Special Report - Afrikan Heroes

What Does 2024 Hold in Store for African Startups? Here are Our Predictions

January 12, 2024

As the African startup ecosystem readies itself for the uncertainties of 2024, a turbulent year seems to be on the horizon. The past year has seen pivotal events that have cast shadows over the potential prosperity of emerging businesses. In this article, we delve into our predictions for African startups in the coming year and explore strategies to navigate the challenges ahead.

Low Funding for Startups: A Tough Financial Terrain

The recent closure of 54gene, a genomics research company that once stood as a beacon of African innovation, serves as a stark reminder of the financial pitfalls awaiting African startups in 2024. Despite securing an impressive $45 million in funding, 54gene succumbed to financial challenges, signaling a potential trend for 2024. Investors may adopt a more cautious approach, leading to a decline in funding opportunities for startups across the continent. Hence, our prediction foresees a decrease in funding activities compared to the levels observed in previous years..

The implications of reduced funding are far-reaching. Startups, often reliant on external investments to fuel growth and development, will need to reassess their financial strategies. In a landscape where securing funds becomes a formidable task, alternative financing models, such as strategic partnerships and crowdfunding, may gain prominence. Additionally, startups must focus on building sustainable revenue streams to weather the storm of financial uncertainty.

High Startup Shutdowns

The shutdowns of startups such as Zazuu, Pivo, 54Gene are not isolated incidents; they are part of a growing trend that may escalate in 2024. Dash, a Ghanaian fintech startup, raised an impressive $86 million only to crumble a year later due to mismanagement, misappropriation of funds, and falsification of data. This emphasizes the critical role of robust governance and financial management in ensuring the survival of startups.

In the face of heightened scrutiny and a potential increase in startup closures, African startups must prioritize transparent financial practices and effective governance structures in 2024 if they are to survive the Hurricane that is coming. Implementing stringent internal controls, regular audits, and fostering a culture of accountability will be crucial in gaining and maintaining investor trust. Startup leaders must learn from the mistakes of their counterparts and establish resilient frameworks that withstand the challenges of the business landscape.

Generally, a Difficult Startup Year

With the specters of startup shutdowns and Dash’s deceptive downfall looming, 2024 is anticipated to be a generally challenging year for African startups. The key to survival lies in cultivating resilient business models, implementing effective management practices, and devising sustainable growth strategies.

Startups must prioritize innovation and adaptability, recognizing that agility is essential in navigating unpredictable market conditions. Strategic planning becomes paramount as businesses confront challenges on multiple fronts. Diversification of revenue streams, expansion into new markets, and embracing emerging technologies will be instrumental in building a foundation for long-term success.

While the predictions for African startups in 2024 may seem daunting, they also present opportunities for growth and resilience. By learning from past failures, embracing financial prudence, and fostering innovation, startups can navigate the difficulties ahead and emerge stronger on the other side. The road ahead may be challenging, but with strategic foresight and determination, African startups can overcome adversity and contribute to the continent’s vibrant entrepreneurial ecosystem.

Summing It Up: Our Key Suggestions

Diversify Funding Sources:

Given the potential decrease in traditional funding avenues, startups should explore diverse sources of capital. This could include strategic partnerships, angel investors, venture debt, or crowdfunding. A mix of funding channels can provide a financial cushion and reduce dependence on a single source.

Emphasize Financial Prudence

In the face of a tough financial landscape, startups must prioritize sound financial management. This includes regular financial audits, transparent reporting, and a focus on cost control. By demonstrating fiscal responsibility, startups can instill confidence in investors and stakeholders, even in uncertain times.

Build Resilient Business Models

Startups should revisit and strengthen their business models to withstand market fluctuations. This may involve diversifying product or service offerings, identifying new revenue streams, or adapting to changing consumer behaviors. Resilient business models can weather economic challenges and sustain growth.

Enhance Governance and Accountability

Learning from the closures of prominent startups in recent times, it is imperative for businesses to prioritize governance and accountability. Establishing robust internal controls, ethical practices, and transparent reporting structures can instill trust and mitigate the risks associated with mismanagement.

Seek Operational Efficiency

Streamlining operations and optimizing efficiency can help startups navigate cost challenges. Assessing and refining internal processes, identifying areas for automation, and eliminating redundancies can contribute to improved operational efficiency, ensuring resources are used judiciously.

Establishing Collaborative Alliances, Mergers, or Acquisitions

Aligning with established companies or fellow startups can yield reciprocal advantages, including shared resources, broader market outreach, and enhanced credibility. Forming strategic partnerships becomes a stabilizing force for startups, offering crucial support during challenging periods.

Adapt to Market Trends

Keep a close eye on market trends and adapt quickly. Consumer behaviors and industry landscapes can shift rapidly, and startups need to be agile in responding to these changes. Staying ahead of the curve can present new opportunities and help mitigate potential risks.

