Startups and founders - Afrikan Heroes

‘A Failed Gamble’: Peter Njonjo’s Abrupt Exit from Twiga Raises Questions About Corporate Leadership in African Startups

January 25, 2024

In a surprising turn of events, former CEO Peter Njonjo’s sudden departure from Twiga Foods, a prominent African agritech startup, has left investors and industry observers questioning the viability of integrating corporate expertise into the fast-paced world of startups. Njonjo, celebrated for his extensive corporate experience at Coca Cola Company, was initially brought in with high expectations of steering Twiga towards unprecedented growth and institutionalization.

Twiga Foods, a major player in Kenya’s informal retail e-commerce sector, had successfully attracted significant investments, boasting a funding portfolio running into millions of dollars. Under founder Grant Brooke’s leadership, the company had ambitious plans to revolutionize traditional supply chains in the informal retail market, leveraging the red-hot venture capital-backed agritech ecosystem.

Njonjo’s appointment was viewed as a strategic move to infuse Twiga with corporate know-how, aiming to scale the company rapidly. Grant Brooke justified the decision by highlighting Njonjo’s successful track record at Coca Cola, where he led the multinational’s West and Central Africa business unit for over two decades. The goal was to leverage Njonjo’s proficiency in managing large institutions to streamline Twiga’s operations and solidify its market position.

However, the grand narrative took an unexpected turn when Njonjo, after a brief and intense tenure at Twiga, decided to step down. The question now looming over the startup ecosystem is whether the attempt to blend corporate prowess with the agility required for startup growth has backfired.

Adding complexity to the unfolding narrative, Njonjo’s recent public remarks about finding his “raison d’etre” and pursuing entrepreneurial ventures have raised eyebrows. His personal investment in the Galana Kulalu Food Security project, a deviation from Twiga’s core business, has fueled speculation about the real motivations behind his involvement with the startup.

Observers sampled by Afrikan Heroes are expressing a certain degree of disillusionment, questioning the effectiveness of bringing in a seasoned corporate executive to navigate the unpredictable waters of a startup. Njonjo’s tenure, intended to usher in a new chapter of growth and stability, now appears to have concluded in what some industry insiders are referring to as a “failed experiment.”

The abruptness of Njonjo’s exit has left Twiga at a crossroads, with industry stakeholders seeking reassurance and clarity about the company’s future trajectory. The inherent risks associated with merging corporate leadership with the dynamic nature of startup ecosystems now seem glaringly apparent, prompting a reevaluation of whether this approach is conducive to the fast-paced and unpredictable world of technology-driven ventures.

Njonjo’s departure comes at a critical juncture for Twiga, with the startup grappling with the need to reassure stakeholders and chart a clear path forward. As the startup ecosystem reflects on this development, the case of Twiga Foods serves as a cautionary tale about the potential challenges and pitfalls of incorporating corporate expertise into the unique dynamics of startups.

Lessons Twiga Foods Has Taught Startups About Disrupting Africa’s Food Supply Chain

Cameroon’s Maviance Dominates 2023: Surges with 13.8 Million Transactions and 320% Growth

January 1, 2024

Maviance, a multiservice platform that facilitates payment operations such as bill payments, sale of communication credit, and mobile money transactions in the CEMAC region, reports 13.8 million transactions with a total value of 295 billion XAF between January and November 2023. According to the information released by the company, these figures reflect a 320% increase in transactional flows.

“This growth is mainly attributed to two factors: the launch of its digital mass payment solution in the market and the adoption of SmartCash by the Société Anonyme des Boissons du Cameroun (SABC) for the digitization of its collections. Maviance’s mass payment solution, used by both small and large organizations, is a digital platform that enables companies to dematerialize their payment processes (salaries, bonuses, missions, up to +5000 people) in a single operation and instantly access transaction reports,” it reads.

