In recent developments within the African tech sector, two significant acquisitions have been announced, each with its unique implications for the companies involved and their respective markets.
Ecentric Payment Systems Acquires Thumbzup
Ecentric Payment Systems, a leading retail payment processor operating primarily in South Africa, has made headlines with its acquisition of Thumbzup, an innovative technology payment solutions company. This strategic move is expected to have far-reaching implications for both companies and the future of omnichannel retail in the region.
Ecentric Payment Systems has a strong reputation for its high-quality technology solutions, catering mainly to Tier One enterprise customers and currently handling 20% of South Africa’s card transactions. As a trusted payment partner, Ecentric has a significant presence in the South African market.
read also Terragon Partners Microsoft to Take African Businesses to New Heights
The acquisition of Thumbzup’s intellectual property (IP) marks a significant expansion of Ecentric’s footprint into the broader retail sector. This move positions Ecentric to reach more national retailers in the tier-two retail sector and establish itself as a reliable partner for service providers supporting small and medium-sized enterprises (SMEs). The acquisition holds strategic importance in Ecentric’s growth plans.
Hassen Sheik, CEO of Ecentric, has emphasized the critical role of this acquisition in their strategic vision. He highlights the need for a robust in-store capability, which will facilitate the integration of point-of-sale devices and technology, especially for national retailers. This strategic move is expected to enhance Ecentric’s offerings, including devices, payment software, terminal management systems, and value-added services, allowing it to cater to a broader range of national retailers while reinforcing its commitment to omnichannel retail.
Additionally, this acquisition simplifies the payment process for new customers, offering a comprehensive solution for both in-store and online payment needs, supported by a streamlined reconciliation process. It also empowers Ecentric to enhance its current offerings to existing customers.
Ecentric is fully integrating Thumbzup’s IP, devices, and technology stack into its operations. The expertise of the acquired team is expected to reduce time-to-market for customer-centric solutions, particularly in integrating point-of-sale software with payment devices.
read also Nigerian Tech Investment Firm Marks Landmark Stock Exchange Debut
This strategic move positions Ecentric to actively engage in best-of-breed Android payment capabilities, expanding beyond traditional payment services. It aligns with Ecentric’s strategy to become a leading retail service provider, supporting consumers’ payment needs in various settings. The integration of skills and IP from Thumbzup enhances Ecentric’s capabilities and strengthens its value proposition for customers.
Writesea Acquires CoverAI
In another noteworthy development, Writesea, a New York-based firm specializing in white-label services for recruitment marketplaces, has acquired CoverAI, a Nigerian AI startup that gained attention for its unique technology.
CoverAI, founded by Chris Adolphus, garnered significant interest with its innovative technology based on OpenAI’s large language model. The startup’s technology can swiftly create or enhance CVs and offers a freemium model for users. To access premium features like interview preparation and job application tracking, customers can choose from one of three subscription tiers.
While Adolphus mentioned that the acquisition was a five-figure cash deal, specific transaction details remain undisclosed. However, he stated that Writesea’s competence and experience make it the ideal candidate to take CoverAI to the next level.
CoverAI remained a bootstrapped venture throughout its three-month existence, with Adolphus investing a minimal sum to launch the project. The challenges associated with using OpenAI’s GPT-4 for applications like CoverAI are highlighted, with tokenization costs contributing to the overall expenses.
Adolphus is already planning his next venture, which he anticipates will be more capital-intensive than CoverAI, with the goal of exiting with a substantial profit. This story underscores the dynamic nature of the tech industry and the potential for rapid growth and acquisition in the African tech sector.
read also Mali Fintech SAMA Money Acquires Bank After Securing Operational License
These acquisitions are significant milestones in the African tech landscape. Ecentric’s acquisition of Thumbzup positions the company for broader retail sector expansion, while Writesea’s acquisition of CoverAI reflects the growing interest in innovative tech startups on the continent. Both acquisitions are expected to have lasting impacts on their respective markets.
African startups acquisition African startups acquisition
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard