Canal+ acquires Nollywood studio ROK from IROKOtv to grow African film

French television company Canal+ has acquired the ROK film studio from VOD company IROKOtv for an undisclosed amount.

Founded by Jason Njoku in 2010—and backed by $45 million  in VC—IROKOtv boasts the largest online catalog of Nollywood film content in the world.

Nollywood is a movie genre popularized in Nigeria that has become Africa’s de facto film industry and one of the largest globally, by production volume.

Based in Lagos, ROK film studios was incubated to create original content for IROKOtv, which can be accessed online anywhere in the world.

Actress and producer Mary Njoku—IROKOtv CEO Jason Njoku’s wife—founded ROK studios and will stay on as Director General under the Canal+ acquisition.

Owned by media conglomerate Vivendi, Canal+ looks to give Mary more production resources, without disrupting ROK’s creative chemistry.

“We are acquiring the talent of Mary,” Canal+ Chief Content Officer Fabrice Faux told TechCrunch on a call.

“We will provide administrative support, finance, and equipment, but otherwise it is our intention to give Mary maximum autonomy and creative freedom,” he said.

Mrs. Njoku’s creative work so far has led ROK to produce over 540 movies and 25 original TV series, according to company data.

Mary Njoku ROK IrokotvThrough ROK, Njoku has expanded Nollywood’s formula for producing films on low budgets, largely shot on location in Nigeria, that connect with African audiences wherever they are. One of ROK’s more recent popular productions is Ojukwu, a period series set in an 1800s Nigerian village, in which Njoku directs and acts.

“Nollywood is Africa…We tell the African story. You can bring a Nigerian story, a Ghanaian story, a South African story…we talk the same drama. So Africans can connect to the average Nollywood story anywhere in the world,” Njoku told TechCrunch.

With the ROK acquisition, Canal+ looks to bring the Nollywood production ethos to other countries and regions of Africa.

Ojukwu ROK IROKOtv“It’s not that easy to produce an interesting movie for $20,000. People in Nigeria, particularly Mary and IROKO, know how to do that,” said Faux from Canal+.

“We want her to bring that to French speaking Africa. Because we need more African content and we need the industry to develop in French speaking Africa.”

Faux would not divulge the acquisition price but confirmed there is a cash component of the deal. “This is key for Jason…to developing the VOD aspects of IROKO,” he said.

Under the deal, ROK will continue to create unique content for IROKOtv, ROK’s four existing channels—three on DSTV and ROK Sky in the UK—as well as Canal+’s Africa and global channels.

The ability to reach a larger network of African consumers on the continent and internationally is another acquisition play for Canal+. Nollywood online content has proven the ability to find demand anywhere Africans are, including diaspora populations abroad. IROKOtv’s top-three streaming countries are Nigeria, the US, and the UK, according to a company spokesperson.

“We’ll now be able to do things in English speaking and French speaking African markets…and gain access to an advertising market where we believe there’s huge potential for growth,” said Faux.

The ROK acquisition is not the Canal+ Group’s first collaboration with IROKOtv. The media company joined a $19 million Series E investment in 2016, that also saw Canal+ and IROKO launch a French VOD channel. This was shortly after Netflix announced it would go live in Africa, though with little original African content. Netflix has since started to commission film content from Nigeria.

VOD tech startups, such as IROKOtv, have worked to take African film online, where it can be better distributed and monetized. That’s become less of a hard road, given the continent’s improving mobile and internet penetration paired with better bandwidth and falling data costs. There has been some attribution and loss. In 2017, Y-Combinator-backed French language VOD startup Afrostream, which had raised over $100 million in VC, shuttered—ending subscription services in 24 African and 5 European countries.

Canal+ and ROK are open to producing content for other VOD and production outlets, according to Njoku and Faux. “We could [for Netflix], or we could create a production corner on another VOD service,” said Faux.

On the possibility of pursuing an African film with crossover appeal to non-African audiences—particularly in the wake Black Panther’s success—ROK CEO Mary Njoku did not rule it out.

“I have been tempted in the past and am tempted today, but I want to focus on making the channels we have now the best Nollywood channels out there,” she said.

 

 

Opera founded startup OPay raises $50M for mobile finance in Nigeria

OPay, an Africa focused mobile payments startup founded by Norwegian browser company Opera, has raised $50 million in funding.

Lead investors include Sequoia China, IDG Capital, and Source Code Capital. Opera also joined the round in the payments venture it created.

OPay will use the capital (which wasn’t given a stage designation) primarily to grow its digital finance business in Nigeria—Africa’s most populous nation and largest economy.

OPay will also support Opera’s growing commercial network in Nigeria, which includes a motorcycle ride-hail app ORide and OFood delivery service.

Opera founded Opay in 2018 on the popularity of its internet search engine. Opera’s web-browser has ranked number two in usage in Africa, after Chrome, the last four years.

