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Africa Roundup: African startup investments turn to fintech this winter season

Forty-seven and a half million dollars is a big commitment to African technology companies — even with the recent uptick in VC investment on the continent.

But for the Kenyan-based fintech firm Cellulant, whose digital payments platform processed 7 million transactions worth $350 million across 33 African countries in the last month alone, raising that amount in a series C round led by TPG Growth’s Rise Fund just makes sense.

In 2017, the company processed $2.7 billion in payments, said chief executive, Ken Njoroge.

Clients include the continent’s largest banks: Barclays Bank, Standard Chartered, Standard Bank, and Ecobank. Cellulant also has multiple revenue streams and is EBITDA positive, according to its CEO.

So what does an African technology company do with $47.5 million? “The round is to accelerate our growth of around 20 percent…north of 50 percent,” said Njoroge. “Most of the investment is to scale out our existing platform in Africa and build usage on our existing network.”

Founded in 2004, Cellulant offers Person-to-Business, B2B, and P2B services on its Mula and Tingg products. It’s also developing a blockchain based Agrikore product for agriculture related market activity.

On Africa’s digital payments potential, “We’ve built internal value models that estimate the size of the market at somewhere between $25BN and $40BN,” said Njoroge.

He differentiates Cellulant’s focus from Safaricom’s M-Pesa –one of Africa most recognized payment products — by transaction type and scope. “Kenya’s M-Pesa is optimized as a P2P platform in a few African countries. We’re optimized as a P2B platform and single pipe into multiple countries across Africa,” he said.

One of those countries is economic and population powerhouse Nigeria — where Cellulant offers both its Ting and Agrikore apps. Nigeria is also home to notable digital payment companies Paga and Interswitch, the latter of which has expanded across Africa and is considered a candidate for a public offering.

On a future Cellulant initial public offering, “it’s too early,” said Njoroge. But he doesn’t rule it out. “When you look at the size of the payments business, you could say we have fairly strong prospects to go in that direction.”


Meanwhile, the Nigerian investment startup closed $1.1M in seed funding and announced a new product — Smart Target, which offers a more secure and higher return option for Esusu or Ajo group savings clubs common across West Africa.

The financing was led by a $1 million commitment from LeadPath Nigeria, with Village Capital and Ventures Platform joining the round.

Founded in 2016, offers online savings plans — primarily to low and middle-income Nigerians — for deposits of small amounts on a daily, weekly, monthly, or annual basis. There are no upfront fees.

Savers earn interest rates of between 6 to 10 percent, depending on the type and duration of investment,’s Somto Ifezue explained in this TechCrunch exclusive.

The startup generates returns for small-scale savers (primarily) through investment in Nigerian government securities, such as bonds and treasury bills. generates revenue through asset management and from the float its balances generate at partner banks.

The Lagos based startup will use its $1.1M in new seed funding for “license acquisition and product development,” according to company COO Odunayo Eweniyi. looks to grow clients across younger Nigerians and the country’s informal saving groups and has taken preliminary steps to launch in other African countries.

Lead investor and LeadPath Nigeria founder Olumide Soyombo was attracted to as an acquisition target.

“The banks have been slow to try new things in this savings space. Piggybank is coming in…and filling a particular need, so they are in a very acquisitive space.”


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African Tech Around the Net

Nigeria’s raises $1.1M, announces group investment product

Seeking to tap into Africa’s informal savings groups the Nigerian investment startup closed $1.1M in seed funding and announced a new product — Smart Target, which offers a more secure and higher return option for Esusu or Ajo group savings clubs common across West Africa.

The financing was led with a $1 million commitment from LeadPath Nigeria, with Village Capital and Ventures Platform contributing $50,000 each.

Founded in 2016, offers online savings plans — primarily to low- and middle-income Nigerians — for deposits of small amounts on a daily, weekly, monthly, or annual basis. There are no upfront fees.

Savers earn interest rates of between 6 to 10 percent, depending on the type and duration of investment,’s Somto Ifezue told TechCrunch in Lagos with co-founders Odunayo Eweniyi and Joshua Chibueze.

