’s arrival in Africa has further accelerated the growth of internet access, and this has sparked tough competition among African internet service providers. The governments of South Africa, Ghana and Zimbabwe have even gone as far as banning Starlink, with some countries banning it for seemingly concrete reasons. I believe the governments of these countries have been lobbied by local ISPs, and are looking to serve their interests. It wouldn’t be the first time.
What matters is that Starlink’s entry has forced African ISPs to step up their game. As a result, African ISPs are now trying harder to provide better services and connectivity to their users. They seem to be actively responding to the growing demand for internet access by offering faster speeds and more affordable plans. The hope is that they are able to better establish their dominance in the market and keep their customers. I guess we’ll just have to watch it play out.
One thing we can all agree on is that the growth in internet access is beneficial to everyone, and its continuous growth can only be good news for the continent. With better internet access, businesses are becoming more competitive, individuals are being empowered, and education is improving. As a result, Africa is poised for continued economic growth and development.
Here are some specific examples of internet-related activities happening across Africa:
In Mozambique, the government has invested $30,000 [2 Million Meticals] to provide free internet to Inhaca Island.
Sonatel, Senegal's largest telecom operator, has become the first country in West Africa to launch 5G commercially.
Benin has welcomed Starlink, a satellite internet service from SpaceX, which is now available in Benin for $99 per month.
Tanzania has secured orbital space for its maiden satellite launch. The launch is expected to take place in 2024.
MTN has announced a partnership with Starlink and AST to revolutionize African connectivity. The partnership will see MTN use Starlink's satellite internet service to provide connectivity to underserved areas in Africa.
2023 African VC Funding Year in Review:
If you’re active in the ecosystem, you’ve probably seen a ton of funding year-in-reviews by now so I will spare you the details and get straight to the point.
A caveat: There is some discrepancy between the data gathered by three main venture data reports. So if you see different data elsewhere, you know why.
African startup funding declined in 2023, reaching a total of $3.5 billion compared to $6.45 billion in 2022 [Source: Partech]
The decline in funding was attributed to several factors, including global economic uncertainty, the war in Ukraine, and regulatory changes in some African countries.
The African tech ecosystem faced a funding crunch in 2023, leading to layoffs, closures, and a reevaluation of business models.
The top three sectors for funding in 2023 were fintech, cleantech and e-commerce.
The largest funding round in 2023 was a $200 million Series C round raised by Nigerian fintech startup Flutterwave.
Francophone Africa saw a significant increase in investment in 2023.
Investors are beginning to look beyond the traditional tech hubs of Nigeria, Kenya, South Africa, and Egypt.
Some investors are worried that the decline in funding could lead to a slowdown in the growth of the African startup ecosystem. Others believe that the ecosystem is resilient and will be able to weather the current storm. The jury is still out on whether the decline in funding will have a lasting impact on the African startup ecosystem.
Briter Bridges, a research firm that tracks African startup funding, argues that there is no need for alarm over the decline in funding in 2023. They pointed out that the number of funding deals in Africa is still increasing, and that the average funding round size is also still growing. They believe that the decline in funding is a temporary blip and that the African startup ecosystem is on a strong trajectory.
I guess we’ll just have to watch things play out this year.
P.S.: We go a little in-depth into this in our monthly roundup podcast, so be on the lookout for it.
Around Africa in one glance:
Keep an eye on these African Product & Startup News. More details in the sources & related readings doc.
Africa:
Amazon Prime Video is pulling the plug on its Africa Originals program, leaving many in the African creative community feeling disappointed.
Techstars ARM Labs Lagos accelerator has launched its second cohort, which includes 12 startups across different verticals.
A growing number of European investors are eager to invest in African startups. However, Africa needs to address challenges like weak infrastructure and political instability to attract more investment.
Iyin Aboyeji, co-founder of Andela and Flutterwave, is launching a new accelerator program called Accelerate Africa to support the next generation of African startups.