Opera Opay NigeriaOn the payments side, OPay in Nigeria has scaled to 40,000 active agents and $5 million in transaction volume in 10 months.

The $50 million investment in OPay is more than just another big round in Africa. It has significance for the continent’s tech-ecosystem on multiple levels.

To start, OPay’s raise tracks greater influence in African tech from China—whose engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities. OPay founder Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.

The majority of the investment for OPay’s raise comes from Chinese funds and sources, including Source Code Capital, Sequoia China, and GSR Ventures. There’s not a lot of statistical data on the value of Chinese VC investment in Africa, but a large portion of $50 million to a fintech venture stands out.

OPay’s VC haul also has significance vis-a-vis digital-finance in Nigeria. In tandem with other trends, it could support the shift of Nigeria surpassing Kenya as Africa’s digital payments leader. For years Kenya has outpaced Nigeria in P2P digital payments volumes and digital financial inclusion, largely due to the rapid adoption of mobile-money products, such as Safaricom’s M-Pesa.

Some of this is due in part to Nigeria’s Central Bank limiting the ability of non-banks (including telcos) to offer mobile payment services. The CBN eased many of those restrictions earlier this year. This opens the door for mobile-operators like MTN, with the largest phone network in Nigeria, to offer mobile-money products. In addition to fintech regulatory improvements, there’s been a gradual increase in VC flowing to Nigerian payment ventures.

The country’s leading digital payment company, Paga, raised $10 million in 2018 to further expand its customer base that now tallies 13 million. OPay’s $50 million backed commitment to grow mobile money in Nigeria should provide another big boost to digital-finance adoption across the country’s 190 million people.

And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa. Part of the $50 million investment includes diversifying country and product offerings. “Geographic expansion of OPay and other services is a key part of our plans,” Opera CEO Yahui Zhou told TechCrunch via email.

This could place OPay and its Opera supported suite of products on a competitive footing with other ride-hail, food-delivery, and payments startups across the continent. It could also mean competition between Opera and Africa’s largest multi-service internet company, e-commerce unicorn Jumia.   

 

 

 

 

 

 

 

 

 

 

 

 

InDriver launches ride-hail app in fourth African country, Uganda

Global ride-hail startup InDriver launches its app-based service in Kampala (Uganda) this week.

After going live in Nairobi in June—the online taxi company now operates in four African countries: Kenya, Uganda, South Africa, and Tanzania

Founded in Russia and now headquartered in New York, InDriver’s mobile-app allows passengers to name their own fare for nearby drivers to accept, decline, or counter. The startup operates in 200 cities, is used by 26 million people, and has raised $15 million in two rounds from Leta Capital, according to a release, Crunchbase, and a company spokesperson.

InDriver entered Latin America and Tanzania in 2018. The startup sees a value proposition for Africa based around urbanization, demographics, and some of the unique characteristics of its platform.

“We think Africa is going to be a big market for us because there’s a lot of cities and high population [areas] that still don’t have access to ride-hail applications,” InDriver’s Chief Marketing Officer Egor Fedorov told TechCrunch on a call.

He believes InDriver can reach an additional market segment in African cities—one that may overlook other ride-hail options that require cards to sign up or don’t feature bidding. The startup’s mobile-app allows for cash-payment and InDriver views itself more as an IT service than a taxi company, according to Federov. The company does not directly finance or brand cars in Africa. InDriver charges a percentage of each ride to generate revenue and doesn’t currently take commission from drivers in Africa, though it does in other markets.

For now, InDriver will stick to car-based taxi service in Africa (with no immediate plans to enter the motorcycle taxi space) or add things it does in other markets, such as truck rental services.

InDriver MapOn marketing outreach for Kampal, InDriver will rely primarily on word-of-mouth gained by (what it projects) as cheaper prices and bringing price-negotiation (common to the continent’s taxi markets) to a quick and controlled online process.

InDriver’s Uganda expansion comes at a time when Africa’s ride-hail markets are becoming a multi-wheeled, Pan-African, and global affair.  A lot of VC is accumulating and expansion happening around the continent’s online car taxis, moto-taxi startups, and car and motorcycle delivery-services.

Uber operates in eight African countries and last year joined global ride-hail company Bolt (previously Taxify) to add motorcycle-taxi services on the continent.

On the local level, Ethiopian auto-taxi startup ZayRide announced it will expand to West Africa in August.

Africa’s motorcycle ride-hail market—worth an estimated $4 billion—has also seen a flurry of investment and expansion. Nigeria’s MAX announced a $7 million round backed by Yamaha to expand in West Africa and pilot electric e-motos. Global web-browser company Opera launched its ORide moto-taxi service in Nigeria last month.

And Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya and recently raised a Series B round, co-led by the venture arms of Germany’s Allianz and Indonesia’s Go-Jek.