Users need an account with one of’s bank partners to use the products. The startup generates returns for small-scale savers (primarily) through investment in Nigerian government securities, such as bonds and treasury bills. generates revenue through asset management and from the float its balances generate at partner banks.

The startup looks to grow clients across younger Nigerians and the country’s informal saving groups.

“The market that we are trying to serve is largely the millennial market, though we do not exclude anyone,” said Eweniyi, the company’s chief operating officer. The venture also looks to meet a demand in Nigeria for accessible investment options, citing a survey they conducted indicating that as a top priority for people with discretionary income.

“Piggybank offers savings, but our vision is not just savings, but to become a holistic platform — a financial warehouse — where other financial providers can plug in their services for PiggyBank users,” said Eweniyi. She cited banks, investment houses, insurance, and pension funds as possible partners.

The company currently has 53,000 registered users — 60 percent of whom are Nigerian Millennials — who have saved in excess of $5M since 2016, according to a release. will use its $1.1M in new seed funding for “license acquisition and product development.”

The startup has taken preliminary steps to launch in other African countries (Kenya in particular) but could not offer exact details.

Groups will be able to choose savings options and goals through’s app and receive automated disbursement of returns across their individual bank accounts, according to COO Eweniyi .

As for how the company assures savers it won’t become another Ponzi scheme, and its lead investor point to the startup’s pending banking license with Nigeria’s Central Bank. The company is in the process of acquiring a micro-finance banking license, something LeadPath Nigeria founder Olumide Soyombo confirmed on a call with TechCrunch. He also pointed to Piggybank’s client balances being held with registered banks, which are protected under Nigeria’s own FDIC type banking insurance.

Soyombo will take a role on’s board and he’d like to see them open up new options for individuals to input money on the platform. “The agent network business is a huge play we plan to go into. They’ve basically become like human ATMs,” Soyombo said. He referenced Nigerian digital payment company Paga and Safaricom’s M-Pesa with large agent network stations where clients can fund digital accounts with cash.

While digital payments products have caught on in certain parts of Africa, E-Trade type citizen investment platforms have yet to emerge at any scale.

Soyombo doesn’t see moving from fixed income investments to equities just yet. “Maybe down the line stocks could be an interesting play, but not right now. People are currently looking for a more risk free place to e-tail,” he said.

Soyombo believes has the potential to become an acquisition target.

“They usually only happen in our market with two main players: banks and telcos,” he said. “The banks have been slow to try new things in this savings space. Piggybank is coming in…and filling a particular need, so they are in a very acquisitive space.”

A look back at the year that the Sub-Saharan African startup scene found its stride

African tech in 2017 was about the normalization of market events mostly absent even a decade ago. There were acquisitions, multiple investment rounds, lots of expansion, big strategic partnerships and some surprise failures.

Africa is fast becoming home to a dynamic tech sector. Here’s a snapshot of the news that shaped that transition over the last year.


Andela’s $40 million VC raise in October was one of the continent’s most notable. The technology training and job placement firm received Series C funding from CRE Venture Capital, DBL Partners, the Chan Zuckerberg Initiative and Salesforce Ventures, among others.

Andela said it would use the funds for continued expansion. The coding accelerator marked three years in May by adding a Uganda office to locations in New York, Nigeria and Kenya.

New investment also helped moved Africa’s startup boom into the used autos space. In May, Nigeria-based raised a $5 million Series A round from the Frontier Cars Group to better connect used-car sellers to digital price quotes, first-time online service histories and offers.

2017 fintech funding went to Nigerian startups Flutterwave ($10 million) and Lidya ($1.25 million).  In digital solar, Kenya’s PayGo Energy raised $1.4 million.

Agtech startup Farmcrowdy received $1 million from investors including Techstars Ventures and Cox Enterprises to bring Nigerian farmers online.

In April, South African media and technology giant Naspers made a $70 million (majority stake) investment in Cape Town-based e-commerce company Takealot.

