africa

Jumia to cut products and overheads as new management chase profits • ZebethMedia

By zebethcontrolPosted on November 18, 2022Posted in africa, Apps, Commerce, jumiaNo Comments

Last Monday, Jumia co-founders Sacha Poignonnec and Jeremy Hodara resigned from their roles as co-CEOs, just ten days before the company’s third-quarter 2022 financial report. The end of their tenure, therefore, marked the first time a new face — Francis Dufay, the ex-chief at Jumia Ivory Coast and now acting CEO of Jumia — took charge of the investor briefing. On the call, Dufay was quick to emphasize why the e-commerce giant’s supervisory board decided to install new management, stressing that Jumia’s approach to turning a profit after half a decade of successive losses on the NYSE (as Africa’s first publicly traded company) required more deliberate execution and a return to basic e-commerce fundamentals. Jumia’s third-quarter report showed a glimpse into what this new approach could offer. For instance, the company’s operating loss and adjusted EBITDA loss fell double-digits year-over-year. Its operating loss declined 33% from $64 million to $43.2 million, while adjusted EBITDA losses were trimmed 13% from $52.5 million to $45.5 million; their lowest level in six quarters. This reduction in losses is driven by a material decline in marketing costs in the form of sales and advertising expenses, which decreased 31.5% from $24 million to $16.4 million year-over-year, and an improved monetization plan that saw gross profit increase of 29.2% within the same period. “We want to significantly improve our unit economics and create the right fundamentals for long-term growth. In the past, we’ve seen a lot of growth as a function of marketing, and promotional events, which then, as a consequence, lead to the alteration of our economics,” Dufay told ZebethMedia in an interview discussing Jumia’s new strategy. “This is not the way we want to see the future. And we believe that we have lots of success cases across our countries that show that we can grow and improve economics simultaneously.” Dufay said he wants Jumia to become a more attractive platform for its third-party vendors to sell on. One way Jumia plans to achieve this is to move away from monetization shortcuts it took in the past where it increased commissions for sellers’ services (for instance, it charges 20-25% for fashion items and 5-10% for electronic items). Instead, the company intends to generate new revenues through value-add such as advertising solutions and building a stronger local supply of goods. The latter, Dufay adds, is particularly important as Jumia battles local currency depreciation from its main markets: Nigeria, Egypt and Ivory Coast), which impacts its e-commerce business. According to the Q3 2022 report, the Nigerian Naira, Egyptian Pound and West African CFA depreciated by 5%, 14% and 13% respectively against the dollar during the nine-month period ending September 30, 2022, compared to the same period of 2021. Many companies around the world are dealing with the impacts of currency fluctuations. Jumia is a good example of the issue, with its revenues coming in at $50.5 million for Q3 2022, a figure that would have been $56.6 million if global currencies had held steady over the last year. “The volatility in foreign currencies has a big impact on us. Most importantly, it impacts the supply on the market and makes it harder for all retailers, including Jumia, to get the right supply at the right time to sell to customers,” said Dufay. “In several countries, for example, we have seen that governments have taken action to protect their currencies which often involves putting very big constraints on customs [which] inevitably impacts the kind of supply that we manage to bring to the website. But we believe that we are laying out the right plan to mitigate that, one of which is focusing a lot on capturing local supply from distributors and vendors, which is something very critical across all markets. Doing well on that part will help us mitigate the current macroeconomic situation.” As Jumia restructures its local supply chain, it’s scaling back some of its offerings that haven’t made a good return on investments across its eleven markets. Dufay added: “These are projects we don’t feel are adding the right value to our ecosystem, to our customers and vendors and the platform.” However, some of these product lines will continue to operate in a few markets. These include Jumia’s logistics-as-a-service platform, which launched some quarters back and at some point moved 3.5 million packages (still active in Nigeria, Ivory Coast and Morocco), and First Party grocery e-commerce (active in Nigeria and Ivory Coast). Jumia Prime, on the other hand, has been paused indefinitely. Launched in 2019, Jumia Prime was pitched as a subscription-based delivery service providing customers with free shipping on its marketplace. The product, modeled after Amazon Prime, was one of Jumia’s main user acquisition strategies, and while there are more than 3.1 million quarterly active customers on the platform (Q3 2022), it turns out this traction, and the volume of business Prime brought in compared to the level of investment it received, fell short of the company’s targets. According to Jumia, it’s discontinuing Jumia Prime because “it was too early in the adoption curve to push such a product” and it’s relieving the team in a broader effort to reduce the company’s General & Administrative (G&A) expense. Jumia’s G&A expenses, excluding share-based compensation, reached $28.3 million in Q3 2022, up 12% year-over-year. While the company implemented hiring freezes earlier this year, it intends to cut more staff costs and downsize in several areas, said Dufay. The number one corporate priority is to enact changes in the Dubai office, where most of the former management team was based, including the former co-CEOs. A handful of contracts have been terminated already (Dufay didn’t disclose how many) while those who still have roles at the company are relocating to various African offices as Jumia attempts to distribute its leadership across the continent. Jumia is also preparing to make significant changes and reduce staff size on a case-by-case basis in each of its markets by the end of the year. “We’re trying to be very clear

IFC launches $225M platform to back early-stage startups in Africa, Asia, Middle East • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in africa, Asia, IFC, Middle East, VentureNo Comments

The International Finance Corporation (IFC) has today launched a $225 million platform to back early-stage startups in Africa, Middle East, Central Asia, and Pakistan. The IFC, a member of the World Bank, will through the platform make equity and “equity-like” investments in tech startups to “grow them into scalable ventures that can attract mainstream equity and debt financing.” The institution said in a statement that it will also use the sector-agnostic platform to work closely with other members of the World Bank to champion for regulatory reforms, sector analyses and other changes that can grow the venture capital ecosystems in these regions. The IFC will also rally for more capital from other development institutions and the private sector. It has so far received a $50 million backing from the Blended Finance Facility of the International Development Association’s Private Sector Window, which de-risks investments in low-income countries. “Support for entrepreneurship and digital transformation is essential to economic growth, job creation, and resilience,” said Makhtar Diop, IFC’s managing director, in a statement shared with ZebethMedia. “IFC’s Venture Capital Platform will help tech companies and entrepreneurs to expand during a time of capital shortage, creating scalable investment opportunities and backing countries’ efforts to build transformative tech ecosystems. We want to help develop homegrown innovative solutions that are not only relevant to emerging countries but can also be exported to the rest of the world,” he said. The IFC’s regions of focus continue to receive a small percentage of the global capital funding, and IFC hopes to help bridge this gap. This is, especially, in the wake of a funding slowdown amidst macroeconomic headwinds. IFC hopes to grow the platform to other startup ecosystems beyond major hubs like Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa. The platform adds to IFC’s Startup Catalyst Program, which is also part of investments and efforts to tap tech ecosystems in Africa, Middle East, Central Asia, and Pakistan. In its initial program, IFC has made investments in Twiga Foods, a Kenyan technology food distribution platform; TradeDepot, a B2B e-commerce startup connecting brands with retailers; and Toters, an on-demand delivery platform in Lebanon and Iraq.

Modus expands to sub-Saharan Africa with the launch of its AI and blockchain-focused $75M fund • ZebethMedia

By zebethcontrolPosted on November 15, 2022Posted in africa, AI, blockchain, modus, Startups, VentureNo Comments