So whether by two wheels or four, Africa’s on-demand transit market is moving rapidly. Time, attrition, and burn-rate will tell which startups—including InDriver—can stay in the race for market-share or are forced off the road.

 

 

Africa Roundup: Yamaha backs MAX, Founders Factory and Norrsken support startups, inside Ethiopia’s tech scene

Competition in Africa’s two-wheel ride-hail market is accelerating. Nigerian motorcycle transit startup MAX.ng was the latest startup to add funding, raising a $7 million funding round in June with participation of Japanese manufacturer Yamaha.

Based in Lagos, the company’s app-based platform coordinates motorcycle taxi and delivery services for individuals and businesses.

With the Series A funding MAX intends to invest in its tech infrastructure, expand to 10 cities and add new vehicle classes — including watercraft and three-wheeled tuk tuk taxis. The company will also use its new funding to pilot e-motorcycles in Africa powered by renewable energy, CFO Guy-Bertrand Njoya told TechCrunch.

MAX.ng’s moves come after competitor Gokada (also based in Lagos) raised a $5.3 million round in May and announced it would expand in East Africa. Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya in 2018 and recently raised a Series B round. 

Uber’s also gotten into the motorcycle taxi market. It started offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) launched motorcycle taxi service in Kenya.

The on-demand motorcycle race could make Africa a reference point in the transformation of mobility. If successful, MAX.ng’s pilot to produce electric taxis powered by renewable energy could also become a global use-case.

June also brought announcements of new resources and funding for Africa’s startups. Sweden’s Norrsken Foundation — a co-working space and investment fund based in Stockholm — opened its tech fund and entrepreneurship hub in Rwanda to support ventures across the region.

Operating from a new Kigali campus, Norrsken will offer seed investments of $25,000 to $100,000 for early-stage startups in all sectors starting this year, CEO Erik Engellau-Nilsson told TechCrunch.

The fund size is still being determined, and Norrsken Kigali will extend the fund to larger series-stage investments from $100,000 to $1 million in the future.

Founders Factory Africa and South African healthcare company Netcare launched a new initiative to select 35 African health-tech startups for an acceleration and incubation program.

The partnership includes an investment (of an undisclosed amount) by Netcare in Founder’s Factory Africa, or FFA. The Johannesburg located organization was formed in 2018 as an extension of Founders Factory in London—an accelerator that has graduated 122 startups.

The application process is now open for FFA’s new Africa health-tech program, which will accelerate 5 startups a year and incubate 2, FFA CEO Roo Rogers told TechCrunch.

Criteria for the accelerator startups include that they have a healthcare focus, be post-revenue, and have a Pan-African scope.

Accelerated startups will receive a £30,000 cash investment (≈$38,000) and £220,000 in support services from Founders Factory Africa. Incubator health-tech ventures will receive £60K cash and £100K toward support.

Founders Factory Africa and Netcare will share a 5 to 10 percent equity stake in each startup accepted into the program.

Africa focused fintech startups made up the 75 percent of JP Morgan Backed Catalyst Fund’s 2019 cohort, announced in June.  The organization plans to extend 30 additional slots (open to African startup applicants) for its accelerator program that provides up to $60,000 in non-equity venture support.

IBM launched its Quantum computer program in Africa in June in a partnership with South Africa’s Wits University that will extend to 15 universities across nine countries.

Quantum — or IBM Q, as the U.S.-based company calls it — is a computer that uses quantum bits (or qubits) to top the capabilities of even the most advanced supercomputers and “tackle problems…seen as too complex and exponential in nature for classical systems to handle,” according to an IBM release.

IBM Africa will roll-out Q to Ethiopia, Ghana, Kenya, Nigeria, Rwanda, Senegal, South Africa, Tanzania and Uganda.

IBM Q, which operates out of IBM’s Yorktown Heights research center in New York, will be accessed from African universities via the cloud. Researchers in Africa interested in working with IBM Q  can apply online.

TechCrunch was on location in Addis Ababa to attend Startup Ethiopia and meet with entrepreneurs and hubs in the East African nation. The country of 105 million with the continent’s seventh largest economy has the workings of a budding tech scene. The biggest hurdle for Ethiopia’s startup community is the local internet situation, with mobile and IP connectivity managed by a state-owned telecom — which occasionally shuts down the net for the entire country, including last month. The government is taking steps to break up the state mobile and IP monopoly and issue teleco licenses by the end of 2019.

The digital ventures, techies, and angel investors I talked to at Startup Ethiopia were in unison on the need for better internet options. Most agreed this was step one for the country to have any chance of joining the continent’s tech standouts — such as Nigeria, Kenya, and South Africa — who lead on startup formation, VC, and exits in Africa.

More Africa-related stories @TechCrunch

African tech around the ‘net

 

 

 

Founders Factory Africa and Netcare to fund 35 health-tech startups

Founders Factory Africa and South African healthcare company Netcare will select 35 African health-tech startups for an acceleration and incubation program.