South African digital cleaning startup Sweep South concluded a Series A Round backed by, among others, DJ Black Coffee.

Several new African tech funding initiatives emerged in 2017. GSMA’s Ecosystem Accelerator Innovation Fund made seven of its first nine global investments in African startups.

Lagos, London and Nairobi-based TLcom Capital raised $40 million for its new growth-stage Tide Africa Fund. In April, The World Bank launched its XL Africa accelerator to support Sub-Saharan African startups with business mentoring and up to $1.5 million in early-stage capital.

In October, U.S.-based private equity firm TPG Growth raised $2 billion for The Rise Fund, founded by TPG CEO Bill McGlashan with Bono’s support.

In perhaps a sign of things to come, Africa also registered some significant outward tech investment. In September, Naspers added $795 million to its holdings in Berlin-based food delivery company Delivery Hero.

Products, Partnerships, Expansion

African tech saw a number new products and platforms launch in 2017. In January, MasterCard’s 2Kuze — an agtech app connecting small-plot farmers to markets, payments and logistics services — went live in Kenya, Uganda and Tanzania.

Africa’s first unicorn, e-commerce venture Jumia, introduced an SME lending program. Safaricom ― Kenya’s largest telecom and M-Pesa mobile money provider ― went live with its Masoko e-commerce platform in November.

Earlier in March, Kenyan communications hardware company BRCK unveiled its SupaBRCK — a waterproof, solar-powered Wi-Fi box that operates as a 3G hotspot and off-grid server.

Africa also registered on the blockchain bandwagon. Earlier this month, 500 Startups-backed SureRemit launched a crypto token product aimed at disrupting Africa’s multi-billion-dollar remittance market.

On expansion and partnerships, Facebook was very active on the continent in 2017. FB announced its Africa Bots for Messenger Challenge in February, detailed plans to boost free Wi-Fi on the continent in April and teamed up with MainOne and Tizeti Network to improve Nigeria’s net connectivity in November. The company partnered with TechCrunch in October for the debut Startup Battlefield Africa and with CcHub to launch Nigeria’s NG_Hub accelerator.

Other big Silicon Valley names also registered in Africa in 2017. Microsoft announced the opening of Cloud Form data centers in May and a partnership with Liquid Telecom in August to accelerate cloud adoption in Africa.

Off of CEO Sundar Pichai’s July Nigeria trip, Google announced plans to train 10 million Africans in digital skills, increase funding to African startups and provide $20 million in grants to digital non-profits and modified versions of products (such as YouTube) in Africa. Google for Entrepreneurs also supported CcHub’s European PitchDrive tour in August.

The same month, eBay expanded its partnership with to allow African vendors to sell wares directly to American online consumers.

On accelerators and capacity building, 500 Startups brought its frontier and emerging markets travel series ― Geeks on a Plane ― to Africa for the first time in March. Airbus held its inaugural BizLab pitch event in Nairobi targeting African startups using UAVs, 3D printing, smart sensors and IoT. The MEST incubator got a new CEO, Aaron Fu, and scaled its presence to include programs in Ghana, Nigeria, Kenya, South Africa and Cote d’Ivoire.

And in October, Safaricom launched its Safaricom Alpha innovation center in Nairobi, with a goal of leveraging the company’s commercial social network (i.e. M-Pesa) to connect people to new product solutions.

Contraction and closing up shop

Of course, no tech sector expands and grows all the time. In September, Y Combinator-backed French language VOD startup Afrostream shuttered, ending subscription services in 29 countries.

In November, Jumia e-commerce competitor Konga slashed 60 percent of its workforce and ended its pay on delivery service, reportedly to cut costs. It’s not clear if this is a sign of trouble or a realignment of business strategy, per Konga founder Sim Shagaya’s Medium post.

Acquisitions, IPOs

Exits and public offerings are still scant in Africa’s tech landscape. There was a notable acquisition in online real estate startup’s purchase of Jumia House Nigeria from e-commerce unicorn Jumia in November. Africa’s much anticipated and much delayed IPO of fintech firm Interswitch is expected in 2019, according to Nigerian tech insiders — who offered TechCrunch perspective on other African ventures with listing potential.