SmartCash, it is learned, is a digital solution proven by entities like ENEO since 2017. It allows companies to instantly collect payments through various payment channels by connecting “our network of agents, payment providers (Mobile Money), microfinance institutions, banks, and GIMAC directly to the company’s information system.”

Thanks to its extensive partner network comprising more than 150 financial institutions, Maviance provides them with the convenience of collecting payments even in rural or underserved areas not served by banks.

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 Africa’s Entersekt Strengthens Global Focus with Modirum 3-D Secure Acquisition

December 14, 2023

In a strategic move to enhance its financial authentication capabilities, Entersekt, the leading player in the field, has successfully acquired the Modirum 3-D Secure software business from Modirum, a renowned digital payment security provider. The acquisition, finalized for an undisclosed sum, marks a significant development in the ever-evolving landscape of financial technology.

Modirum, with a rich history spanning 25 years, has been a trailblazer in facilitating authenticated card-not-present payments. Its cloud-based 3-D Secure (3DS) technologies have been instrumental in authenticating digital payment transactions globally across various payment systems, issuers, and merchants. Entersekt’s acquisition of Modirum’s 3DS business is a strategic move to address the escalating challenges faced by financial institutions in combating fraud threats.

According to Julie Conroy, Chief Insights Officer at Datos Insights, financial institutions grapple with the complexities of using disparate authentication tools across various banking channels, leading to inconsistent user experiences and vulnerabilities in fraud prevention strategies. The integration of Entersekt’s authentication capabilities with Modirum’s 3DS products aims to provide consumers with a seamless, cross-channel user experience and robust protection against evolving fraud schemes.

With this acquisition, Entersekt is poised to expand its customer base significantly, securing over 2.5 billion transactions annually. This move not only affords Entersekt a compelling global footprint but also establishes a clear technological advantage with a solution spanning digital, payment, and data channels for issuers, acquirers, and merchants.

Schalk Nolte, co-founder and CEO at Entersekt, highlights the broader set of solutions and increased data sources resulting from the combination of Entersekt and Modirum. This strategic move allows Entersekt to scale globally, providing the financial world with a comprehensive, cross-channel platform for secure, frictionless, Context Aware™ Authentication of customers and payments.

Entersekt plans to integrate Modirum’s 3DS solutions into its Entersekt Secure Platform for transaction authentication, with the entire Modirum 3DS team joining the company. This acquisition is expected to accelerate product development, enhance Entersekt’s existing product offering, and reinforce the company’s ability to scale and support customers globally.

Moreover, Modirum’s impressive list of customers significantly boosts Entersekt’s market share of financial institutions offering 3DS, making the combined offering the most advanced solution available for financial institutions today. Kumbi Gundani, Head of Telecommunications, Media, and Technology at Standard Bank South Africa, expresses pride in supporting Entersekt’s acquisition, emphasizing the bank’s commitment to promoting African technology on the global stage.

Entersekt’s 13-year track record in helping financial institutions reduce fraud losses, increase revenue, maintain regulatory compliance, and deliver superior customer experiences positions it as a key player in the industry. The incorporation of Modirum’s expertise further strengthens Entersekt’s ability to offer advanced Context Aware Authentication, protecting digital payment transactions against continually evolving fraud threats.

Modirum, founded in 1997, has a global presence in over 50 countries, serving more than 100,000 merchants, hundreds of card issuer banks, and over 100 million cardholders. The alignment of Modirum’s 3DS solution and talented team under the unified brand, Entersekt, signifies a response to the market’s demand for an integrated digital payment security platform.

In the words of Modirum CEO Jari Heikkinen, “Entersekt delivers amplified strengths in both online payment and customer authentication through a single offering, breaking down silos and enabling higher transaction success rates, reduced false declines, and less fraud for financial institutions, ultimately improving the overall consumer experience.”

Entersekt’s strategic acquisition of Modirum’s 3DS business stands as a testament to the dynamic nature of the financial technology sector and sets the stage for a more secure and integrated future in digital payment authentication.

