Startup Advisory - Afrikan Heroes

d.light Secures $125 Million Investment to Power Up Off-Grid Solar Solutions in Tanzania

August 18, 2023

d.light, a company specializing in off-grid solar solutions tailored for low-income households, recently concluded a significant funding round, securing a total of $125 million. This funding has been acquired through a securitization facility, strategically aimed at addressing the increasing demand for off-grid solar products in Tanzania.

The infusion of new funds is intended to accelerate the expansion of its low-cost PayGo personal finance segment. Notably, this expansion is concurrent with the augmentation of its existing securitized financing facility in Tanzania. This move contributes to bolstering d.light’s financing through securitization to a substantial sum of $490 million, dating back to 2020.

In conjunction with its lending partner African Frontier Capital (AFC), d.light is capitalizing on the raised capital as the foundation for a fresh financing entity named Brighter Life Tanzania 1 Limited (BLT1). Noteworthy achievements include d.light’s attainment of 150 million customers, marked by the sale of over 30 million products in May.

Reasons Behind the Investment

The company has demonstrated its prowess as a frontrunner in the off-grid solar sector, catering to the underserved low-income population. This success is underscored by d.light’s achievement of the impressive milestone of 150 million customers, signifying its capacity to effectively penetrate its target market.

Moreover, the demand for off-grid solar products in regions like Tanzania has been on the rise due to a confluence of factors. These include the inherent challenges of traditional energy infrastructure, which often fails to reach remote or economically disadvantaged areas. d.light’s emphasis on affordability and sustainability aligns with the market’s needs and positions the company as a reliable solution provider.

The financial structure, particularly the PayGo model, has proven its efficacy in Tanzania and other regions. The ability to leverage customer payments for expansion not only ensures business growth but also aligns with the financial realities of the target customers, making it a symbiotic arrangement. The involvement of established institutions like the TDB Group further bolsters investor confidence in the feasibility of this financing approach.

A Look at d.light

Founded in 2007 at Stanford, California, d.light has evolved into a prominent player in the off-grid solar industry. Its founders established the company with a vision to address the energy needs of low-income households, focusing on regions where conventional energy infrastructure struggles to reach. The company’s operational headquarters are split between Nairobi and Palo Alto, California. While its origin lies in California, d.light’s impact is most profound in regions like Tanzania, where the demand for reliable and affordable off-grid energy solutions is robust.

d.light’s product lineup spans a wide spectrum of solar-powered devices that cater to various household needs. Ranging from lanterns and cookstoves to comprehensive solar home systems, TVs, radios, and even smartphones, the company’s offerings are designed to enhance the lives of those with limited access to traditional energy sources.

Beyond the product spectrum, d.light has ventured into the realm of consumer finance through its PayGo model. This model has proven to be a pivotal driver of both customer access and business growth. By scaling up this model, d.light aims to extend its reach even further among low-income families in Tanzania, ensuring that access to sustainable energy remains affordable and practical.

In collaboration with African Frontier Capital (AFC), d.light has introduced Brighter Life Tanzania 1 Limited (BLT1) as a strategic financing vehicle. This innovation not only underlines d.light’s commitment to innovative funding but also emphasizes its proactive approach to addressing energy access challenges in emerging economies. As evidenced by its achievements and sustained growth, d.light continues to shape the off-grid solar landscape while concurrently advancing financial inclusion and sustainable development.

Changeblock Secures Funding from EMURGO Africa for Blockchain-driven Carbon Trading Revolution

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

Establishing Your Business in Singapore as a Foreigner: Experience as a Startup Lawyer Bridging Africa and Asia

August 3, 2023

2.00 AM, amidst a yawning time difference, I found myself staring into the stern eyes of the bank compliance officer on the other end of the video conference call. The pressure of ensuring a seamless Know Your Customer (KYC) documentation process for my client’s startup in Singapore weighed heavily on my shoulders. One small error, and our efforts would be sunk into a deep, bottomless hole.

As the compliance officer began speaking, I couldn’t help but notice a sudden calmness in their tone, a reassuring coolness that eased the tension in the room. It was evident that they were well-versed in the intricacies of Singapore’s regulatory landscape and that our diligent efforts to comply with all requirements were appreciated.

Indeed, the time zone differences were challenging, but I was determined to facilitate the bank account opening for my clients, which included investment funds and promising African startups. The rigorous KYC documentation process demanded an unwavering focus on details, leaving no room for errors. However, I knew that the credibility and reputation of Singapore’s financial system would ultimately work in our favor.

This is just one case among many so far, and through them, I have learned that navigating the intricate pathways of Singapore’s business ecosystem can be both daunting and exhilarating.