Focus on Customer Retention

Acquiring new customers can be challenging in a difficult year, making customer retention even more crucial. Prioritize customer satisfaction, gather feedback, and tailor products or services to meet evolving customer needs. Loyal customers can serve as a stable foundation during uncertain times.

Cultivate a Positive Company Culture

A positive and supportive company culture can foster resilience among the team. Encourage open communication, provide support for employees, and maintain a shared vision. A motivated and unified team is better equipped to face challenges head-on.

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.

In Central Africa, Mobile Money Dominates Financial Scene with 96% of All Transactions — Report

November 9, 2023

In an age where technology is rapidly reshaping the financial landscape across the globe, one African region, in particular, has emerged as a fascinating case study. The Central African Economic and Monetary Community, known as CEMAC, consisting of countries such as Cameroon, Congo, Gabon, Chad, the Central African Republic (CAR), and Equatorial Guinea, is witnessing a profound transformation in its financial sector.

Mobile Money, a digital payment system, has quietly become a formidable contender against traditional banks in the CEMAC region. With a remarkable 37 million accounts registered in 2022, it’s evident that Mobile Money is on a trajectory to revolutionize financial transactions.

The latest report published by the BEAC, the common central bank for CEMAC countries, unveils some astonishing insights. In 2022, more than 96% of all transactions in the CEMAC zone, totaling 2.3 billion operations, were executed through Mobile Money. In stark contrast, a mere 2% of transactions, comprising 48.3 million operations, were conducted using traditional bank transfers and credit cards. This trend highlights the surging popularity and adoption of Mobile Money for day-to-day financial activities.

However, the story is not just about numbers; it’s about the changing nature of financial transactions. Mobile Money predominantly caters to smaller transactions, reflecting the habits of economic agents conducting everyday business. For more substantial transactions, traditional banks still maintain their dominance, commanding 44% of transactions by value. This amounts to a staggering 48,573 billion CFA francs ($79M). Instant electronic money transfers represent 21% of transactions, translating to 23,332 billion CFA francs ($38M). In essence, while Mobile Money dominates in quantity, traditional banks continue to reign supreme in terms of larger, high-value transactions.

But what truly underscores the significance of this transformation is the sheer scale. In 2022, CEMAC was home to 498 payment service providers, facilitating a staggering 2.4 billion transactions. These transactions added up to a colossal total, exceeding 107,126 billion CFA francs ($174M).

As the global financial landscape continues to evolve, this tale from the heart of Africa offers a compelling glimpse into the dynamic interplay between technology and finance. The rise of Mobile Money in CEMAC countries serves as an important case study for the growth of fintech in Francophone Africa, shedding light on the power of digital innovation in redefining how individuals and businesses handle their finances in the digital era.

Central Africa mobile money Central Africa mobile money

Togolese Startup Gozem Acquires Benin’s Moneex, Eyes Fintech Expansion

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

Why Digital Nomads in Algeria are Worried that the New Auto-Entrepreneur Card Isn’t What It Claims to Be

July 14, 2023

Algeria, a country known for its vibrant tech community, recently introduced the auto-entrepreneur card, an initiative aimed at integrating freelancers into the formal economy. While the card promises a range of benefits, including social security coverage and simplified proof of income, skepticism looms large among tech solos. This report delves into the intricacies of the auto-entrepreneur card, exploring its purpose, benefits, and the concerns raised by Algerian freelancers. By shedding light on the current status and addressing the grey areas, we aim to provide a comprehensive understanding of this government project.

Understanding the Auto-Entrepreneur Card and Supporting Law

The auto-entrepreneur card is a government initiative that recognizes freelancers working in various domains, from online services to personal coaching. By obtaining this card, freelancers can operate within the official economy and gain access to a host of benefits.

The card allows freelancers to engage in seven main types of work: consulting and education, digital services and related activities, domestic services, personal services, leisure and recreational activities, business services, and cultural, communication, and audiovisual services. However, specific examples within each category are not specified.

The details regarding taxes are still unknown and are expected to be determined in future financial laws, potentially in the loi de finance (2024) or complementary loi de finance (between June and October 2023). Initially, a flat 5% tax rate was proposed, but later there were mentions of an average 5% rate.

Furthermore, there is no information available about the ability to freely withdraw USD/EUR in cash for those exporting online services. It is likely that withdrawals will be in DZD (Algerian dinar) or limited to USD/EUR for business-related trips and expenses only, but confirmation is still required.

auto-entrepreneur card Algeria — *What the auto-entrepreneur card looks. Credits: Anae.dz*

How the Auto-Entrepreneur Card Works and Its Benefits in Real Life

Process of Obtaining the Auto-Entrepreneur Card

To obtain the Auto-Entrepreneur Card, individuals must meet the eligibility criteria, which include engaging in a lucrative activity listed as eligible by regulations and maintaining an annual turnover not exceeding 5 million DA. Excluded from this status are liberal professions, regulated activities, and craftspeople. The process involves registering in the National Register of Auto-Entrepreneurs, declaring existence with tax services to obtain a Tax Identification Number (NIF), and registering with the National Social Security Fund for Non-Employees (CASNOS).

The auto-entrepreneur card system in Algeria is regulated by an agency, located in Algiers and under the Ministry of Startups.

Benefits for Freelancers

The auto-entrepreneur card offers several advantages for freelancers, aiming to provide financial security and simplify their professional activities.

Social Security Benefits through CASNOS

One of the significant benefits of the auto-entrepreneur card is access to social security benefits through CASNOS. Freelancers holding the card can enjoy health insurance coverage and contribute to their pension, ensuring a safety net for the future.

Ability to Open a Current Bank Account

Freelancers with the auto-entrepreneur card are eligible to open a current bank account. This provides them with a secure and official channel for managing their finances, improving transparency and control over their monetary transactions.

Proof of Income Simplification

The auto-entrepreneur card serves as simplified proof of income for freelancers, eliminating the need to navigate complex registration processes solely for income verification purposes. This streamlines administrative procedures and reduces costs for freelancers.

Benefits for Employers

The auto-entrepreneur card also brings benefits for employers, encouraging them to embrace freelancers and leverage their skills.

Reduced Taxes and Social Security Contributions

Employers stand to benefit from reduced taxes and social security contributions when hiring freelancers with the auto-entrepreneur card. This incentivizes businesses to utilize the services of freelancers, potentially leading to cost savings and increased flexibility in workforce management.

Flexibility in Hiring Skilled Talent

By embracing the auto-entrepreneur card system, employers gain the flexibility to hire skilled freelancers for specific projects or tasks. The simplified administrative process allows for a more agile workforce, providing businesses with access to a diverse talent pool without the constraints of traditional employment contracts.

Mitigation of Indemnity Risks

Employers often face the risk of indemnity payments when terminating employment contracts. However, by hiring freelancers with the auto-entrepreneur card, businesses can mitigate these risks, as the card operates within a different legal framework. This offers employers greater flexibility in project-based or short-term collaborations.

Current Status of the Auto-Entrepreneur Card for Algerian Freelancers

Recently, three executive decrees were issued (SEE HERE), providing further details and regulations related to the auto-entrepreneur card. These decrees aim to streamline the implementation process and address specific aspects of the project for freelancers and employers.

Pending Information and Implementation

Despite the issuance of executive decrees, there is still pending information and clarification on certain critical aspects of the auto-entrepreneur card. Areas that require further development include taxation regulations and foreign currency withdrawals. The government needs to provide comprehensive guidelines to address these concerns and ensure a smooth implementation process.

Concerns Raised by Algerian Digital Nomads about the Auto-Entrepreneur Card

Skepticism Regarding the Algerian Banking System

Many Algerian digital nomads express skepticism toward the country’s banking system, citing concerns about reliability and transparency. This skepticism extends to the auto-entrepreneur card, with doubts arising about the ability to freely withdraw foreign currencies and the overall efficiency of banking services.

“If they don’t get their act together and fix the banking system, I’m not even gonna bother with it. Moving abroad seems like the only way out for me, you know?” one Algerian tech freelancer says.

Lack of Trust in the Government’s Intentions

Given the history of mistrust toward the government, some Algerian digital nomads remain skeptical about the true intentions behind the auto-entrepreneur card. Freelancers and the broader community seek assurances that this initiative is not merely a means to impose additional taxes and control over their income.

“Everyone I know feels the same way,’’ says another Algerian tech freelancer. “ This card thing? Had no clue it even existed until now. But let me tell you, as soon as I heard this, I thought to myself, “Oh great, just another lame attempt to squeeze more taxes out of us freelancers.” Can you believe it?”

Uncertainty about Foreign Currency Withdrawals

Freelancers who earn income in foreign currencies, such as USD or EUR, seem to be more concerned about their ability to freely withdraw these funds than the auto-entrepreneur card.

“I completely agree…” one freelancer captures this. “I’m referring specifically to individuals who work online and receive payment in foreign currencies like USD. Many of them have already turned to the unofficial market in search of better exchange rates, completely disregarding the use of the dinar.”

“In an ideal world,” he adds, “these auto-entrepreneurs would be allowed to withdraw their earnings in the same currency they earned them. For instance, if they earned EUR, they would have the freedom to withdraw their earnings in EUR. However, let’s be realistic here, we all know that such a solution is highly unlikely to materialize.”

Resolving the Grey Areas

Pending Clarifications on Tax Regulations

One significant grey area surrounding the auto-entrepreneur card is the absence of specific tax regulations. Freelancers and employers eagerly await detailed guidelines to understand their tax obligations and how it will impact their income and overall business operations. The government should prioritize providing clear and comprehensive tax regulations to instill confidence and enable freelancers to plan their financial affairs effectively.

Lack of Specifics on Foreign Currency Withdrawal Options

The lack of specific information on foreign currency withdrawals raises concerns among freelancers who earn income in foreign currencies. Clarity on this aspect is crucial to alleviate doubts and ensure that freelancers can efficiently manage their earnings, especially those engaged in global markets.