The partnership includes an investment (of an undisclosed amount) by Netcare in Founder’s Factory Africa, or FFA. The Johannesburg located organization was formed in 2018 as an extension of Founders Factory in London—an accelerator that has graduated 122 startups.

The application process is now open for FFA’s new Africa health-tech program, which will accelerate 5 startups a year and incubate 2, FFA CEO Roo Rogers told TechCrunch.

Criteria for the accelerator startups include that they have a healthcare focus, be post-revenue, and have a Pan-African scope.

Accelerated startups will receive a £30,00 cash investment (≈$38,000) and £220,000 in support services from Founders Factory Africa. Incubator health-tech ventures will receive £60K cash and £100K toward support. 

Founders Factory Africa and Netcare will share a 5 to 10 percent equity stake in each startup accepted into the program.

This is the first big foray into tech funding for Netcare, which operates South Africa’s largest private hospital network, according to CEO, Dr. Richard Friedland. The organization has 11,000 hospital beds, across 54 hospitals, and 18 primary care centers, he told TechCrunch.

Netcare’s interest in partnering with Founders Factory Africa to support startups comes down to multiplying healthcare solutions across the continent and shaking up the healthcare industry, according to Friedland.

“The way we deliver healthcare in South Africa, Africa, and perhaps internationally…is in many cases broken,” he said, adding there’s a crisis of affordability and access to healthcare in Africa.

“I believe healthcare is ripe for disruption and innovation and that couldn’t be more true than it is here in South Africa and the rest of the continent,” Friedland said.

He named the FFA partnership as a way to increase quality of healthcare in Africa. “We think the…continent and even our own business in South Africa can benefit,” he said.

Though a value wasn’t named for the Netcare round, it’s Founders Factory Africa’s second investment raise and collaboration.

Founders Factory entered Africa in 2018 through a partnership with Standard Bank (the continent’s largest bank), which a release said included a “multi-million pound investment.”  Founders Factory Africa selected the first five startups for its fintech accelerator track in April 2019.

Briter Bridges Africa Healthtech Innovation MapsOverall, Founders Factory’s move into Africa and healthcare (through FFA) raises several compelling things to watch.

One is the rise in African health-tech as a sector and the need for more capital. Formation of healthcare focused African startups has picked up but investment into these ventures is relatively low compared to annual VC: only $19 million of roughly $1 billion (using Briter Bridges and Partech numbers).

This is also particularly meager given the potential impact of health-focused startups on a continent that still posts dismal stats comparatively. World Bank life expectancy rates, which on average place Africa last, are just one indicator. So the FFA initiative could serve as a needed boost for African health-tech.

World Bank Africa Life Expectancy.png II

 

Another interesting observation: Standard Bank—and now Netcare’s—investment in Founders Factory Africa could be a preview of Africa’s large corporates embracing more venture investing. It’s definitely a sign the continent’s established companies are taking the ability of Africa’s startups to innovate (and potentially disrupt) more seriously.

And finally, Founders Factory Africa and Netcare’s investment in health-tech could produce innovation models with use-cases beyond Africa. We’ve seen this already with drones and fintech: Zipline piloted programs in Africa before launching in the U.S. and African startups are exporting payment models.

“There are so many issues in terms of healthcare delivery in Africa that can benefit from technological solutions,” Netcare CEO Richard Friedland said.

“I think the old bricks and mortar model of delivering healthcare in South Africa, in a private insurance or public setting, is archaic, it’s limited, it’s capital intensive and I think health-tech solutions can break that down,” he added.

If one extracted “Africa” and “South Africa” from Dr. Friedland’s comments, what he described could easily apply to the healthcare sector in the United States.

So it’s conceivable health-tech in Africa could produce scalable solutions that travel across the continent and abroad.

Startups aiming to pursue that objective through Founders Factory Africa’s new accelerator program have until September 6 to apply.

 

 

 

South African SME finance startup Lulalend raises $6.5M Series A

South African digital lender Lulalend has raised a $6.5 million Series A round co-led by IFC and Quona Capital.

The Cape Town based startup uses an online application process and internal credit metrics to provide short-term loans to small and medium sized businesses that are often unable to obtain working capital.

Lulalend will use the round to build its tech and data team and improve its ability to reach more SMEs in South Africa, according CEO Trevor Gosling—who co-founded the startup in 2014 with Neil Welman.

“The biggest thing is strengthening our balance sheet so we can access traditional debt funding to grow our loan book,” Gosling told TechCrunch on a call.

On the market for Lulalend’s business, Gosling highlighted IFC numbers indicating a $23 billion financing gap for South Africa’s SME’s—which are estimated to contribute 34 percent of the GDP for the country of 56 million.

Lulalend’s loan sizes range from around $1500 (≈ 20,000 South African Rand) up to $70,000, for 6 to 12 month tenors, requiring monthly payments of one-sixth or one-twelfth the total loan with monthly costs of 2 to 6 percent.