Tech to power

African tech and politics collided on several occasions in 2017. In September, anti-government protests in Togo, and the use of social media to mobilize them, led to the president shutting down the internet for several days.

In a tech to power success story, Cameroon’s #BringBackOurInternet movement — developed by local IT activists — went global, forcing the country’s government to restore connectivity after switching it off in response to demonstrations that started in January.

Revenues and space

Big revenue news from African tech startups is still elusive, but Paga offered promising info in August. The Nigerian digital payments firm reported its first EBITDA positive quarter, after processing 31 million transactions worth some $1.3 billion since inception.

And in July, teams from Nigeria and Ghana launched satellites into space, with a little help from SpaceX and NASA — demonstrating the sky was not the limit for Africa’s scientists and techies in 2017.

More Africa-related stories @TechCrunch

African tech around the ‘net

Featured Image: NASA/Bill Ingalls/NASA/Bill Ingalls

Africa Roundup: Lori Systems wins BFX Africa, Andela raises $40M, Jumia lends to SMEs, Safaricom launches incubator

Logistics transportation company Lori Systems won best of show at TechCrunch’s Startup Battlefield Africa after gaining majority votes of the event’s 15 judges. The Kenyan-based venture pitched its platform to optimize all points of the cargo delivery supply chain ― from the trucks, to the suppliers, to invoicing and costs. Co-founded by South African Josh Sandler and Kenyan Gichini Ngaruiya, Lori Systems will now compete in TechCrunch’s flagship event, Disrupt San Francisco 2018.

Lori wasn’t the only winner at Startup Battlefield Africa, where 15 finalists presented before a full house and global audience via live stream. Agtech company Agrocenta ― which helps small holder farmers improve their value chain ― won the competition’s social good category. SynCommerce took honors in the gaming and entertainment category, which also included fashion. The Ghana-based startup helps sellers list and synchronize product inventory and sales across multiple sites, such as Shopify, eBay and Etsy.

Startup Battlefield Africa also included a panel lineup that discussed everything from investing in startups to solving Africa’s internet connectivity equation. Some of October’s bigger African tech headlines dropped around speaker-related companies.

The technology training and job placement company Andela raised $40 million in Series C funding. The financing came from CRE Venture Capital, a Pan-African venture firm, with additional participation from DBL PartnersAmploSalesforce Ventures and Africa-focused TLcom Capital.

Previous investors, including the Chan Zuckerberg Initiative, GV and Spark Capital, also joined in funding.

Andela says it will use the money to fund an aggressive expansion plan — including the launch of offices in two additional African countries.

E-commerce company Jumia, Africa’s first unicorn, is expanding a small business loan program  into every country where the company operates.

Working with the San Francisco-based lender Branch, Jumia began offering small businesses startup loans in May. The loans were pegged to vendors’ sales history with Jumia and future performance projections.

In Kenya, sellers received loans of up to 30,000 Kenyan shillings (roughly $290), with a six-month term and interest rates of 1.2 percent per month.

Under the expanded program, Jumia sellers across the continent will be able to access credit at terms no higher than 12 percent per year. Credit decisions will be made within two days.

To apply for the program sellers can fill out an online application form. So far, 200 vendors have applied for and received loans from a beta version of the new program, according to the company.

Safaricom — Kenya’s largest telecom company and provider of the nation’s mobile money service M-Pesa — launched a new innovation center in Nairobi.

Named Safaricom Alpha, a priority of the incubator is to identify spending patterns on M-Pesa and turn those insights into additional Safaricom products, Chief Innovation Officer Kamal Bhattacharya told TechCrunch at Startup Battlefield Africa.

“We’d actually like to move beyond M-Pesa by leveraging its power as a social network to connect people to other product solutions,” he said.

Bhattacharya sees one of the innovation center’s first products “as a messenger solution with full payment integration to better support the kind of social patterns that our customers are already using informally.”