Fawry Partners with Hulul and WideBot to Boost SMEs Through Innovative Fintech Solutions

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.

Lessons Learned as Nigerian FinTech Pivo Shuts Down After Raising $2M

December 6, 2023

In a twist of fate, Pivo, the Nigerian fintech sensation, has abruptly shuttered its doors just one year after clinching an impressive $2 million in seed funding. The backdrop to this unexpected closure? A tumultuous economic landscape in Nigeria, rife with currency overhauls and policy upheavals. Among Pivo’s high-profile backers were Mercy Corps, Precursor Ventures, Vested World, FoundersX, and the prestigious Y Combinator.

What adds a layer of intrigue to this narrative is the remarkable achievement of Pivo’s co-founders, Amadi-Emina and Ijeoma Akwiwu, who in 2022 etched their names in history as the first all-female-founded team in Nigeria to secure Y Combinator’s coveted support. This landmark follows a similar trail blazed by the now-defunct Ghanaian startup Tress, marking the second instance in Africa where Y Combinator threw its weight behind an all-female-founded team.

As the curtains fall on Pivo’s venture, we delve into potential catalysts for its demise below:

Market Conditions and Economic Challenges:

The startup operated in Nigeria, where there were challenges related to imported products, broken transport infrastructure, and a tough business environment.

The decision by the Central Bank of Nigeria to redesign the currency notes and the subsequent cash crunch in the market affected businesses, including Pivo. This created difficulties for businesses to access cash and impacted their operations.

Currency Depreciation and Economic Policy Changes

The floating of the naira by the newly elected president negatively impacted the value of the currency against the dollar. This resulted in increased production costs for many businesses, including Pivo, affecting their financial stability.

Business Model Challenges

Pivo’s business model may have faced challenges, particularly in dealing with irregular payment cycles of supply chain businesses. The lending service, Pivo Capital, aimed at providing loans to businesses in the supply chain sector, might have struggled due to the difficulty in obtaining capital and potential high-interest rates.

Customer Acquisition and Trust Issues

Pivo may have faced difficulties in convincing users to see it as their primary banking provider. Despite the growth of digital banks in Nigeria, some people remained wary of using them as their main financial service provider. Building trust and acquiring a substantial customer base could have been challenging.

Competitive Landscape

While Pivo had a first-mover advantage in the freight carrier-focused digital banking space, potential competition from other startups in related sectors could have posed a threat. The presence of similar startups like Duplo and the possibility of e-logistics companies developing similar platforms all point to stiff competition concerns.

Capital Dependency

Pivo’s lending service relied on external sources of capital for loans. If obtaining capital became challenging due to increased interest rates or other financial market conditions, it could have strained the startup’s ability to provide loans to its customers.

In light of these multifaceted challenges, Pivo’s closure serves as a cautionary tale for the broader fintech sector, highlighting the intricate interplay of economic dynamics, regulatory decisions, and market competition in shaping the fate of innovative startups in emerging markets like Nigeria.

Pivo fintech

Africa Finance Corporation Signs US$350 Million Long-term Line of Credit With African Development Bank for Infrastructure

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.

Nigeria’s Payday Yields to Crypto Startup Bitmama in Major Acquisition Deal

December 5, 2023

In a landmark move within Nigeria’s rapidly evolving fintech landscape, blockchain payments platform Bitmama Inc. has officially acquired Payday, a virtual card service provider. This strategic acquisition, facilitated through Bitmama’s cross-border payments product Changera, is set to redefine the industry and consolidate blockchain payment solutions.

The acquisition comes on the heels of Payday’s impressive $3 million seed funding round merely nine months ago and follows three months of exploring potential sale options. While the financial terms of the deal remain undisclosed, a reliable source close to the matter indicated that acquisition talks were initiated just a few weeks ago and are currently at an advanced stage, approximately 85% complete.