One of the key reasons entrepreneurs and investors alike are drawn to Singapore is the government’s policy of allowing foreigners to own 100% of the stock of a company without the need for local partners or shareholders. This level of openness and flexibility in ownership is rare and makes Singapore an attractive destination for startups looking to establish a global presence.

The allure of Singapore’s startup ecosystem is undeniable. Its estimated value of $25 billion dwarfs the global average of $5 billion, cementing its reputation as a hotbed for innovation and growth. To encourage entrepreneurship and foster growth in the country, the Singaporean government offers a Startup Tax Exemption Scheme (SUTE).

Under the SUTE, qualifying startups enjoy a 75% tax exemption on the first SGD 100,000 of chargeable income and an additional 50% exemption on the next SGD 100,000 for their first three tax years of operation. This tax incentive serves as a crucial lifeline for budding businesses, providing the financial support they need to weather the initial stages of operation.

For some clients whose activities do not align with the SUTE criteria, securing the Partial Tax Exemption (PTE) becomes imperative. Navigating this complex landscape requires in-depth knowledge of the local regulations and expertise in tax planning. Thankfully, I have a strong local network that offers invaluable insights, making it possible to tailor tax strategies that best suit my clients’ specific needs.

Singapore business lawyer Africa — *The Merlion, Singapore City, Singapore. Credits: Viator*

One of the most demanding aspects of the process is usually the Know Your Customer (KYC) documentation. Local banks in Singapore have stringent compliance practices, necessitating meticulous attention to detail. However, I find that clients with a solid reputation and credibility encounter minimal rejections, further highlighting the importance of maintaining a pristine track record.

To streamline the incorporation process, I also assist my clients with procuring employee pass applications. The efficient handling of employee pass applications is critical to ensuring a smooth transition for their workforce to Singapore. With the right connections on the ground, we are able to navigate the bureaucracy seamlessly, saving valuable time and resources.

Again, navigating the local corporate and compliance ecosystem has been seamless so far. The corporate ecosystem in Singapore is governed by the Singapore Companies Act, which covers all aspects of a business’s life cycle, from incorporation to winding up. Compliance with this act is non-negotiable, and I leave no stone unturned to ensure that my clients adhere to all regulatory requirements to avoid any legal repercussions.

Maintaining compliance with the Accounting and Corporate Regulatory Authority (ACRA) requirements is essential for the smooth functioning of a Singapore company. Under the Companies Act, businesses are required to hold an Annual General Meeting (AGM) once a year, where shareholders, directors, and officers gather to review the company’s financial statements and discuss key matters. Private companies are now automatically excused from holding AGMs if they submit their financial statements to members within five months of the fiscal year-end, streamlining compliance for many startups.

The role of the corporate secretary is pivotal in ensuring legal compliance. Acting as the backbone of the organization, the corporate secretary is responsible for efficiently running the company’s administration and acting as a mediator between shareholders and directors. I rely on the expertise of a licensed and trusted local corporate secretary to handle all regulatory obligations and keep the companies on the right side of the law

Directors play a significant role in overseeing company operations and making crucial decisions. The Companies Act mandates that a minimum of one local resident director is necessary for companies in Singapore. These directors are required to act with honesty, transparency, and a duty of care towards the company’s best interests, ensuring a high standard of corporate governance.

The 2017 amendments to the Companies Act introduced significant improvements, simplifying debt restructuring processes and enhancing transparency regarding a company’s ownership and control. Notably, small businesses meeting specific criteria are exempted from audits, reducing compliance burdens and promoting a more conducive business environment.

As I wrapped up the video conference with the compliance officer, a sense of accomplishment washed over me. Navigating the Singapore business landscape has been a journey filled with challenges, learning opportunities, and moments of triumph. I feel immensely grateful for the experience, knowing that my efforts have contributed to expanding my clients’ businesses and tapping into the boundless opportunities that Singapore has to offer.

The vibrancy of Singapore’s startup ecosystem and its unwavering support for entrepreneurs makes it a place where dreams could take flight and ambitions could be realized. The generous tax benefits, supportive government policies, and access to a thriving global market make Singapore an attractive destination for startups seeking growth and success. As I look ahead, I am eager to continue exploring the endless possibilities and unlocking the potential for my clients’ businesses in this dynamic city-state. The journey has only just begun, and I am ready to embrace the challenges that lies ahead, armed with the invaluable knowledge and experience gained from my foray into the world of doing business on behalf of clients in Singapore.

