This is an encouraging report for South African startups. With more funding opportunities,comes the impossibility of being hindered by inadequacy of capital. In its latest report, Southern African Venture Capital and Private Equity Association’s (Savca) Venture Capital Industry Survey has indicated that southern African VC funds made investments of over R1.5-billion last year in South African startups and businesses — an increase of 31% from the over R1.1-billion invested by such funds in 2017. The figure is expected to be higher this year.
The VC sector had one of the best years in South Africa in 2018, with deal value up 31% over 2017 — reveals a new report
Here Is All You Need To Know
The report which was released earlier this month, was carried out in collaboration with research partner Venture Solutions. The survey features data gathered from over 50 fund managers as well as other industry investors.
While the report also covered countries bordering South Africa — Namibia, Botswana, Lesotho, Swaziland, Mozambique and Zimbabwe — South Africa accounted for 99.7% of all deal value under management currently.
The report was presented at an event held at law firm Bowmans’ offices in Cape Town recently.
The report’s author Venture Solution’s Stephan Lamprecht said last year’s figures were evidence that the VC sector is on an “exponential upward curve”.
“The quantums that investees are raising — we haven’t seen that in recent years,” he added.
Lamprecht said driving the increase has been the recent uptake in the funds registered under the South African Revenue Services’s (Sars) Section 12J of the Income Tax Act.
The incentive allows investors who make investments in approved VCCs — that then invest in qualifying small companies — a tax deduction.
The year saw a substantial growth in seed, startup deal value
In 2018, 41% of all deals by value were in startup capital.
The total number of deals invested through seed or startup deals amounted to 60% of all deal value — up from 57% in 2017 and 49% in 2016.
Despite the growth in early-stage deals by share of deal value, Lamprecht said South Africa still needs to improve the system that taps into talent and that more must be done to get industry to invest in the startup sector, beyond just enterprise development deals.
Firms Located in the Gauteng Province of South Africa got the biggest share
When it comes to the location of investees, Gauteng businesses last year received the largest share of VC money (R658-million), up 38% from 2017. This, while the Western Cape saw an increase in 2018 of 14% in VC investments. amounting to R433-million.
The report also noted that KwaZulu-Natal backed VC businesses saw a significant increase in activity in comparison to 2017, with R71-million invested in 2018.
By number of deals, Gauteng has shown significant growth. In 2014 just 19 deals were conducted in the province, climbing to 41 in 2017 and 73 last year.
In comparison, the number of deals in the Western Cape has been more stable — 41 in 2014, 45 in 2017 and 61 last year (see below graph — Figure 7b).
Low number of exits was also recorded in the year under review
Concerning however, noted the report is that overall exit activity remains low. Just 11 exits took place last year, compared to 15 in 2017. Most exits are by trade sales.
Of the 11 last year, six were reported as profitable, compared to nine in 2017 (see below, Figure 9).
Lamprecht attributed the low number of exits to evidence of South Africa’s nascent VC industry. He pointed out in the report that a range of opportunities and early stage investment challenges need to be addressed in order for the industry to continue to grow and mature.
So, that was 2018, but how much capital have VC fund managers in the Southern Africa currently deployed?
The report puts this figure at the end of 2018, at over R5.3-billion, invested in 665 active deals.
Most of these funds are being deployed in the Western Cape (48.2% of active deal value), followed closely by Gauteng (42.5%). By number of transactions the Western Cape accounts for 52.6% and Gauteng 34.6% (see below graph).
Manufacturing comprised 14.2% of the value of all deals invested at 31 December 2018 with the food and beverages sector and medical devices and equipment sector accounting for 12.3% and 10.5% respectively (see below graph — Figure 3a).
Software amounts to only 5.2% of deals if taken by value (and 9.4% by deal number — see below graph — Figure 3b), and consumer products and services to 5.4% (10.8% by number), but combined these make up one in five transactions under management currently.
The report also noted that deals in energy type businesses amount to the fourth largest share in active deals if taken by value. Lamprecht pointed out that the growth in this sector had been stimulated by the 12J tax incentive, with investors having invested in solar PVR units among others.
For example, the number of deals jumped to 24 in 2018, from less than four in 2017. Software was also up significantly, from eight to 17.
In all, consumer products and services account for the largest share of active deals by number (10.8%), followed closely by manufacturing (10.4%) and software (9.4%).
The latter mirrors the global trend for investing in deals involving software, including many transactions classified as Consumer Products & Services where the business activity involves software, noted the report.
South Africa’s economy might be mired in political and economic uncertainty, but the VC sector is growing in leaps and bounds.