The most common loan is around $10,000 (≈ 148,000 Rand) over a 6 month term for a cost over principal of roughly $1700, according to Gosling.

Lulalend loan terms

SMEs can apply online and need a bank account to receive a loan disbursement. A high percentage of Lulalend’s approvals are processed automatically—without requiring manual due diligence—using the company’s proprietary credit scoring tech.

Loans by sector for the startup run pretty evenly across online commerce companies, manufacturing and distribution type businesses, and professional and business services firms.

Lula 197 2Lulalend does not release info on revenue or loan portfolio size, but Gosling said the company has a loss-rate below 4 percent and has reached profitability—something confirmed in the round due diligence process.

The startup has an internal data-base, developer team, and operates on Microsoft’s Azure cloud services. Co-Founder Neil Welman is the company’s CTO and brings previous experience in financial credit risk analysis.

“When we set up the company the biggest piece within the automation that we’ve had to solve for is the underwriting component and ability to score companies,” Gosling said.

That internal ability to assess loan risk and process loan applications (largely) straight through is how Lulalend is able to serve an under-served SME market. For many big South African banks, that require traditional due diligence and collateral, booking small loans doesn’t make economic sense, according to Gosling.

“With a very manual credit process and little automation, it doesn’t make…it….profitable to do $5000 loans,” he said.

As part of the $6.5 million Series A, investor Quona Capital (which is sponsored by fintech organization Accion) will join LulaLend’s board.

On why the fund invested in the startup, “We believe Lulalend’s tech-enabled scoring, combined with their ability to provide funding in a quick and transparent way, has the potential to…catalyze SME growth in South Africa,” said Quona Capital Partner Johan Bosini.

LulaLend co-founder Trevor Gosling said the the startup could consider expansion in the future but will remain focused on South Africa for now.

On long-term performance goals for the startup, he named generating revenue and lending volume as the primary target. “What we’re trying to achieve is building a $100 million loan book as quickly as possible and that’s what this raise is assisting us with,” he said.

“We believe if you build a quality business opportunities will present themselves, whether it’s through a strategic partnership or an IPO or whatever makes sense at that time.”

Gosling said Lulalend is also keeping its door opened to partnerships with big banks or telcos to provide access to finance to greater numbers of South Africa’s SMEs.

 

 

 

 

 

 

 

 

 

 

 

African fintech dominates Catalyst Fund’s 2019 startup cohort

African fintech has taken center stage for the Catalyst Fund, a JP Morgan Chase and Bill & Melinda Gates Foundation-backed accelerator that provides mentorship and non-equity funding to emerging markets startups.

The organization announced its 2019 startup cohort and three out of the four finance ventures — Chipper Cash, Salutat and Turaco — have an Africa focus (Brazil-based venture Diin, was the fourth).

Catalyst Fund, which is managed by global tech consulting firm BFA,  also released its latest evaluation report, which showed 60% of the organization’s portfolio startups are located in Africa.

The new additions to the fund’s program will gain $50,000 to $60,000 in non-equity venture building support (as Catalyst Fund dubs it) and six months of technical assistance. The funds and support are aimed at moving the ventures to the next phase of catalyzing business models, generating revenue and connecting to global VCs.

“We really tailor the kind of help we give to companies so they can reach market fit and proof points that investors want to see to enable the next phase of growth,” BFA Deputy Director Maelis Carraro told TechCrunch.

Catalyst Fund’s 2019 startup cohort also gained exposure to the fund’s Circle of Investors — a network of impact and commercial backers who can make decisions on investing in and accelerating particular companies.

Next Big Thing and Deciens Capital recently joined the group of 40 investors that includes Techstars and the Mastercard Foundation.

The tenor for support for Catalyst Fund’s newest cohort of startups lasts through 2019. The ventures will also attend the big SOCAP 2019 tech conference in San Francisco, where Catalyst organizes workshops and meetings with its Circle of Investors.

Founded in 2016, the Catalyst Fund’s mandate includes supporting fintech startups that are developing solutions for low-income individuals in emerging markets. The organization has accelerated 20 ventures in Africa, Asia and Latin America that have raised $25.7 million in follow-on capital, according to its latest report.

With the Bill & Melinda Gates Foundation and JP Morgan Chase as the lead backers, Catalyst Fund partners also include Rockefeller Philanthropy Advisors and Accion.

JP Morgan Chase’s interest in supporting Catalyst Fund connects to a firm-wide commitment of the global bank to financial inclusion, according to JP Morgan’s Head of Community Innovation Colleen Briggs — who is also a day-to-day Catalyst Fund manager.

JP Morgan recently launched a $125 million, five-year commitment to improve global financial health, she explained. “For us there is a true market opportunity…we genuinely believe that financial inclusion is the foundation for the economy,” Briggs said.

“If we don’t get the social issues right it undermines the resiliency of the communities and the markets where we’re trying to operate.”

That Catalyst Fund’s cohorts have shifted toward Africa focused ventures speaks to the thesis for fintech on the continent.

By a number of estimates, Africa’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population.

An improving smartphone and mobile-connectivity profile for Africa (see GSMA) turns this scenario into an opportunity for mobile-based financial products.

Hundreds of startups are descending on Africa’s fintech space, looking to offer scalable solutions for the continent’s financial needs. By stats offered by Briter Bridges and a 2018 WeeTracker survey, fintech now receives the bulk of VC capital and deal-flow to African startups.

Ventures such as Catalyst Fund cohort member Chipper Cash — co-founded by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled — are looking to grow across Africa first before considering any global moves.

The company plans to introduce its no-fee, P2P, cross-border mobile-money payments products beyond current operations in Ghana and Kenya to Rwanda, Tanzania and Uganda within the next 12 months.

Ventures looking to join companies like Chipper Cash as a Catalyst Fund-supported startup can seek a referral from Catalyst’s Circle of Investors — who make a recommendations on new candidates. Catalyst Fund aims to choose 30 startups for its cohort over the next two years, according to program director David del Ser.

Ethiopia’s bid to become an African startup hub hinges on connectivity

Ethiopia is flexing its ambitions to become Africa’s next startup hub.

The country of 105 million with the continent’s seventh largest economy is revamping government policies, firing up angel networks, and rallying digital entrepreneurs.

Ethiopia currently lags the continent’s tech standouts—like Nigeria, Kenya and South Africa—that have become focal points for startup formation, VC, and exits.

To join those ranks, the East African nation will need to improve its internet environment, largely controlled by one government owned telecom. Last week Ethiopia’s government shut down the internet for the entire nation.

Startups, hubs, accelerators

Ethiopia has the workings of a budding tech scene. Much of it was on display recently at the county’s first Startup Ethiopia event held in Addis Ababa.

On the startup front, ride-hail ventures Ride and ZayRide have begun to show traction (Uber has not yet entered Ethiopia). Their cars are visible buzzing throughout the capital and ZayRide will expand in Liberia in August, CEO Habtamu Tadesse confirmed to TechCrunch.

While in Addis, I downloaded and used Ride—founded by female entrepreneur Samrawit Fikru—which quickly flashed connections to nearby drivers on my phone and allowed for cash payment.

This month’s Startup Ethiopia also showcased high-potential early-stage ventures, such as payment company YenaPay and online food startup Deamat. YenaPay has worked to build a digital payments imprint in Ethiopia’s largely cash based economy. The startup has onboarded over 500 merchants, including ZayRide, according to co-founder Nur Mensur.

Deamat blends e-commerce and agtech. “We connect small-holder farmers with consumers. People can use their phone, pay with their phone, get any kind of agricultural products they want and we deliver,” co-founder Kisanet Haile told me after pitching to judges that included Nigerian angel investor Tomi Davies and Cellulant CEO Ken Njoroge.

Ethiopia has several organizing points for startup, VC, and developer activity. Tech talent and startup marketplace Gebeya is located in Addis Ababa (with offices globally) and offers programs and services for ventures and tech professionals to gain developer skills and scale their digital businesses.

BlueMoon is an Ethiopian agtech incubator and seed fund. Its founder Eleni Gabre-Madhin has extensive experience working abroad and played a central convening role in the debut Startup Ethiopia event.

In terms of developer and co-working type spaces, Ethiopia has iCog Labs—an AI and robotics research company—and IceAddis, one of the country’s oldest tech hubs. Founded in 2011, IceAddis’s mission is to develop Ethiopia’s IT ecosystem, co-founder and CEO Markos Lemma told me during a tour. The hub runs programs such as Ice180, a six-month startup accelerator bootcamp that has graduated 40 ventures. IceAddis also offers a 24 hour co-working space for techies and startups who want to burn the midnight oil with internet access.

Angels and mentors

Startup Ethiopia featured two angel and support networks for Ethiopia’s startups. Tomi Davies and Ethiopian diaspora returnee Shem Asefaw announced the first Addis Ababa Angel Network, supported by African Business Angels Network, which is expected to accept startups this year.

Startup Ethiopia also showcased Ethiopians in Tech, an entrepreneur support group with Silicon Valley roots. SV based Bernard Laurendeau, a director at data analytics firm Zenysis and EiT founding member, made the trek from San Francisco to meet with local startups. So did Stackshare founder Yonas Beshawred.

Talk of leveraging Ethiopia’s diaspora, which is particularly strong and successful in the United States, for tech was mentioned several times at Startup Ethiopia, including on my panel.

Connectivity

The biggest hurdle for Ethiopia’s startup community (that I could identify) is the situation with local internet.