Charles Rapulu Udoh is a lawyer based in Lagos, Nigeria. He may be reached on LinkedIn: https://www.linkedin.com/in/udohcharlesrapulu/

Singapore business lawyer Africa Singapore business lawyer Africa Singapore business lawyer Africa

Digital Payment Service PayShap Closes in on a Million Transactions

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

When A Startup Fails to Raise Funds, What Happens to Unpaid Employee’s Compensation? Lessons from a Recent Case

August 1, 2023

Startups are often hailed as the lifeblood of innovation and progress, but they also come with inherent risks. While some startups thrive and transform industries, others face the harsh reality of failure, leaving their employees in a precarious position. One such instance recently came to light when CSIS Health Ltd, a startup in the health technology industry, struggled to raise money and had to deal with the ramifications of unpaid employee remuneration. This case, decided by the Workplace Relations Commission (WRC) of Ireland, teaches important lessons concerning the obligations of startups and the rights of employees while facing financial difficulties.

The Case of Per Johansson

Per Johansson, a software engineering manager, was employed by CSIS Health Ltd from May 2022 to December 2022. However, the startup experienced financial difficulties and could not pay its employees, including Mr. Johansson. As a result, Mr. Johansson took his case to the WRC, seeking unpaid wages, notice pay, and accrued holiday entitlements.

The Struggles of a Startup

CSIS Health Ltd, like many startups, faced the daunting challenge of securing funding to sustain its operations and growth. Despite their best efforts, the company’s attempts to obtain grants or shareholder funding were unsuccessful. They even explored international opportunities, engaging with potential investors in the US. However, the COVID-19 pandemic disrupted their plans, and they were unable to secure the much-needed investment.

The WRC’s Decision

The WRC’s adjudicating officer, Peter O’Brien, carefully examined the case and acknowledged that CSIS Health Ltd owed Mr. Johansson the unpaid wages, notice pay, and accrued holidays. While the company acknowledged its financial obligations, it claimed a lack of funds to make the payments and had little hope of obtaining them in the near future.

In the ruling, Mr. O’Brien found in favor of Mr. Johansson, emphasizing that the unpaid wages were legitimately due and uncontested. The decision highlighted a breach of Section 5 (6) of the Payments of Wages Act 1991, which is intended to protect workers’ rights regarding their compensation.

The Compensation Award

Based on the WRC’s decision, Mr. Johansson was awarded €3,489 for unpaid wages from September 2022, €8,333.33 for each of the months of October and November 2022, and €4,545 for December 2022. Additionally, he received €25,000 gross as compensation for the non-payment of his notice period and €1,008.06 gross for his accrued holiday entitlements. The total compensation amounted to €50,708.72.

compensation when startup fails — *Credits: Burke Broadcast*

Takeaways for Startups and Employees

The case of CSIS Health Ltd and Mr. Johansson offers essential lessons for both startups and their employees:

Transparent Employment Contracts: Startups should ensure that employment contracts clearly outline notice periods and procedures for termination by either party. Clarity in contracts can prevent misunderstandings and disputes.
Responsibility and Accountability: While startup founders face immense challenges, they must also be accountable for their employees. Adequate financial planning and responsible management are crucial to meeting obligations to employees, even during difficult times.
Legal Compliance: Startups should familiarize themselves with employment laws and regulations in their respective jurisdictions to avoid breaching any provisions related to payments, wages, or termination.
Investor Contingency Plans: When startups rely on external funding, they should have contingency plans in place to manage potential financial setbacks. Diversifying funding sources and exploring alternatives can mitigate risks.
Communication: Open and transparent communication between startups and employees is vital. In times of financial distress, keeping employees informed about the company’s challenges and efforts to address them fosters trust and understanding.

The case of CSIS Health Ltd underscores the challenges startups face and the importance of honoring employees’ rights. Financial struggles do not absolve startups from their obligations to their workforce. By learning from cases like this, startups can build a more resilient and equitable business environment, fostering trust and promoting fair treatment of employees even in times of adversity.

compensation when startup fails compensation when startup fails

Medius Successfully Completes Acquisition of Tunisia’s Expensya

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

South African Women’s Health Startup Zoie Health Secures Funding for Expansion and Growth

June 28, 2023

Zoie Health, a South African e-health startup, has successfully raised additional pre-seed extension funding to support its expansion and overall growth. The company, which is dedicated to providing a comprehensive digital wellness platform exclusively for women and managed by women, offers a range of services such as virtual consultations, in-home consultations, medication subscriptions, valuable resources, and a supportive community of women who can assist one another through various healthcare needs.

Currently, Zoie Health serves a membership base of over 5,000 individuals, boasting an impressive 80 percent subscriber retention rate. The company has achieved this success by effectively utilizing network effects, relatability, and fostering a sense of belonging within its community. Moreover, Zoie Health has already partnered with 50 healthcare practitioners and is now poised for further growth thanks to the recent funding it received from 4DX Ventures and E Squared Investments.

Thato Schermer, the co-founder and CEO of Zoie Health

With the newly secured funds, Zoie Health intends to expand Africa’s first-ever digital women’s health clinic. The company plans to achieve this by broadening its product offerings and entering new markets across the continent. Thato Schermer, the co-founder and CEO of Zoie Health, expressed confidence in their ability to scale, stating, “We believe that our offering has great potential to expand, and we will be looking to enter other emerging African markets within the SADC region, as well as Kenya and Nigeria.”

Gladwyn Leeuw, the Chief Investment Officer at E Squared, highlighted the impressive expertise of the Zoie Health founding team, emphasizing that it is entirely led by black women. Leeuw further stated, “This formidable team is building a high-impact tech solution that we believe will be a tremendous addition to our portfolio of companies, aligning with our values and generating significant returns. This extension of funding builds upon E Squared’s initial support through the E Squared Pathways facility.”

Leeuw expressed their hope that through this partnership, they can support digital innovation in women’s healthcare and make quality and affordable healthcare accessible to working-class women. They believe that incorporating digital components will enhance accessibility to traditionally hard-to-reach services and offer a viable alternative for those unable to take time off work or endure long queues at government clinics. It also addresses the financial challenges associated with accessing private sector healthcare, which can be prohibitively expensive for many.

Orange Fab Tunisia’s 5th Cohort Startups Secure National and International Contracts

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

Here Are Lessons Learned By Ahmed Yousry, Founder Of Egypt-based 20-minute Delivery Startup Rabbit

December 31, 2022

The volume of e-commerce in the Egyptian market is expected to reach more than 93 billion pounds in 2022, according to a research paper published by the Information and Decision Support Center in the Egyptian Council of Ministers. The delivery market is also expanding, thanks to the support of emerging businesses, such as the “Rabbit” platform, which has been able to achieve great success in this market.

The company is getting ready to enter the Saudi market, and co-founder and CEO Ahmed Yousry has spoken about the company’s economic and societal goals. Last year, “Rabbit” closed a financing round of $11 million, making it the largest pre-establishment financing round in the Middle East and North Africa at the time.

Why did you decide to start your business in this industry?

I’m not a patient person by nature, so when I opened my refrigerator one day and discovered that there was nothing inside, I started brainstorming other time-consuming requests I might have on a daily, weekly, or monthly basis, such as fast food, produce, groceries, and even electronic products that you have to go out and look for and compare to the best. Hence, the inspiration for Rabbit. Providing the consumer with all of this in the quickest time feasible while maintaining the greatest level of quality.

And how did the company prevail in the fierce competition with other delivery and e-commerce firms?

We have a very strong work team that has enabled us to achieve what we have, and each individual has responsibilities and roles that he masters. This is especially true considering our management method is unique and there are no job grades; instead, everyone collaborates in a harmonious system. The work team is the secret to making a difference and securing a unique position in this market.

Our strategy is clear and simple for the entire work team, which helps us implement it quickly and effectively and helps us gain space and time more quickly. The idea is always the hero of our story, not the individual, and we deal with mistakes differently. In particular, we celebrate those who make mistakes because they gained experience.

How do you generally perceive the competition?

Competition is not a factor in our calculations because we can see that there is plenty of room for growth in the market and that it has not yet reached the point of saturation. The customer also continues to have needs beyond what is readily available, so there is no need to worry about competition..

The problem is not competition; rather, we are working to create a market, a supply chain, and a way to deliver goods to customers faster and for less money. By doing this, we can improve customer service and facilitate faster money transfers, which boosts the economy overall, especially when it comes to locally produced goods. Of our more than 100 million citizens, only a small portion shop online.

What about Rabbit? Startups have been known to make mistakes in their early stages.

While mistakes were made, we adhere to the idea that this is a marathon, not a sprint. We employ a unique strategy for every step. You shouldn’t start the race running at the same pace as you finish it.

For us as a startup, it was the logical course of action to try to borrow from tomorrow, in the sense of spending more money today to acquire customers for tomorrow, in order for the company to increase its speed. However, when the money became expensive or unavailable, it took us an additional month and a half to switch to the second course of action, which involved not growing as quickly and trying to rationalise our investments and spend every penny. I believe that this is the single thing we might have done better. Nevertheless, this decision set us apart and enabled us to reach a positive profit margin, which is crucial for the company’s ability to rationalise its investments.

What were the biggest difficulties you encountered?