Concluding:

While the auto-entrepreneur card holds significant potential for freelancers and employers in Algeria, its success depends on how well the government addresses concerns and implements the project. Continued development, adjustments, and improvements are necessary to create an enabling environment for freelancers, boost the gig economy, and promote economic growth. By actively engaging with stakeholders and providing comprehensive guidelines, the auto-entrepreneur card can empower freelancers, drive innovation, and contribute to Algeria’s economic development.

“It’s worth noting that the current situation requires more time to mature and unfold. We’ll need to wait several years, at best, to gauge its progress and determine its efficacy,” comments an Algerian freelancer.

“Considering the details shared about this card, it appears to primarily benefit the government, aligning with the pattern observed in various aspects of our country. It’s a lamentable reality, to say the least,” adds another freelancer. “Essentially, it seems like freelancers are being asked to pay taxes without receiving any substantial favors or rights in return. It’s a rather disheartening prospect, isn’t it?”

auto-entrepreneur card Algeria auto-entrepreneur card Algeria

What Does The New “Auto-entrepreneur Bill” Mean For Startup Founders In Algeria. Here’s What You Should Know

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

Why Nigerian Genomics Startup 54gene Added New 25% Cut To Its Dwindling Workforce

March 27, 2023

54gene founder and chief executive officer (CEO) Dr Abasi Ene-Obong

Another wave of layoffs has been enforced by Nigerian genomics business 54gene, located in Washington. This time, around 10 employees — or 25% of its already small workforce — were impacted, according to two persons familiar with the incident. According to our source, the organisation now employs less than 30 individuals across all of its functions.

The new leadership at 54gene is focused on prioritising the business’s core objective and setting the company up for future success, which means some jobs have been redefined or abolished recently, according to 54gene, which confirmed the latest layoffs.

Due to an almost dried-out runway, 54gene started 2022 with over 300 employees, but by the end of the year, its number had shrunk to only 39. This financial crisis resulted in a down round investment that reduced the company’s valuation from $175 million to $50 million and Abasi Ene-departure Obong’s as co-founder and CEO in October. Teresia Bost, the organization’s former general counsel, was appointed temporary CEO by the board of the firm. In an effort to attract more money, the firm said last week that its management will be completely restructured. Bost has transitioned into an advisory position, and San Francisco-based serial entrepreneur Ron Chiarello is now in charge.

One source claims that the entire marketing, sales, and compliance departments have been disbanded, and that the surviving staff members and contracted outside companies are now filling the vacant positions. The corporation has insisted that its initial area of focus — genomic research — will continue to be its major priority. There are now only six individuals managing this core service, according to a source. In 54gene’s three branches of genomic research — sequencing, biobank, and genotyping — two individuals are employed in each area.

According to a second person acquainted with the firm’s predicament, it is clear that the company needs additional workers in its key areas after the layoffs since “fatigue could push staff to depart without being fired off.” Parts of the company’s statement acknowledged that moving forward, “our recruiting will correspond to our fundamental objective,” so it appears to be aware of this.

The business asserts that its commitments to the impacted workers were met.

Africa-focused Market Intelligence Startup Rwazi Raises $4M To Accelerate Growth

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

FBI accuses China of trying to ‘ransack’ Western companies through hacking

July 10, 2022

FBI director Christopher Wray warned Western companies that China aims to “ransack” their intellectual property so it can eventually dominate key industries, escalating a dispute between the world’s two largest economies over hacking.

The Asian nation’s spies were snooping on “companies everywhere from big cities to small towns — from Fortune 100s to start-ups, folks that focus on everything from aviation, to AI, to pharma”, Wray said in remarks to a gathering of business leaders and academics in London.

He appeared alongside the head of MI5, Ken McCallum — the first time the heads of the Federal Bureau of Investigation and the UK’s domestic counter-intelligence agency have shared a forum.

China was running a “lavishly resourced hacking programme that’s bigger than that of every other major country combined”, Wray said, according to a statement from the US government. The nation “sees cyber as the pathway to cheat and steal on a massive scale”, he added.

Washington and US cybersecurity companies have long alleged that China runs expansive hacking operations.

Last year, the US, UK and their allies blamed an attack on the Microsoft Exchange on actors affiliated with the Chinese government, accusing Beijing’s leadership of a broad array of “malicious cyber activities”. The US also charged four Chinese nationals affiliated with the ministry of state security with a years-long drive to get into computer systems of dozens of companies, universities and government entities in the US and abroad.

‘Empire of hacking’

China denies the accusations, saying it is a victim of cyber snooping and calling the US “empire of hacking”. The foreign ministry in Beijing didn’t immediately respond to a request for comment on Thursday.

Wray also said that China is “looking for ways to insulate their economy against potential sanctions” after seeing how Russia was punished over its attack on Ukraine. “If China does invade Taiwan, we could see the same thing again, at a much larger scale,” he said.

