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Africa’s Biggest Company Is Investing Over $30 Million in U.S. Education Platform

July 27, 2019

This is a big shot from Naspers, Africa’s biggest company, which in terms of GDP, would be richer than the West African country of Liberia. Naspers is invading the US disruption market, leading a $30 million investment round in Brainly, a U.S. startup that allows learners to help each other with homework problems in different parts of the world.

Here Is What You Need To Know

The Cape Town-based Naspers has led the latest $30 million investment round in Brainly, a U.S. startup that allows learners to help each other with homework problems in different parts of the world.
The students earn points for the quality of their answers and can enter leadership-boards in different subjects such as history, mathematics, and others.
Naspers Ltd., Africa’s biggest company by market value and soon to be one of Europe’s largest listed technology companies, is investing more of its $10-billion cash-pile in educational platforms.

“At Naspers, we back companies seeking to address big societal needs like education, helping them to achieve global scale,” said Naspers Ventures Chief Executive Officer Larry Illg. “Brainly has the potential to serve the needs of hundreds of millions of students around the world, and has shown strong growth in the U.S. and high growth markets such as India, Indonesia, Turkey and Brazil.”

The cash from the current funding round will be used to update the platform and expand its base in the U.S., where it has already managed to make money from the service.
Brainly is also expanding into India, where Naspers also led a $540 million funding round into another educational tech company Byju in December last year. The Brainly platform is growing at around 200% a year. Before the Byju investment, Naspers’s education investments have all been in the U.S. and includes other online learning platforms such as Udemy.
Naspers also led $540 million funding round in India’s Byju

Naspers first invested in Brainly in 2016. Runa Capital and Manta Ray have also invested in the latest funding round.

A $32 million initial investment in Tencent Holdings Ltd. back in 2001 transformed the South African newspaper and Pay TV business into one of the largest technology investors globally.

Its 31% stake in the Chinese game-maker is worth $140 billion, compared with its total market value of $110 billion in Johannesburg.

The valuation gap motivated a decision for Naspers to list its internet businesses on the Euronext in September to close that discount.

From the pie chart above it is clear that majority of revenue for Naspers comes from Internet services, which contributed 69.34% to NPN’s revenue, second biggest revenue earner was E-commerce with 15.2% or $1.987 billion dollars followed by video entertainment, with 14.1% or $1.834 billion.

Naspers’ Money At A Glance

A look at the financial results for the 6 months ending in September 2018, as revealed by Naspers in its financial statement shows:

Operating Revenue: $3.34billion
Cost of providing services and sale of goods :$1.981billion
Selling, general and administration expenses: $1.284billion
Operating profit: $49million
Share of equity accounted investment (basically Naspers’ share of Tencent profits as rest of equity-accounted results are negligible compared to Tencent’s contribution): $2.098 billion
Taxes: $317 million
Profit for the period: $3.454 billion

Read Also: South Africa ’s ‘Uber of Cleaning Services’ Gets $2 Million Investment From Naspers

Per-share statistics:

Diluted headline earnings per share: $6.32
Dividend yield: 0.24%
Cash per share: $7.32
Net asset value per share: $62
Cash generated from operations per share: $0.54

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Startup VertoFX Raises $2M For African and Emerging Market Currency Trading Platform

July 20, 2019

More startups that are either Africa-based or Africa-focused are really having a good time raising funds to scale their businesses. Indeed, this funding goes to show that even startups with very remote niches can raise funds. VertoFX, the startup that focuses on currency trading and payment for African and emerging markets has just raised a $2.1 million seed round, led by Accelerated Digital Ventures.

Here Are The Funding Details And What This Means For Similar Startups With Remote Niches

The $2.1 million seed round of funding was led by Accelerated Digital Ventures.
The startup is simply a bureau de change for African and emerging market businesses.
The startup will use the round for platform development, expanding the currencies and gaining licenses in new countries. It will also use the round for hiring, primarily in compliance and regulator type roles. VertoFX already has a developer team in India and is looking at local developer talent for its Africa offices.
Although London-based company, with a subsidiary in Lagos, Nigeria, the startup’s platform allows businesses and banks to exchange and make payments in exotic foreign currencies that don’t often convert or trade conveniently across businesses or banks.
For example, South Africa’s Rand is Africa’s most convertible and traded currency — with lower spreads and transaction costs — while currencies of countries such as Ethiopia or Egypt may be difficult or expensive to trade or transact B2B payments.
All around the world, there are around 40 currencies that are considered exotic or illiquid, most of them in frontier markets in Asia, Africa, and the Middle-East, says Oyetayo, VertoFX founder.

“That’s the reason we are utilizing technology to create a marketplace model and price discovery to create liquidity for these currencies,” VertoFX founder Ola Oyetayo said in an interview.

And there’s a revenue opportunity to creating a convenient online marketplace for trading and payments in these currencies.

“Our research says there’s about $400 billion being done by small and medium-scale businesses in Africa alone in transactional volume on an annual basis. If we take 1% of that as a commission or transaction fee, that’s a $4 billion addressable market, just in the continent,” said Oyetayo.

A Look At VertoFX

VertoFX was founded in 2017 by Oyetayo and Anthony Oduwole — both ex-global bankers born in Nigeria. The company was part of Y Combinator’s 2019 winter cohort and processed around $7 million in transaction volume last month, according to Oyetayo.

VertoFX is registered as a payment services provider with the U.K.’s Financial Conduct Authority. Current clients include several undisclosed banks and San Francisco-based payment venture Flutterwave.

VertoFX doesn’t release revenue figures but confirmed it earns a commission, or spread, on each transaction processed on its platform. There are currently 19 currencies on the platform and the ability to settle in 120 countries, including China and the U.S.

VertoFX is also moving into offering market research — toward potential subscription services — on the currencies it trades, according to Oyetayo.

On the possibility of becoming acquired by a big bank, VertoFX isn’t so interested, according to Oyetayo.

“We both come from big banks and if we’d wanted to go down that route we’d have developed this more like a software as a service platform,” he said.

“We’re playing the long game here, and I don’t think the acquisition is the end game,” he said.