Ivory Coast:
Ivory Coast-based fintech Julaya has raised $7 million in funding, including a $5 million pre-Series A round, and has seen a 4x return for its early investors.
Nigeria:
Pade, the Nigerian HRTech startup, disbursed over ₦11.4 billion in salaries to its customers in 2023. This is a 41.1% increase from the ₦8.1 billion disbursed in 2022.
Nigeria's government is investing $5 million in 45 AI projects across sectors like healthcare, education, finance, and sustainability.
Wyclef Jean and Caribbean International Commerce are partnering to build a $25 million technology hub in Plateau state, Nigeria.
Afri-Venture Capital is launching a $100 million venture fund to invest in the innovative ideas of young Nigerian tech startups, starting with Northern Nigeria.
Nigerian crypto startups Quidax and Luno are among those seeking a license from the Security Exchange Commission (SEC) after the central bank lifted a ban on crypto-related bank accounts.
Rwanda:
German biotech company, BioNTech, opens a new mRNA vaccine manufacturing facility in Kigali, costing $150 million and producing up to 50 million doses per year.
Rwanda is making waves in the African tech space with initiatives like the Centre for the Fourth Industrial Revolution Rwanda, the National AI Policy, and a Personal Data Protection and Privacy Law. The government's support and infrastructure investments have attracted international investors and helped local startups flourish. It's also hosting top tech-related organizations like BioNTech's African vaccine plant, Norrsken House Kigali, and Carnegie Mellon University Africa.
Francophone Africa:
Women-focused investment fund WIC Capital has secured a £1 million loan from FSDAi Nyala Facility to invest in women-led businesses in Francophone Africa.
Kenya:
Kenya's mobile money sector saw its slowest growth in 16 years in 2023, due to the government's decision to raise excise duty on transaction fees.
Over 300,000 jobs are available for Kenyan youth in Google, Intel, and Apple due to successful negotiations between the Kenyan government and the companies.
Safaricom, M-PESA Africa and Sumitomo Corporation have launched a new accelerator program for early-stage startups in the fintech and content space.
alGROWithm is expanding its training programs into new African markets and offering scholarships for aspiring Growth Hackers with funding from Digital Africa.
TikTok has launched a $1.49 million fund in partnership with Yunus Social Business to support small and medium-sized enterprises (SMEs) in Kenya.
Somali:
In Somalia, Guurdoon, a dating app designed to help users find compatible marriage partners, has gained popularity since its 2022 launch. The app differs from Western dating apps by focusing on compatibility and cultural values.
Ghana:
Ghana to become visa-free for all Africans in 2024
Some project that Ghana's tech ecosystem might be stagnant in 2024 due to a lack of funding, uncertainty about open banking, elections and a struggling economy.
Ghana has granted over GHS 100 million to startups and MSMEs to create jobs and boost the economy.
Tanzania & Nigeria:
The World Bank has found that enhanced internet coverage over three years contributed to a seven per cent decline in extreme poverty in Nigeria and Tanzania.
Democratic Republic of Congo (DRC):
The Democratic Republic of Congo emerged as a new tech hub in Africa, raising $62 million in startup funding in 2023, the highest amount in the Central African region.
Uganda:
Uganda is developing a National Start-Up Policy to support local startups and make them more competitive. The policy will address issues like low innovation, stagnated growth, low startup scalability, low startup sustainability, and unfair competition.
South Africa:
South Africa's FSCA will grant crypto asset service provider (CASP) licenses to 50 companies in the coming weeks. This is a positive development for the crypto industry in South Africa.
South African e-Commerce group, Takealot appoints a new CEO amidst Amazon threat and regulatory challenges.
Ethiopia:
A new incubator, weVenture, has been founded to support and grow early-stage startups in Ethiopia.
Ethiopia's tech startup ecosystem is booming, with VC funding rising from $0.65 million in 2019 to over $6 million in 2022.