Says Lamprecht: “We haven’t seen anything that will decimate the sector, despite the current economic and political challenges”. The question is, will it keep booming?
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
Everyone is talking about it and everyone is promising it. You’re constantly surrounded by it, and sometimes you’re even worried by it — Innovation. In the corporate world, innovation has become one of the most used words of the decade. Sit in any boardroom meeting and industry seminar and you’re likely to hear this term being used repeatedly, and if you’re in the technology space you don’t really have a choice. Innovation is the name of the game.
But what does innovation truly mean? Both for my company and my audiences? This is a question that a lot of leaders today are forgetting to ask. More importantly, what measures do you put in place to guarantee your innovation is successfully driving your company forward, whilst in parallel creating a positive impact on the wider community? In order to make true change, these questions must be addressed head on. If you do this successfully, not only will your business be at the top of its game, but your workforce will act as a force for good. This is where the concept of exponential innovation comes in.
Exponential innovation: redefining the value chain
When Uber was trying to solve the problem of taxi availability anytime, anywhere, it invented an entirely new concept and caused a paradigm shift. Now, every car on the road can potentially become a taxi, and the industry has changed forever. Airbnb in the hospitality industry, and Spotify and Netflix in the entertainment industry have done the same.
Similarly, in the payments industry, when tokenization technology was introduced, it was a conceptual shift in thinking. Should card data be compromised, the data became useless to fraudsters. This not only helped to protect consumers’ financial data, but also boosted consumer confidencein an industry becoming increasingly more digital. This is the very definition of exponential innovation: it goes above incremental innovation to reimagine the consumer experience and create efficiencies within the industry’s value chain. It challenges the status quo, looks at pain points with a different set of lenses, with the aim to eliminate them, not just reduce them.
It is necessary to approach your product or service from the viewpoint of the end-consumer. Every organization today is a B2C organization, not a B2B or a B2G, because ultimately the work you do will have considerable impact on individual lives. It is that impact that you must look to positively transform, to achieve exponential innovation. Three-pronged approach to exponential innovation: Build, Acquire, Collaborate Build.
This is perhaps the most obvious one: design, invent and innovate. Building the right solutions requires looking internally and investing in those technologies and solutions that aim to disrupt existing technologies. In the era of the Fourth Industrial Revolution, emerging technologies such as Artificial Intelligence, Internet of Things, Machine Learning, Robotic Process Automationand Blockchain are ruling the roost in terms of their use-cases for commercial purposes. Gartner forecasted that the number of things connected to the internet surpassed the number of humans and is expected to reach 20.4 billion by 2020. The boundaries of technologies continue to increase, and there has never been a better time in history for innovators to experiment, build and test new solutions.
Complementing this is the growth of the knowledge economy, in which technology giants no longer work in individual silos, but rather encourage knowledge-sharing with each other in order for the world’s technologies to be able to talk to each other. Egypt recently announced plans to set up a Knowledge City in the new administrative capital that will include branches of foreign universities, research, innovation and entrepreneurship centers, in addition to a science park. The Knowledge City is part of Egypt’s Higher Education and Research Strategy that aims to promote science, technology, and innovation ,indicating that the region is ripe for further invention.
Acquire
Look at your landscape. The rise of fintechs and startups is disrupting virtually every industry, not just the tech sector. 2018 saw a record of 366 startup deals across MENA, amounting to $893m of total funding. Egypt was the fastest growing ecosystem, with 22 percent of deals in the region .Thanks to hyper-digitalization, these startups have far greater access to consumers than was ever possible before.
It is important to view these players not as competition, but as potential strategic partners that can help you achieve exponential innovation. Looking at the positive sentiment that Careem and Souq received this past year after being acquired is a clear indication that the region is increasingly becoming a hotbed of unicorn startups, and it makes business sense to leverage this opportunity.
Collaborate
Let me give you a world famous example. When Apple decided they wanted to launch the Apple Card, Mastercard didn’t shy away — we became their global payments network.
Similarly, many technology-based startups and consumer-facing apps only work thanks to established companies partnering with them. For example, popular apps in the region such as Zomato, Uber and Namshi enable consumers to purchase their food, travel and clothing anytime, anywhere simply from their smartphones. For this to happen, several stakeholders need to work together. The app itself needs to ensure that the consumer has an easy-to-understand user experience that allows them to make the purchase seamlessly. The telecom provider needs to ensure that a person has sufficient data capabilities to be able to process this payment via their phone. The payment provider needs to ensure they can seamlessly process the payment safely and securely. Collaboration is thus key in this process.
