In a heartfelt LinkedIn post, Devin de Vries, the CEO and founder of South African mobility startup WhereIsMyTransport, announced the company’s cessation of operations. The news marks the end of a remarkable journey aimed at enabling freedom of movement in emerging markets, and it comes after the startup was unable to secure the necessary funding to continue its operations.
A Long, Hard Journey
WhereIsMyTransport began as a humble venture, with Devin de Vries and a small team operating out of a garage, surrounded by friends who believed in their vision. From these modest beginnings, the company’s trajectory was nothing short of extraordinary. Eight years ago, they secured their first round of funding, and in the intervening years, they grew into a robust organization with a presence in 22 countries and a team of 200 employees, supported by thousands of gig-mappers. Their efforts culminated in providing transit data for over 50 cities across four continents, benefiting millions of consumers and tens of millions of transit users.
The startup’s mission was clear: to empower people everywhere to get where they want to go. They specialized in mapping both formal and informal public transport networks, using this data and technology to enhance public transportation, making it more reliable, predictable, safe, inclusive, and accessible for the residents of densely populated megacities in Africa, South Asia, Southeast Asia, and Latin America.
Devin de Vries was the CEO of WhereIsMyTransport. Credits: WhereIsMyTransport
A Grateful Farewell
In his LinkedIn post, Devin de Vries expressed his gratitude to the investors who had supported WhereIsMyTransport along the way. He recognized that without their backing, their groundbreaking work would not have been possible. He also extended his thanks to the dedicated team that passionately and committedly worked towards the mission of empowering people to reach their desired destinations.
The South African startup’s most recent high-profile investment came in the form of a US$7.5 million funding round, with notable participants including Google, Toyota Tsusho Corporation, and others. This investment aimed to further the company’s global expansion efforts and enhance its data collection capabilities to translate complex data into actionable information for commuters.
A Change of Course
Devin de Vries reflected on how WhereIsMyTransport had to pivot and evolve over the years to achieve its vision. He noted that they initially attempted to create solutions for individual groups within the transportation ecosystem but found that these efforts fell short of addressing the core problem they sought to solve: making transport information accessible to the right people at the right time and place. This realization led them to embark on a much grander endeavor — a platform that could unite the entire transport ecosystem.
Despite the challenges they faced and the need to leave their humble garage headquarters, WhereIsMyTransport’s journey continued with the ambition to become the definitive source for information on the public transport networks of emerging markets. Their products served as tools for cities, operators, and passengers to coordinate, integrate, and access vital data, ultimately making public transport more reliable, predictable, safe, inclusive, and accessible.
A Final Note
With this shutdown, WhereIsMyTransport joins a growing list of African startups that have shut down in recent time -54gene, Dash, Sendy, among others. While their journey has come to an end, it leaves a legacy of dedication to improving public transportation for millions in emerging markets. It’s a testament to the persistence and vision of entrepreneurs like Devin de Vries, who are willing to start over and over again to make a meaningful impact on the ecosystem.
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
500 Global, one of the world’s most active venture capital firms, in collaboration with the Information Technology Industry Development Authority (ITIDA), has officially announced the inaugural cohort of their business growth program in Egypt, aptly named “ScaleUp.”
This groundbreaking “ScaleUp” program, designed specifically for startups in the financing and seed stage (A) financing, spans a duration of seven weeks. Its primary aim is to empower these budding companies’ founders through individualized guidance and the introduction of growth strategies, thus paving the way for their future success.
Set to commence on November 16, the Scale Up Showcase will be a momentous event celebrating the remarkable progress made by founders and their companies across various sectors such as fintech, marketing technology, real estate, logistics, and supply chain, among others. The event will feature presentations and discussions attended by an audience that includes key stakeholders and partners.
Amal Anan, a partner at 500 Global, commended the resilience of Egyptian company founders who, despite the challenges posed by the global and local economies, have proven that Egypt remains a thriving technology market in the Middle East and Africa. The “ScaleUp” program, she noted, boasts a cadre of capable individuals who are contributing to the development of flexible, high-capability companies. The program’s ultimate goal is to create a supportive environment for selected leaders, enabling sustainable growth and expanding their presence in their respective industries.
Anan expressed her gratitude for the ongoing partnership with ITIDA, highlighting the program’s ability to bring expert mentors and seasoned investors to Cairo to provide founders with the essential knowledge and experience required for the success of their ventures. The program’s broader mission is to nurture talent in the region, preparing them to contribute to local startups and facilitating their expansion and growth, ultimately sharing their unique business models and technologies with a global audience.
The program officially kicked off on October 1 at the Cretiva Center in Giza, one of Egypt’s Digital Innovation Centers, also known as the “Factory,” which is managed by ITIDA. The cohort embarked on a three-day retreat in Fayoum, delving into well-being and leadership development through empowerment activities, and fostering a sense of community among participants. This laid the foundation for greater engagement in the upcoming workshops organized and delivered by Global 500 mentors, covering topics such as growth experiences, sales and marketing, operational excellence, and recruitment.