The most difficult challenge for us was dealing with the Egyptian farms, factories, and suppliers in order to obtain the goods we desired from them in a timely and reliable manner. This is because we do not build a service from scratch; rather, we build people who support us with their services and we help them automate the processes that need to be automated.

What are your thoughts about expanding outside of Egypt?

One of the most significant markets for our expansion is Saudi Arabia, where we have secured the licence. Our expansion is broken up into three stages. First, we broaden into new areas of Egypt. For example, we presently cover three-quarters of Cairo, and our goal is to finish Cairo as well as the remaining governorates. The services and goods we provide to customers have also increased. Thirdly, regional enlargement to other countries. We are examining this in relation to the expansion issue.

What is the company’s goal over the next few months?

In addition to our corporate objective, we also have a community objective. The company’s objective is to create a service for the customer that is made in Egypt for Egyptians and offers him a level of service that exceeds his expectations. As of right now, we can see that we are developing the infrastructure to deliver anything to the customer at the time he needs it because there is a customer who needs his requests to be fulfilled promptly or immediately. We create the infrastructure necessary for each person to be able to get what they want when they need it at a particular date.

Regarding the societal issue, we want to develop personnel from both inside and outside the company to assist other businesses so that they can benefit from our experiences and recognise the mistakes we made in order to jointly create a better future for Egypt’s pioneering market. On this, we will be concentrating a lot of our efforts in the near future. Every one of our more than 200 workers has experience in something, so anyone with an idea or a problem can benefit from what we’ve discovered and build on it.

We didn’t all start from zero to get to where we are now; instead, we all built on existing market opportunities, and the success of any one of us draws us all together.

Rabbit delivery Rabbit delivery

China’s MSA Capital Explores Egypt Further, Backs 20-minute Delivery Startup, Rabbit, In $11m Pre-seed

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

Africa-focused Tech Firm Cassava Secures $50M Investment

July 19, 2022

Cassava Technologies, an African integrated technology corporation, said today that it has received a $50 million investment from C5 Capital (C5), a specialist venture capital firm that invests in cyber security, space security, and energy security. The investment is part of a larger funding round to help Cassava grow faster.

C5’s investment will help to accelerate Cassava’s efforts to improve digital connectivity and inclusivity on the African continent.

Strive Masiyiwa, Founder and Executive Chairman of Cassava Technologies

Cassava will serve as the go-to-market partner in Africa for C5’s cutting-edge portfolio firms, delivering best-in-class cyber security, satellite and space technologies, and renewable energy.

C5 and Cassava have already announced a collaboration in which Haven Cyber, a C5 portfolio business, and Cassava will scale Microsoft’s range of cybersecurity technologies across Africa to assist battle cybercrime.

“This investment from C5 is part of our plan to raise additional growth capital whilst diversifying our investor base. We are delighted that C5 has joined us to help realise our vision of a digitally connected future that leaves no African behind,” says Strive Masiyiwa, Founder and Executive Chairman of Cassava Technologies.

Cassava Technologies operates in over 20 African countries and is at the forefront of offering new technological solutions to local businesses and individuals.

The company offers digital solutions (in fibre networks, renewable energy, cloud, cyber-security, fintech, and digital platforms) to over 1 million businesses and internet connectivity to over 500 million Africans.

“We are delighted to partner with Cassava Technologies, to bring the most innovative cyber security, space and energy security products and services to African markets,” said André Pienaar, Chief Executive and Founder of C5 Capital.

C5 and Cassava want to provide expertise in cyber security to Africa by building a network of state-of-the-art Cyber Security Operations Centres (CSOCs) across Africa through a partnership between Haven Cyber (a C5 portfolio firm) and Liquid Cloud & Cybersecurity (a Cassava business).

The CSOC network will enable the continent to receive cyber security services and operations more quickly. The first CSOC is scheduled to open in South Africa later this year.

“Recent industry reports highlight that cyber security threats cost Africa close to $4.1 billion in lost GDP in 2021. This is primarily due to the massive increase in the adoption of technology in businesses and governments across Africa and increased vulnerabilities as cyber-attack technologies evolve,” said Hardy Pemhiwa, the President and CEO of Cassava.

“Today’s investment from C5 and our pan-continental partnership will enhance our ability to enable our customers to build secure and stable cloud-based digital services critical to transforming lives on the continent.”

Cassava tech Cassava tech

Moroccan On-demand Tutoring Startup SmartProf Raises New Funding

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. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

As Famous VCs a16z, Bessemer Dump Traditional Venture Capital, What’s The Way For Startup Investors In Africa?