New York-based venture platform Modus has launched Modus Africa, a venture capital fund for AI and blockchain startups across sub-Saharan Africa, ZebethMedia has learned. The fund is expected to reach a final close in the first quarter of next year. The spinoff continues Modus’s string of moves over the past 18 months, which has seen it add branches in Abu Dhabi, Cairo, and, most recently, Riyadh, supported by institutions like Mubadala’s Hub71. Modus says that its entry into Africa creates an “additional conduit of market access for Modus portfolio companies while also enabling African startups to scale into the MENA region.” As a “holistic venture platform,” Modus runs three business units focusing on entrepreneurs and startups in the MENA and GCC regions. They include the Venture Builder, which works with idea and early-stage MVP stage companies. Then there’s Corporate Innovation, a service platform that leverages the firm’s internal know-how to support corporations and government entities. And its Venture Capital arm provides investment to early and midstage-sized startups, such as staffing platform Ogram. On its website, Modus says its fund is backed by several investors ranging from UHNWI, family offices, private investors, and government-backed entities from the U.S., the EU, and MENA. Although Modus primarily invests in foreign-based companies that are “portable to the Middle East,” as well as startups in Egypt and the GCC, its expansion into sub-Saharan Africa isn’t surprising. Last year, African startups raised over $5 billion and minted five unicorns (per this report, the continent observed a 250% year-over-year growth in funding and surpassed capital deployed in MENA). And despite the current macroeconomic trends and conditions that have resulted in layoffs, down rounds and shutdowns, startups on the continent are set to top last year’s fundraising record numbers. Unlike other firms with marked funds interested in Africa, Modus’s interest in AI and blockchain technologies is intriguing. Though it has household names such as Tunisia’s InstaDeep, Kenya’s Sama, and South Africa’s DataProphet — and several web3 startups claiming to build on the blockchain — Africa’s AI and blockchain sectors are still relatively nascent. The thinking behind adopting this strategy can be traced to Vianney Mathonnet and Andre Jr. Ayotte, the general partners of Modus’s Africa-focused fund. Both partners, in an interview with ZebethMedia, described how several stints working in banking, finance and Dubai-based family offices pointed them to the emergence of blockchain technology and its outsized opportunity and application in Africa. “Not long after we launched this project after noticing how massive blockchain and AI could be in Africa, we were approached by Modus Capital because they wanted a Pan-African strategy themselves,” said Ayotte. “They were looking for people with the know-how, the network, experience to do that, so we started discussing how the partnership would work. Ultimately, what happened is that our project became the Modus Africa fund.” L-R: Andre Jr. Ayotte and Vianney Mathonnet (General Partners, Modus Africa) According to a statement, Modus says Africa has the potential of reaching 200 million+ new blockchain users in the next four years, fueled by necessity and a fast-growing tech-savvy population. Nevertheless, the six-year-old VC firm isn’t only taking a chance on purely AI and blockchain startups; instead, it is cutting checks in startups across broader sectors that are implementing those technologies into their products. The firm is currently closing three investments in startups using AI and blockchain across insurtech, fintech and health tech, said the general partners who control the fund’s thesis, direction and investment strategy while leveraging Modus’s 50+ team to carry out due diligence and portfolio management. Mathonnet said the “jurisdiction-agnostic” Modus Africa will invest in about 45 seed-stage startups and allocate 50% of the $75 million SDG-focused fund for follow-on investments, especially in Series A rounds. These checks will range from $350,000 to $1.2 million across both stages. “We as a fund will reinvest in our winners and our LPs are also looking to reinvest in them outside the fund, catalyzing even more money in the ecosystem in Africa,” said the partners. “In terms of countries, we know that tech talent and incubators are really strong in tech ecosystems like Kenya and Nigeria, Egypt, and South Africa, and it’s inevitable that a good deal flow within all these regions. With that said, though, we are exploring new regions and searching for key partnerships to enter those markets and add some support and sustainability for deal flow.” Some of these markets include the Democratic Republic of Congo (DRC), Niger and others in Francophone Africa. Speaking on the formation of Modus Africa, Kareem Elsirafy, the managing partner of Modus, said in a statement: “Modus is proud to be launching an Africa-MENA investment corridor to continue supporting and investing in emerging innovation ecosystems. The Modus platform is uniquely positioned to deliver impact and value to African communities through operational, institutional, and financial capital. We’re excited to have Vianney and Andre leading the way on this journey.”

Jeremy Hodara and Sacha Poignonnec step down as Jumia co-CEOs • ZebethMedia

By zebethcontrolPosted on November 7, 2022Posted in africa, Commerce, jumiaNo Comments

African e-commerce giant Jumia has made a new change in management as co-founders Jeremy Hodara and Sacha Poignonnec step down effective today as co-CEOs, according to a statement seen by ZebethMedia. The two founders, who share the chief executive role, have been at the helm of Africa’s only publicly traded company for over a decade, overseeing Jumia’s pan-African expansion across 11 countries as well as its product journey that now includes a marketplace, JumiaPay, its payment arm and a logistic platform. Francis Dufay, who previously held the CEO role at one of Jumia’s fledging markets, Ivory Coast, will now replace both co-founders as acting CEO, the company’s Supervisory Board said in the statement. Dufay has been with Jumia since 2014, holding multiple senior leadership roles, more recently Executive, VP, Africa, responsible for the group’s e-commerce business across the continent. According to the Supervisory Board, Dufay and Antoine Maillet-Mezeray — previously Jumia’s Group Chief Financial Officer — have been appointed members of the company’s Management Board. Maillet-Mezeray, having stayed with Jumia for over six years and driving the company’s finance function and “further developing it in a public market context,” has earned a promotion too: Executive Vice President, Finance & Operations. “We thank Jeremy and Sacha for their leadership over the last decade to envision and build a company that became the leading pan-African e-commerce player,” Jonathan Klein, Chairman of the Supervisory Board, said of the announcement. “As we look ahead to the next chapter of Jumia’s journey, we want to bring more focus to the core e-commerce business as part of a more simplified and efficient organization with stronger fundamentals and a clearer path to profitability. We look forward to working closely with Francis, Antoine and the leadership team to execute on these objectives and continue on our mission of offering a compelling e-commerce platform to consumers, sellers and the broader Jumia ecosystem in Africa.” This is a developing story…