McCallum urged companies to take steps to protect themselves, saying “a wide range of government and commercial targets” have been hacked.

Over the last year, the UK had shared intelligence with 37 nations to help them defend against such spying, he said, adding that in May “we disrupted a sophisticated threat targeting critical aerospace companies”, without providing more details.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Tesh Durvasula To Lead Africa Data Centres As CEO

February 14, 2022

Hardy Pemhiwa, President & CEO of Cassava Technologies

Cassava Technologies has announced the appointment of Tesh Durvasula to lead its transformation process at Africa Data Centres (ADC) as the new Chief Executive Officer. Durvasula will be responsible for driving growth, innovation and strategy of Cassava Technologies’ data centres to meet Africa’s accelerating demand for data and digital infrastructure.

Durvasula is an experienced technology and real estate industry executive with a 25-year track record of successful leadership and value generation in the digital infrastructure sector. He will lead the ADC team as the organisation rapidly expands its footprint of hyperscale data centres throughout Africa with a plan to add an additional ten data centres in the top ten economic centres in Africa.

The Chairman and Founder of Cassava Technologies Mr. Strive Masiyiwa, said that, “At Cassava Technologies our objective is to empower individuals and businesses with technology, based on our vision of a digitally connected future that leaves no African behind. Through our digital infrastructure and services, we are empowering our customers to fully participate in the fast-growing digital economy in Africa. Expanding our data centres footprint and management capacity is key to our strategy”.

Hardy Pemhiwa, President & CEO of Cassava Technologies, “We are delighted to welcome Tesh into the Cassava Technologies family and look forward to leveraging on his extensive industry experience as he leads our data centres business into its next phase of rapid expansion to meet the increased demand for data centre capacity in Africa. Following the conclusion of our $300m funding with the US IDFC and the recent $90m equity investment by IFC, it was imperative that we scale up our management team”.

Prior to joining ADC, Tesh served in a variety of executive roles at CyrusOne, culminating in his appointment as the Chief Executive Officer of the company. And, before that, he served as president of Europe operations for CyrusOne, overseeing CyrusOne’s expansion into England, Ireland, France and Germany, helping grow CONE into one of the largest publicly traded REIT’s in the US.

“The potential to grow digital infrastructure is bigger in Africa than anywhere else and this will provide a number of opportunities for economic transformation. I am extremely pleased to be joining Africa Data Centres and Cassava Technologies, especially now as Africa has become one of the fastest-growing data usage regions in the world. I feel we are well poised to make an invaluable contribution to Africa’s rapidly developing digital ecosystem,” concluded Durvasula.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has travelled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

South Africa’s Orderin Raise Fund for DaaS Business

January 21, 2022

South Africa’s only pure Delivery-as-a-Service (DaaS) business with 100% proprietary technology Orderin, has raised $4.7 million (R70 million) in a recently closed pre-series B funding round. The funding will allow the business to scale up infrastructure, and enhance last mile delivery, which continues to be a pain point for many businesses, particularly small and medium sized enterprises (SMMEs).

The money raised in this latest round of funding brings total investment to R303 million, having raised R6.5 million in pre-seed funding, R38.5 million in seed funding and R285 million in operational capital between 2018 and October 2021. This supplements the delivery network’s biggest round of funding which raised R102 million in 2020. Orderin Chairman, Dr Lutz Mieschke, owner of Mieschke Investments in Switzerland, is one of the main investors among 25 investors since founding Orderin in 2013.

“E-commerce has been growing steadily over the last few years but the Covid-19 pandemic has rapidly accelerated this growth. Customer expectations have placed demand on businesses for easy, quick and sometimes even free delivery options,” says CEO of Orderin, Thembani Biyam. “Driving the growth and development of infrastructure will not only improve last mile delivery and make it more accessible for businesses. This applies especially to SMMEs who can find it difficult to compete with larger enterprises on this point, but can also usher in a new future of e-commerce.”

According to a recent report by World Wide Worx, South Africa’s online retail market has more than doubled in the two years defined by the Covid-19 pandemic. E-commerce grew by 66% in 2020 with online sales reaching R30.2 billion and projected to top R40 billion in 2021. Biyam notes that emerging technologies are playing a huge role in enabling businesses to meet this high consumer demand when it comes to last mile delivery. “Businesses often have to deal with costly and inefficient last mile delivery due to challenges such as unpredictable timelines, the need to make multiple stops with only a small number of parcels being dropped off at each destination, congested traffic and more” says Orderin Head of Finance, Vulnavia Gura.

“Digital technologies such as Artificial Intelligence and data science can improve last mile delivery by finding the best routes to take to avoid traffic, the most efficient use of fuel, or even better predict demand and labour requirements. These technologies play a crucial role in enabling dynamic predictive models which permit our customers to circumvent these challenges at the speed needed for successful delivery. However, it is costly. The funding we raise allows us to scale our talent, tech and offering as we grow our customers and revenue.”