Trying to achieve exponential innovation comes with its fair share of challenges. In the payments industry for instance, our biggest concernis around misconceptions around security. Consumers take a lot of time to change behaviors and have concerns regarding cybersecurity and fraud. In 2018, the proportion of organizations in the Middle East reporting that they’ve fallen victim to acts of fraud and economic crime increased to 34%, up from 26% in 2016.
The key to addressing this is three-fold. First, it’s necessary to establish a dialogue involving knowledge-sharing with governments, and banking and technology partners to address these issues in a collaborative way. Second, deploy the technological tools available that minimize fraud concerns, and strengthen authenticity. Tokenization and Artificial Intelligence have been instrumental in achieving these goals. Lastly and most importantly, it is necessary to raise awareness on these issues to gain trust amongst consumers. Trust is the foundation of the digital economy, and consistent efforts must be made to ensure that trust.
Transforming industries, economies and communities
Every company that aims to innovate will have its fair share of challenges while trying to achieve exponential innovation. But keeping the larger picture in mind and addressing these concerns is essential not just for a firm’s growth, but also their sustainability and survival.
By executing a three-pronged approach and leveraging technology to achieve exponential innovation, it is possible to transform industries, benefit economies, and positively impact and enrich communities.
The world today is evolving at an exponential pace — disrupting technologies are changing the way people shop, travel, communicate, pay and much more.Exciting times lie ahead, providing companies are able to approach and harness innovation in the right way.
Gaurang Shahis the Senior Vice President, Product Management, Digital Payments & Labs, Middle East and Africa — Mastercard
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
In a perfect world of the gig economy, James should be able to hire a car from a rental service store, present his driving license and other certifications to Uber (a car hailing service, for instance), get registered if he is considered qualified based on a series of paper checks and tests, and take to town helping online car hailers to reach their destinations, at an automated pay rate, and of course, as long as he fully complies with the terms and conditions of his engagement with Uber. In this arrangement, although James uses the Uber hailing service as a vehicle to carry out his business, he is still considered by Uber as an independent contractor who works off the controls and the supervision of Uber, except on occasions where he is skidding off his original rules of engagement. Thus, in a gig economy, James should not be on Uber’s payroll and is not even qualified to be classified as an employee of Uber. But all that has been shaken up, disrupted by the Californian state legislature, in a landmark new bill that has just scaled through the last phase in parliament, pending an assent by the Californian state governor. If other jurisdictions draw inspiration from California’s new standards, then all logistics, transport and other similar startups that have built their business models around independent contracting would be back to square one; that is, to the previous era when there was little or no disruption.
Bradley Tusk, president of Tusk Ventures and Uber’s first political strategist, told The Verge, “A domino effect [is] not just possible, it’s all but guaranteed.”
First Here Is What The New Law Proposes
The bill has changed the criteria for being an independent contractor.
Now, for a company to classify a worker as an independent contractor, it must prove three things (you may hear this being called the “ABC Test”). If they can’t, then the worker is treated as an employee.
First, companies must prove “the worker is free from the control and direction of the hiring entity in connection with the performance of the work.” In other words, companies can’t manage contractors the way they would employees. As an example, if a catering hall contracted a chef to prepare food events, but controlled how the chef prepared the food — giving them custom orders from customers, giving a strict schedule for production, and instituting standard procedures — they would likely not satisfy this part of the test.
Second, companies must prove “the worker performs work that is outside the usual course of the hiring entity’s business.” This means a company like Uber has to prove that driving users from location to location is outside the company’s usual course of business. Uber said as much in a press release, contending that the company is actually a “technology platform for several different types of digital marketplaces.”
Third, the companies must prove “the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.” For example, an electrician doing contract electrical work is still a contractor. It’s unclear if ride sharing or meal delivery companies will be unable to clear this bar.
Consequently, under this new law, all of these independent contractors could earn employee status if the companies can’t satisfy the ABC test — which greatly increases the company’s overhead. Worker’s comp, benefits, tax implications — it would be a serious reshaping of these companies’ finances.
Applying The New Californian Rule To Similar African Startups
There is no specific legislation on independent contractors in two of Africa’s largest economies — Nigeria and South Africa. However, the English common law standards have continued to apply.
The common law recognises a distinction between a contract of service (an employer-employee relationship under which the employee subordinated his or her services to the authority of the employer — a locatio conductio operarum) AND a contract for services (a principal — independent contractor relationship where the former contracts the latter to deliver certain services and there is no subordination by the contractor, who instead is answerable to the service deliverables contracted for — a locatio conductio operis).