The partnership between 500 Global, the Ministry of Communications and Information Technology, and ITIDA was initiated in 2022, with the goal of igniting innovation and boosting the startup ecosystem in Egypt. Dr. Hossam Othman, Vice President of ITIDA, underscored the authority’s commitment to supporting entrepreneurship throughout its entire lifecycle, emphasizing the significance of programs like “ScaleUp” in accelerating the growth of the Egyptian startup ecosystem and promoting innovation-based entrepreneurship. The collaboration brings together global leaders, experts, prominent companies, mentors, entrepreneurs, and potential founders, creating a dynamic startup community that enriches and advances the ecosystem to new heights.
The program is set to culminate in the Scale Up Showcase on November 16 at the Cretiva Giza Center in Cairo. This exclusive event provides a platform for startup companies under the program’s umbrella to showcase their innovative projects. It also offers founders the opportunity to engage with the “Global 500” network, comprising leaders, partners, and key players from various sectors. The “Skillup Showcase” will feature startups delivering demonstrations and product introductions, along with keynote speeches by renowned international speakers, including Sean Ellis, author of “Hacking GrowthK.” Panel discussions will focus on both regional and global perspectives. A brunch hosted by Courtney Powell, Chief Operating Officer and Managing Partner at 500 Global, will bring together exhibition participants.
The program’s support extends for three months after the exhibition, allowing beneficiaries to access individual meetings with mentors and advisors, free office space at the “Cretiva” Giza Center for an entire year, and assistance in charting growth strategies for their companies, among other benefits.
The inaugural cohort of the program includes the following startups:
Bird Nest: A company specializing in technology-enabled property development, operation, and leasing.
Blink: A digital consumer finance platform leveraging artificial intelligence to promote financial inclusion in Egypt.
ConvertedIn: An e-commerce marketing operating system utilizing data and shopper insights to create personalized multi-channel marketing.
Dress Code: A direct-to-consumer fast fashion company offering affordable, high-quality clothing for young consumers.
FriendiCar: Pioneers in the car subscription model among individuals in the Middle East and North Africa.
ILLA: A logistics holding group providing comprehensive delivery solutions to consumer product companies.
Khaznali: A multi-channel technology platform for logistics services.
MQR: Offering high-quality, accessible gathering spaces with hospitality services and amenities.
Nawlon: An online shipping platform facilitating global shipping options, instant quotes, and shipment tracking.
Now Pay: A fintech startup focusing on employee financial well-being.
07 Therapy: Revolutionizing mental health through an integrated digital platform in the Middle East and North Africa region.
Orcas: Providing live educational experiences for students from kindergarten to twelfth grade.
Rology: A platform for diagnostic radiology experts enhanced by artificial intelligence.
Spled: Building a digital platform for restaurant supply chains.
Cylinder: A leading marketplace for used cars in Egypt, catering to consumers and dealers in buying, selling, and financing.
For those interested in participating in the exhibition, requests to attend can be submitted by registering through the website: https://thescaleupshowcase.splashthat.com.
500 Global: Global 500 is a venture capital firm with assets under management of $2.4 billion (as of the end of June 2023). It invests in the establishment of fast-growing technology companies, focusing on markets where technology, creativity, and capital can create long-term value and drive economic growth. The company collaborates closely with key stakeholders, providing guidance to government agencies on enhancing the entrepreneurial environment for startup success. Global 500 has supported over 5,000 founders from more than 2,800 companies in over 80 countries. It has invested in 35 companies with valuations exceeding a billion dollars and 160 companies valued at over 100 million dollars, including private and publicly traded firms. The company’s team, comprising over 200 employees, operates in more than 30 countries and possesses extensive experience in entrepreneurship, investment, and technology institutions.
Information Technology Industry Development Authority (ITIDA): ITIDA serves as the executive arm of the Egyptian Ministry of Communications and Information Technology. Since its establishment in 2004, ITIDA has been dedicated to advancing the Egyptian information technology sector to enhance global competitiveness and stimulate economic growth. Recognizing the vital role of technology-supported entrepreneurship in driving economic growth, ITIDA collaborates with various private and governmental entities, universities, international organizations, business accelerators, startup incubators, and investment entities to support the growth of startups in technical fields. This includes emerging companies focused on advanced technical 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
Mostafa Kandil is the co-founder and CEO of SWVL, an Egyptian mobility startup. As a reminder, SWVL is a platform that aims to revolutionize public transportation in major cities. Kandil started this journey in 2017 as a university student in Egypt, living in Cairo. At that time, he noticed a gap in the public transportation system, and together with his friends, decided to address this issue. SWVL made waves by going public on the American stock market in 2021 through a Special Purpose Acquisition Company (SPAC), but since then, the company has faced challenges, with a significant drop in its market value. In a recent interview with Swalif Business monitored by Afrikan Heroes, Kandil shared his latest experience at the helm of affairs of SWVL.