According to Biyam, the funding will assist Orderin in scaling its proprietary DaaS technology with its current client base in the short term, launch DaaS for SMMEs in the medium term, and establish a flywheel for its long-term goal of providing a platform for all types of business to get access to a variety of affordable eLogistics services to keep them competitive and help grow their businesses.

Orderin, which currently provides delivery services for the likes of McDonalds and Pick n Pay, one of South Africa’s largest supermarket chains, employs 120 people, and has created delivery opportunities for a further 2000 people. The funding will allow Orderin to grow the headcount to 200 and expand the delivery platform and delivery partners to 3000.

“We are moving quickly to mature our operational and governance models — our investors demand it and our stakeholders expect it. We believe that as a young company entrusted with investors’ funds we should create a reputation for prudence. This will engender confidence in future funders,” says Gura.

“The reason we built our own proprietary tech is because a lot of the global DaaS platforms just didn’t provide the depth and flexibility necessary to deliver services in alignment with our mission to enable best in class online fulfillment locally and, regionally,” adds Gura. “We’ve worked with many partners over the years; some have invested, some as product development partners, and others in running pilot programs. As a business in its growth phase, creating value for all our partners and clients is a balancing act, but I strongly believe that our commitment to achieving this is what powers our growth.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Fintech Startup Wave Puts Orange Money’s Business Model In Cote D’Ivoire Under Threat. Here’s How

October 21, 2021

Alioune Ndiaye, CEO of Orange Middle East and Africa

“Mobile money” stores abound in the dusty alleyways of Abidjan, the official capital of the West African country of Cote D’Ivoire. The colorful flags and posters that adorn their storefronts, promoting payment apps from telecom carriers like as Orange Money, MTN Money, and Moov Money, can be seen from afar. In recent months, a newcomer, Wave, has joined the ranks of telco advertising signs.

Wave is not only displaying its wares, but it is also doing the unthinkable: dividing the commission it receives on sales by three. This appears to be devastating for competitors such as Orange Money, which has been in business for thirteen years. Orange’s mobile payment business has evolved into a key component of the company’s African success.

Wave first launched presence in Senegal in the summer of 2020, then in Côte d’Ivoire this year.

On average, telecom companies in Cote D’Ivoire charge roughly 3% commission on “mobile money” transactions, with commission rates as high as 10% on small-dollar withdrawals. Wave approximately halves these rates by three by allowing totally free withdrawals and a single 1% fee on transfers.

This isn’t the first time someone has attempted to sabotage the “mobile money” market. However, the risk posed by the New York startup has become more than credible after obtaining $200 million in September from numerous firms, including Partech and Sequoia Heritage.

“Their strategy makes free what made 80% of our income, and it is unavoidably brutal,” Alioune Ndiaye, the CEO of Orange Africa, admitted in response to a question from the company’s employees. “We must act quickly and decisively. Our economic model must be altered. We don’t have an option any more. The model of charging customers for cash withdrawals is certain to fail. As a result, we’ll have to adjust our prices. In Senegal, Orange has already decided to unite with Wave, while it has recently decided to do so in Ivory Coast.

The Price War Is An Earthquake For Orange

The company’s mobile payment system, which was launched in 2008 and is based on the Kenyan M-Pesa, has become a cornerstone of the company’s African operations. Last year, Orange Money generated more than 500 million euros in revenue, accounting for roughly 10% of total revenue in the region, with a profit margin comparable to that of telecoms. In Sub-Saharan Africa, where banking rates are still low, demand for these dematerialized payment options, which are available to anyone with a smartphone, is growing. To the point where, by 2025, Orange expects to have doubled its revenue from it.

“The goal of generating 1 billion euros in revenue from mobile financial services by 2025 is unstoppable,” Stéphane Richard, the group’s CEO said. “Until now, the rise has been constant, averaging 25 to 50 percent per year. With the addition of new players like Wave, things will become more challenging, but we have resources. In Africa, we founded Orange Bank, which will serve as a hub for our mobile financial activities.”

SÉNÉGAL – TRANSFERT D'ARGENT:WAVE attaqué en justice par les agents des multi-services – PORCEPIK — *Source: Wave*

Already Yielding To Wave’s Challenge

In response to the fierce price competition, Orange in Cote d’Ivoire has set its mobile money withdrawal fee at 1% of all transactions. The decision took effect from Wednesday, October 20, 202.

Orange Money has 50 million customers, compared to approximately 130 million for the company’s mobile phone services. The management of Orange Africa is hoping that increased transaction volume will more than compensate for the rate cut.

MTN MoMo Côte d’Ivoire has recently also announced a 1 percent reduction in MoMo transfer costs.

Wave Orange Cote d’ivoire Wave Orange Cote d’ivoire

Senegal-based Fintech Startup, Wave, Becomes Africa’s Latest Unicorn After A $200m Investment

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Cape Town Displaces Lagos As The Most Valuable Startup Ecosystem In Africa — New Report

September 22, 2021

Lagos, Nigeria’s commercial capital, has given way to South Africa’s Cape Town as the top startup ecosystem in Africa, according to the latest Global Startup Ecosystem Report released by Startup Genome, in partnership with the Global Entrepreneurship Network. According to the report, African ecosystems are now worth $6.6 billion in total. Cape Town, Lagos, Johannesburg, Nairobi, and Accra account for $6 billion of that total.