54gene valuation slashed by over $100M amid job cuts and CEO exit • ZebethMedia

By zebethcontrolPosted on October 28, 2022Posted in 54gene, africa, Biotech & Health, StartupsNo Comments

It’s been a strange couple of months at African genomics startup 54gene. In August, it sacked 95 employees, mostly contract staff (in labs and sales departments) hired to work in 54gene’s COVID business line launched in 2020. In September, co-founder and VP of Engineering Ogochukwu Francis Osifo left the company. And this week, founder and now ex-CEO Dr. Abasi Ene-Obong stepped down from his executive role to be replaced by General Counsel Teresia L. Bost. This news coincided with more job cuts. The company confirmed to ZebethMedia that this second round of layoffs, which took place on Tuesday, affected over 100 staff: 55% of the total workforce remaining after the first round of layoffs. The biotech didn’t specify what roles and departments got trimmed. The Washington- and Lagos-based genomics startup has been considered the showpiece of Africa’s fledging biotech space since it got into Y Combinator in 2019. But while 54gene launched to address the gap in the global genomics market, where Africans make up less than 3% of genetic material used in pharmaceutical research, its growth in 2020 overlapped elsewhere, with the COVID-19 pandemic, and it hired aggressively to meet the demands of being one of Nigeria’s largest providers of COVID testing. Its preparedness to meet this opportunity with its clinical diagnostic arm was also a catalyst to increasing its revenue and raising two huge growth rounds in quick succession: a $15 million Series A that year and a $25 million Series B in 2021 from investors such as New York-based Adjuvant Capital, Pan-African firm Cathay AfricInvest Innovation Fund (CAIF), KdT Ventures and Endeavor Catalyst. Yet, 2022 will be a year to forget for the biotech startup. Not only has its revenues dwindled and laid off almost 200 employees, but the company’s value has also been significantly trimmed in a period when startups’ valuations are taking a beating. According to people with knowledge of the matter, 54gene’s valuation has dropped by two-thirds, from the $170 million secured when it raised its Series B to about $50 million in a bridge round involving lead investors from the company’s board. Sources also said the down round closed at a 3x to 4x liquidation preference, meaning that investors — typically the lead investor — would be paid back triple or quadruple their money before other stakeholders, including other investors, founders and employees in the case of an exit. These terms, which shift power back to investors, were rare during the venture capital boom between mid-2020 and last year but are now commonplace in this fundraising environment. 54gene didn’t confirm or deny the premise of this deal. Still, it stated in an email response: “The existing investors injected fresh capital into the company at terms that reflect current market conditions. We hope this round not only supports the company through this challenging period but also positions it for success in the future — whether it be to raise additional capital, attract strategic partners, or another future path.” Often, liquidation preferences signal that investors want to protect themselves if a growth-stage portfolio company exits at a value lower than initially expected. In some cases, the investors believe that the startup might struggle to produce a solid exit due to underlying challenges affecting its business. When the company’s first layoff news broke, allegations of financial impropriety were leveled against the then-CEO and his executives from a group of employees. And though they remain unfounded, these accusations have come to light again following Ene-Obong’s resignation. Affected employees — who claim they haven’t received their severance packages and spoke to ZebethMedia on the condition of anonymity — unsubstantially blame 54gene’s current troubles on irresponsible hiring, questionable expansion drives and misappropriation of funds. The YC-backed biotech didn’t respond to ZebethMedia’s request for comments about its former executives’ alleged mismanagement of funds and employees’ unpaid severance packages. 54gene’s tight-lippedness on the matter and Bost’s appointment from her legal role to interim CEO arbitrarily raises questions and leaves room for interpretation tilting toward these accusations, especially as both co-founders resigned a few weeks apart. However, in an email to ZebethMedia, the company subtly counterargues that Osifo’s resignation had been in process for some time and was unrelated to this month’s activities, while Bost, hired last September, was what 54gene needed — with support from COO Delali Attipoe — for its next phase. “Teresia is a well-rounded executive with a depth of experience in the global pharmaceutical and biotech industry, leading global teams and overseeing corporate governance,” the company said. “These skills, coupled with her breadth of experience driving business operations and translating complex regulatory requirements, will be invaluable at the helm of 54gene in this next phase of the company. Delali and Teresia will make a great team that together will strengthen 54gene’s position as a genomics leader in the industry.” Meanwhile, 54gene stated that its ex-chief executive “will continue to support the company in its go-forward plans such as strategic partnerships and fundraising” without explaining why he stepped down. However, according to several people with knowledge of happenings at the company, the terms of 54gene’s new deal contributed to Ene-Obong’s resignation. They say Ene-Obong — retaining his position on 54gene’s board while moving to a new senior advisor role — may have resigned as CEO in protest of 54gene’s new valuation and the liquidation preference offered by investors in the bridge round. There is some speculation that some of the investors also attempted to reprise the company’s previous prized round to get more shares while diluting that of the founders and other investors. 54gene declined to comment on the matter. The fact that 54gene had to arrange a bridge round in-house despite securing over $45 million over the last three years is a reminder that biotech projects are highly capital-intensive — for instance, it costs about $700 to sequence a human genome (one of 54gene’s main procedures). Typically, biotechs deploy investors’ funds into research while thinking about revenue later and the case isn’t different with 54gene. Still, the