July 4, 2022

When the 10-year-old venture capital firm, Andreessen Horowitz, decided to give up its venture capital business in 2019, it was as though the firm was bringing the entire venture capital industry to a crushing end. This was not, in any way, the end Marc Andreessen and Ben Horowitz, founders of Andreessen Horowitz, saw ten years ago in 2009 when they set up the traditional venture capital firm. And for a business that has over $28.2 billion in Assets Under Management (AUM), it would appear foolhardy to imagine that it was on the edge of bankruptcy. But was it? Andreessen Horowitz — or a16z (as it is briefly called) — was simply responding to an existential threat. Joined by other venture capital firms, such as General Catalyst, Touchdown, the Foundry Group, Sequioa, Bessemer Venture Partners, a16z understood the job of every business manager: to constantly evolve to remain competitive. All mentioned VC firms have relinquished the title of “venture capital firm” in preference to “investment adviser.”

But Why An ‘Investment Adviser’?

As would be shown in the comparison table below, venture capital firms are constrained in their capacity to invest outside of the typical startup scene, a sector that has become flooded with record amounts of cash as a result of enormous funds such as SoftBank’s $100 billion Vision Fund.

By becoming a Registered Investment Adviser (RIA), Andreessen can invest more capital in areas such as cryptocurrency, which frequently includes the acquisition of tradable coins as opposed to equity, and can let analysts from diverse fields to speak more openly with one another, as opposed to being walled off.

S/N	Queries	VENTURE CAPITAL FIRMS (VCs)	REGISTERED INVESTMENT ADVISER (RIAs)

1	What can this type of structure do?	VCs provide investment advice to the funds they manage and then manage the portfolios.	RIAs primarily provide advice on securities or other investments to clients and manage their portfolios.
2	At what point is registration required for each to offer services offered by the other?	VCs provide services offered by RIAs only to the extent of the funds and portfolios under their control. Therefore, registration as RIAs is required if VCs want to offer services primarily offered by RIAs. However, there are situations when VCs may offer services offered by RIAs without registration as RIAs. These situations can only arise only if VCs can show that: They only use a venture capital strategy within a private fund structure to manage the investments. At least 80% of the VC’s fund’s assets is invested in the stock of a private portfolio company, and that portfolio company does not borrow money or issue debt in connection with the private fund’s investment (i.e. no leveraged buyouts). If a VC wants to invest in secondary offerings, other venture funds, or the public equity of a company they took public, they can only do so with 20% of their fund’s total assets.	RIAs can provide venture capital services offered by VCs only to the extent of the clients and portfolios under their control. Therefore, registration as VCs is required if RIAs want to offer services primarily offered by VCs.
3	What are the major regulatory advantages and limitations in choosing one for the other?	VC companies can register as “exempt reporting advisers” or ERAs under US SEC laws. This lets them invest in startups without many compliance hassles. However ERAs, VC funds must limit non-qualifying investments (such as secondary offerings, crypto, or other venture funds) to less than 20% of their assets.	RIAs don’t have any such 20% cap on their assets. However, being an RIA comes with severe constraints including audits and advertising regulations that make cheerleading for a company harder. Upon SEC registration as an RIA, an RIA must adopt and frequently evaluate policies and procedures controlling almost every element of its activity. These obligations stem from the 1940 Investment Advisers Act. Particularly, RIAs should address the following policy and procedure issues: ( portfolio management processes, including allocation of investment opportunities — especially if they are limited as venture capital investments tend to be; insider trading; safeguarding of client assets; marketing activities; valuation of investments; client privacy; record-keeping; business continuity plans; cybersecurity; disclosure to clients and regulators; surfacing and managing conflicts of interests; The employees and certain consultants of the RIA must adhere to a code of ethics which govern certain behaviors outside of work such as personal trading, other business activities, gifts and entertainment, and conflicts of interest; finally, an RIA must have a dedicated Chief Compliance Officer who is responsible for administering the policies and procedures. Thus, although RIAs have more flexibility investing, this usually comes at a higher compliance cost.
4	What is the fundamental difference between an RIA, VC and a broker dealer?	VCs provide investment advice to the funds they manage and then manage the portfolios. A broker dealer does not.	Legal obligations and compensation are the main differences between RIAs and broker dealers. An RIA has a fiduciary duty to its clients, while a broker dealer is held to a suitability standard, meaning its advice must be suitable for the client’s need at that time and not always what is best for the client. Fiduciary obligation is a higher standard than suitability. Broker-dealers are paid by commissions on the investment products they sell. An RIA charges its clients (or fund) a proportion of assets under management, a fixed or hourly fee, or an incentive fee if assets rise in value. Furthermore, whereas broker dealers are members of FINRA, which is regulated by the SEC, RIAs are registered with the SEC or a state securities regulator.