Woeful Outing on Nasdaq
In 2021, we decided to go public. It’s logical for many companies not to want to go public, as no one might be interested in acquiring them. At that time, people couldn’t envision it, but we decided to go public right away. We benefited from coverage, but we faced a tough market, and the business dropped by half. In 2020, we lost 93% of our revenue. Only 3% of revenue remained. It went down significantly, and we persevered for four months without any income. This occurred during a time when there were no lockdowns. For instance, Cairo’s economy wasn’t affected, and people there weren’t staying at home. We had to weather the storm for four months until things started to normalize. During this period, the community declined significantly, and we saw investors and employees losing faith. We remembered our initial commitment not to let anyone profit during this challenging period. We didn’t cut employees’ salaries, but we did cut other expenses. I was personally covering nearly 100% of everything, excluding employee salaries, as we had discussed earlier.
Numerous issues arose, or went unresolved with companies that went public through the Special Purpose Acquisition route, as those companies failed to meet their promised targets. Many companies, especially those solely on paper, were unable to deliver on their claims. Several might have even profited from these schemes. When they entered the market, they were primarily companies with just ideas and lacked substantial operations. As people often say, nobody was fixing these problems. Unfortunately, we got embroiled in this entire situation. We became part of a war; and the internet boom, among other factors, greatly impacted us. The markets were highly volatile, with fluctuations as high as 60%. In currencies and other areas, it felt like a storm. Like idealism, the SPAC market collapsed within the first six months of the IPO.
We had investors, including significant ones from Russia. However, the war caused them to reconsider their investments. They decided not to put more money into the company or, if they did, they demanded the ability to sell their stock. The very next day, we already knew the market was collapsing. We stood firm and refused to let them withdraw their commitments. Those investors were the first to sell off their stocks, and as the markets plummeted, even the stock we bought from them was rendered almost worthless. The global financial crisis had begun, and everyone was panicking. Investors abandoned the ship, which in turn exacerbated the situation.
This, in addition to other points we’ve mentioned, had an impact on employees. Employees were not previously concerned about the stock’s value. They understood how the company operated and knew it was a robust business. Our faith was unwavering, and the stock’s value didn’t mean much to us. Regardless, it created a crisis, and it was disheartening to see how the employees who had worked diligently saw their stock options lose value.
The employees began to sell their stocks and depart. There was no clear objective behind it. It wasn’t my stock, and I had no control over the situation. Those were the investors, and some of them were major players like Apple. They initially invested in the IPO, but the market was no longer favorable for them. They made their exit. In a crisis, employees often sell and move on. Purely from a financial perspective, I believe they sold because they saw little value in the stocks. I didn’t have any say in the matter, as the investors were the ones in control. Initially, our investors included large players like Apple.
On the Strategies Behind SWVL’s several acquisitions
We purchased companies, and we did so without using cash. We acquired these companies through stock transactions, paying their value in shares only. We bought all these companies at a fixed price per share, all done without cash payments. We paid them based on certain multiples that were considerably lower. Therefore, we made a profit with every acquisition, buying these companies without needing to expend cash, only using shares. We continued buying companies using shares without any out-of-pocket expenses. At present, these companies are part of your business. Yes, these companies are now integrated with us, and they were instrumental in our growth. We did have to let go of some companies as our performance declined, but others remained and played a crucial role in our success.
SWVL’s stock was at risk of being delisted?
It didn’t reach that point; we implemented a stock split, a technical financial maneuver. Instead of having a stock valued at one dollar, we divided it into two one-dollar stocks. It was a precautionary measure to prevent delisting. When you’ve been listed for more than thirty days, it’s possible to merge stocks and start afresh. But this is a real danger indicator. It signifies that you’re not meeting the numbers. Even when things get tough, we don’t plan on leaving Nasdaq. Nasdaq is a financial market. To be there, you must comply with legal regulations, essentially behaving as a public company. There are others in this market too. But stock prices in Nasdaq can recover, and the merger process continues.
Mostafa Kandil is a co-founder and CEO of SWVL. Credits: SWVL
SWVL’s Current value?
I won’t provide exact figures, but some people have sold due to various factors, such as market sentiment or low daily trading volumes. Even if the trading percentage is small, it impacts stock prices. A high price is good because it signifies that even if immediate buyers are scarce, most initial investors saw the company’s true value beyond its stock price. We aim to reach the highest potential. Some companies have restrictions that prevent investors from selling before a specific time, like six months from now. We’ve been in a similar situation before, and the stock initially dropped from ten to four, but it later rebounded to a remarkable extent. Investors extended the offering period because they saw the company’s real value was much higher than the stock price.
Employee Reduction
In 2022, we let go of about a third of our employees. It was challenging, as I met many of these employees for the first time. We had to reduce costs to exit certain markets, such as Portugal. We focused on sectors where we were more profitable and cut back in areas where we weren’t. I believe in 100% transparency. I share everything that happens in the company with the employees. We consider ourselves the first employees of the company, and I emphasize that we’re all in this together.
Market Presence
Initially, we were in six countries, but by the time of the IPO, we had expanded to ten and then scaled back. Now, we operate in three countries.
On Delisting from Nasdaq, and Going Private
Indeed, there were such speculations. Some believed that the company’s diverse operations might benefit from being taken private. They claimed the company itself generates revenue. I won’t delve into specifics. I would consider starting with approximately half of the company, no more, I would say.