54gene CEO steps down as the company looks to cut more jobs • ZebethMedia

By zebethcontrolPosted on October 25, 2022Posted in 54gene, africa, Biotech & Health, Layoffs, StartupsNo Comments

54gene co-founder and chief executive officer Dr. Abasi Ene-Obong has stepped down from his executive role, the African genomics company confirmed to ZebethMedia today. The three-year-old company has appointed General Counsel Teresia L. Bost as interim CEO. She will be supported by Chief Operating Officer Delali Attipoe, the company said. Ene-Obong, on the other hand, will retain his position on 54gene’s board while moving to a new role of senior advisor. Ene-Obong’s resignation and Bost’s ascension comes two months after 54gene laid off 95 employees, or more than 30% of its workforce, in August. The layoffs affected employees, mostly contract staff (in labs and sales departments) recruited to work in 54gene’s COVID business line launched in 2020 to complement its flagship product: a biobank of the African genome. Founded in 2019 by Ene-Obong, 54gene addresses the gap in the global genomics market where Africans make up less than 3% of genetic material used in pharmaceutical research despite being more genetically diverse than any other population. The audacious project has received over $40 million from investors such as Adjuvant Capital, Y Combinator and Cathay AfricInvest Innovation Fund (CAIF) and partnered with organizations like Illumina, Genentech and Parexel. Biotechs globally tend to have a long-term approach toward making money; in fact, such companies can still be worth billions with little to no revenue. For the Washington-based but Africa-focused 54gene, its primary revenue path involves working with pharmaceutical companies to co-develop drugs and medicine–and that takes time. A typical time frame for a new drug from creation to market entry can take up to a decade, so it made sense for 54gene to turn its lab capabilities to COVID testing as a new source of revenue. However, the decline in COVID testing has presented 54gene with fresh challenges: dwindling revenues and redundant roles. Though it has already let go of 95 employees, the company confirmed that it will conduct a second round of layoffs following restructuring across several departments. According to the YC-backed company, it wants to focus resources on its core mission of African genomics research and equalizing precision medicine. At the same time, its clinical diagnostic arm takes the back seat. Here’s more information on the company’s new direction: Going forward, the primary focus will be on the unique genomic research the company has started by further leveraging its genomic datasets derived from 54gene’s state-of-the-art biobank, that currently houses over 130,000 unique patient samples and corresponding genomic data, all with the objective of positioning the company to make contributions to precision medicine and drug discovery. This continues the meaningful work the company has invested in, whilst de-emphasizing the clinical diagnostic business line at the time. It’s unclear exactly why Ene-Obong is stepping down. Yet, it’s not farfetched to assume that the company’s recent struggles are a contributing factor. In response to whether the company’s decision to let him go was performance-related or because the ex-CEO was moving on to new projects, 54gene only said, “Abasi has decided to step down as the CEO but will continue to support the company in its go-forward plans such as strategic partnerships and fundraising. We cannot comment on what other new interests he will pursue if any, but we wish him well and still consider him a key team member.” Interestingly, the former CEO’s resignation also comes one month after Ogochukwu Francis Osifo, the company’s co-founder and VP, Engineering, left the company in September. As 54gene shifts into a new phase, Ene-Obong, who consulted for organizations such as Gilead and IMS Health in the past, believes the startup is in the best hands as Bost and Attipoe “have deep insight into the workings of 54gene.” Bost boasts more than 20 years of extensive knowledge and experience across pharmaceutical, biotechnology and healthcare industries with companies such as Celgene and Quartet Health while providing strategic support of securities matters, corporate governance and finance matters. Attipoe, on the other hand, brings more than 15 years of experience in the pharmaceutical sector working with firms like Roche and Genentech. Ene-Obong, addressing his exit and the transition in a statement, said: I have always believed that the scale of genetic diversity in Africa and other highly diverse populations will materially impact our understanding of biology and lead to better medicines and interventions for the global population, and I am proud of what has been achieved at 54gene. I’d like to thank the 54gene Board for their support over the years, and the many talented scientists and technology professionals I have had the pleasure to work with during my time at the company. I will continue to support the company and the scientific ecosystem, particularly the African genomics ecosystem. Teresia and Delali bring decades of experience in building and scaling high-impact global pharma companies, and they also have deep insight into the workings of 54gene. I am excited to see them take the company to its next phase.