Changera, Bitmama’s flagship product launched in 2021, is poised to integrate key personnel from Payday, spanning departments such as marketing, customer service, and engineering. The integration process is already underway, with Payday employees transitioning to Changera. The fate of Payday’s CEO, Favour Ori, known for his strong technical background, remains uncertain, but indications suggest a potential departure given Bitmama’s established leadership and robust technical team.

For Payday’s 300,000 customers, now under Changera’s care, the transition promises continuity with no immediate noticeable changes. The move is anticipated to address operational challenges faced by Payday, including industry-wide charge-back fraud issues, disruptions in Mastercard services, and senior team exits earlier in 2023.

Bitmama’s management assures that Payday’s brand will persist, operating under the broader umbrella of Changera and supported by its stablecoin infrastructure. This integration aims to enhance customer experience and service reliability by mitigating Payday’s dependence on third-party integrations.

In the short term, no alterations are planned to Payday’s fee structures or terms of service. However, customers can expect an expanded suite of services and potential new features as the integration progresses, leveraging the combined strengths of Bitmama and Payday.

Post-acquisition, Bitmama sets forth an ambitious roadmap, highlighting the development of a groundbreaking solution aimed at enhancing FX transactions for African businesses. The solution, slated for launch in Q1 2024, is expected to address critical market needs, facilitating smoother and more efficient B2B cross-border financial interactions.

This acquisition aligns with a broader trend of strategic consolidations within the fintech industry, reminiscent of Chaka’s acquisition by Risevest in September 2023. The trend underscores the growing inclination of fintech companies toward strategic partnerships and acquisitions as a means to overcome market challenges and scale operations.

Background on Payday’s Journey and Achievements

Founded in June 2021 by CEO Favour Ori, Payday embarked on a mission to create the African version of PayPal. Despite facing initial challenges and strategic shifts, Payday secured notable investments, with Moniepoint Inc. leading a $3 million seed funding round in March 2023.

Payday’s innovative approach to global payments accounts denominated in USD, EUR, and GBP garnered attention, attracting over $5 million in funding to date. The fintech company, headquartered in Kigali and Vancouver, strategically narrowed its focus to Nigeria after joining the Techstars program in Toronto.

With an initial modest customer base, Payday experienced rapid growth, currently serving 300,000 users and processing an impressive average of 40,000 transactions daily, totaling over $25 million monthly. The fintech’s profitability, achieved in August 2022, defied its burn rate increase due to an intensive marketing campaign.

Payday’s strategic partnerships, including collaboration with SpaceX’s Starlink, showcased its commitment to innovation. The fintech’s foray into social media marketing further solidified its market presence, with the company’s leadership expanding to include experienced professionals from global fintech Revolut, Nigeria’s Bank of Industry, Goldman Sachs, and Expedia.

This acquisition by Bitmama marks a pivotal chapter in Payday’s journey, unlocking new possibilities for both companies and signaling a transformative period in Nigeria’s fintech ecosystem.

Payday Bitmama Payday Bitmama

Payday Raises $3M Seed Led by Moniepoint Inc. to Revolutionize Africa’s Borderless Payments

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

How Ivory Coast’s Julaya Delivered 4X Returns to Early Backers on Their Investments

December 4, 2023

In a significant financial triumph, Ivory Coast-based fintech Julaya has emerged as a promising investment opportunity, yielding a remarkable 4x return for its early angel investors. The success story unfolds against the backdrop of Julaya’s recent $5 million pre-Series A funding round, bringing its total fundraising to $7 million. The round was led by Speedinvest, a European VC firm, with participation from notable investors such as EQ2 Ventures, Kibo Ventures, Orange Ventures, and Ivorian business angel Mohamed Diabi, among others.

The fresh capital injection is earmarked for Julaya’s ambitious expansion plans across Francophone West Africa, targeting countries like Benin, Togo, and Burkina Faso. The funds will also support talent acquisition and bolster product development, including the launch of a loan product catering to around 200,000 SMEs in the UEMOA area.