Who Therefore Is An Employee Or Independent Contractor In South Africa?
Since there is no express law that draws a distinction on who an independent contractor or employee in South Africa is, courts in the country have often adopted an approach that can best be described as a “reality approach”, which involves assessing the reality of the relationship by taking account all of the relevant factors on a substance-over-form basis, the public interest and the fact that parties have no licence to artificially take themselves out of the scope of important legislation such as the Labour Relations Act 66 of 1995 (“LRA”) the Basic Conditions of Employment Act 75 of 1997 (“BCEA”) and the Employment Equity Act 55 of 1998 (“EEA”) in existence in the country. Consequently, there is currently in place in the country an authoritative judgement on the issue. By the rules, in arriving at whether a person is an independent contractor or not, questions must asked on whether:
The principal has rights of supervision and control over the contractor, i.e. whether the contractor is obliged to follow the instructions of the principal, including whether the principal is able to dictate to the contractor when he/she is required to render their services, the manner in which such services are rendered and generally whether the contractor is at the principal’s ‘beck and call’
Whether the contractor forms an integral part of the principal’s organisation, e.g. whether the contractor participates or is an integral part of the principal’s internal management and/or staff structures; whether the contractor is ‘part and parcel of the organisation’ or whether the work done is for the business but is not integrated into it and is only accessory to it; whether the contractor would appear to an outsider to be an employee of the principal.
The contractor is economically dependent on the principal or whether he/ she is free to derive income from other sources as well. Thus, a person who is truly self-employed cannot be economically dependent on their “employer” when he or she retains his or her ability and power to contract with and render services to other persons or entities.
The above three factors are not exhaustive of all the factors to be taken into consideration when considering whether a person is an independent contractor or not.
The South African parliament has however gone ahead to incorporate these three conditions (considered as presumptions which can be rebuttable) as part of South Africa’s national legislation on employment.
Consequently, under the LRA and BCEA, a person who earns less than an earnings threshold amount determined by the Minister of Labour in terms of the BCEA3, and who works for or renders services to another person, will be presumed — until the contrary is proved and regardless of the form of the contract — to be an employee of the other person if one or more of the following factors are present:
• the manner in which the person works is subject to the control or direction of the other person; • the person’s hours of work are subject to the control and direction of the other person; • in the case of a person who works for an organisation, the person is a part of that organisation; • the person has worked for the other person for an average of at least 40 hours per month over the last 3 months; • the person is economically dependent on the other person; • the person is provided with tools of trade or work equipment by the other person; or • the person only works for or renders services to the other person.
The effect of this classification into the status of an employee or an independent contractor is that in the Fourth Schedule to the South Africna Income Tax Act, only employees and not independent contractors are entitled to earn “remuneration”. That is, a person can only earn ‘remuneration’ if their services or duties are required to be performed mainly at the premises of the client and:
the worker is subject to the control of any other person as to the manner in which his duties are or will be performed, or as to the hours of work; or
the worker is subject to the supervision of any other person as to:
the manner in which his duties are or will be performed; or
the hours of work.
This will also mean that the independent contractor would not be part of certain benefits applicable only to employees such as a working period of not more than 45 ordinary hours in any week, fair termination of employment among others. As opposed to employees, independent contractors are only entitled to such “benefits” and terms as have been agreed to between the independent contractor and his / her client. Again, the termination of independent contracting relationships is governed only by the agreement between the parties.
Who Is An Employee Or Independent Contractor In Nigeria?
Nigeria’s case is very much the same with South Africa’s. Both countries have no legislation that specifically defines who an independent contractor is, except of course the application of the common law principles of contract of service and contract for service. Nigeria’s Supreme Court, in Shena Security Co. Ltd v. Afropak (Nig.) Ltd & 2 Others [2008] 18 NWLR (Pt. 1118) 77 SC; [2008] 4–5 SC (Pt. II) 117 has laid down the some extensive factors that should guide courts in determining which kind of contract the parties entered into –
If payments are made by way of “wages” or “salaries” this is indicative that the contract is one of service. If it is a contract for service, the independent contractor gets his payment by way of “fees”. In like manner, where payment is by way of commission only or on the completion of the job, that indicates that the contract is for service.
Where the employer supplies the tools and other capital equipment there is a strong likelihood that the contract is that of employment or of service. But where the person engaged has to invest and provide capital for the work to progress that indicates that it is a contract for service.
In a contract of service/employment, it is inconsistent for an employer to delegate his duties under the contract. Thus, where a contract allows a person to delegate his duties there under, it becomes a contract for services.