Global VC Flourish launches Madica, an Africa-focused program to back pre-seed stage startups • ZebethMedia

By zebethcontrolPosted on October 24, 2022Posted in africa, Flourish Ventures, Startups, VentureNo Comments

Access to funding and lack of support systems are some of the greatest challenges faced by startup founders in sub-Saharan Africa. And while venture capital and founder support programs within the continent are growing, a lot still remains to be done to meet the financing, technology and social capital needs of the especially marginalized groups like women founders. It is these gaps that continue to inspire the development of new programs like Madica by US-based venture capital firm Flourish Ventures, which hopes to lessen the burdens of building startups. Launched today, Madica is a pan-African investment program that aims to offer funding, technology support, and mentorship to underrepresented founders across the continent. The sector-agnostic program targets technology startups in the pre-seed stage, which is where most ideas fail. The program has set aside $6 million for investment in up to 30 African startups, each receiving up to $200,000 in exchange for equity, availing the much needed funding. The initial investment phase will run for three years. “Although investment is booming on the continent, funds are often disproportionately targeted at a few well-networked entrepreneurs and skewed towards the more prominent tech hubs… Madica is sector-agnostic and intends to double down on providing hands-on support, extensive resources, access to networks and more. This is why in addition to $6M of investment capital, we have reserved an equal amount for programmatic support,” said Manica’s head, Emmanuel Adegboye. “We encourage founders across the continent to apply for our program. We believe Africans have an unmatched entrepreneurial spirit, and one of Madica’s core goals is to ensure a level playing field for every African founder,” he said. Madica said it is also keen on reaching underserved markets in the continent, outside the well-established hubs of Egypt, Kenya, Nigeria, and South Africa. This is part of its push to ensure a pan-African reach by supporting local, and women founders. To qualify for the program, founders need to be working on their idea full-time, have a minimum viable product, and should have received little or no institutional funding. Application and admission to the program will be on a rolling basis. Madica is also partnering with AfriLabs, Pariti, Africa Early Stage Investor Summit, CELO foundation, and Rising Tide to identify entrepreneurs to support. Participating founders will be matched with mentors including Isis Nyong’o, the Asphalt & Ink partner; Ceviant Finance co-founder, Idris Saliu, and Wendy Hoffman, the Capital Legal Counsel at The Delta. “Madica is an investment in the African venture ecosystem, with the audacious goal of creating a broader systemic shift. Through Madica, we intend to develop a cadre of mentors, create world-class programming, crowd-in follow-on capital and leverage Flourish’s global presence to extend the reach of local networks. These will eventually benefit other participants in the ecosystem – startups, investors, and policymakers,” said Ameya Upadhyay, the venture partner at Flourish Ventures, an early-stage fintech VC whose portfolio includes Nigeria’s Flutterwave and Paga. “We hope that Madica can help change the narrative around African startups – lower the perception of risk, attract more capital, inspire more founders, and garner more media attention,” said Upadhyay.