Which Direction Should African Venture Capital Firms Take?

While the startup funding landscape in Africa is still growing and concern is more focused on getting more venture capital firms to join the investment space, knowing which path — venture capital or investment adviser model — to follow could only serve, for now, as a strategic tool for wriggling out of the growing competition in the investment landscape.

However, given that a majority of African venture capital firms are headquartered in the US, it makes more sense to substantially comply with the rules and regulations of the US. For example, as of December 2021, no venture capital fund has been registered with the SEC in Nigeria.

The size of a VC’s fund and its investing strategy should primarily determine which of the paths to toe. Where it chooses the VC path, it must limit its non-qualifying investments (such as secondary offerings, crypto, or other venture funds) to less than 20% of their assets in keeping with the SEC rules, as discussed above. Fortunately, the US DEAL Act, introduced in the US House of Reps last year, seeks to update the definition of a qualifying investment to include secondary transactions and allow venture funds to invest in other funds without counting against the 20% limit. This is part of major lobby efforts by the US’ National Venture Capital Association (NVCA), to “modernize” what it means to be a venture capital firm

For funds registered in respective African countries, local laws should apply; however, it must be borne in mind that a majority of African countries still frown at certain investments in alternative asset classes such as cryptocurrency.

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Nigeria’s Healthtracka Raises $1.5M Seed For Its At-home Lab Testing Platform

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. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

A New War Brewing Between Mobile Money Operators And Fintech Startup, Wave, In Ivory Coast

November 9, 2021

Wave ’s entry into the mobile money business in Ivory Coast has radically altered the landscape. The American company has established its costs as follows: 0% for deposits, 0% for withdrawals, and only 1% (of the total amount moved) for transfers.

In response to the public demand for the newcomer, mobile phone carriers who also offer mobile money, such as Orange, MTN, and Moov, have cut their rates to keep up with Wave.

The National Union of Mobile Money Point of Sale Owners of Côte d’Ivoire (Synam-CI) has also stepped up to make its views heard.

“Synam-CI brings to the attention of the public that the providers of mobile money services in Côte d ‘ Ivoire are in no way against lower transaction fees, buut underlines that for a long time, the owners of points of sale receive low commissions which do not allow them to make a decent living from their activity. This is partly due to the multiplication and increase in taxes which trample on our income (Ripsi or Arsi, VAT),” Elvis Ayemou, Secretary General of Synam-CI, said in a press statement.

“The Synam-ci can in no way oppose the fight against the high cost of living. The Synam-ci thanks the traditional operators for the efforts made regarding the reduction of transaction costs and the maintenance of the commissions of the service providers that we are,” the union leader added.

Synam-ci, however, called on the Ivorian authorities with a view to reducing taxes which “negatively impact our commissions”.

Synam-ci, on the other hand, appealed to the Ivorian government to reduce levies that “harm our commissions.”

“We request that the government investigate our area of operation in order to identify appropriate solutions for the long-term viability of mobile money in Côte d’Ivoire,” the union stated.

Wave mobile money Ivory Coast Wave mobile money Ivory Coast

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 write

Gokada Appraises Future Operations, Launches Super App

June 1, 2021

One of Africa’s leading transportation and last-mile startups, Gokada has strengthened its platform to provide food delivery, e-commerce and ride hailing in a new app as it crosses US$100 million in annualized transaction value. The startup which just announced crossing the one million food delivery and ecommerce orders on behalf of over 30,000 merchants in the last 12 months alone, has expressed great optimism that with the launch of its Super App, it will exceed expectations earlier than predicted.

Growth at the company is accelerating, as Gokada has grown its volume >3x in the last 6 months. With increasing internet penetration and ease of mobile payments, the ecommerce sector in Nigeria is set to grow and last mile delivery is set to drive this even further.

Gokada is looking to serve this growing market with expansions from its current base in Lagos, across multiple cities in Nigeria, including Abuja, Port Harcourt, Ibadan and Ogun. Gokada plans to leverage its recent NIPOST license for cross-country courier and logistics services as it expands across the country.

The company’s new CEO Nikhil Goel said that “The ecommerce and delivery market in Nigeria is growing at an exponential rate and will be worth >US$20 billion over the next few years.

Recalling similar growth experience while working at Zomato in India, he said that “much like in India and our counterparts in other emerging markets, Gokada is building a transport infrastructure from the bottom up, using well-trained riders, powered by technology, to connect businesses large and small with a consumer base in its millions”.

“This launch is core to our objective of positioning Gokada at the center of Nigeria’s e-commerce and delivery revolution”.