Mobile and IP connectivity in the country is managed by state-owned Ethio Telecom, though the government — led by newly elected Prime Minister Abiy Ahmed and President Sahle-Work Zewde — has committed to privatize it.

At Startup Ethiopia, I moderated and sat on panels with Ethiopian government representatives to discuss the country’s net situation. This was to the backdrop of the tech event’s WiFi not functioning properly over two days—something that was readily pointed out during Q&A by Ethiopian techies and Liquid Telecom CTO Ben Roberts, who flew in from Nairobi.

Several officials, such as State Minister of Innovation and Technology Jemal Beker, named specific commitments to improve the country’s internet quality, access and choice within the next year, with the Director General of Ethiopia’s Ministry of Innovation and Technology — Getahun Mekuria — seated in the front row.

Shortly after officials made these public pledges, the government shut down the country’s internet to coincide with national exams.

The government didn’t issue an official reason for the shutdown — and an official in charge of ICT policy did not respond to a TechCrunch inquiry — but press reports and a source speaking to TechCrunch on background said the stoppage was done to stop students from cheating.

Valid reason or not, I received several messages from local techies and startup heads (when the internet was intermittently switched back on) complaining about how the shutdown had totally crippled their businesses.

It appears the situation with internet in Ethiopia may be a bit of steps back before steps forward. After shutting things down, the government announced policy steps last week to break up the national telecom and IP monopoly and issue individual telco licences by the end of 2019.

Prospects

On the upside of Ethiopia’s bid to become a tech and startup hub, the country has a strong demographic and economic thesis—in its large population and economy—to support the scale up of problem-solving, digital businesses. Ethiopia’s large and entrepreneurial diaspora populations, with strong ties to Silicon Valley, could also become a bridge to capital and capacity for its early-stage ventures.

And another edge Ethiopia could have over other African tech hubs is country’s advances in developing a manufacturing industry (and higher-paid workforce) that’s now pulling some assembly from China. That includes a mobile assembly plant in Addis Ababa for Tenssion’s Tecno, Africa’s leading mobile phone brand.

Ethiopia’s startup scene will be stuck in the mud, however, without changes to the internet landscape. As we discussed on the Startup Ethiopia stage, the tech and startups of tomorrow—in Africa and globally—won’t just be IoT, or the Internet of Things driven.

Tech ventures and their end-users are shifting toward an IoEA future: the internet-of-everything-all-the-time. And it’s impossible for Ethiopia’s startups to move in that direction in a market with one state controlled mobile provider and IP that has the power to arbitrarily nix connectivity.

So on the policy side, the single most effective thing the government of Ethiopia can do to provide an enabling environment for startups is open up its internet market to improve penetration, choice, cost, and reliability.

Do that and it’s likely the other tech pieces assembling in and around the country—ventures, angels, hubs, and entrepreneurs—will sort the rest out.

 

MAX.ng raises $7M round backed by Yamaha and pilots EVs in Nigeria

Nigerian motorcycle transit startup MAX.ng has raised a $7 million funding round led by Novastar Ventures, with participation of Japanese manufacturer Yamaha.

Based in Lagos, the company’s app-based platform coordinates motorcycle taxi and delivery services for individuals and businesses. Six-million of the investment is in Series A capital followed by $1 million in grants.

MAX has an extended menu for the round. “We intend to invest massively in our technology capabilities,” including the company’s payment infrastructure, CFO Guy-Bertrand Njoya told TechCrunch.

The startup will also expand to 10 cities in West Africa (starting in Ghana and Ivory Coast) and add new vehicle classes—including watercraft and three-wheeled tuk tuk taxis.

And in what could be a first in Africa’s growing motorcycle ride-hail market, MAX will use its new funding for EV development. “We’re piloting electric motorcycles in partnership with EV manufacturers and working with grid operators across Nigeria to deploy charging stations,” Njoja said.

He would not name EV partners, except to clarify Yamaha is not currently part of the e-pilot. The the research also includes renewable energy as an e-moto power source, according to Njoja. MAX’s current fleet consists primarily of Yamaha Crux Rev and Indian manufacturer Bajaj’s Pulsar motorcycles.

Co-founded in 2015 by MIT Sloan alumns Adetayo Bamiduro and Chinedu Azodah, MAX has completed over 1 million trips and is one of the largest delivery partners in West Africa for Jumia—the e-commerce unicorn that recently listed on the NYSE.

Breakthrough Energy Ventures, Zrosk Investment Management, and Alitheia Capital joined Novastar Ventures and Yamaha in the $7 million round—which takes MAX’s total funding to $9 million.

Yamaha confirmed its investment in MAX to TechCrunch. Part of the company’s interest in the startup connects to market research and Yamaha’s existing Nigeria operations. “We want to work with good entrepreneurs in Africa to develop new business in Africa,” Shoji Shiraishi of Yamaha Motor Company’s New Venture Business Development Section told TechCrunch.

He added that Yamaha sells and manufactures motorcycles in Nigeria. “We really want to understand local needs for motorcycles and…to support [MAX] expanding their business,” he said.

This is Yamaha’s second move in less than a year in an emerging market ride-hail company. In December it invested $150 million in Grab, a Southeast Asian two and four-wheel on demand transit company.

Yamaha’s investment in MAX suggests global interest in Africa’s two-wheel ride-hail space. Overall, the motorcycle taxi market is becoming a significant sub-sector in the continent’s mobility startup landscape.

Motorcycle transit ventures are vying to digitize a share of Africa’s boda boda and okada markets (the name for motorcycle taxis in East and West Africa)—representing a collective revenue pool of $4 billion (now) that’s expected to double by 2021, per a TechSci study.

Uber  began offering a two-wheel transit option in East Africa in 2018, around the same time Bolt (previously Taxify) started motorcycle taxi service in Kenya.

Last month MAX competitor Gokada (also based in Lagos) raised a $5.3 round and announced it would expand in East Africa. Rwanda has motorbike taxi startups SafeMotos and Yegomoto. Uganda-based motorcycle ride-hail company SafeBoda expanded into Kenya in 2018 and recently raised a Series B round, co-led by the venture arms of Germany’s Allianz and Indonesia’s Go-Jek.

On the question of how MAX (a 2018 TechCrunch Startup Battlefield Africa participant) will compete in a market with more players, co-founder Chinedu Azodoh named diversification and satisfying drivers. “We’re a very driver-centric business and at the end of the day the driver is where the business is at,” he said, highlighting the ability of MAX’s platform to deliver market-share to those drivers.

Azodoh also believes MAX’s mix of business delivery and personal transit offers an advantage over competitors. He noted that MAX.ng has local developer team and is always looking at new revenue opportunities. “Strategic for us is making sure we’re doing the right thing at the right time,” he said, indicating the company has already scaled up and scaled down certain service offerings in response to market needs.

“If we find that maybe there’s something else we’re missing out on, we’re happy to jump into that,” Azohdo said.

One of those areas could be development of EV mobility services for Nigeria and Africa. “The economics are promising and could offer significant value to the drivers and end-users,” MAX CFO Guy-Bertrand Njoya told TechCrunch.

So electric motorcycle taxis in African cities powered by renewable energy could become a reality. That would definitely place the continent in a unique position in the transformation of global mobility.

 

 

 

 

 

 

 

Days after pledging to expand internet, Ethiopia’s govt shuts it off

Days after Ethiopian ICT officials made public pledges to improve net access, the government began playing on-again, off-again with the internet—shutting it down (almost completely) to coincide with the country’s national exams.

Data provided to TechCrunch from Oracle’s Internet Intelligence confirmed intermittent net blackouts from June 11 to 14, with connectivity returning for brief periods during that time-span.

Sources on the ground, including in the country’s tech community, confirmed to TechCrunch internet stoppage over the period.

Mobile and IP connectivity in Ethiopia is managed by state owned Ethio Telecom, though the governmentled by newly elected Prime Minister Abiy Ahmed and President Sahle-Work Zewde—has committed to break up the telecom and privatize it.

On the reason for the outage, the government of Ethiopia has not issued a statement and a government official in charge of ICT policy did not respond to a TechCrunch inquiry.

Press reports, and a source speaking to TechCrunch on background, said Ethiopia’s internet stoppage was done to stop students from cheating on national exams, which took place this week.

Earlier this week I attended Ethiopia’s ICT Expo and first Startup Ethiopia event, moderating and sitting on panels with Ethiopian government representatives to discuss the country’s startup community and internet landscape. Several officials, such as State Minister of Innovation and Technology Jemal Beker, named specific commitments to improve the country’s internet quality, access, and choice within the next year.

Ethiopia took policy steps in that direction, announcing steps  this week to issue individual telco licences by the end of 2019.

The East African nation of 100 million with the continent’s seventh largest economy is bidding to become Africa’s next startup hub.

Ethiopia has a budding tech scene, but lags the continent’s tech standouts—like Nigeria, Kenya and South Africa—that have become focal-points for startup formation, exits, and VC.

Still, startups such as local ride-hail ventures Ride and ZayRide have started to gain traction (Uber has not yet entered Ethiopia). This week’s Startup Ethiopia event also showcased high-potential early-stage ventures such payment company YenaPay  and agtech, e-commerce startup Deamat.

One thing discussed at Startup Ethiopia was the need for startups—most of which operate on mobile platforms—to have consistent, affordable, and accessible internet to drive forward business models.

Ethiopia is taking steps and making statements in that direction, but this week’s net stoppage shows there are still hurdles and disconnects.

One of those is the country’s government pursuing an internet shutdown just days after attempting to convince investors, angel networks, and a global tech audience it’s serious about making Ethiopia an African startup hub.