Where the hours of work are not fixed it is not a contract of employment/of service. See Milway (Southern) Ltd v. Willshire [1978] 1 RLR 322.
It is not fatal to the existence of a contract of employment/of service that the work is not carried out on the emjployer’s premises. However, a contract which allows the work to be carried on outside the employer’s premises is more likely to be a contract for service.
Where an office accommodation and a secretary are provided by the employer, it is a contract of service/of employment.
These factors, as in South Africa’s case, would also provide a guide in considering whether the benefits and the responsibilities expected of the independent contractor or the principal as the case may be.
The Implication of The Positions of The Law in the Two Countries In Relation To California’s New Rules
The above explanations are important because in both countries, courts will not usually be bound by the labels that parties chose to attach to their relationship or defer to the declared intent of the parties in this regard, whether in their contract or elsewhere. Thus, stipulating in a contract (or elsewhere) that a relationship is one between independent contractor and principal or referring to the contract as an independent contractor or consultancy agreement, when the relationship between the principal and the contractor is, in reality, one between employee and employer, does not make the relationship any less of an employment relationship, and vice versa.
Comparing South Africa and Nigeria’s case on the one hand and California’s case on the other, it is obvious that California’s case went too far in establishing who an independent contractor is. For instance, apart from the fact that in California’s case, companies must prove “the worker is free from the control and direction of the hiring entity in connection with the performance of the work,” companies must also prove “the worker performs work that is outside the usual course of the hiring entity’s business” and that “the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.”
While the first test, i.e. that of control, appears to still conform to the basic standards used in determining who an independent contractor is, the second and the third tests tend to have looked beyond these basic features of control and supervision to question the need for independent contractors when the engaging companies could as well themselves do the work. This, in all ramifications, is predatory legislation, and which would be very hard to found followership in other jurisdictions.
Do African Startups Need To Re-Adjust In Time?
As a matter of strategy, remodelling the nature of services African startups offer on the basis of this new Californian legislation would, of course be a matter of long-term strategic plans for startups. African government’s demeanour towards this is such that it does not seem that they are very much in a hurry to change the status quo. Unlike, other jurisdictions that have clear-cut definitions of who an independent contractor is, most African countries are yet to come up with even a legislated definition of the term. California’s case cannot be unrelated to the continuing agitations by Uber drivers in the state, of exploitation by the multi-billionaire dollar car hailing company. In March, Uber agreed to pay $20 million to settle a nearly six-year-old lawsuit by California and Massachusetts drivers over their classifications. The case is McRay v Uber Technologies Inc, U.S. District Court, Northern District of California, №19–05723.
Uber, rival Lyft Inc and food delivery service DoorDash, on their own, have pushed for separate legislation to boost driver pay and benefits while preserving their independent contractor status.
African startups with similar business models as Uber, Lyft Inc, DoorDash, Fiverr, Upwork, and others should however, keep this in mind. It not only has the capacity of suddenly bringing to an end the gig economy, it also has the potency of sending all new disruptive business models that rely on public workforce into an abrupt extinction.
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.
This year, African edutech startups have seen much of investment, compared to their counterparts in fintech, logistics or transport. Cape Town-based edtech startup Digemy seems to be the latest on the scene. The startup has now raised R 1 million in new investment, bringing its total valuation to R40-million.
Here Is The Deal
This is the second round of funding and it came from Greenwold Capital.
The latest investment follows a R2-million investment previously made by Greenwold Capital in the startup in 2017.
However, this would be the end of the road for Digemy’s co-founder Carl Wallace, who Digemy CEO and co-founder Kobus Louw said had been replaced on the startup’s board by an investment representative after Wallace was diagnosed with lupus and Crohn’s disease.
With the recent investment Greenwold Capital now holds a slightly smaller stake, of 24.4%, while Digemy CEO holds a 48.9% stake and Vigo, which allows users to create their own websites, holds the remaining 26.7%. Wallace’s stake in Digemy was formerly represented by Vigo (which has two tech subsidiary companies — Digital Drawing Room and Wapp).
However effective from 1 September, Wallace was replaced on Digemy’s board by Stocks & Strauss director and co-founder Wayne Stocks, who has previously helped SA tech startup JUMO to expand in East Africa.
Louw said the funding from this second round will be used to expand the Digemy team, launch the besmarta financial literacy platform, and to pursue entrepreneurial development.
What Digemy Does
Digemy was founded in 2016 by Wallace and Louw. The startup’s platform provides corporates with in-depth insights into the knowledge levels of employees, from course-level to the most granular level of every syllabus. Training material is delivered in bite-size chunks.