*JF Gauthier, Founder & CEO of Startup Genome*

“Entrepreneurs, policymakers, and community leaders in Africa have been working hard to build inclusive innovation ecosystems that are engines of economic growth and job creation for all,” said JF Gauthier, Founder & CEO of Startup Genome. “The Global Startup Ecosystem Report is the foundation of knowledge where we, as a global network, come together to identify what policies actually produce economic impact and in what context.”

With data from over 3 million companies across 280 ecosystems, the Global Startup Ecosystem Report (#GSER2021) claims it is the world’s most comprehensive and widely-read research on startups. The report lists the top 30 worldwide ecosystems and the top 10 runner-up ecosystems, as well as a top 100 list of emerging ecosystems.

For the 2021 rankings, Global Startup Ecosystem Report rated ecosystems across seven performance indexes. They are: Performance; Funding; Market Reach; Talent & Experience; Connectedness; Knowledge

Here Is What You Need To Know

According to the report, the average amount of early-stage funding in African startup ecosystems during the GSER period was $46.5 million, more than double the amount seen the previous year.

Fintech dominates early-stage investment in Africa, according to the research, with over $206 million spent in the Sub-Sector between January 2018 and June 2020.

It claims that the overall exit value in Africa was over $1.1 billion, with Cape Town, Johannesburg, and Durban topping the list.

The research also lists Kampala, Abuja, Durban, and Kigali as Africa’s top regional challengers in that order.

Lagos Comes Back Top In Africa On The Top 100 Emerging Ecosystems Ranking

Despite falling behind Cape Town in terms of valuation, Lagos still ranks first in Africa among the Top 100 Emerging Ecosystems worldwide. Last year it was third in Africa, behind Cairo and Cape Town.

Startup Genome assesses over 275 ecosystems across over 100 countries to rank the top 30 globally, runners-up, and since 2020, the top Emerging Ecosystems.

The top Emerging Ecosystems are still at their earliest stages of growth.

In the ten years between 2011 and 2020, the Top 100 emerging ecosystems spawned 124 billion-dollar startups, with 53 ecosystems accounting for the bulk. The Top 100 Emerging Ecosystems have a total ecosystem value of approximately $540 billion, up 55 percent from last year, according to the report.

In Africa, Lagos is ahead of Cairo which places second. Nairobi, Kenya is third, while Cape Town, South Africa, ranks fourth in Africa and 81st in the world.

This year, Mumbai rose to the top of the Emerging Ecosystems list once more. In terms of performance, funding, experience, and talent and experience, it outperformed all others.

Global Performance

Despite a difficult year for many, the top five global startup ecosystems remain at the top, with Silicon Valley topping the list for the second year in a row, followed by New York City and London, which are tied for second place.

At #4 and #5, respectively, are Beijing and Boston.

North America continues to lead the Global Rankings, with 50 percent of the Top 30 ecosystems originating from this region, followed by Asia with 27 percent and Europe with 17 percent.

One new entrant to the Top 10 global startup ecosystems is Tokyo, which is now ranked #9, up six spots from last year. This is partly due to a rise in the number of successful exits in Tokyo, which has resulted in an increase in the ecosystem value of the city.

In addition to Tokyo, three other ecosystems have risen through the ranks: Shenzhen has reached the Top 20 at #19, Philadelphia has risen 15 places from #43 to #28 this year, and Salt Lake-Provo has entered the Top 30 at #30.

Other than Tokyo and Philadelphia, the largest movers this year are Toronto-Waterloo, which jumped four spots from #18 in 2020 to #14, and Seoul, which jumped from #20 in 2018 to #16 this year.

This year sees two new entrants to the Runners-Up list — Research Triangle (the Raleigh-Durham-Chapel Hill area of North Carolina, USA) and Dublin, Ireland.

For more on the report, visit https://startupgenome.com/report/GSER2021

Cape Town startup ecosystem Africa Cape Town startup ecosystem Africa

Why Lagos Is The Most Valuable Startup Ecosystem In Africa

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Five Reasons Why 5G Makes a Real Difference

September 6, 2021

By Peter Linder

Over the last 36 months, 5G has rapidly gained mindshare in society as a vital technology. But not all stakeholders in industries adjacent to the telecom industry understand what makes 5G different from its predecessors.

In this post, we describe a set of strategic choices made for previous mobile generations of which we made a single choice. 5G makes it possible to embrace both options, thereby unlocking larger opportunities earlier in the deployment cycle.