Ethiopia has the potential to become Africa's next fintech giant, thanks to its large unbanked population, supportive government policies, and rapidly growing mobile penetration rate.
Zambia:
Zambia is establishing free Community Digital Transformation Centers (CDTCs) to increase internet penetration using SpaceX's satellite internet service, Starlink.
Gambia:
The Gambia Tech Project, funded by the French Embassy, helped incubate 40 startups, trained 600 youths, and gave them grants to support their businesses.
Zimbabwe:
Despite raising over $1 million, Jamboo remains the exception rather than the rule in Zimbabwe's startup scene due to a small market, poverty, currency issues, and a country profile that raises concerns among international investors.
Mozambique:
The Mozambican government has installed a new free internet zone, Kanyaka, on Inhaca Island, which will provide free internet access to over 6,000 residents and benefit the local community.
Mauritius:
Financial Services Commission of Mauritius (FSC) has launched a new Fintech and Innovation webpage to provide a comprehensive resource hub for the financial services and fintech industry in Mauritius.
Tanzania:
Tanzania is leading the way in the adoption of 3D printing technology, which is expected to revolutionize manufacturing, construction, and spare parts production in the country.
The Zanzibar government has implemented a new digital financial system, BAMAS, which has improved the efficiency, transparency and service delivery of the government.
Tanzania has secured a spot for its first broadcasting satellite, which will improve broadcasting services and cut costs. The country has also acquired frequencies for 5G, which could revolutionize internet speed.
Gabon:
World Bank provides a $68.5 million loan to Gabon to modernize legal identity systems and increase access to digital public services.
Namibia:
Despite Namibia having several innovative startups, it struggles to attract venture capital due to macroeconomic deficiencies, lack of technical talent, and stringent regulatory requirements.
Opportunities: Courses, Fellowships & Accelerators.
All the relevant links are here
Courses:
Ahead Mini-MBA: Entrepreneurship training for aspiring business leaders in Africa
HarvardX’s Entrepreneurship in Emerging Markets: 7-week online course for aspiring entrepreneurs in Africa
Fellowships
Savvy 2024 Fellowship: Global impact fellowship for young leaders
Africa XYZ’s Vision 2030 Fund I: Fund to empower 300 million youths in Africa
Injini Mastercard Foundation EdTech Fellowship: Fellowship to support the development of EdTech solutions for Africa
CcHub, Mastercard Foundation Edtech Fellowship in Nigeria: Fellowship to support the development of EdTech solutions in Nigeria
Westerwelle Young Founders Programme 2024: Accelerator for young founders from Africa
Accelerators
MEST: 12-month entrepreneurial training program
Spark Accelerator for Kenyan startups: Accelerator for Kenyan startups
BlueInvest Africa: Accelerator for Blue Economy Ventures
Talent 4 Startups Program: Program to support the development of digital education startups in Africa
Baobab Network Fund: Network for African entrepreneurs
Events
2024 Africa Tech Events (List of upcoming tech events in Africa)
On an unrelated note:
Here are four of my favourite reads and listens this week:
Hidden Potential: The Science of Achieving Greater Things by Adam Grant
The Villager: How Africans Consume Brands by Feyi Olubodun
Signing Out:
Alright, folks! We’ve come to the end of our first issue of the year! I hope you found it insightful. If you did, please let me know in the comment section. Your thoughts light up my day, so I'd love to hear them!
Also let me know what topics you’d love for me to cover this year.
I have to say, putting this together was tougher than usual but I’m glad I scaled through. Unfortunately, I didn’t get to share any ecosystem gist because of how long this issue was, but you’ll get some next month unfailingly.
Also, don’t hesitate to reach out if you have any questions, or if you just want to connect — I'm always here at dumss@vizible.africa.
I’m wishing you the most fulfilling new month ahead! 💫
Yours in Product Discovery,
Dumss