Despite the disruption around Wallace’s departure, Louw said the startup had signed four listed companies as clients, and had grown its valuation five times in the last 18 months. It has also just finished a proof of concept with one of the top banks in South Africa. While he could not reveal who the bank was, he said the listed companies include pharmaceutical giant Cipla and Transaction Capital’s software firm Principa. The startup is currently working to conclude a deal with Deloitte too, he added.
Last year, Digemy placed in the top five for the Best Enterprise Solution at the AppsAfrica Awards, won an MTN Business App of the Year award for their besmarta financial literacy solution, and has now been named the second best tech start-up in Africa in 2019, according to Africa Tech Week. The company has also partnered with Kevin Horsley, New York Times best-selling author and the World Record Holder for the matrix memorisation of 10 000 digits of Pi. Through this partnership, the startup hopes to develop and launch an app that helps children memorise times tables.
Digemy is currently partnering with corporates to roll out its besmarta platform in their organisations. The platform provides learners with access to microlearning modules and quizzes on financial literacy that aim to decrease financial stress and help them gain financial independence. The startup is also helping organisations to create their own online academies to assist in employee and consumer education solutions. They also create specialist courses and offer their platform as a SaaS solution.
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.
Egypt ’s Central Bank is set to launch a fund to support fintech startups early next year with a capital of $50–100m. Also, the Egyptian government plans to set up seven technological parks this year in various universities at an investment of EGP 1 billion ($60.8 million), in its drive to foster digital technology infrastructure.
Here Is All You Need To Know
According to Egypt’s government, the parks will be financed through Egypt’s Ministry of Communications and Information Technology’s resources in parallel with the beginning of the new academic year, Daily News Egypt reported.
The ministry is ready to contribute to the fintech fund, which the Central Bank of Egypt (CBE) plans to launch next year, if the latter requests it.
Central Bank of Egypt aims to launch a fund to support fintech startups early next year with a capital of $50–100mln, the report said.
Egypt’s ICT sector recorded 16 percent growth in fiscal year 2018/19 and the sector contributes 3.2 percent of the country’s GDP, Daily News Egypt reported citing the minister.
Egypt aims to increase investments in its ICT sector and the ministry intends to increase the ICT contribution in the GDP to reach 8 percent, the report said.
Egypt is also developing a comprehensive legislation system and framework to regulate the ICT sector, through issuing the e-commerce bill and a personal data protection law, Talaat said.
For almost 10 years, Egypt has made a dramatic leap in a number of fast-expanding startups and an amazing set of supporting institutions and communities.
In 2018, Egypt was ranked the fastest growing startup ecosystem in the Middle East and North Africa and the second largest after UAE, according to a report by start-up platform MAGNiTT.
The Egyptian government has also successfully established many incubators, providing a stepping stone for local entrepreneurs. Bedaya, TIEC — Technology Innovation and Entrepreneurship Center, and Fekretak Sherketak are the top incubators founded by the government, offering funding for new innovative ideas.
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.
With Jumia’s controversial listing on the New York Stock Exchange, Konga’s recent acquisition by the Zinox Group, and barely a poor history at fund-raising this year, it does seem that confidence is gradually returning to Africa’s ecommerce sector (although this is still very much connected to fintech). South African startup SnapnSave, which has developed a cashback grocery coupon app, has raised an undisclosed amount of funding from Vunani Capital as it builds towards its Series A round.
Here Is The Deal
The amount in this round of investment is undisclosed but investment came from VC firm Vunani Capital through its fintech-focused fund.
“We are delighted to be working closely with the team at Vunani. Their expertise in understanding corporate finance and their relationships in Africa will aid the company as we prepare for a Series A raise that will allow us to expand into new markets in 2020,” said SnapnSave co-founder Mark Bradshaw.
Why The Investor Invested
One thing is top on the list of why VC Vunani invested — SnapnSave belongs in the fintech space.
“This investment offers the Vunani group exposure to a new wave of fintech businesses that are using digital platforms to bring benefits to ordinary consumers,” Vunani executive director Mark Anderson said. “SnapnSave is our first fintech investment. We are expecting to enter into more transactions in the fintech space as we diversify our financial services offering.”
What The Startup Does
SnapnSave gives shoppers cash back on their favourite products, wherever they shop, just by snapping a photo of their till slip.