In addition to the launch of the Gokada Super App and its multi-city expansion plans, Gokada is also strengthening its Senior Management team, with the recent appointment of Dika Oho as VP Product, who was previously Director of Developer Growth at Andela and will lead Gokada’s product development.

Gokada’s expansion will see the creation of new jobs, with the addition of thousands of new G-pilots, the largest last mile delivery fleet size in Lagos. As well as significantly expanding its last-mile delivery offering, Gokada will also reintroduce its popular ride-hailing service in cities where licenses are available, initially starting with Ogun and Ibadan.

As the company expands its service offering, by providing a reliable and seamless same day delivery service for thousands more businesses across Nigeria, the Gokada Super App, available on Android and iOS, has been developed so customers will have enhanced discovery of key services and products, can access all Gokada pilots at the touch of a button, rate the service instantly and choose single or multi point deliveries.

For the thousands of businesses who rely on the Gokada Super App to fulfill deliveries, they will have access to thousands of pilots, be able to create easy order management, use API integration to create and cancel orders, estimate delivery charges, and receive status updates straight from their mobile device, as well as select route optimization to reduce delivery costs. Gokada currently works with the likes of Eden, Krispy Kreme and Sooyah Bistro, and will continue to build out its technology and G-pilot infrastructure to support Nigeria’s growing business community.

Nikhil Goel concludes, “The past year has shown us all – whether it be for general use or for business continuity – just how much we rely on delivery services to fulfill daily needs. Business is changing, and the Gokada Super App has been designed with that very consideration in mind – keeping customers and businesses connected and updated at all times throughout the delivery process. We are excited to be leading and growing this market segment in Nigeria, delivering a service that we believe will be the backbone and catalyst for the future of commerce in Africa”.

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

The Best Strategies For Trading Gold in Africa

May 9, 2021

Trading in commodities like gold, silver, and oil has been at the heart of investing for generations, and it’s the accessibility of these markets that make them so attractive to investors. From Asia to Africa, precious commodities are a trading sector that ‘never sleeps’ – a market is always open somewhere on earth, after all. Not only is it affordable to do so, whether you’re entering the market with a hundred dollars or several thousand, but the strategies and approaches you’re able to trade commodities with are very flexible, too.

As with a lot of commodities markets, the fundamental focus of your strategy comes down to the timeframes you hold onto certain assets. For example, if you’re investing in Gold ETFs – that’ll mean purchasing and holding onto those assets for potentially extended periods of time – possibly months, rather than the hours or minutes that currencies are sometimes traded within. Prices can fluctuate many times over a matter of days, and so the Forex trader has to have a clear investment goal in mind and a healthy risk appetite, to avoid panic selling.

The option to invest in physical gold is perhaps the most obvious one. It typically requires a highly conservative approach, due to several reasons. It tends to have a slower buying and selling pace, no ability to sell shorts, its value won’t always reflect the value of trading in other gold products on the market due to mark-ups on bars or nuggets. The final issue is the need to physically hold these commodities somewhere. Finding adequate and secure proofing and storage facilities is a further expense. For the average trader in a large continent like Africa, you’re not limited to only purchasing physical Gold – here are some of the most popular alternative routes to investing in the best-known precious metal.

Futures

Trading in Gold options and futures – instruments that represent physical Gold – are traded via a well-regulated exchange, and its strong security and regulations are one of its greatest assets. Usually, you’ll be required to lay down a deposit through a futures brokerage. This is due to the limitations on the smallest possible Gold CFD futures contract, which only covers slightly more than 935g of Gold. Therefore, by giving a small deposit, you’re able to cover the necessary margins and support the buying or selling of a single futures contract.

Trading Gold ETFs

Another popular route is to buy gold through an ETF (exchange-traded fund). The ETF is a collection of stocks and shares grouped together, so price changes in Gold ETFs are typically closely related to the fluctuations of physical gold’s price. By opening an account with a brokerage, you are able to access direct trading in these stocks and shares. Again, deposits are often common, as are commission fees on trades. If you’re looking to trade in gold under approximately $5000 in value, often this route can be impractical, largely due to those additional fees.

Trading Gold Mining Shares

A further option is to trade in Gold through shares in Gold mining companies. In Africa, there is an abundance of gold mines and so your connection to these markets is reasonably strong and local to your timezones. The value of Gold mine shares is directly tied to Gold’s own value, however, the same drawbacks – speed, costs, and minimum deposit – and the value of Gold itself are several additional factors that make gold mining shares more unpredictable.

While many forms of investing and trading tend to require a wealth of patience, or only remain open during a small window of trading hours, Gold markets allow you to apply strategies over hours or days, as you see fit. If you’re looking for a commodity that’s close to home and moves at an exciting pace, Gold may be an asset for you

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