The decision to allow early investors to exit the business during this funding round was a strategic move, driven by an opportunity to bring in a new fund while managing dilution. This decision resulted in a substantial 4x return for the initial backers, marking a significant win for those who believed in Julaya’s vision early on.

CEO Mathias Léopoldie revealed that the company’s payment processing volume has skyrocketed, from over $1.5 million weekly in July 2017 to an impressive $7.5 million, with revenues experiencing an annual surge of nearly 500%. Notable clients such as Jumia and Sendy underscore Julaya’s growing influence in the B2B payments landscape in Francophone West Africa.

Julaya’s success isn’t confined to financial metrics alone. The startup’s innovative approach to corporate spending management distinguishes it in the market. Utilizing mobile money channels, Julaya facilitates bulk payments between businesses and their unbanked staff. Moreover, the company introduced a Mastercard-issued prepaid card designed for corporate cost management, further expanding its service offerings.

The inclusion of professional football star Édouard Mendy as an investor adds an intriguing element to Julaya’s investor base. Mendy, a limited partner in the company, exemplifies a growing trend where athletes recognize the potential of venture capital as both a lucrative investment and an opportunity to contribute to their home countries.

While Julaya’s financial returns are undoubtedly impressive, its success narrative extends beyond mere numbers. Founder Mathias Léopoldie emphasizes the importance of building a great company that creates genuine economic activity, underlining the nuanced definition of success that goes beyond financial metrics.

As Julaya continues to navigate the complex payment ecosystem in Francophone West Africa, its innovative solutions and strategic partnerships position it as a transformative force, not only in payments but potentially as a close banking partner for businesses in the region, according to Enrique Martinez-Hausmann, principal at lead investor Speedinvest. The company’s growth trajectory and investor returns underscore the pivotal role intuition, strategic decision-making, and a strong team play in shaping a fintech success story.

South Africa’s Revix, BitFund, and Coinpanion Merge to Form Altify

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 Are More North African Startups Emigrating to France?

November 28, 2023

In recent times, an increasing number of startups from North Africa, particularly the Maghreb region, comprising Algeria, Libya, Mauritania, Morocco, and Tunisia, have found a new home in France. This migration trend is noteworthy, with companies such as Algeria’s Yassir, Tunisia’s Save Your Wardrobe and Winshot, and Morocco’s Sobrus and Cloudfret either fully relocating or establishing regional branch offices in France. The allure of France as a hub for North African startups is multifaceted, with factors ranging from enhanced access to funds, larger markets, and a thriving pool of migrating talent.

Access to Funding

One significant driving force behind this trend is the heightened access to funding in France. Notably, Morocco, Algeria, and Tunisia are predominantly French-speaking countries, and many investors from French-speaking African nations have their headquarters in France. This proximity has naturally led startups to gravitate towards France, seeking to overcome the persistent challenge of limited access to funding in their home countries. An illustrative example is Save Your Wardrobe’s recent establishment of an office in Paris, a strategic move aimed at tapping into the financial opportunities that France presents.

Hasna Kourda, CEO of Save Your Wardrobe, explains, “France is currently at the forefront of promoting maintenance and repair initiatives. This year, the country took a significant step forward with the creation of the Repair Fund (a €154m Fund), thereby taking the lead in promoting a culture of circularity and responsible consumption. In line with this vision, our new French office is ready to play a central role in promoting the principles of maintenance, repair, and post-purchase responsibility.”

Access to a Larger Market

The relocation to foreign markets, particularly France, has enabled North African startups to serve larger clients and expand their horizons. For instance, Expensya from Tunisia has secured multi-million dollar contracts with major conglomerates in Europe, such as Le groupe Electricité de France (EDF). The move to France has not only broadened the startup’s clientele but has also facilitated partnerships with other European industry giants like Uber, Orange Business Services, Microsoft, H&M, and more.

Omar Sefiani, co-founder of Sobrus, underscores the strategic importance of positioning in France, stating, “Deployment in Lille, France serves as a catalyst for growth in an established, mature, and competitive European market.”

Access to Migrating Talent

The pursuit of talent is another crucial aspect of the migration wave. While tech talents in North Africa may opt to stay home, a significant portion is increasingly migrating to Europe. France, facing an anticipated deficit of 400,000 tech talents by 2030, has become a magnet for these skilled individuals. The cross-border migration of North African startups aims to tap into this talent pool and shift the competition for skills to a new battleground.

The phenomenon of brain drain, often considered a challenge for North African countries, is viewed as an opportunity by countries seeking skilled professionals. France, in particular, has implemented initiatives like the “French Tech Visa” to encourage professional immigration in the digital field, simplifying visa application procedures for innovative companies.

Sami Nasr, a sociologist, emphasizes the changing dynamics, stating, “The culture of failure is no longer bearable in Tunisia. A young graduate can no longer be content to watch his neighbor, who has immigrated illegally abroad and found a job, while he, with his degrees in hand, remains unemployed.”

In essence, the surge of North African startups to France is a complex interplay of access to funding, larger markets, and the pursuit of migrating talent — a strategic dance that shapes the landscape of the startup ecosystem on both sides of the Mediterranean.

Who Are The Investors In Francophone African Startups And How Do They Invest?

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

Lessons Learned as Africa-focused FinTech Zazuu Shuts Down After Raising $2M

November 18, 2023

In a startling turn of events, Zazuu, the Africa-focused remittance aggregator, has announced its closure, sending shockwaves through the African financial technology sector. Founded in 2018 with a mission to empower African immigrants in navigating the intricate landscape of international money transfers, Zazuu managed to secure $2 million in a 2022 funding round. However, despite its valiant efforts, the company has succumbed to the relentless challenges posed by a formidable funding climate.

A Mission Unraveled by Financial Realities

Zazuu’s inception was marked by an admirable commitment to addressing the financial impediments faced by African immigrants, particularly those residing in the U.S. and the U.K. Operating in an environment where traditional financial systems often present formidable obstacles, Zazuu sought to provide transparency and choice in remittance options.

The reality, however, proved harsh as Zazuu grappled with the daunting task of securing growth funding to propel its mission forward. Despite achieving significant milestones such as obtaining regulatory approvals and establishing a diverse portfolio of remittance options, the unforgiving funding landscape emerged as the principal catalyst for Zazuu’s demise.

Navigating a Crowded Landscape

Zazuu entered a remittance space that has progressively become saturated and fragmented. The emergence of digital disruptors like NALA, Lemonade Finance, and Chipper Cash, alongside established players such as WorldRemit and Remitly, created a highly competitive environment. Zazuu attempted to carve a niche for itself by offering a comprehensive aggregator service, allowing users to discern rates and fees from over 17 service providers across multiple corridors.

The initial success of Zazuu as a chatbot, disseminating daily remittance rates on social media platforms, evolved into a full-scale aggregator. CEO Kay Akinwunmi underscored the company’s commitment to providing users with a transparent and unbiased view of their remittance options, aiming to shift power away from traditional financial institutions.

Challenges and the Harsh Reality of Closure

Despite Zazuu’s reported 2.3 times growth in its user base during Q1 2022 compared to the entire previous year, the platform grappled with challenges in a fiercely competitive market. While it aimed to alleviate pain points for service providers, such as high customer acquisition costs and churn, the company’s closure emphasizes the uphill battle faced by fintechs in balancing user growth and sustainable operations.

Zazuu’s closure prompts a reflective examination of the volatile funding climate within the fintech space. Despite raising a commendable $2 million in 2022, the company found itself unable to secure the necessary funding for sustained operations. This underscores the capricious and competitive nature of the landscape that even promising startups must navigate.

Lessons Learned from Zazuu’s Demise

Fintech Challenges in Bridging Financial Disparities

Zazuu’s closure shines a spotlight on the arduous terrain of the remittance landscape, particularly in sub-Saharan Africa. Despite the increasing inflow of remittances, the World Bank reports that the region remains the most expensive for sending and receiving money, with an average cost of 8% for a $200 transfer compared to the global average of 6%. Zazuu’s demise underscores the persistent difficulties in devising effective solutions to address these challenges.

The Struggle for Transparency in Remittance Services

While Zazuu entered the scene as a transparent aggregator, aiming to empower users by providing a comprehensive view of remittance options, its closure suggests that achieving transparency and altering consumer behavior in the remittance space remains an uphill battle. Analysts from the World Bank’s Remittance Prices Worldwide emphasize the vital role of transparency in reducing remittance costs.

Market Fragmentation and Fintech Competition

Zazuu’s experience in a highly fragmented remittance market, teeming with both digital upstarts and established players, highlights the significance of sustainable strategies for fintechs entering such crowded domains. The company’s initial success as a chatbot informing users of daily remittance rates underscores the challenges posed by fierce competition.

In all, Zazuu’s closure serves as a stark reminder of the ruthless realities faced by fintech startups, navigating a complex landscape fraught with challenges. The lessons learned from Zazuu’s demise will undoubtedly reverberate throughout the industry, prompting a reevaluation of strategies and a heightened awareness of the delicate balance between user growth and sustainable operations.

Zazuu Shuts Down Zazuu Shuts Down Zazuu Shuts Down

African Fintech Zazuu Raises $2M For Its Cross-border Payment Marketplace

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

Tunisia’s Konnect Plans North African Expansion with Visa Accelerator Selection

November 15, 2023

Amin Ben Abderrahmen, Founder and CEO of Konnect

In a good development for Tunisia’s fintech scene, Konnect, the innovative player revolutionizing financial services, has announced its exclusive selection as the sole Tunisian representative in the prestigious Visa Accelerator Program for Africa. The announcement came on the 13th of November, 2023.

Chosen amidst fierce competition from 1044 African startups, Konnect is set to be a driving force in this transformative initiative led by Visa and Plug and Play, aimed at reshaping the financial landscape across the region.

Visa’s CEO emphasized the dynamism of the African market, particularly noting the emergence of the first digital-native generation. Konnect’s acceptance into the Visa Accelerator program underscores its distinctive and innovative role within Tunisia’s financial ecosystem.

Renowned for its rapid and secure payment link and API service, facilitating payments for individuals, SMEs, and large corporations within Tunisia and beyond, Konnect stood out from the extensive pool of contenders. Now, armed with this recognition, Konnect is poised to leverage the resources and opportunities offered by the Visa Accelerator Program to expand its influence and revolutionize the fintech sector in the region.

The Visa Accelerator Program promises to be a catalyst for Konnect’s growth by providing a unique platform with opportunities for one-on-one mentoring, cutting-edge training resources, and investment prospects. These elements are expected to amplify Konnect’s innovative capabilities and further solidify its position in the fintech sector.

Amin Ben Abderrahmen, Founder and CEO of Konnect, expressed his pride, stating, “This acceptance into the Visa Accelerator Program is a testament to our unwavering commitment to innovation and transformation in Tunisia’s fintech landscape. It marks a significant milestone for Konnect, and we are honored to be part of this innovative journey.”

The Visa Accelerator Program not only opens doors for Konnect to expand its presence and launch new payment products but also positions it to accelerate its expansion in North Africa and extend its reach and impact throughout the continent and beyond.

Konnect stands at the forefront of reshaping Tunisia’s financial landscape, offering an online payment solution dedicated to empowering individuals and businesses with innovative payment solutions. With a vision to break financial barriers and foster universal prosperity, Konnect is committed to building an inclusive financial future where opportunities know no boundaries.

Nigerian Edtech AltSchool Targets Next Growth Phase Following $3 Million Fundraising

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

Navigating Debt Funding: African Founder Shares Important Insights for Finding the Right Funder

November 12, 2023

As an increasing number of African startups turn to loans when equity funding becomes challenging to secure, there is often limited discussion about the terms that founders encounter during negotiations. A recent case shed light on the nature of these loan agreements when WiSolar, a leading green digital utility startup, turned down a $1.5 million loan from the Industrial Development Corporation (IDC) of South Africa. WiSolar voiced concerns about terms that could hinder their growth and compromise their objectives.

WiSolar, led by its founder and CEO, Tonye Irims, took a stand against terms that raised concerns about potential hindrances to their growth and compromise of their objectives. The loan, issued under the Energy Resilience Scheme, featured terms such as a terminal drawing date of March 31, 2025, monthly annuity installment repayments from the draw date, and a ten-year term.

Irims emphasized the need for founders to negotiate debt funding agreements more favorably. In this report, he shares insights into what constitutes a well-negotiated agreement and outlines key considerations for founders navigating the complex terrain of debt financing.

Mission Alignment as Non-Negotiable: Irims firmly states that while “lack of funding continues to be the biggest reason for talent flight and unhygienic job creation in Africa,” the criticality of mission alignment when seeking debt financing cannot be overemphasized. To this effect, he stresses the need for founders to scrutinize funding offers, rejecting any that could compromise the core mission of their companies, thereby safeguarding long-term sustainability and impact.

Building Respectful Partnerships: Addressing a patronizing relationship with funders, Irims suggests founders seek respect in their dealings. This recommendation implies a call for collaborative partnerships where both parties value and respect each other’s perspectives. Building respectful relationships is foundational for fostering a positive and conducive environment for growth.

Balancing Transparency and Confidentiality: Irims emphasizes the importance of funding aligned with the company’s objectives while cautioning against unnecessary exposure of sensitive information. Founders can interpret this as an indirect recommendation to carefully negotiate terms that strike a balance between transparency and confidentiality, safeguarding the startup’s competitive edge.

Value-Added Investments: Criticizing the IDC’s approach as merely providing funding without added value, Irims advocates for more comprehensive partnerships. Founders are encouraged to seek lenders who bring strategic insights, industry expertise, and networks to the table, enhancing the startup’s growth potential beyond financial backing.

Simplifying Interest Structures: While not directly advising, Irims critiques the complex interest structure, suggesting a preference for clarity. Founders can infer the importance of negotiating for straightforward interest rates and fee structures to ensure financial transparency and mitigate potential challenges in financial management.

Critical Evaluation of Additional Agreements Incorporated by Reference into the Main Agreement: Irims underscores the need for founders to meticulously assess any additional agreements referenced within the main loan agreement. By critically evaluating these components, founders can ensure a comprehensive understanding of all terms and potential implications for their business.

Incorporation of Local Law Requirements: Irims raised concerns about potential drawbacks of incorporating local law requirements, such as local component or local content requirements, implying that founders should critically assess the impact on operations. He recommends negotiation for terms that support compliance with local laws without compromising operational flexibility.

Flexible Fund Withdrawals: Voicing concerns about restrictive fund withdrawal conditions, Irims implies the necessity for flexibility. Founders are suggested to negotiate withdrawal conditions that are reasonable and align with the company’s operational needs, ensuring timely access to funds when necessary.

Post-Term Planning: The absence of information on post-term scenarios is highlighted by Irims as a concern. Founders are indirectly urged to negotiate for clarity on what happens after the loan term ends, enabling effective long-term strategic planning and avoiding uncertainties in the post-loan period.

WiSolar, founded in 2016, is a South African-based on-demand digital solar company. It operates uniquely as the only company offering prepaid solar for residential use in South Africa. Employing a Power Purchase Agreement (PPA) business model, WiSolar installs and maintains solar systems on customers’ homes, selling power through an app based on consumption. This model allows property owners to adopt solar without upfront costs. WiSolar’s innovative approach is available in South Africa and Nigeria, with plans for expansion into Zimbabwe and Rwanda.

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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