The startup secured ZAR14 million (US$980,000) in funding from Kalon and Smollan in 2017, taking in the second tranche of that investment last November. The startup has seen significant growth since it was launched in 2015, and now has more than 350,000 users that have submitted over 1.5 million till slips and earned more than ZAR14 million (US$950,000) in rewards. Its latest round of funding, which comes from VC firm Vunani Capital through its fintech-focused fund, will be used to further grow and scale the shopper and vendor base of SnapnSave as it builds towards a Series A round. Bradshaw’s fellow SnapnSave co-founder Tina Fisher said with over 200,000 grocery retail points in South Africa, it was clear that shoppers in the market do not just shop at one store for their favourite grocery items.
“With promotions in retail traditionally being store-specific, more and more shoppers are signing up for SnapnSave to benefit from cash back savings available at any retailer. Leading brands like Coke, Pioneer Foods, Unilever, SC Johnson and more are working closely with SnapnSave to engage with these shoppers,” she said.
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
At this age and time, $135 may no longer be enough to start up a business in Namibia. This is what the review of the old Namibian Youth Credit Scheme seeks to consider. The Namibian government is reviewing the country’s Youth Credit Scheme as it seeks to enhance capacity in providing financial services to start-up youth business enterprises. The Namibia Youth Credit Scheme provides start-up loans to young Namibians aged 18 to 35 seeking to establish or expand their businesses.
Here Is All You Need To Know
The Namibia Youth Credit Scheme (NYCS) is a youth credit initiative formulated to enable youth of Namibia to access capital, enabling them to significantly participate in the socio-economic development of Namibia, according to a report by the scheme.
The NYCS was co-funded by the Ministry of Youth, National Service, Sport and Culture (MYNSSC) and the Social Security Commission of Namibia. It is an integrated support programme, providing simplified business management training as well as loans ranging from N$400 to N$4000 as a means of supporting youth of ages ranging from 18 to 35 years in their efforts to establish small and medium enterprise (SME) initiatives as strategies for self-employment and income generation, thereby improving their living standards.
During 2018, the Scheme dispersed seed capital to 218 Namibian youth-led business es countrywide, valued at 1.8 million Namibian dollars.
The loans are given to individuals in groups from the same community (usually 5–10 people). It is necessary for the young people to be recommended by their parents or legal guardians in order to join the programme (they need to either sign a letter or the loan agreement).
The review aims to take another look at its funding model for small-medium enterprises, and to ensure that the programs meet current demands.
“The Scheme was initially launched as a social welfare program through the Commonwealth. Currently, funding starts from 2,000 Namibian dollars (135 U.S. dollars), which is no longer adequate for most start-ups, which poses a challenge to wider national economic development. Hence; the need to review the Scheme,” Emma Kantema-Gaomas, executive director of the Ministry of Sport, Youth and National Service said.
The review is expected to be completed by the end of November this year.
The total population in Namibia was estimated at 2.5 million people in 2018, according to the latest census figures. Looking back, in the year of 1960, Namibia had a population of 0.6 million people.According to Kantema-Gaomas, the ministry is underway with consultative meetings with key stakeholders to review the amount to be provided to entrepreneurs and unemployed youth, as well as other modalities.
“The prime objective is further to strengthen the program, and come up with a model that will drive sustainability and economic prosperity,” she added.
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
Apart from fintechs, logistics and transport, Venture Capital firms seem to be going after Africa’s e-health startups this year. South Africa ‘s e-health startup Erada is the latest to join the league of fund raisers, with a new EUR288,000 (US$318,000) foundation grant from the De Beers Group to support its saliva-based Malaria Asymptomatic and Asexual Rapid Test (SMAART) test.
Here Is The Deal
De Beers Group, which has mining operations in South Africa, Botswana, Canada and Namibia, has provided the grant through its Venetia Diamond Mine in Limpopo, close to the border with Zimbabwe and Botswana.
The foundation grant from mining firm De Beers Group will be utilised in the final stages of Erada’s work prior to the product’s global launch, planned to coincide with World Malaria Day in April 2020. SALVA! will complete its field trials before full commercialisation and distribution in 2020.
The (SMAART) test developed by Erada is known as SALVA!, and is the world’s first ever saliva-based rapid diagnostic test for malaria. It includes a simple device for standardised collection of saliva, and can detect parasites circulating in an infected human before symptoms start to show, assisting in early detection of malaria.
“This generous grant from De Beers Group makes it possible for Erada to complete much of our vital preparatory work before we conduct field trials and finalisation of commercialisation of SALVA!,” said the startup’s founder Dr Benji Pretorius.
