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Egypt’s Trella Shuts Pakistan Operations Less Than A Year After SWVL. Lessons for Emerging Market Startups

April 16, 2023

The Pakistan startup scene was dealt another blow recently as it was announced that Egyptian-based startup, Trella, would be stopping new orders in the country due to the current macroeconomic turmoil. This news comes less than a year after Dubai-based Swvl Holdings, VavaCars, and Uber-affiliated Careem all suspended services, causing a funding crunch and valuation pressures for global tech companies in Pakistan.

Trella, which raised a whopping $42 million from investors including AP Moller-Maersk’s investment arm in 2021, did not respond to media inquiries. However, sources close to the company cited Pakistan’s credit rating downgrades, restrictions on imports due to a dollar shortage, and the country’s currency losing over a third of its value as reasons for its precarious business in Pakistan. All of these factors have impacted the trucking business, making it challenging to operate in the country.

Despite the Pakistan setback, Trella plans to retain some employees to help carry out its business in Egypt, the UAE, and Saudi Arabia. The start-up entered Pakistan in 2020, and the move was seen as a strategic one given Pakistan’s growing logistics market. However, the current economic climate has made it difficult for foreign companies to survive in the country.

The closure of Trella’s Pakistan operations is a significant setback for the country’s start-up economy, which is already struggling to attract investment. Start-ups in Pakistan face a funding crunch, and with the recent suspension of several well-known tech companies, the outlook is uncertain. Airlift, which raised a record $85 million in funding, also closed its operations last year.

Trella’s exit from Pakistan marks the latest chapter in the country’s tumultuous start-up story. The closure of several high-profile companies has left the industry in disarray, and it remains to be seen whether any new players will enter the market. Despite the challenges, however, entrepreneurs in Pakistan remain optimistic about the future and are hopeful that the country’s start-up scene will eventually flourish.

Trella Pakistan — *The Trella team. Source: Trella*

That said, here are some lessons to be gleaned from Trella’s closure of operations in Pakistan:

The importance of considering macroeconomic factors: Trella’s exit from Pakistan highlights the importance of considering macroeconomic factors before investing in any country. While Pakistan’s logistics market showed promise, the country’s economic challenges made it difficult for foreign companies to operate.
The impact of currency fluctuations on businesses: Trella’s exit also highlights the impact of currency fluctuations on businesses. Pakistan’s currency lost over a third of its value, which made it difficult for companies that operate in the country.
The importance of diversification: Trella’s decision to retain some employees to help carry out its business in Egypt, the UAE, and Saudi Arabia shows the importance of diversification. By diversifying its operations across multiple countries, Trella can reduce its dependence on any single market and mitigate risks associated with macroeconomic factors.
The challenges facing startups in emerging markets: The closure of several high-profile start-ups in Pakistan highlights the challenges facing start-ups in emerging markets. These challenges include a funding crunch, valuation pressures for global technology companies, and economic instability.
The need for long-term planning: Trella’s exit from Pakistan also underscores the importance of long-term planning. Startups that enter emerging markets must have a long-term plan in place to weather economic downturns and market fluctuations.

Overall, the story of Trella’s closure of operations in Pakistan highlights the importance of carefully considering macroeconomic factors, diversifying operations, and having a long-term plan in place when entering emerging markets. It also underscores the challenges facing start-ups in emerging markets and the need to be prepared for economic instability and market fluctuations.

Trella Pakistan

Egyptian Transport Startup SWVL Shuts Down Kenya, Pakistan Operations

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

Arifpay Opens Door for Ethiopian Fintechs to Join EthSwitch’s Payment Ecosystem — Here’s How

April 15, 2023

Arifpay Financial Technologies, the first private payment system operator in Ethiopia, has announced its integration with EthSwitch, the national switch operator, in a move that is set to transform the Ethiopian fintech ecosystem. The joint press conference held recently, highlighted the numerous benefits that this integration would bring to customers, merchants, and banks alike. These benefits include increased financial inclusion, improved payment efficiency, enhanced interconnectivity, support for small businesses, and increased job opportunities.

Some of the concrete significance of this integration for Arifpay and the Ethiopian fintech ecosystem are:

Increased Financial Inclusion: The integration of Arifpay with EthSwitch will create an interoperable payment system that allows users to make transactions across different payment platforms, leading to increased financial inclusion for unbanked and underbanked populations.
Improved Payment Efficiency: The integration will streamline payment processing and reduce transaction times, leading to improved payment efficiency, reduced transaction costs, and increased customer satisfaction.
Support for Small Businesses: Small businesses in Ethiopia will benefit from the integration, as they will have access to a range of payment options and increased opportunities to transact and grow their businesses.
Enhanced Interconnectivity: The integration of Arifpay with EthSwitch will create a seamless payment ecosystem that connects all payment platforms in Ethiopia, leading to enhanced interconnectivity and a more robust fintech ecosystem.

Yilebes Addis, CEO of EthSwitch, emphasized the company’s commitment to promoting financial inclusion and digital payments in Ethiopia through the integration of Arifpay with EthSwitch. Bernard Laurendeau, CEO of Arifpay, highlighted the introduction of interoperable ArifPOS Smart devices, which will give consumers more payment options beyond debit cards.

Arifpay’s entry into EthSwitch’s national payment ecosystem is a significant milestone, as it paves the way for other private payment startups to integrate with the national payment infrastructure and drive the growth of the Ethiopian economy. Arifpay’s payment solutions for smartphone, POS, and quick response have been gaining popularity since the company received a commercial license from the National Bank of Ethiopia to commence POS operation and payment gateway services.

Barely One Month After Launch, Ethiopian Fintech Startup ArifPay Raises $3.5m

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

Jumia Kenya Names Third CEO in Two Years: Key Reasons Behind the Leadership Changes

Jumia Kenya, the e-commerce platform, has announced the appointment of Charles Ballard as its new CEO. This comes after the company went through two CEOs in just two years, raising concerns about the stability of its leadership.

Betty Mwangi was appointed as CEO in November 2020, succeeding Sam Chappatte. However, she left the position just one year later, and Juan Seco took over in July 2022. Seco, who had served with Jumia for eight years, has now left to join Mukuru, a pan-African fintech company, as Chief Growth Officer and MD East Africa.

Charles Ballard has been with Jumia Kenya since 2019, starting as the Head of Performance and Planning before being promoted to Chief Operating Officer in 2021 and then Senior Vice President-Commercials in 2022. Before joining Jumia, he worked as a Retail Consultant at Sagaci Research and Deputy CFO at ACTED.

Jumia Kenya has recorded losses of $87.8 million (KSh 11.6 billion) since its establishment in May 2013. The losses increased by $9 million (KSh 1.2 billion) in 2021, up from $78.8 million (KSh 10.6 billion) in 2020. The company also reported a loss of $72.7 million (KSh 9.7 billion) in 2019, signalling a consecutive decrease in its revenue.

Out of its ten global markets, Jumia reported a gross loss of KSh 99 billion in the same year. However, the company plans to use the accumulated losses to offset future taxes once it rebounds to profit.

Ballard’s appointment comes as Jumia Kenya looks to increase its online shopping sales, particularly in rural areas where over 70% of the population resides. The platform has over 11,000 sellers countrywide and more than 1,000 pick-up stations.

In his statement, Ballard expressed his excitement at continuing to drive the e-commerce narrative in rural Kenya, where access to modern retail is a challenge, and e-commerce can bring better prices, more choices, and convenience to rural Kenyans. He hopes to leverage his experience to grow Jumia’s online marketplace and increase its coverage in rural areas.

Jumia loss grew by KSh 1.2 billion to hit KSh 11.6 billion. — *Jumia Kenya CEO Charles Ballard. Photo: Jumia Kenya*

The appointment of Charles Ballard as Jumia Kenya’s new CEO is a step towards stabilizing the company’s leadership and increasing its online shopping sales. However, it remains to be seen whether the company can turn its losses into profits and achieve long-term success.

Jumia Kenya has been recording losses since it set up its base in May 2013, with a cumulative loss of $87.8 million (KSh 11.6 billion) in nearly nine months. In 2019 alone, the company reported a loss of $72.7 million (KSh 9.7 billion), indicating a consecutive decline in revenue.

The increasing focus on rural areas is another reason for the change. Charles Ballard, the new CEO, has expressed his desire to drive the e-commerce narrative in rural Kenya, where more than 70% of the population lives. He believes that access to modern retail is a challenge in these areas, which presents a significant opportunity for growth in Jumia’s online marketplace.

Moreover, Jumia Kenya has struggled to develop a strategy that addresses the unique challenges of the Kenyan market. The company has not been able to keep up with the fast-changing dynamics of the e-commerce sector, leading to a series of leadership changes.

The competitive landscape of the e-commerce sector in Kenya has intensified, making it more challenging for Jumia to maintain its market share. Local and international players have entered the market, creating more competition.

250 Ugandan Entrepreneurs Get Business Boost from Youth Startup Academy

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

Nigerian Crypto Startup Lazerpay Shuts Down Operations After Two Years. Here Are The Key Reasons

April 14, 2023

Lazerpay, a Nigerian crypto startup that was committed to driving global crypto adoption, has announced its closure after two years in operation. The company had enabled over 3000 businesses to accept payments in stable-coins all over the world and added off-ramp features to help merchants convert their crypto to fiat directly into their bank accounts in over 100 countries. It had also introduced an on-ramp/off-ramp product to help merchants convert their crypto to fiat and vice-versa.

In a statement released by the CEO and Founder, Njoku Emmanuel, the company had fought hard to secure the necessary funding to keep Lazerpay going, but unfortunately, it was unable to close a successful fundraising round. The team had made the difficult decision to cease operations and advised merchants to withdraw their funds from the platform before the 30th of April 2023 using the Bank or Crypto payout option.

Lazerpay commences layoffs — *Source: Lazerpay*

The company had been fortunate enough to garner the support of a phenomenal community that had made their experience so rewarding. They remain committed to helping their users transition smoothly and ensuring that any outstanding matters are resolved. Lazerpay also welcomed offers from companies interested in purchasing its IP and continuing to build the future of crypto payments.

In November 2022, Njoku Emmanuel announced that the company would be laying off employees in a bid to extend its operating runway. The company had initially resorted to stopping the salaries of the management team and cutting the salaries of other employees but was forced to lay off employees due to the lack of funding.

Despite the closure of Lazerpay, the team remained optimistic about the future of crypto adoption and proud of everything they had achieved.

In Summary, Here Are The Key Reasons Why Lazerpay Shut Down So Early

Unable to secure necessary funding: The most significant reason for Lazerpay’s shutdown appears to be the company’s inability to secure funding. Despite the team’s efforts to close a successful fundraising round, they were unable to do so. This lack of funding, which first forced the company to lay off employees, ultimately led to the company’s decision to shut down.
Competitive market: The crypto payments industry is highly competitive, with many players competing for market share. Lazerpay may have struggled to compete with larger, more established companies in the space, which could have made it difficult to attract investors and secure funding.
Market adoption: Despite Lazerpay’s efforts to drive crypto adoption globally, it is unclear how successful the company was in this regard. If the company failed to gain significant traction in the market, this could have made it more challenging to secure funding and stay afloat.
Management issues: While not explicitly stated, the fact that Lazerpay initially stopped paying the salaries of its management team could suggest that there were internal management issues that contributed to the company’s shutdown.

Lazerpay shutdown

A List Of Over 600 Newest Investors In African Startups

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

Hong Kong Opens its Doors to African Tech Startups To Establish Headquarters. Here’s How

April 13, 2023

Hong Kong is rolling out the welcome mat for African tech startups looking to set up there. Thanks to InvestHK, the department of the Hong Kong Special Administrative Region (HKSAR) government responsible for foreign direct investment, setting up your headquarters in Hong Kong has never been easier. HKSAR has a presence in 33 markets and is actively pursuing relationships with African enterprises, including major banks, and metro development organizations.

Director-General of Investment Promotion at InvestHK, Stephen Phillips, notes that nearly 4,000 new businesses from around the world are now based in Hong Kong, a 52% increase from 2018. Many of these businesses are in the digital technology sector and have taken advantage of Hong Kong’s specialized incubators, business accelerators, and government funding schemes.

Through Startmeup.hk, InvestHK helps innovative and scalable start-ups set up or expand in Hong Kong. As Asia’s leading business destination and the gateway to Mainland China and Asia, Hong Kong is located within five hours of travel by two-thirds of the world’s population, making it the perfect entry point to the region. With growing interest among African businesses in the potential for expansion into the Asian market, InvestHK has opened representative offices in South Africa and Kenya.

African startups InvestHK Hong Kong — *InvestHK ‘s team during a visit to Kenya recently. Credits: InvestHK*

Phillips points out that Hong Kong, with a local population of 7.5 million and 86 million from the Greater Bay Area, is a significant market for art, food, and consumer goods. It also presents significant opportunities for smart city and internet of things technology, electronics, and green technologies. “Hong Kong offers a route to growth markets in Asia, with their demographic dividends, high rate of tech adoption, and growing intra-Asian investment flows,” says Phillips. “Of course, there is also the economic beast — Mainland China — with opportunities to enter the market through JVs [joint ventures] and partnerships.”

With Hong Kong’s thriving tech ecosystem and InvestHK’s support, African tech startups have an exciting opportunity to expand into Asia and beyond.

African startups InvestHK Hong Kong African startups InvestHK Hong Kong

Kenyan Aquaculture Tech Victory Farms Raises $35M For East African Tilapia Expansion

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

Zambian Fintech Lupiya, Started With $500, Catches Attention of US Vice President Amid $5M Funding

April 11, 2023

Lupiya, a Zambian fintech startup, has caught the attention of US Vice President Kamala Harris during her recent visit to Zambia. Lupiya has been instrumental in providing loans to smallholder farmers in Zambia, enabling them to invest in climate-resilient farming techniques and technologies. Vice President Harris praised Lupiya for its work in empowering smallholder farmers in Zambia to adopt environmentally sustainable practices while boosting economic growth. The company’s efforts have resulted in increased crop yields, improved soil health, and reduced greenhouse gas emissions, all while providing a sustainable livelihood to rural communities.

Lupiya is funded by US-based Venture Capital Firm, Enygma Ventures, who have invested more than $2 million in a seed round, and it has also partnered with Mastercard to provide cash displacement solutions to improve financial efficiency in rural communities across Africa.

Lupiya US President — *Lupiya CEO Evelyn Kaingu and CTO Muchu Kaingu greeting Vice President Harris and Panuka Farms CEO Bruno Mweemba. Credits: BalistiQ Media*

Founded in 2016 by an economics graduate of Cavendish University, Zambia, Evelyn Chilomo Kaingu, Lupiya is a branchless, digital microfinance platform that leverages technology to make the process of borrowing simpler and easier for people and businesses located across Zambia. Lupiya is an online platform and provides micro-loans to individuals and small businesses, especially women micro-entrepreneurs. The company is available across all demographics in Zambia, and it offers pieces of advice about the best types of financing that fit their needs.

Lupiya has raised over $5 million dollars and is currently raising $10 million dollars in a Series A fundraising round. Lupiya became the first company to be backed by Google in 2021 under the prestigious Google Black Founders Fund.

In an interview with Afrikan Heroes, Kaingu explained how Lupiya operates and shares insights on fundraising effectively and navigating the Zambian startup ecosystem. Despite Zambia’s small financial ecosystem and low internet penetration rate, Lupiya has succeeded by finding partners, targeting customer segments, and putting in physical effort to bring customers online, she said.

Lupiya’s work aligns with the United States’ broader goals of supporting sustainable development, bolstering food security, and fostering climate resilience in vulnerable communities. Vice President Harris highlighted the need for international cooperation and knowledge sharing in developing and implementing sustainable agricultural practices. She expressed her hope that Lupiya’s model could inspire similar initiatives worldwide, helping to mitigate the effects of climate change on food production. The US government has committed $7 billion to support initiatives that provide resilience to smallholder farmers in Zambia such as access to finance, insurance, and climate information services.

We Started With Just $500: Interview With Evelyn Kaingu, CEO & Founder, Lupiya

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

Cameroon’s PaySika Launches New Partnership With Visa To Conquer Central African Digital Banking Space

PaySika, a digital bank focusing on French-speaking African countries, has announced its partnership with Visa’s Fintech Fast Track program on March 31, 2023. The partnership will provide PaySika with access to Visa’s global network of partners and experts who will help the start-up to expand its services in Central Africa, starting with Cameroon.

Co-founder and general manager of PaySika, Roger Nengwe, stated that they believe everyone should have easy access to a range of financial services and better manage their money and payments, and the prepaid bank cards offered by PaySika will be free, with a simple application to manage everything independently without having to travel.

PaySika was founded in France in February 2020 by Roger Nengwe and his colleague Stezen Bisselou to provide digital banking solutions to French-speaking African countries where over 80% of the population is unbanked. PaySika aims to offer banking services to as many people as possible at an extremely low cost. The fintech intends to develop mobile banking solutions, responding to the widespread use of mobile money and smartphones in the region, and its first fundraising effort in March 2023 secured €300,000 to help attract new additional profiles and continue its development by creating more fluid, safe services that fulfill user expectations.

The emergence of regulatory environments conducive to fintechs and the success of the smartphone have encouraged many neobanks in the region to develop digital banking solutions to attract customers. PaySika is not alone in this endeavor, with other start-ups such as Sparkle and Kuda in Nigeria and TymeBank in South Africa raising millions of dollars to expand their operations in Africa.

PaySika raises €300,000 to launch neobank services in francophone Africa — *Roger Nengwe is the co-founder and CEO of PaySika*. *Credits: PaySika*

Why This Partnership Matters

The partnership between PaySika and Visa’s Fintech Fast Track program signifies a significant boost for PaySika’s operations in Central Africa, particularly in Cameroon. As a start-up developing digital banking solutions for French-speaking African countries where most of the population is unbanked, PaySika will benefit from access to Visa’s growing network of partners and experts, who can guide them towards efficient ways to offer banking services to as many people as possible, and at an extremely low cost.

By joining Visa’s Fintech Fast Track program, PaySika will be able to extend its services rapidly and gradually, providing free prepaid bank cards with a simple application to manage everything independently without having to travel. This will bring strong added value to its users, particularly the new generation, for whom there is a strong appetite for this kind of service.

In summary, the partnership with Visa adds substance to PaySika by providing it with the necessary resources to accelerate its operations in Central Africa, particularly in Cameroon. With access to Visa’s growing network of partners and experts, PaySika can now offer free prepaid bank cards with a simple application to manage everything independently without having to travel, and this will bring strong added value to its users, particularly the new generation.

PaySika Visa PaySika Visa

Barely A Year Old, Digital Bank, PaySika, Raises Funding To Explore Francophone Africa

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

From Tunisia to the US: Agritech Startup NextProtein Gains FDA Approval To Commercialize Its Fly-Based Products

NextProtein, a Tunisian agritech startup, has achieved a significant milestone in its journey towards global expansion. The company has received authorization from the US Federal Food and Drug Administration (FDA) to market its products in the United States, marking its next bus stop in its quest for expanded growth. This achievement follows its authorization in 2020 to sell its products in the European Union, making it the first insect breeding company outside the EU to obtain clearance to sell its products in the region.

Syrine Chaalala and Mohamed Gastli, NextProtein founders

In 2020, NextProtein raised $11.2 million in funding, the largest early-stage food technology funding in Tunisia to date. A group of investors led the funding round, including Blue Oceans Partners, Telos Impact, RAISE Impact, Mirova, Althelia Sustainable Ocean Fund, Kepple Africa Ventures, and Aucfan Incubate Inc. The latest investment would help NextProtein build its second production facility, hire more personnel, and accelerate research and development. The company plans to scale production to 100,000 tonnes per year by 2025, representing an estimated 10% of the total insect protein market globally.

Founded in 2015 by Tunisian couple Syrine Chaalala and Mohamed Gastli, NextProtein uses EU-approved organic waste to raise black fly larvae for animal feed, focusing initially on the aquaculture industry. Basically, NextProtein focuses on transforming insects, specifically the black soldier fly, into protein-rich food products for animals. The company aims to provide sustainable solutions to societal challenges such as population growth, food waste, and environmental impact. Insect protein provides solutions to these issues as it is a raw material that can be used in animal feed and organic and natural fertilizers for agriculture.

With the FDA’s approval to market its products in the US, NextProtein’s next bus stop is set to expand its reach globally and impact more lives positively. The latest move also highlights the potential for African startups to tap into the global market and compete with established players in the industry.

Game-Changer for African Startups: UAE’s $816K Tax Threshold Opens Doors for International Expansion

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard

How Co-founder Conflict Forced Africa-focused Crypto Firm Paxful To Shut Down

April 6, 2023

Paxful, the peer-to-peer Bitcoin marketplace, announced its sudden shutdown and directed users to withdraw their funds from its platform. The CEO and co-founder Ray Youssef cited “key staff departures” and “regulatory challenges for the industry” in a blog post, but also acknowledged during a Twitter space that a lawsuit brought by a co-founder who was “kicked out of the company” more than a year ago was a factor in the decision.

Youssef did not name the co-founder explicitly, but court dockets hosted on CourtConnect show that Artur Schaback, a co-founder and current board member of Paxful, filed a lawsuit against Youssef in Delaware Chancery Court in January. Schaback is reportedly suing Paxful and Youssef, and the lawsuit may have played a role in the closure of the platform.

Paxful shut down — *Ray Youssef is the CEO of Paxful. Source: Paxful*

Youssef also claimed that Paxful’s senior staff were largely driven away from the company because of actions taken by the unnamed co-founder’s legal team. The co-founder also reportedly refused to pay some of Paxful’s employees. Youssef said, “His litigation team was really nasty. They drove away all of our senior-level staff who just couldn’t deal with this guy anymore.”

The closure of Paxful comes just days after Youssef promised to refund all affected users of its Paxful Earn product, which allowed users to earn a yield on their Bitcoin through a partnership with Celsius, a prominent crypto lender that filed for bankruptcy last July. Despite the company’s impending closure, Paxful’s wallet is reportedly operational, and “users can get their funds out safely.”

Paxful was originally founded in 2015 and allowed customers to trade Bitcoin and Ethereum, along with the leading stablecoin Tether. However, the company dropped support for Ethereum last December. According to Coin Dance, trading volume on Paxful totaled around $35 million in the past week, with users based in countries like Argentina, Kenya, and India. Despite the company’s closure, Youssef claimed that Paxful was ultimately successful in fostering Bitcoin adoption in West Africa and other areas of the Global South.

Paxful shut down Paxful shut down

How Novastar Ventures Will Invest Its New $25M Africa People + Planet Fund

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

Nasdaq Issues Second Removal Warning to Egyptian Transport Disruptor SWVL in Just 5 Months

April 3, 2023

Swvl Holdings Corp, an Egypt-born provider of tech-enabled mass transit solutions, has again received a notice from The Nasdaq Stock Market stating that it is not in compliance with Listing Rule 5450(b)(2)©, which requires companies listed on the Nasdaq Global Market to maintain a minimum market value of publicly held shares of $15,000,000.

The company has until September 25, 2023, to regain compliance by ensuring that the minimum market value of publicly held shares must close at $15,000,000 or more for a minimum of 10 consecutive business days prior to the Compliance Date. Failure to do so would result in delisting, which could lead to a loss of confidence among investors.

On November 4, 2022, Swvl first received a notice from NASDAQ that it was not in compliance with Listing Rule 5450(b)(2)©. This was due to the company’s shares trading for more than 30 straight days below $1.

When SWVL received its first removal warning from Nasdaq in November 2022, the company responded by approving a reverse stock split of its Class A ordinary shares. This split was approved by the company’s Board of Directors at a ratio of one-for-25, which meant that every 25 issued shares would be combined into one share with a par value of $0.0025 each. The company also restated its articles of association and revised them to reflect the reverse share split, which did not require any shareholder permission according to the British Virgin Island’s Business Companies Act, where SWVL was registered

The reverse share split took effect on January 25, 2023, after which SWVL’s ordinary shares started trading on the Nasdaq Global Market on a split-adjusted basis from January 26, 2023.

Swvl provides intercity, intracity, B2B, and B2G transportation services, offering semi-private alternatives to public transportation for individuals who cannot afford private options. The company’s parallel mass transit systems aim to make mobility safer, more efficient, accessible, and environmentally friendly. Customers can book their rides using a proprietary app with various payment options and access to high-quality private buses and vans.

Swvl transport Nasdaq — *SWVL co-founders. Sources: SWVL*

The notice from Nasdaq is a significant development for Swvl, as failure to regain compliance with the minimum market value requirement could lead to delisting and a loss of confidence among investors. While the company has 180 days to regain compliance, it will need to take prompt action to address the issue.

Swvl has stated that it intends to actively monitor its minimum market value of listed securities and may consider implementing available options to regain compliance. The company may also choose to transfer the listing of its ordinary shares to The Nasdaq Capital Market. However, there is no assurance that the company will be able to regain compliance or maintain compliance with any other listing requirements.

When securities are delisted from an exchange, it means that they are no longer available for trading on that particular exchange. This typically occurs when a company fails to meet the listing requirements or violates the exchange’s rules and regulations. Delisting can also occur voluntarily, when a company decides to move to a different exchange or go private. Once a security is delisted, it can still be traded over-the-counter, but liquidity may be reduced, and investors may face difficulty finding buyers or sellers. Additionally, delisting can have negative implications for a company’s reputation and investor confidence.

Swvl transport Nasdaq Swvl transport Nasdaq

Tracking Egypt’s Swvl Long After Its SPAC Outing. Three Hard Lessons For African Startups

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