Africa’s tech talent accelerators attract students, VC funding as Big Tech comes calling • ZebethMedia

By zebethcontrolPosted on October 23, 2022Posted in africa, developers, EC Africa, EC Future of Work, Startups, VentureNo Comments

Tech giants are increasingly looking for tech talent in Africa, where the number of developers reached 716,000 last year, up 3.8% from 2020, according to Google. In the last six months, Microsoft and Amazon have been on a recruitment drive that came along with enticing offers including relocation to their hubs in the U.S. and Europe, endearing themselves to the small but growing talent pool amid tough competition from other tech giants like Google, as well as startups. This demand for African developers is expected to continue, buoyed by the effects of the Great Resignation, which led employers to search for new talent elsewhere, and as tech behemoths like Google, Oracle and Visa expand their operations in Africa. Yet as demand rises, the number of new developers entering the market is disproportionately small, mainly because traditional education institutions in most African countries have been slow to revamp their courses to keep up with job market demands and the fast-evolving world of technology. On the other hand, the gap between demand and supply has unequivocally steered the launch of new developer schools and propelled the growth of existing ones in recent months, many of which are gaining the attention of global venture capitalists.

Seven scaleups hog over 70% funding to Africa’s Solar PayGo ventures • ZebethMedia

By zebethcontrolPosted on October 21, 2022Posted in africa, Climate, solarNo Comments

Over the last 10 years startups in Africa’s off-grid solar sector have attracted over $2.3 billion funding. However, the largest share of the financing has gone to just seven pay-as-you-go (PayGo) Africa-based scaleups, leaving hundreds others in the early-stage struggling to fundraise, according to the biennial Gogla-World Bank report. The seven most funded solar startups are Sun King, Zola Electric, M-Kopa, Bboxx, d.light, Engie Energy Access, and Lumos which, according to the Gogla Investment database, have attracted 72% of the sector’s equity, debt and grant financing while over 150 startups in the seed and phases accounted for the rest of the amount. In terms of equity funding, the scale-ups received investments worth $600 million, between 2015 and last year, as early-stage startups attracted $255 million VC funding over the same period. Overall, access to debt has not been easy for most early-stage startups in Africa especially since the Covid pandemic hit, yet the scaleups continue to unlock more debt funding amidst a similar operating environment. The aforementioned scaleups operate pay-go models that offer asset-based financing (pay-to-own) for solar kits and lanterns, products that are hugely popular in Sub-Saharan Africa where millions are off-grid, as national power grids remain underdeveloped. The lack of capital means that the early-stage startups are not able acquire assets like solar kits and lanterns, which are required to help them scale and capture more consumers and markets. Kenya, Uganda, Nigeria, Rwanda and Ghana, DRC are some of their major markets in Africa “Start-up companies report that accessing equity capital has been challenging, resulting in some being over leveraged, and others facing business difficulties. Lack of early-stage equity has resulted in the stifled growth of many companies,” “This is a barrier to the expansion of off-grid solar in new markets; as equity, grants, or output-based incentives, such as results-based financing, are generally best placed instruments for market expansion,” said Gogla, a global association for the off-grid solar energy industry, in the report. The trend is likely to continue as data on disclosed deals from the BigDeal database shows that so far this year, several of the seven scaleups accounted for most of the funding has been raised by the off-grid solar Paygo companies. A review of the data shows that nearly half a billion dollars in debt-equity funding has been raised by nearly 30 startups and scale-ups this year. Of the amount, $367 million is equity funding raised by 11 companies — including SunKing, M-Kopa and d.light which claimed 93% of the total equity amount. If we add d.light’s $50 million and Bboxx’s $35.5 million debt-funding, the four scale-ups so far account for 86% of the total funding raised by startups in Africa’s paygo solar sector. The ability of these companies to attract funding is attributable to their ability to capture huge markets across Africa, and by tapping syndicated loans. These companies, some of which offer financing for other assets, have also been quick to add new revenue streams further tapping and increasing their clientele base.

Nigerian retail automation platform Bumpa raises $4M, led by Base10 Partners • ZebethMedia

By zebethcontrolPosted on October 19, 2022Posted in africa, Base10 Partners, bumpa, Commerce, StartupsNo Comments

Millions of small and medium businesses still operate inefficiently due to dependency on manual processes, which limits their capacity to grow and scale; this is despite contributing to about 48% of Nigeria’s GDP in the last five years, But the tide is turning. Over the last couple of months, we’ve seen a wave of upstarts launching solutions geared toward digitizing small business operations. In the latest development, Bumpa, one of them which says it is building the infrastructure to power online commerce and enable African small business owners to start, manage and grow their businesses from their mobile devices, has raised a $4 million seed round. The company, which announced a $200,000 pre-seed last September, said it intends to use the investment to hire talent, build up its processes, structure, and scale into new African markets. Founded by Kelvin Umechukwu and Adetunji Opayele, Bumpa intends to use the investment to hire talent, build up its processes and structure and scale into new African markets. It announced a $200,000 pre-seed last September. The platform’s origin story can be traced to 2018 when founders Kelvin Umechukwu and Adetunji Opayele — while running another startup that involved consulting for small businesses — built websites for small business owners interested in coming online for the first time. Subsequent versions were tailored in Shopify’s image: a basic website builder small businesses could use without much assistance. However, after gaining little traction, it was clear that Bumpa had to evolve to meet the growing demands of businesses on the platform, including recording sales and bookkeeping, inventory tracking, and storing customer details. It also helped that both founders came from families of small business owners, so they had a firsthand view of these problems. And as businesses moved online in droves when COVID hit in 2020, Bumpa returned to the drawing board, revamped its product and launched a new version into the market the following year. This version lets businesses create websites in “60 seconds,” accept payments, manage inventory, handle bookkeeping, fulfil orders and engage customers. “We’re trying to solve the inefficiencies small businesses face as most of them have operated in a black hole for the longest time. They don’t have enough data and insights into what’s happening, what’s being sold and how their products are being sold,” CEO Umechukwu said on a call with ZebethMedia. “While many startups are trying to solve this, we’re doing it differently. We’re evolving, and we consider our features as the foundation of what is possible with Bumpa.” Bumpa 2.0: Integrating an ecosystem of products These days, small businesses in Nigeria are spoilt with options, in addition to Bumpa, for products that can digitize their operations, including bookkeeping, invoicing and inventory management. Some include Pastel, Kippa and OZÉ. In August, Bumpa made a move that conveyed a message: It approached its relationship with small businesses differently as a retail automation company, not an embedded finance platform. “I think the ideology and the product direction between Bumpa and other companies differ. Most of them have fintech elements; we are not trying to be fintech — we’re in the retail automation space,” CEO Umechukwu expressed. “We’re not trying to solve things in fintech that have already been solved. There are new things that have not been tested before, like the Meta integration.” Our big announcement is finally here! Bumpa has now integrated Meta to make selling on Instagram 5x faster! Business owners can now connect their Instagram business account with Bumpa, receive Instagram DMs directly on their Bumpa app & sell products @ Bumpa speed.#BumpaXMeta pic.twitter.com/DMRrW2HEpN — Bumpa (@getBumpa) August 1, 2022 Bumpa’s integration with Meta allows its merchants to connect Instagram and Facebook accounts to their Bumpa app, receive DMs from their customers and respond via the Bumpa app. The integration also lets them share and sell products, share invoices/receipts, record sales, store buyers’ information and request payments on the Bumpa app while it reflects on their customers’ Instagram DMs. All these transactions occur without the merchants leaving Bumpa and the buyer leaving Instagram. Several tech onlookers have lauded the Meta integration, which, according to Umechukwu, will carry Bumpa to its next phase: bringing various digital solutions essential to the daily operations of small businesses and integrating them under the social commerce and retail automation platform. “There’s so much fragmentation in the space. A business owner probably uses up to 10 solutions, including social media, payments, invoicing, logistics and marketplace apps. But none of these solutions communicate with one another,” he said. “We want to be that connecting platform on the continent. The idea now is to connect all of these solutions and channels that small businesses use together with a click of a button and basically facilitate the transfer of information for efficiency.” That said, Bumpa would not be heading into this Herculean task blindly. It will prioritize based on orders and activities completed on the platform. For instance, what drove the Meta integration was that 40% of all the orders on Bumpa come from Instagram and WhatsApp. And in a subtle bid to bring conversational commerce to over 50,000 small businesses on its platform, the next couple of integrations will include WhatsApp, Messenger and Google My Business. The play is similar to what Charles has in Europe. These integrations are not free, though. Bumpa has latched them to a subscription plan to complement its first revenue stream: commissions on online transactions. Umechukwu said subscriptions have doubled Bumpa’s revenues from Q2 to Q3 this year. Generally, Bumpa has completed over 200,000 orders since its inception and recorded a GMV of more than $20 million. Base10 Partners, the world’s largest Black-led fund, is the lead investor in Bumpa’s seed round; it’s the firm’s second investment in Africa after Okra, a Nigerian API fintech. Other participating investors include Plug & Play Ventures, SHL Capital, emerging markets-focused fund Magic Fund, Jedar Capital, DFS Labs, FirstCheck Africa Angel Program, E62 Ventures, Club14 and Fast Forward Ventures. Fast Forward Ventures’ managing partner Opeyemi Awoyemi said Bumpa