Here are 5 Reasons Why 5G Makes a Real Difference:

The introduction of 4G was consumer-led, with infrastructure and device technology development centred around smartphones for consumers. Businesses adopted consumer technology through a more visible, bring-your-own-device (BYOD) movement. Internet of Things (IoT) realisations using 4G focused on re-using technology designed for smartphones at a later stage of the 4G journey. Where devices such as smartwatches came after smartphones.

5G has always been a consumer AND business-led phenomenon. The existing consumer-led market is growing at 0.53 percent CAGR this decade, and the business-led market is growing at 12 percent CAGR. In simple terms, the consumer segment will remain the business foundation, and the business segment represents the growth potential for communications service providers (CSPs).

5G gives enterprises access to a richer value proposition for wireless connectivity. The 5G standards have prioritised whole business use categories, such as massive IoT and critical IoT. Service providers are transforming their marketing and sales teams to engage beyond selling SIM cards and buckets of data traffic, to supporting the digital transformation of enterprises.

5G Enables Both Mobile Broadband and Fixed Wireless Access

Mobile broadband led with its coverage and capacity capabilities during the rollout of 4G infrastructure. Cellular technology, which provided internet access to mobile devices, was dominated by smartphones, and fixed wireless 4G applications came to market once mobile broadband applications were successful in niche volumes.

5G is enhanced mobile broadband AND fixed wireless access (FWA) led from the start. Mobile broadband to smartphones defines initial coverage plans and device introduction strategies. Half of the 800+ 5G devices launched to date are smartphones. FWA using 5G comes earlier in the deployment cycle and will play a larger role in the market. We expect FWA to grow from 60 million in 2020 to 180 million in 2026. A mix of 4G and 5G will connect the next 100 million households, with 5G serving 70 million connections by 2026.

5G allows fixed wireless to become a powerful alternative to wired broadband where fibre doesn’t exist and where existing copper/coax infrastructure delivers subpar performance. 5G can be rolled out faster, at a lower cost, and with a high synergy between fixed and mobile broadband upgrades.

5G is for Universal Use, as well as for Business and Mission-Critical Use

4G started as a homogenous business proposition, defined around a universal internet connectivity service. All applications and all users would get equal access to the available network capacity. Today, support for unique requirements by business and mission-critical applications vary across 4G networks.

Network architecture and design for 5G support all three connectivity types. These connectivity types leverage traffic separation, reliability, availability, and security as the main improvement areas, from standards to implementation, and allow us to raise the bar for what 5G can support. One network supporting all three connectivity types is vital for applications where dedicated spectrum and infrastructure is not an option. The FirstNet deployed by AT&T in the United States is an excellent example of how powerful these combinations are already.

Business-critical connectivity supports business processes where performance, security, availability, and reliability are higher and require service level agreements. Mission-critical applications support users, like first responders, who have even higher requirements and where nationwide coverage is vital.

Network slicing is a mechanism introduced with 5G, where network resources in a public or private network can be dynamically allocated for different connectivity types. This opens the door for mobile infrastructure to play a bigger role as a platform for digital transformation supporting tailored connectivity services. We are at the point where one network slice does not fit all use cases any longer.

5G is in Both Public Networks and Private Networks

Today, public networks use 4G technology, and private networks use WiFi technology for wireless connectivity. 4G uses licensed spectrum, and WiFi uses unlicensed spectrum. These distinct silos with a service provider that are linked to a specific spectrum and technology are changing.

4G and 5G are moving beyond public networks and into the private or hybrid network domain, using licensed, shared or spectrum acquired on commercial terms. Ownership preference for private networks varies by industry. Private networks use a dedicated or shared spectrum.

The private network movement comes from the demand for superior cellular technologies for business-critical applications. 5G offers the performance of inflexible wired infrastructure with the flexibility of insecure and unreliable wireless alternatives.

New business models are emerging for private/hybrid networks with different combinations of spectrum ownership, network asset ownership, service provider, and degree of support for public services – mobile broadband, for example.

Urban, Suburban and Rural Coverage through 5G

The roll-out of 4G started with a focus on urban and suburban areas. Ten years into the deployment cycle, there are still areas in developed economies without 4G coverage. Citizens in rural areas are often left one mobile generation behind, accepting less capable infrastructure options.

Access and early access to 5G is necessary for both urban, suburban AND rural communities. Luckily, market forces are currently driving 5G implementation in urban and suburban areas. Early 5G builds in rural communities come from a combination of visionary business and society leaders who see the potential of 5G, and government subsidies.

The real value of 5G in rural communities is threefold. First, rural consumers will get digital access for their work and leisure that’s on par with their urban and suburban peers. Second, rural businesses will get the opportunity to be equal partners in the digital economy.

For example, many industries such as agriculture, outdoor recreation and green energy production will remain in rural areas and go through a digital transformation. And finally, rural communities will gain anchor institutions like education and healthcare that are on par with cities.

5G has the potential to close two digital divides in mobile and fixed broadband, with one infrastructure. Not in areas where fibre already exists or will reach this decade, but for the large areas beyond the fibre footprint.

Peter Linder is the Head of 5G Marketing at Ericsson.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry