In a groundbreaking development for the financial technology sector in Mali, Sama Money, a fintech company specializing in mobile payments and money transfers, has been granted an Electronic Money Establishment (EME) license by the West African Central Bank (BCEAO). This significant milestone marks a new era in the company’s journey, as it transitions from operating in partnership with UBA Mali to becoming an autonomous player in the electronic money distribution space.
Sama Money, founded in 2019 by Daouda Coulibaly, initially entered the electronic money distribution market in 2020 through a collaborative effort with UBA Mali, operating under the name “Sama by UBA.” For three years, this partnership enabled the company to provide essential services, such as cash withdrawals, currency exchange, and mobile payments, with the backing of UBA’s banking infrastructure.
However, on Friday, September 1st, 2023, Sama Money achieved a significant milestone by securing its independent EME license from BCEAO. This license grants Sama Money the legal authorization to issue and distribute its electronic currency, facilitating essential services such as cash withdrawals, loading electronic currency with fiat money, as well as payments and money transfers within the electronic money ecosystem.
Credit: SAMA Money
Notably, Sama Money has now become the fifth electronic money establishment in Mali, joining the ranks of Orange Money, Moov Money, Wizall, and Zelia, as per data from BCEAO as of April 2023. What sets Sama Money apart from its counterparts is its autonomy — unlike other companies that have entered partnerships with technical operators, such as banks and telecom companies, for electronic money distribution in Mali, Sama Money stands as the first fintech to be authorized by BCEAO to operate independently, without the need for a partner, in issuing and distributing electronic money within the country.
This achievement highlights the company’s dedication to enhancing financial inclusion and mobile payment solutions in Mali, providing a more accessible and convenient platform for users to manage their electronic finances. As Sama Money embarks on this exciting new chapter, it aims to further revolutionize the electronic money landscape in Mali, potentially setting the stage for further fintech innovation in the region.
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 a financial saga that could rival the most gripping courtroom drama, Tingo Group, Inc. (NASDAQ: TIO), a thriving fintech, agri-fintech, and food company, finds itself locked in an intense battle with the short seller Hindenburg Research. The latest chapter in this high-stakes showdown unfolded on September 5, 2023, when Hindenburg fired another salvo of allegations against Tingo. But Tingo Group is not backing down. In a statement released on September 6, 2023, the company boldly asserts that a comprehensive investigation conducted just days prior has debunked every single claim made by Hindenburg.
This financial thriller began when Hindenburg Research, known for its short-selling strategies, first targeted Tingo Group on June 6, 2023. Allegations of financial wrongdoing and misconduct were hurled at the fast-growing fintech company. However, instead of crumbling under the pressure, Tingo Group decided to fight back.
On August 30, 2023, Tingo Group’s independent directors launched a meticulous investigation into Hindenburg’s claims, leaving no stone unturned. Independent counsel meticulously reviewed evidence and identified areas that warranted further investigation. The company also enlisted the help of a top-tier U.S. law firm to conduct its own inquiry. The result? Tingo Group emerged from this intensive scrutiny with a clean bill of health, confidently refuting each and every one of Hindenburg’s allegations.
One of the key points of contention was the company’s cash balances. Tingo Group, which operates in multiple countries, held accounts with major banks in Africa. To clear any doubts, the company’s legal counsel obtained bank statements directly from these financial institutions and conducted interviews. The result? The bank balances were confirmed and matched the company’s accounting records, proving that Tingo Group’s financial health was robust.
Hindenburg also took aim at Tingo Group’s relationship with its mobile phone supplier, UGC Technologies Limited. To unravel this mystery, Tingo Group provided extensive documentation of all transactions with the supplier. The investigation showed that Tingo Group’s supplier was indeed UGC Technologies Limited, a legitimate entity with offices in Africa and China, rather than the unrelated UGC Mobile Technologies in the U.S. This revelation further discredited Hindenburg’s claims.
The drama continued with Hindenburg’s allegations regarding Tingo Group’s cooperatives. Ailoje Royal Farms Multi-Purpose Cooperative and Kebbi (Dala) Multipurpose Cooperative Society, both key players in Tingo Group’s operations, were called into question. However, Tingo Group’s outside counsel conducted on-site investigations, inspecting a mountain of documentation and conducting video interviews with cooperative leaders. The results were crystal clear: these cooperatives were legitimate and played a vital role in Tingo Group’s business.
As if that wasn’t enough, Tingo Group’s inventory management was scrutinized, with allegations of discrepancies in the handling of inventory. Tingo Group swiftly dispelled these accusations, providing a clear timeline of inventory sales that aligned with its financial records.
Hindenburg’s accusations even reached into Tingo Group’s dealings with telecom giants like Airtel. Yet again, Tingo Group was ready with evidence showing that it did not directly provide airtime and data services, instead relying on third-party vendors. The company also explained its Nwassa platform, highlighting its unique USSD-based system designed to operate in rural areas where traditional internet access is limited.
Tingo Group’s audacious response also addressed its flourishing export business, Tingo DMCC. Hindenburg had questioned the export records, but Tingo Group revealed that marine shipping records only represented a portion of their export activities. Overland transport was not accounted for in Hindenburg’s review.
And the climax of this financial thriller? The 38 questions submitted by Hindenburg on August 9, 2023, were systematically answered and debunked through the investigations, leaving no room for doubt.
In the end, the battle lines are clear. Tingo Group stands resolute, asserting that it has weathered Hindenburg’s storm of allegations. The company now turns the tables, investigating Hindenburg’s allegations against the founder of Tingo Mobile and Tingo Foods.
Tingo Group, Inc., a global fintech and agri-fintech conglomerate, remains undaunted in its mission to provide innovative products and services to millions of subscribers across the globe. With a commitment to transparency and integrity, Tingo Group vows to protect its shareholders and its reputation against all comers.
The world watches as this financial saga unfolds, with Tingo Group and Hindenburg locked in a battle of titans, each determined to have the last word in this high-stakes showdown.
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 a troubling turn of events for the African startup scene, mPharma, a Ghanaian healthtech platform founded in 2014, has been compelled to make significant workforce reductions. The move comes as the continent grapples with a harsh economic climate, impacting various startups across the region.
mPharma, a company that has already raised approximately $90 million, including $30 million in 2022, to fuel its growth, announced the layoffs of 150 employees, as reported by Techcabal on September 4th. Gregory Rockson, the CEO of the startup, cited the current macroeconomic conditions linked to the devaluation of the Naira as the driving force behind the decision to “resize the team.”
Gregory Rockson, chief executive officer (CEO) of mPharma.
Rockson emphasized that this decision would enable them to continue serving over 200,000 patients who rely on their Mutti service (the startup’s online pharmacy service) for their healthcare needs each month. He also stated, “We have allowed affected employees to retain their health insurance, and we have extended the period during which they can exercise their stock options from 90 days to 3 years.”
Throughout this year, several startups across the continent have been forced to take drastic measures to stay afloat. For instance, the Kenyan online sales platform Copia Global had to withdraw from the Ugandan market in April due to economic slowdown and limited financial markets. Nigerian fintech companies Lazerpay and Bundle Africa also ceased operations after staff reductions.
Concurrently, venture capital investments in African startups have slowed down significantly. In the first half of 2023, only $2.2 billion was invested in African startups, a 52% drop compared to the same period in 2022. The number of investment deals has followed the same trend, with just 263 reported in the first half of this year compared to over 400 during the same period in 2022. This represents a clear deceleration in the African startup ecosystem, which had previously been bucking the global trend.
The challenges faced by mPharma and other startups in the region underscore the need for innovative strategies and resilience amid a challenging economic landscape in Africa’s emerging tech sector.
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
Tingo Group, Inc. (NASDAQ: TIO), a thriving and rapidly expanding fintech, agri-fintech, and food conglomerate, has officially concluded its meticulous inquiry into the accusations levied against the company by short seller Hindenburg Research. The investigation was conducted under the guidance of the Company’s independent directors and has yielded insightful results regarding the allegations and their validity.
Independent legal counsel, at the behest of the Company’s independent directors, undertook an analysis of certain allegations raised by Hindenburg Research. The initial findings, along with areas warranting further examination, were outlined in an interim report presented to the independent directors. Subsequently, the Company’s external legal advisors initiated their own probe into the allegations, which encompassed a thorough examination of the matters highlighted by the independent counsel. Following an exhaustive investigative process, merging insights from both investigations, Tingo Group is now equipped to deliver a comprehensive response addressing the contentions outlined in the Hindenburg report.
Key Findings and Responses
Agri-Fintech Holdings, Inc. Resignation of Director: Christophe Charlier’s resignation from Agri-Fintech Holdings, Inc., a company distinct from Tingo Group, was acknowledged. Charlier’s role as a co-Chairman of Agri-Fintech Holdings, Inc., and the subsequent sale of Tingo Mobile Limited to Tingo Group were delineated. Notably, Charlier has never held a position on Tingo Group’s Board of Directors or been involved in the Company’s management. His resignation was attributed to communication and collaboration issues within Agri-Fintech Holdings.
The veracity of Tingo Foods’ reported revenue and operating margin for Q1 2023, at 24.8%, was verified.
Tingo Foods Business Relationships
From September 2022 to March 31, 2023, Tingo Foods procured raw crops from two Nigerian organizations, including the All Farmers Association of Nigeria (AFAN). These crops were subsequently supplied to third-party food processors. Processed food products were then distributed to major Nigerian wholesalers, highlighting the Company’s business model.
Food Processing Facility Progress
The construction of Tingo Foods’ processing facility in Nigeria, intended for food and beverage operations, is in advanced stages. Commencement of operations is anticipated in Q2 2024. Notably, the images employed during the groundbreaking ceremony were stock images sourced from an external marketing agency. The actual renderings of the facility are being employed. The Company has contractual agreements in place for the construction of the facility, along with arrangements for a solar power plant to provide energy.
Tingo Mobile’s Relationships with Farming Organizations
Tingo Mobile’s relationships with four farming co-operatives were reconfirmed. It was clarified that Tingo Mobile leases mobile phones to these entities, allowing their members to access services and products.
Mobile License Clarification
Tingo Mobile’s engagement in providing airtime and data services was elucidated. Third-party vendors currently offer these services, absolving Tingo Mobile from the need for a Mobile License from the Nigerian Communications Commission.
Tingo Mobile’s Device Suppliers
The Company’s relationships with its mobile phone suppliers were established, underscoring its association with UGC Technologies Limited and Bullitt Mobile.
Tingo Mobile’s adherence to tax obligations was emphasized, specifically its payment of corporate income tax and tertiary education tax for the fiscal year 2022 to the Nigeria Federal Inland Revenue Service (FIRS).
Expansion in Ghana
Tingo Mobile’s expansion into Ghana was discussed, highlighting its collaboration with the Ashanti Investment Trust. The Company’s current operations and future plans were delineated.
TingoPay and Partnerships
The Company’s collaborations with Visa and Stanbic Bank were outlined, along with the development of TingoPay and related services.
Nwassa Platform Functionality
The functionality of Tingo Mobile’s Nwassa USSD platform, along with its integration with third-party payment processors, was clarified. The platform’s offerings were detailed, encompassing various financial and transactional services.
Tingo DMCC’s Export Activities
Tingo DMCC’s role as an agricultural export business was highlighted, noting its transactions with neighboring African countries.
Financial Statement Accuracy
Clarification was provided regarding errors highlighted by Hindenburg Research in Tingo Group’s financial statements and MD&A. These were attributed to typographical errors that did not affect the accuracy of the financial data.
Auditor Selection and Bank Balances
The engagement of Brightman Almagor Zohar & Co. for auditing purposes was explained, considering the Company’s operational locations. Additionally, the verification of bank balances through direct engagement with the banks and video conference interviews was outlined.
With the conclusion of the investigation into allegations against the Company and its operations, attention now turns to examining Hindenburg’s allegations against the founder of Tingo Mobile and Tingo Foods, Dozy Mmobuosi.
About Tingo Group: Tingo Group, Inc. (NASDAQ:
TIO) is a global conglomerate comprising fintech, agri-fintech, and food enterprises, operating across Africa, Southeast Asia, and the Middle East. Tingo Group’s various business verticals, including Tingo Mobile, TingoPay, Tingo Foods, and Tingo DMCC, encompass a diverse range of innovative products and services. The Company remains committed to its international expansion and collaborative endeavors, aimed at enhancing the lives of millions.
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 recent development that marks the final chapter of the tumultuous journey of Capiter, the Egyptian e-commerce and information technology services startup, the decision to liquidate the company has been officially confirmed. This decision comes in the wake of the startup’s failed attempt to secure a merger and obtain much-needed financing to navigate its severe financial crisis.
Last September, Capiter made headlines when it ousted its founders due to their repeated absence during the crucial due diligence checks preceding a potential merger. This move was prompted by the startup’s precarious financial situation, which had been worsening over time. The founders, Mahmoud and Ahmed Noah, were unable to meet their obligations and responsibilities towards the company, failing to engage with the Board of Directors, shareholders, and investors during the pivotal due diligence process.
Sources familiar with the matter revealed that both local and Gulf-based companies had initially considered injecting investments to revive Capiter. However, these plans were abandoned in light of escalating legal disputes between the estranged founders and the company’s board. Moreover, concerns arose regarding the possibility of rebuilding trust in the brand among merchants and the public following the company’s bankruptcy crisis.
In the aftermath of Capiter’s liquidation, Mahmoud Noah, the former founder of the startup, has set his sights on creating a new investment entity. Reports indicate that he is currently working on establishing this entity from within a Gulf country. Meanwhile, his brother, Ahmed, is situated in Russia. These developments effectively signal the end of their association with Capiter.
The Capiter saga began in July 2020, when the company was founded by Mahmoud Noah as CEO and his brother Ahmed as the Chief Operating Officer. The startup quickly amassed a sizable presence, boasting around 22,000 products on its platform, a network of 1,000 sellers, a fleet of 600 trucks, and an employee count exceeding 2,000. At its peak, Capiter garnered an estimated investment volume of $33 million.
The startup had managed to secure this funding through its initial financing round, which saw participation from prominent companies and investors such as Capital Quona, MSA Capital, Savola, Shorooq Partners, Foundation Ventures, Accion Venture Lab, and Derayah Ventures.
In the midst of the crisis, speculations had arisen regarding the alleged misappropriation of funds, leading to widespread allegations that the founders had mismanaged the company’s finances. Entrepreneur Walid Rashid addressed these claims on his official Facebook page, attributing the financial struggles to mismanagement, poor decision-making, and inadequate evaluation of matters, rather than deliberate fraud or embezzlement.
Former Capiter CEO Mahmoud Noah broke his silence on the issue during a phone call to an MBC Egypt news show. He denied the rumors surrounding his and his brother’s escape from responsibility, asserting that the $33 million investment from various firms and investment funds had been properly utilized to grow the business. He further clarified that Capiter was held under the parent business located in the UAE, and a total of 18 investors, including himself and his brother, held stakes in the company.
While acknowledging that Capiter had accumulated commitments surpassing its assets, indicating its indebtedness, Noah refuted claims that they were formally informed of their dismissal. He pointed to the global financial crisis, triggered by the Russia-Ukraine conflict, as a contributing factor to Capiter’s financial challenges.
The underlying cause of the impasse that eventually led to Capiter’s liquidation was revealed to be a discord between the founders and investors. However, the situation had not been resolved in a conventional manner, and a mutually agreeable solution remained elusive.
Notably, Mohamed Nagati, an investor and entrepreneurship expert, shared his insights on the matter. He explained that Egypt’s entrepreneurial sector was transitioning from a growth phase to a phase of consolidation, a trend observed in emerging economies globally. While the Capiter issue could impact the local entrepreneurial climate, Nagati emphasized that failure is inherent in business, and the sector has previously delivered substantial returns and employment opportunities to the Egyptian economy.
As the final chapter of Capiter’s story unfolds, the Board of Directors officially removed Mahmoud and Ahmed Noah from their executive positions as Co-Founder & CEO and Co-Founder and Chief Commercial Officer, respectively. Maged Al-Ghazouli, Capiter’s Chief Financial Officer, was appointed as interim CEO, tasked with addressing concerns from stakeholders and continuing negotiations with the entity that had been targeted for a merger with Capiter. With the liquidation decision now set in stone, the once-promising startup’s journey ends in a tale of financial struggles, internal disputes, and unrealized potential.
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
ValU, the prominent financial technology company headquartered in Egypt, has recently announced a comprehensive strategic change that encompasses rebranding and a shift in competitive positioning. This transformation underscores ValU’s evolution from being one of the largest providers of buy-now-pay-later (BNPL) solutions to becoming a versatile financial services technology enterprise. The rebranding serves as a pivotal step in ValU’s journey towards expansion and diversification of its product and service offerings, aiming to fortify its presence in the dynamic realm of financial services technology.
Evolution and Expansion
Since its inception, ValU has consistently upheld its position as a frontrunner in delivering innovative financial solutions that align with the changing preferences of its customers. Recognizing the continual advancements within the financial services technology sector, ValU remains dedicated to enhancing its technological infrastructure to provide an optimized user experience. This commitment is reflected in the modern and attractive design of its updated electronic application, which now comprehensively showcases all its offerings.
Walid Hassouna, the CEO of ValU
Under this strategic transition, ValU has absorbed Bynas products and services, amalgamating them under its own brand. Business-to-business (B2B) services are now provided under the ‘Value Business’ banner. The newly introduced ValU brand encapsulates values such as responsibility, innovation, agility, and a steadfast commitment to superior customer service. This rebranding encapsulates ValU’s transformation, bolstering its standing in the Egyptian market as the foremost institution in the financial services technology sector.
Walid Hassouna, the CEO of ValU, underscores the company’s journey since its launch in late 2017, emphasizing its impactful role in the financial services technology sector. ValU’s scope of operations has expanded beyond consumer financing services to encompass an array of offerings including cash-back services, savings solutions, investment products, an employee management services platform, and more. This strategic rebranding aligns with ValU’s portfolio diversity and its status as a specialized leader in financial services technology.
The revamped ValU brand umbrella encompasses several platforms and programs, each catering to distinct financial needs:
‘U’ Brand: ValU’s BNPL services are now consolidated under the ‘U’ brand. This includes financing plans and programs extending up to 60 months. Specific programs under this brand include:
“Shaqlbaz”: An instant cashback program for customers.
“Ma3ak”: Catering to undergraduate students aged 18 to 23.
“Family”: Extending consumer financing services to first-degree relatives over the age of 16.
“Alter”: A luxury shopping financing program enabling payments for high-value products.
“Business” Platform: This platform caters to companies (B2B) by providing solutions in human resources services. It includes salary and benefits transfer cards, along with various other financial services. This platform was acquired by ValU in 2022 and was previously known as “PayNas.”
“Akeed”: A novel savings product that allows individuals to save while also enjoying returns for future shopping.
“Flip”: A product facilitating instant money transfers and serving as a popular gift card solution in Egypt.
“Invest”: An investment platform providing flexible and competitive investment solutions. It includes the AZ ValU investment fund launched in collaboration with the “Azimut” group and the EFG Hermes ONE application, a prominent electronic platform for securities trading.
Acquisition Streak
ValU’s trajectory includes a series of strategic acquisitions that bolster its market presence and offerings:
Paynas: In 2022, ValU fully acquired Paynas, an online platform specializing in employee management services and offering a range of financial services to small, medium, and micro companies. Paynas has been rebranded as ValU.
Qiwi: ValU acquired a minority stake in Qiwi, a fintech startup responsible for developing the first social payment app for youth in Egypt.
PayTabs Egypt: ValU secured an indirect 2% stake in PayTabs Egypt, strengthening its position within the fintech ecosystem.
Hoods Platform: ValU acquired a minority stake in the Hoods platform, which specializes in e-commerce within the Middle East and North Africa region.
EFG EV Fintech: ValU holds a 10% stake in EFG EV Fintech, which serves as the accelerator and incubator for the EFG Holdings Group.
Expanding Footprint
ValU’s expansion is reflected in its impressive metrics:
Over 3 million transactions completed.
A merchant network exceeding 5,500 across 1,500 e-commerce platforms.
More than 1 million active app customers.
Gross merchandise value increased twofold to 5.8 billion Egyptian pounds by the end of 2022, compared to 2.4 billion pounds in 2021.
ValU’s journey is marked by its commitment to innovation, customer-centricity, and a strategic approach to acquisitions. Its rebranding underscores its evolution into a versatile financial services technology organization, poised to cater to a wide spectrum of financial needs across the Middle East and North Africa region.
ValU Buy Now Pay Later ValU Buy Now Pay Later ValU Buy Now Pay Later
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 landmark development for Egypt’s startup arena, the Financial Regulatory Authority (FRA), under the leadership of Dr. Mohamed Farid, has rolled out Decision No. (150) for 2023, revolutionizing the way startups are valued. This innovative framework underscores FRA’s steadfast dedication to nurturing startup growth through customized valuation techniques.
Unveiling the Startup Landscape
Egypt’s startups are distinguished by their youthful vigor, unwavering innovation, and ambitious aspirations. These fledgling enterprises often embark on their journey with constrained initial funding while shouldering substantial initial expenses. These attributes are the bedrock of Egypt’s entrepreneurial vigor.
Introducing the Risk Capital Method
At the heart of FRA’s valuation methodology lies the Risk Capital Method. This sophisticated approach hinges on several crucial components: the forecasted exit value, the projected return on investment, and the investor’s stake upon exit. By factoring in these elements, potential investors gain invaluable insights into potential engagement and the associated risk landscape.
Illustration: Consider the case of Startup X, actively seeking investment. It envisions a $5 million exit value within a 5-year span, with investors eyeing a 3-fold return. Investor A holds a 20% stake in this scenario.
Investor’s share upon exit = $5 million × 0.20 = $1 million
Investment returns = $1 million × 3 = $3 million
Arriving at the Precise Valuation
The pre-investment valuation emerges by deducting the initial investment from the calculated investment returns:
Pre-investment valuation = Investment returns — Initial investment Pre-investment valuation = $3 million — $1 million = $2 million
Crucial Elements of Valuation
Startup valuation is a multifaceted process that transcends mere numerical computations. A comprehensive grasp of the startup’s dynamics is pivotal. This encompasses evaluating future growth opportunities, aligning with governance norms, and the startup’s commitment to fulfilling its obligations.
Several fundamental elements steer the startup valuation process within FRA’s methodology:
Exit Value: This signifies the projected value of the startup at exit, determined through comprehensive income-based or market-based assessments. Eg. Startup X predicts $5 million future worth.
Investment Multiplier: The target multiplier is a crucial factor for precision in valuation, calculated via direct methods or exit returns. Eg. Target of the investor in Startup X is 3 times (3X) returns.
Retention Ratio and Investment Recommendation: Striking the right balance between stakeholder involvement and optimal investment paths is a cornerstone of effective valuation.
Holistic Analysis for Precision Valuation
Before embarking on valuation calculations, a thorough assessment of sector-specific nuances and latent profit potential is essential. This forward-looking perspective enhances the accuracy of evaluating a startup’s growth prospects.
Exploring the Nuances of Startups
Valuation of a startup goes beyond mere arithmetic — it encapsulates the essence driving these ventures. Also consider other factors, such as:
FRA’s meticulous valuation criteria signal a new era for Egypt’s startup valuation landscape. This evolution transcends numerical exercises to offer a comprehensive insight into potential and value. By following these structured steps, Egyptian entrepreneurs and investors can embark on a journey of precise valuation, paving the way for startup growth and success within the ever-evolving business tapestry.
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 leap for the Ugandan insurtech scene, Turaco, a prominent player in the African insurance technology sector, has clinched the distinction of becoming the first insurtech company in Uganda to secure an underwriting license. This groundbreaking achievement comes with a pledge to spearhead the provision of accessible and straightforward microinsurance offerings, aimed at bridging the insurance gap for underserved communities across Uganda. This milestone aligns seamlessly with Turaco’s global ambition of extending insurance coverage to an impressive one billion individuals.
Under the umbrella of “Turaco Microinsurance,” the company is poised to develop and distribute uncomplicated insurance products tailored to the specific risks faced by mass-market customers. Impressively, these policies will kick off at an astonishingly low UGX1,000 per month. Distinguishing itself through a customer-centric approach, Turaco Microinsurance vows to present terms and conditions so succinct that they can be encompassed within just three SMS messages. Even individuals unfamiliar with insurance will be empowered to comprehend their policies and the extent of their coverage.
In its role as an underwriter, Turaco Microinsurance is set to revolutionize the enrollment process by seamlessly integrating with distribution partners’ systems through APIs. This integration will empower customers to access insurance coverage at the mere touch of a button. Notably, the company is committed to expediting claims processing, with claims slated to be paid out within hours. This efficiency is expected to foster a new level of trust both in insurance products and the broader insurance industry.
Turaco Microinsurance Company stands as the Ugandan arm responsible for underwriting within the Turaco Group, an all-encompassing Pan-African embedded insurtech endeavor. This larger initiative is dedicated to fostering financial resilience in emerging markets through affordable and straightforward health and life insurance options designed for underserved populations. Since its establishment in 2019, Turaco has already made its presence felt in Kenya, Uganda, and Nigeria.
Hon. Evelyn Anite (left) the State Minister of Finance for Investment, Hamza Mutebi (centre), the Turaco Microinsurance Company General Manager and Bernard Obel, the Insurance Regulatory Authority (IRA) Director Supervision. Credits: Turaco
By partnering with leading mobile network operators, technology-enabled companies, and microfinance institutions, Turaco has been able to effectively distribute accessible insurance products to its customer base. Remarkably, individuals can secure insurance coverage with premiums starting as low as USD1 per month. The company’s claims processing time, clocking in at less than three business days, ensures that policyholders receive their rightful compensation promptly. Thus far, Turaco has successfully insured over a million lives and facilitated the settlement of more than 15,000 claims.
Hamza Mutebi, the General Manager and Principal Officer of Turaco Microinsurance Company, articulated the significance of this achievement during the official launch. “Today marks a monumental achievement for Turaco,” Mutebi stated, highlighting the journey from their origins as an agency to their current status as an underwriting entity. This license acquisition paves the way for the creation and dissemination of affordable and accessible products, thus enabling Turaco to extend its reach to even more underserved individuals while harnessing technology for efficient claims processing.
Bernard Obel, the Director of Supervision at the Insurance Regulatory Authority (IRA), emphasized the necessity of innovation in microinsurance. He underlined how microinsurance targets a demographic often unfamiliar with insurance concepts and stressed the need for insurers to craft easily comprehensible products. Turaco’s pivotal role in expanding insurance accessibility to the mass market through strategic distribution was acknowledged. He expressed the regulatory body’s commitment to collaborating with Turaco and the insurance industry at large to develop products, define governance, and establish service standards.
The dire consequences of health emergencies for low-income households in Africa were also highlighted. Limited financial resiliency frequently renders these households vulnerable to unforeseen medical costs, often plunging them into poverty. Shockingly, over 14 million low-income households are pushed into poverty annually due to health-related expenses. In Uganda, more than 15% of the population faces catastrophic health expenses each year. Unfortunately, insurance adoption remains low, with a mere 2% of individuals in sub-Saharan Africa being insured, and less than 1% of Ugandans holding insurance coverage.
Turaco Microinsurance aspires to leverage its triumphant technology-driven insurance distribution model to bolster insurance penetration in Uganda. The company plans to blend Turaco’s user-friendly policy sign-up process and expedited claims processing via WhatsApp with its newfound underwriting capacity, enabling the creation of innovative and affordable insurance products.
In a landscape characterized by limited insurance coverage and understanding, Turaco’s acquisition of the underwriting license is set to be a transformative step. As it forges ahead with its mission of insuring one billion lives in Africa, Turaco’s pioneering strides will likely serve as an inspiration to other players in the industry to prioritize innovation, accessibility, and simplicity in the realm of microinsurance.
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 move that’s making waves across the fintech landscape, Moniepoint Inc., a company with roots in Nigeria, is expanding its horizons to Kenya through the acquisition of 100% shares in Kopo Kopo Inc. This groundbreaking decision has received the unconditional green light from the Competition Authority of Kenya (CAK), marking a significant shift in the financial technology sector in both countries.
Understanding the Acquisition
Moniepoint Inc., hailing from the United States, has been a major player in the Nigerian fintech scene. The company boasts subsidiaries like Teamapt Limited and Moniepoint Microfinance Bank in Nigeria and has even established a foothold in the United Kingdom. However, prior to this acquisition, Moniepoint had yet to set foot in Kenya, with no operational presence or financial activity recorded in the East African nation.
On the other side of the equation, Kopo Kopo Inc., also originating from the United States, has been actively operating in Kenya under its distinct brand, offering digital financial services including short-term loan facilities tailored for small and medium-sized enterprises (SMEs). The proposed acquisition represents a merger, as defined by the Competition Act, and thus required the approval of the CAK.
CAK’s Approval and Key Considerations
The CAK’s decision to approve this acquisition came after careful examination of two critical factors: the potential impact on competition in the digital credit market and any possible negative effects on public interest. Delving into the competition aspect, the CAK focused on identifying the relevant product market and the geographical market.
In terms of the relevant product market, the transaction’s impact was assessed in the context of the digital credit market. This market has undergone substantial growth in Kenya due to the proliferation of mobile-based banking and lending platforms. In fact, according to Geopoll, digital lending has boosted financial inclusion in Kenya by over 50%. The Central Bank of Kenya (CBK) has granted licenses to 32 Digital Credit Providers (DCPs) since 2021, driving increased access to loans for a broader spectrum of the population.
The CAK’s Digital Credit Market Inquiry in 2021 revealed that the sector is characterized by a variety of providers, with a few dominant players like M-Shwari, Fuliza, and KCB-MPESA. Notably, the target entity of the acquisition, Kopo Kopo Inc., holds a mere 4% market share within this landscape.
Implications of the Acquisition
One of the most significant implications of this acquisition is the potential for increased competition within Kenya’s digital credit market. Moniepoint’s entry into the market as a new player, coupled with Kopo Kopo’s existing presence, is anticipated to foster a more competitive environment, thus potentially benefitting consumers by offering a wider array of options and better services.
From a public interest standpoint, the CAK’s evaluation found no negative concerns stemming from the acquisition. Employment prospects remain secure for Kopo Kopo’s existing staff, and Moniepoint’s plans to establish a network of distribution associates could even lead to job creation.
As the ink dries on this landmark deal, all eyes are on the evolving fintech landscape in Kenya. With Moniepoint’s entry into the market, alongside its acquisition of Kopo Kopo, the digital credit space is poised for increased dynamism, competition, and innovation, ultimately shaping the future of financial technology in the country.
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
Twiga Foods Ltd, a prominent player in Africa’s B2B e-commerce technology sector, is making strategic adjustments to its workforce in response to changing economic conditions. The company, known for its provision of affordable high-quality goods and services to retailers, is navigating challenges by implementing what it terms “strategic operating adjustments”, which sees new set of 283 employees affected.
In light of ongoing economic shifts and a declining purchasing power, Twiga Foods is focusing on optimizing its operations for enhanced adaptability. The company’s “strategic operating adjustments” are designed to position it for resilience in the face of evolving market dynamics.
twiga foods
While Twiga Foods maintains its adherence to labor laws and workforce restructuring as part of these changes, the cumulative nature of these adjustments raises curiosity. With previous investments in expansion and business development, the company’s decision to implement workforce changes seems to be part of a broader strategy to ensure its operational fitness.
Twiga Foods’ approach to becoming a more streamlined and agile organization is in alignment with market trends favoring adaptability. However, it’s worth noting the potential implications of these measures on employee morale and the company’s overall workforce strategy.
The recent adjustments come on the heels of the company prior transition of trade development representatives into agents as a means of enhancing its operational model. This earlier move was seen as a prudent step to meet market demands and secure the company’s growth trajectory.
In addition to workforce adjustments, Twiga Foods is revising certain benefits and compensation structures. The reduction of staff per diems and travel reimbursements could be seen as a pragmatic response to financial considerations, although the company’s commitment to supporting its workforce remains apparent.
To mitigate the impact of these changes, Twiga’s management is offering employees the option to transition into agent roles, providing an alternative path amid evolving circumstances. The implications of such transitions, including potential changes in job security and benefits, will likely be weighed by affected employees.
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