“The introduction of SALVA! is going to play a major part in achieving effective diagnostic testing and surveillance; as well as prevention and treatment of this disease, and therefore will be a major catalyst in meeting the WHO’s 2030 target to reduce malaria incidence and mortality by 90 per cent, ” Dr. Benji Pretorius said.
“Mining and exploration operations face a number of unique challenges related to exposure to endemic diseases such as malaria, emergency medical care and in some cases a lack of available health services. Our investment in a local business which has the potential to transform the lives of millions of people worldwide is a logical extension of De Beers Group’s long history of supporting world and community health projects,” said Gerrie Nortje, general manager of the Venetia mine.
“Through this foundation grant, we are proud to be playing a pivotal early part in the eradication of one of the most pervasive and destructive diseases on the planet.”
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
Africa Check in conjunction with Facebook, expands its local language coverage as part of its Third-Party Fact-Checking Programme.
Facebook’s reality checking project depends on input from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey
Facebook), today with Africa Check reported that it has included new neighborhood language support for a few African dialects as a major aspect of its Third-Party Fact-Checking program – which surveys the exactness of news on Facebook and expects to decrease the spread of deception.
Propelled in 2018 crosswise over five nations in Sub-Saharan Africa, including South Africa, Kenya, Nigeria, Senegal and Cameroon, Facebook has banded together with Africa Check, Africa’s first free certainty checking association, to grow its neighborhood language inclusion over:
Nigeria, in Yoruba and Igbo, adding to Hausa which was at that point bolstered
Swahili in Kenya
Wolof in Senegal
Afrikaans, Zulu, Setswana, Sotho, Northern Sotho and Southern Ndebele in South Africa
As indicated by Kojo Boakye, Facebook Head of Public Policy, Africa, stated: “We keep on trying huge interests in our endeavors to battle the spread of false news on our stage, while building strong, sheltered, educated and comprehensive networks. Our outsider reality checking system is only one of numerous ways we are doing this, and with the extension of neighborhood language inclusion, this will help in further improving the nature of data individuals see on Facebook. We know there is still more to do, and we’re focused on this.”
Remarking, Noko Makgato, official chief of Africa Check, said “We’re excited to grow the munitions stockpile of the dialects we spread in our work on Facebook’s outsider truth checking program. In nations as semantically different as Nigeria, South Africa, Kenya and Senegal, certainty checking in neighborhood dialects is imperative. In addition to the fact that it lets us actuality check increasingly content on Facebook, it likewise implies we’ll be contacting more individuals crosswise over Africa with confirmed, believable data.”
Facebook’s reality checking project depends on criticism from the Facebook people group, as one of numerous sign Facebook uses to raise possibly false stories to certainty checkers for survey. Neighborhood articles will be reality checked close by the confirmation of photographs and recordings. In the event that one of Facebook’s reality checking accomplices distinguishes a story as false, Facebook will demonstrate it lower in News Feed, essentially lessening its dispersion.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.
This is a huge chance for agritech startups across Nigeria. The FCMB-Wennovation Agritech Incubation Programme, in conjunction with Wennovation Hub, has launched a bid to guide early-stage AgriTech Start-ups across Nigeria so that they can test and validate their ideas as well as gather their first set of customers or pivot if need be.
This will be done through a combination of financial support, guidance, and training. The secondary objective is to prepare these start-ups for acceleration.
Here Is All You Need To Know
The goal of the 2019 incubation is to:
Expose 10 teams across Nigeria to the root of the pre-defined problem statement by merging an in-depth problem definition strategy with an immersion process.
Support at least top 10 teams with a demonstrable Minimum Viable Product to build a sustainable business model by taking them through a design thinking workshop and subsequently a 3 weeks incubation program.
Support at least tops 2 Agritech startups in Nigeria with seed investments and grants.
Offer access to experienced mentors and a cohort structure that encourages peer learning and support.
Provide opportunities to connect with potential customers and investors.
What Are Expected of Prospective Applicants
Applications should focus on four problem statements, namely Input, Production, Processing and Storage, and Marketing and Sales, with Wennovation Hub looking for MVP-stage startups with some form of market validation.
The programme commences with a one-week immersion component where selected startups get to interact with community members through Wennovation Hub immersion partners. Startups who successfully complete the immersion programme and the required reporting commitments will be invited to a two-week Bootcamp in Lagos.
It all concludes with a demo day in September, with all successful startups to be taken into a six-month post-Bootcamp aftercare programme
At the end of calls for application, 10 Agritech start-ups will be selected for the incubation program.
The program will be concluded with a pitching competition at the demo day where 2 Agritech startups will win a total of N3million in Grants.
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.