Some leadership positions have already been named. Former African Development Bank technology lead, Dr. Shikoh Gitau, will be Head of Products Innovation. Safaricom’s Veronica Ogeto-Tchoketch will head the innovation center’s Strategic Partnerships unit and David Nyamai will manage a Business Intelligence and Big Data team.

The product incubator will eventually connect to a VC function, including Safaricom’s Spark Venture Fund, to support investments and partnerships, according to Bhattacharya.

More Africa-related stories @TechCrunch

African tech around the net    

  • Nigeria’s Aella Credit Raises Funding From 500 Startups―@DisruptAfrica
  • Vice, Econet to Launch African Network, Kwese Vice―@HollywoodReporter
  • SAP Faces U.S. Probe Into South Africa Kickback Allegations―@Reuters
  • Millions Caught in South Africa’s ‘Worst Data Breach’―@BBC
  • AIF Opens Entries For Innovation Prize Africa 2018 Awards―@VentureBurn

Safaricom and mSurvey launch Consumer Wallet to map Africa’s cash economy

Kenya’s leading mobile provider, Safaricom, is teaming up with data collection startup mSurvey to launch Consumer Wallet ― an online platform using mobile and SMS to map Africa’s cash-based economy.

A beta version of the product goes live in Kenya this month. Safaricom and mSurvey are testing the app with potential clients and corporate partners, including McKinsey Consulting, mSurvey CEO Kenfield Griffith told TechCrunch.

Consumer Wallet will be available on a subscription and license basis as early as August 2017. “We are refining the product with a group of potential clients to design the pricing model,” said Griffith. “We are scaling it along Kenya, but also looking beyond because we are not just solving a Kenyan problem, we are solving an African problem.”

Griffith was referring to the challenge many business face of quantifying consumer spending habits and trends on the continent, where more than 50 percent of economic activity and employment occurs in informal sectors, according to the African Development Bank.

Based in Kenya and operating since 2012, mSurvey harnesses Africa’s shift to digital to better track consumer preferences. The startup employs mobile phone-based surveys to gather data on various topics and market segments. mSurvey has received seed and venture funds  from backers including Cross Culture Ventures and Alpha Angels. It also counts Safaricom’s Spark Venture Fund as an investor.

The Consumer Wallet partnership pairs mSurvey’s data research function with Safaricom’s internal resources and distribution network. Safaricom is Kenya’s largest telco, with 25 million (65 percent) of the country’s mobile subscribers.

In addition to its M-Pesa mobile money product ― used by 16.6 million Kenyans through a 100,744-agent network ― the company has been adding consumer and small business-based products to its mobile network. These include digital TV, the M-Kopa solar-powered lighting kit, Lipa-Na bill pay service and Little ride-hail app, which is now going head to head with Uber.

For the Consumer Wallet beta test, mSurvey will use daily SMS and text messages to track the cash-based spending of a 1,000-person sample drawn from Safaricom mobile subscribers. This will feed into the Consumer Wallet database tracking preferences and expenditures on items such as food, transport, education and housing.

The Consumer Wallet launch follows a trend of consumer research in Africa becoming a formalized sector. A decade of growth and reform in many of the continent’s core economies, along with expansion in retail sectors, has driven demand for more detailed customer data.

Several global consumer-focused companies have expanded in Africa over the last decade, from Wal-Mart in 2011 to Netflix and e-Bay in 2016.

Big global research firms such as Nielsen and Euromonitor have been upping their African consumer research offerings. An American company, GeoPoll, has also built out a digital survey service and database in 20 African countries.

mSurvey expanded its core consumer research platform into South Africa in 2016 and is looking at moving into countries such as Zambia, Ghana and Nigeria, according to Griffith. Though neither would name countries, both mSurvey and Safaricom plan to take the new Consumer Wallet beyond test market Kenya to other nations on the continent.

“To invest in Africa, you have to understand its consumers,” said Safaricom CEO Bob Collymore, on the value of the new platform to businesses looking to tap the continent’s cash-based economy.