The challenges SWVL faced as it entered new markets and how it managed to overcome them
Our ambition has always been to be a part of the global community. We hope and aspire to it. For us, entering new markets is a challenge due to the differences in language and culture. We wanted to learn and engage with various cultures. At a time, we were in Kenya, four hours away from Cairo. It presented a similar time constraint. Our goal was clear, but Kenya posed a significant problem with the absence of public transportation services. Everything was disorganized, and I bought a bus and started a service on my own; there was no established public transport system. In Egypt, there was also a lack of public transportation services.
That’s how challenging it was. Within six months, we managed to acquire fifty buses. It was a daunting task, given that the existing system had been in place for decades. We entered the market and offered a vastly improved quality of service compared to the informal transport network. We realized that the organization needed proper regulation. The regulatory body is known as National Transport and Safety Authority’s (NTSA) if I remember correctly. The board of directors primarily consisted of individuals from the informal transport network.
The Kenyan Nightmare
The same regulatory framework was created by those who initially benefited from it. The members of the board of this regulatory body in Kenya were the same individuals who owned informal transport buses. Exactly, they were our initial competitors. They attempted to hinder our progress and work against us. We were competitors, but we were not compelled to operate outside the law. However, we had no other option. Our staff were arrested and released from prison on the same day. They even included my name in the records and placed it in a specific location. A significant number of them were corrupt. Thankfully, we managed to overcome these challenges. When you meet the right people in a country, engage with them, and provide a service that benefits the public, you can succeed.
How SWVL adapt its services to different countries with unique cultural and geographical aspects
The cultural aspects of people vary significantly. For instance, in Kenya, people are willing to walk to the bus station, and if it takes them more than five minutes to reach the station, they won’t use the service. We always had to be within a five-minute reach for our customers. If they choose to take cars, the service demand drops significantly if they have to walk for more than five minutes. For instance, in Kenya, people don’t mind walking a bit if there is a reasonable distance, as it aligns with their lifestyle. They wait for the bus and are comfortable with more passengers getting on. However, they do have a problem with long delays. Thus, each country has its unique characteristics, and the city’s geography plays a significant role. In some cities, the residents both live and work in the same area. In such areas, you can establish a public transport company that connects points throughout the day. However, in a city like Nairobi, there are suburbs where people commute from the outskirts to the city in the morning for work and return to the outskirts at the end of the day. In these cases, the buses operate accordingly. Coastal cities have their own dynamics. In a city built entirely along the coast, you can offer a service similar to that in Cairo, launching it from various locations. Our approach has always been to provide services that cater to the needs of the people in a specific geographic area.
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
Orange is set to launch a range of solar-powered freezers in 12 African countries where it operates, in partnership with the Franco-Nigerian startup Koolboks. Koolboks deploys a freezing and refrigeration solution through equipment equipped with solar panels and batteries that provide up to three days of autonomy.
Koolboks’ solar equipment also includes LED lights and USB ports, enabling quick charging of various devices like phones and tablets, according to an official statement. As per the same source, the partnership between the Orange Group and the Franco-Nigerian startup will first be implemented in the Democratic Republic of Congo before expanding to the other 11 countries where the Orange Group operates, including Cameroon.
Ayoola Dominic, the founder and CEO of Koolboks.
“Koolboks is proud to partner with Orange to distribute our solar freezers. This product was designed to meet a need, allowing small businesses and families to store food and have light in off-grid areas. With this partnership, we can offer this luxury in many countries and regions,” stated Ayoola Dominic, the founder and CEO of Koolboks.
“No one should be deprived of refrigeration due to its cost. Thanks to Koolboks’ innovative integrated payment technology, distributors can offer Koolhome freezers to their customers with a rent-to-own option. With Koolboks, individuals and businesses can make small monthly or weekly payments to own a solar refrigerator,” the startup explained regarding the payment terms. In addition to the Aganza, Paygee, and Solaris platforms, payments can now also be made using Orange Money.
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 con
In recent developments within the African tech sector, two significant acquisitions have been announced, each with its unique implications for the companies involved and their respective markets.
Ecentric Payment Systems Acquires Thumbzup
Ecentric Payment Systems, a leading retail payment processor operating primarily in South Africa, has made headlines with its acquisition of Thumbzup, an innovative technology payment solutions company. This strategic move is expected to have far-reaching implications for both companies and the future of omnichannel retail in the region.
CoverAI founder, Chris Adolphus
Ecentric Payment Systems has a strong reputation for its high-quality technology solutions, catering mainly to Tier One enterprise customers and currently handling 20% of South Africa’s card transactions. As a trusted payment partner, Ecentric has a significant presence in the South African market.
The acquisition of Thumbzup’s intellectual property (IP) marks a significant expansion of Ecentric’s footprint into the broader retail sector. This move positions Ecentric to reach more national retailers in the tier-two retail sector and establish itself as a reliable partner for service providers supporting small and medium-sized enterprises (SMEs). The acquisition holds strategic importance in Ecentric’s growth plans.
Hassen Sheik, CEO of Ecentric, has emphasized the critical role of this acquisition in their strategic vision. He highlights the need for a robust in-store capability, which will facilitate the integration of point-of-sale devices and technology, especially for national retailers. This strategic move is expected to enhance Ecentric’s offerings, including devices, payment software, terminal management systems, and value-added services, allowing it to cater to a broader range of national retailers while reinforcing its commitment to omnichannel retail.
Additionally, this acquisition simplifies the payment process for new customers, offering a comprehensive solution for both in-store and online payment needs, supported by a streamlined reconciliation process. It also empowers Ecentric to enhance its current offerings to existing customers.
Ecentric is fully integrating Thumbzup’s IP, devices, and technology stack into its operations. The expertise of the acquired team is expected to reduce time-to-market for customer-centric solutions, particularly in integrating point-of-sale software with payment devices.
This strategic move positions Ecentric to actively engage in best-of-breed Android payment capabilities, expanding beyond traditional payment services. It aligns with Ecentric’s strategy to become a leading retail service provider, supporting consumers’ payment needs in various settings. The integration of skills and IP from Thumbzup enhances Ecentric’s capabilities and strengthens its value proposition for customers.
Writesea Acquires CoverAI
In another noteworthy development, Writesea, a New York-based firm specializing in white-label services for recruitment marketplaces, has acquired CoverAI, a Nigerian AI startup that gained attention for its unique technology.
CoverAI, founded by Chris Adolphus, garnered significant interest with its innovative technology based on OpenAI’s large language model. The startup’s technology can swiftly create or enhance CVs and offers a freemium model for users. To access premium features like interview preparation and job application tracking, customers can choose from one of three subscription tiers.
While Adolphus mentioned that the acquisition was a five-figure cash deal, specific transaction details remain undisclosed. However, he stated that Writesea’s competence and experience make it the ideal candidate to take CoverAI to the next level.
CoverAI remained a bootstrapped venture throughout its three-month existence, with Adolphus investing a minimal sum to launch the project. The challenges associated with using OpenAI’s GPT-4 for applications like CoverAI are highlighted, with tokenization costs contributing to the overall expenses.
Adolphus is already planning his next venture, which he anticipates will be more capital-intensive than CoverAI, with the goal of exiting with a substantial profit. This story underscores the dynamic nature of the tech industry and the potential for rapid growth and acquisition in the African tech sector.
These acquisitions are significant milestones in the African tech landscape. Ecentric’s acquisition of Thumbzup positions the company for broader retail sector expansion, while Writesea’s acquisition of CoverAI reflects the growing interest in innovative tech startups on the continent. Both acquisitions are expected to have lasting impacts on their respective markets.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
In the ever-evolving landscape of African startups, a disconcerting pattern has emerged that keeps investors on edge. Scarcely a week goes by without African investors grappling with palpitations, their hearts racing as they navigate the treacherous waters of controversy that have engulfed some of their most promising ventures. Recent events have only heightened these anxieties. The collapse of Dash, a once-promising Ghanaian fintech startup that managed to raise an astonishing $86.1 million, has sent shockwaves reverberating through the African startup ecosystem. However, these unsettling episodes are not isolated anomalies; they are merely ripples in a vast sea of controversy that has afflicted numerous founders across the continent. In this article, we delve deep into the common threads binding these controversial African founders, shedding light on the key factors that have contributed to their downfall.
Founder Experience Not Necessarily a Safeguard:
Perhaps one of the most profound observations stemming from these controversies is the unsettling revelation that founder experience does not necessarily act as an impenetrable bulwark against ethical lapses and financial mismanagement. Contrary to the notion that seasoned entrepreneurs, particularly those with illustrious pedigrees like Y Combinator alumni, would exhibit heightened ethical standards and impeccable financial stewardship, the stark reality paints a markedly different picture. The cases of Dash, Capiter, and Springleap resoundingly attest that even individuals with a decade or more of experience at the helm of their startups can find themselves ensnared in the web of scandal. This challenges the very foundation of the belief that founder experience alone serves as an infallible guarantor of ethical conduct and judicious financial management, raising profound questions about the vetting processes and oversight mechanisms within the startup ecosystem.
Another thought-provoking facet of these controversies is the remarkable diversity of industries and countries implicated. While the embattled companies span an array of sectors, encompassing fintech, e-commerce, advertising, etc., they all share the unfortunate distinction of being ensnared in a maelstrom of controversy. Similarly, these startups hail from disparate African nations, spanning Ghana, Nigeria, South Africa, and Egypt. This expansive geographic and sectoral diversity suggests that the issues at hand are not confined to a specific region or industry niche but rather indicate a more systemic problem entrenched within the overarching African startup ecosystem.
Recent Cases
Dash — Ghana (Fintech):
Dash, conceived in 2019, embarked on a mission to revolutionize cross-border payment solutions for mobile money users and bank accounts across Africa. However, in 2023, the startup’s founder Prince Boakye Boampongfaced a barrage of allegations, ranging from exorbitant $50,000 monthly salaries to the alleged diversion of at least $8 million of the company’s funds. These disconcerting revelations ultimately led to the demise of the company and the suspension of its founder. Notably, this founder boasted an extensive background, boasting over a decade of experience in a founder capacity and an illustrious stint as a Y Combinator alumnus. This case serves as a stark reminder that even a founder with a glittering track record can plummet from the heights of adulation to the depths of ignominy.
Capiter — Egypt (E-commerce/FMCG):
Capiter, founded in 2020, set out to disrupt the Egyptian e-commerce and fast-moving consumer goods (FMCG) sectors. Nevertheless, in 2022, the founders found themselves ensnared in allegations of misappropriating funds by investors, allegations they vociferously refuted. The ensuing turbulence culminated in the founder’s ouster by the Board of Directors and the eventual shuttering of the company. This case underscores the vulnerability of startups, even in their nascent stages, to internal disputes that can have cataclysmic ramifications.
Springleap — South Africa (Advertising Agency):
Springleap, established in 2012, stood as an exemplar of advertising prowess in South Africa. The founder, Eran Eyal, possessed a wealth of experience, amassing over a decade at the helm of various ventures and attracting international acclaim. However, in 2018, the New York Attorney General arrested Eyal, accusing him of absconding with $600,000 from investors through fraudulent solicitations. Subsequently, he was found guilty of duping investors out of millions in multiple investment schemes, including a $42.5 million initial coin offering (ICO). In 2020, he was ignominiously deported from the US to Israel. This case lays bare the global reach and devastating consequences of unscrupulous actions by founders.
The Ultimate Price of Founder Compromise: Death of Startups
In all these cases, the breach of trust by the founders had severe consequences for their startups. It led to the loss of trust and confidence among key stakeholders, including investors, employees, and clients. When trust is compromised, it becomes challenging for a startup to secure funding, maintain its operations, and continue to grow. Ultimately, the loss of trust often results in the shutdown of the startup as it becomes untenable to sustain the business under such circumstances.
These cases highlight the critical importance of trust and integrity in the startup ecosystem, and how a founder’s breach of trust can have far-reaching and detrimental effects on the company’s viability and survival.
Finally, the disconcerting trend of African founders embroiled in controversies raises profound questions about the nexus between founder experience, governance structures, and ethical behavior within the startup ecosystem. These case studies serve as cautionary parables for both investors and aspiring entrepreneurs, underscoring the imperative of robust governance, transparency, and ethical rectitude to ensure the enduring vitality of startups across the African continent. Only by grappling with these complex and multifaceted challenges can the African startup ecosystem continue to evolve, attract vital investment, and fulfill its enormous potential.
Find more of these controversies in our recently published article available here.
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
Flapmax, a trailblazing data and AI technology firm, unveiled its selection of twelve promising companies for the second edition of the FAST Accelerator startup initiative. This program, forged in collaboration with Microsoft, aims to bolster and amplify Africa’s digital landscape. Following a rigorous two-week Online Bootcamp, featuring participation from over 60 tech firms and mentorship by seasoned experts, the 12 startups of FAST Accelerator are gearing up for a comprehensive five-week acceleration experience set to take place in the heart of Silicon Valley, California, commencing this October.
Dr. Dave Ojika, the visionary founder and CEO of Flapmax
“Our vision is to empower startups in their journey to scale their enterprises and generate fresh employment opportunities, with AI as the driving force,” said Dr. Dave Ojika, the visionary founder and CEO of Flapmax. “Through partnerships with industry giants like Microsoft and Intel, we are assembling a unique fusion of cutting-edge AI technologies, business development strategies, and global-scale growth prospects for Africa and emerging markets. Our goal is to accelerate the growth of startups and underrepresented entrepreneurs, fostering sustainable expansion and job creation through the transformative power of AI.”
Mame-Fatou Gueye, SME Program Manager at Microsoft Africa Transformation Office, expressed Microsoft’s unwavering belief in the potential of African startups and SMEs to become the cornerstones of the African digital economy. Gueye explained, “Participation in the FAST Accelerator program will provide these entrepreneurs with the tools to harness growth opportunities and extend their market presence.”
The FAST Accelerator program received an impressive 1,200 applications from 35 African countries, spanning diverse industry sectors such as Financial Services, Healthcare, Agriculture, Transportation & Logistics, Clean Technology & Energy, and Creative Media & Entertainment. These applicants offered an array of cloud-based products and services designed to address critical challenges, enhance efficiency, and foster innovation through AI across various domains within the continent.
The FA23 cohort consists of the following innovative startups:
Zeeh Africa (FinTech): Utilizing AI to establish an open banking platform connecting businesses to financial data.
Sumundi (eCommerce): Pioneering an intelligent eCommerce platform tailored for African retail businesses.
Cotrust Equity (FinTech): Revolutionizing micro-lending in Africa, akin to the “Uber for micro-lending.”
Trucki (Supply Chain): Leveraging AI to create a comprehensive haulage infrastructure connecting cargo stakeholders.
Orange VFX (Creative Media): Delivering high-quality animation and visual effects to boost African businesses.
10mg Pharma (HealthTech): Using AI to drive cost savings on medications for chronic pain patients.
Wallx (FinTech): Providing payment and business solutions catered to small business owners.
Moosbu (FinTech): Empowering SMEs with AI-driven tools for sales and financing.
KCG Aquatec Fish Farming (AgTech): Establishing sustainable aquaculture infrastructure for fish farmers.
Aibanc (FinTech): Offering AI-powered banking for High Earners Not Rich Yet (HENRY).
Zendawa Africa (HealthTech): Enabling neighborhood pharmacies to sell online.
Greenbii (FinTech): Deploying AI-driven asset financing and software management for SMEs.
Commencing on October 23, the FA23 cohort will embark on a multifaceted journey, encompassing training, AI integration, business development, fundraising, and a range of events. Collaborating closely with Intel and Microsoft on co-innovation projects, they will receive support in sales and marketing, enabling them to reach broader audiences. Moreover, the Flapmax engineering team will provide guidance in optimizing Large Language AI models (LLMs), along with scaling and fine-tuning these models on Microsoft Azure and Intel platforms.
Previous participants of the Online Bootcamp program shared their experiences:
“It is inspiring to learn what is happening in the AI and tech space across sectors and to interact with cohort members and speakers who are experts in their fields.” — Cohort member HealthX Africa
“This [will] provide us with mentorship, networking and fundraising opportunities with global startups. This is a huge one for us and we are more than excited to embark on this adventure!” — Dataleum.
“It was such a great privilege participating in the FAST Accelerator program! Thank you for the phenomenal classes and the opportunity to build new cross-national networks with other amazing entrepreneurs creating global solutions to local problems with one single aim to make the world a better place for everyone!” — Ricard Oboh, Co-Founder and Creative Director of Orange VFX Studios
Flapmax has also announced the launch of its digital matching platform, FAST Portal, designed to connect investors with startups. FAST Portal will facilitate introductions between investors, partners, and startups within the FAST Accelerator community. Corporate partners and organizations are invited to join in on the mission to empower entrepreneurs and innovators in underserved markets worldwide.
FAST Accelerator, a global initiative by Flapmax in partnership with Microsoft, links international entrepreneurs and startups with opportunities for business development, AI technology integration, funding, and community building, all geared towards fostering rapid and sustainable growth. Graduates of this program have secured millions in startup funding, created hundreds of jobs in their communities, and are utilizing technology to advance global economic and sustainable development goals in healthcare, agriculture, supply chain management, and climate justice.
Flapmax is a data and AI technology company collaborating with leading technology providers worldwide to identify and accelerate sustainable technology solutions that enhance communities across the globe. Their mission revolves around empowering and transforming lives through the widespread adoption of AI technology. Flapmax is facilitating collaboration across borders, connecting entrepreneurs and innovators with digital transformation solutions, advanced AI models, and global partnerships.
African AI startups African AI startups African AI startups
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
Google-backed Cova Africa has launched a digital insurance offering for the Cameroonian and Ivorian diaspora. Cameroonian startup Cova Africa announced on September 19, 2023, the introduction of Cova Mboa. This is a digital insurance service that enables Cameroonians and Ivorians living in France to purchase life insurance for their families back in Africa. It can be accessed at www.cova.africa/mboa.
“With Cova Mboa, you can now obtain financial support ranging from 900 to 4,500 euros, depending on the selected option, paid in one lump sum. This can be used to finance your travel or family contributions in the event of the death of a usual money transfer beneficiary or simply a chosen family member residing in Cameroon or Ivory Coast. You can also ensure the livelihood of your regular money transfer beneficiaries if you are no longer able to provide for their needs. If you become unable to work (total permanent disability) or pass away, they will receive between 75 euros and 500 euros per month for a fixed period of 5 years, depending on the chosen option,” explained Cova Africa in a statement.
Virginie Pouna Ngomi, CEO of Cova Africa
This offering is made possible through the collaboration of three significant players in the insurance industry: Acam Vie in Cameroon, Saar Vie in Ivory Coast, and Nubia Finances, licensed in France for insurance distribution. According to Marcelin Chiakoua Bassi, Deputy General Manager of Acam Vie, Cova Mboa is an initiative that combines relevance and modernity, not only through the simplicity of the proposed solutions but also through fully digitized subscription and management processes.
“We wanted this product to be simple… We thank our insurance partners who have embraced this simplicity… We are actively seeking banking and money transfer institution partners worldwide that are open to products tailored to the African diaspora to offer our service and set up monthly bank deductions for our clients,” said Virginie Pouna Ngomi, CEO of Cova Africa.
Cova Africa was among 60 additional African startups selected as beneficiaries of the Google for Startups Fund for Black founders in Africa in 2022.
The selected startups will receive $100,000 in non-dilutive cash, along with up to $200,000 in Google Cloud credits per startup. They will also benefit from practical and ongoing business and technical mentoring from Google’s network of mentors and facilitators, learning best practices across a range of topics, from artificial intelligence to growth strategies, organizational culture, and personnel management.
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
DKK Partners, a FinTech company specializing in emerging markets and foreign exchange liquidity, has obtained a license from the Financial Market Surveillance Commission (Consumaf). This license, issued by the supervisory and regulatory authority for the financial market of the Economic and Monetary Community of Central Africa, paves the way for DKK Partners to further strengthen its financial services operations in Africa.
“The African market requires foreign currency liquidity to promote business opportunities and support banks or financial institutions offering financing opportunities for essential imports,” the fintech stated in a press release.
Dominic Duru and Khalid Talukder, cofounders of DKK Partners
Africa has become a focal point for global companies seeking growth opportunities, and DKK Partners is no exception. By obtaining the Consumaf license, the company positions itself to effectively navigate future regulatory and licensing changes in the Central and West African regions.
This development follows DKK Partners’ recent establishment of operations in Ghana, complementing its existing presence in Cameroon. This strategic expansion aims to serve as a hub for the burgeoning African market by providing essential foreign exchange and financial services, including virtual IBAN accounts. “These services enable clients to access new territories and currencies while enhancing liquidity in emerging markets (EM),” the press release noted.
“As DKK Partners expands into African markets, we understand the importance of ensuring that we are fully eligible to operate in financial markets, regardless of the regulatory framework. Acquiring the COSUMAF license ensures that we are protected against any future changes, allowing DKK to continue disrupting global markets with revolutionary technology in the years to come,” stated Khalid Talukder, co-founder of DKK Partners.
In many African countries, such as Cameroon, Côte d’Ivoire, and Ghana, a significant portion of goods is denominated in foreign currencies rather than the local currency, creating a substantial need for reliable foreign exchange services. DKK Partners aims to bridge this gap and, by obtaining the Consumaf license, further democratize access to financial services in the markets of West Central Africa.
“The African market needs support in foreign currency liquidity to advance business opportunities and support banks or financial institutions offering financing opportunities for essential imports,” said Sam Nti, Director of DKK Partners.
Founded in 2020 by Dominic Duru and Khalid Talukder, DKK Partners has quickly established itself as a key player in the world of providing foreign exchange liquidity in emerging markets. With a turnover exceeding £100 million, the company leverages its deep expertise in foreign exchange and emerging markets to develop innovative strategies and methodologies that enable businesses to effectively manage exchange rate risk.
DKK Partners’ acquisition of the Consumaf license marks a significant step in its commitment to the African market. By obtaining this license, the company not only protects its operations against future regulatory changes but also positions itself as a crucial catalyst for financial growth and stability in the West Central Africa region.
In addition to this achievement, DKK Partners recently announced the successful completion of their pre-seed funding round, raising £3 million, surpassing their initial target by 33 percent. This milestone sets the stage for their Series B funding round scheduled for early 2024. The company’s oversubscribed status has solidified its pre-money valuation at approximately £100 million, underlining its remarkable revenue growth over the past 3.5 years and its rapid expansion since its inception in 2020. The funding will be used to further fuel expansion opportunities in the coming years.
This news comes on the heels of DKK Partners’ expansion into East Africa, with the opening of new offices in Nairobi, Kenya, followed by Uganda and Tanzania. This expansion is supported by the successful acquisition of the CONSUMAF license, which will accelerate the company’s financial services operations across the African continent.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
In a significant development in the South African e-commerce landscape, Livecopper, an emerging e-commerce startup specializing in the procurement of building fixtures for industry professionals, has secured a substantial equity investment from Moa Holdings. This strategic partnership marks the entry of Moa Holdings into the world of online construction supply, signaling a fresh chapter for Livecopper.
Moa Holdings, the brainchild of the renowned Yuppiechef co-founders Andrew Smith and Shane Dryde, has extended its support to Livecopper with an undisclosed investment that will fuel the company’s growth ambitions and broaden its range of product offerings. The investment will see Moa Holdings holding a 20% stake in Livecopper, an exciting step forward for both entities.
Yuppiechef co-founders Andrew Smith and Shane Dryde
Yuppiechef, a household name in the South African e-commerce arena, was successfully acquired by Mr. Price in March 2021 for an impressive R470 million (approximately $25 million). This triumphant exit paved the way for Andrew Smith and Shane Dryde to explore new opportunities, and they firmly believe that Livecopper embodies the potential for another e-commerce success story.
Andrew Smith expressed his enthusiasm for the partnership, saying, “We are excited to invest in Livecopper and to collaborate with its talented team. Livecopper is a well-established company with a stellar reputation for quality and exceptional customer service. We are convinced that Livecopper can ascend to a prominent position in the building fixtures industry, and we are fully committed to supporting the company’s journey to its fullest potential.”
For Livecopper, this infusion of investment and expertise signifies a pivotal moment. Alf Allingham, Managing Director of Livecopper, highlighted the significance of the deal, saying, “This partnership allows us to harness the vast experience of Smith and Dryde in the e-commerce and retail sectors. Their impressive track record in these domains, coupled with their shared commitment to superior customer service and product quality, aligns perfectly with our values and aspirations. We are eager to collaborate with them to propel Livecopper’s growth and meet the evolving demands of our valued customers.”
Founded in 2012 by Alf Allingham and Andrew Davies, Livecopper has grown to become a trusted one-stop e-commerce platform catering to industry professionals seeking high-quality building fixtures, including lighting, plumbing, and sanitaryware. With this strategic investment from Moa Holdings, Livecopper is poised to embark on an exciting new chapter, capitalizing on the wealth of experience and vision of its new partners to redefine the construction supply industry in South Africa.
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
