Africa e-tailer Jumia reports first full-year results post NYSE IPO

Pan-African e-commerce company Jumia got into the black (by a small amount) on its gross profit vs. fulfillment expenses, expanded financial services and still posted losses.

The online sales company, with an operations center in China, also anticipates some negative impact on 2020 growth from the coronavirus outbreak, CEO Sacha Poigonnec said.

These were highlights today for Jumia’s fourth-quarter and full-year results — 10 months after the company became the first vc-backed startup in Africa to go public on a major exchange.

The results

Jumia — with online goods and services verticals in 11 countries — posted 2019 revenues of €160 million, representing growth of 24% over 2018. The company increased its annual active customer base in the fourth-quarter by 54%, to 6.1 million, from 4.0 million for the same period last year.

Jumia’s 2019 Gross Merchandise Value (GMV) — the total amount of goods sold over the period — contracted by 3% to €301 million in the fourth-quarter.

Poignonnec attributed the decline to “business mix re-balancing”, which entailed reducing expenditures on promotions. The company also saw a contraction in sales of phones and electronics, which impacted GMV.

The online retailer had a 49% increase in orders from 5.5 million in Q4 2018 to 8.3 million in Q4 2019.

Perhaps the brightest spot in Jumia’s 2019 performance was the company’s ability to reach a gross profit of €1.0 million after deducting fulfillment expenses in Q4.

That obviously doesn’t get them to profitability over all the company’s other expenses, but fulfillment costs have been historically high for Jumia as an online-retailer in Africa.

The overall pattern of growing revenues and customers YoY has been consistent for Jumia.

But so too have the company’s losses, which widened 34% in 2019 to €227.9 million, compared to €169.7 million in 2018. Negative EBITDA for Q4 increased 5% to €51.2 million from €48.6 over the same period in 2018.

CEO Sacha Poignonnec pointed to Jumia’s ability in Q4 to reach positive gross-profit over fulfillment expenses — one of the company’s largest costs — as a sign it could eventually get into the black overall.

“As we reach these milestones we’ll bring new milestones. This year we were profitable after fulfillment expenses and one day we’ll be profitable after marketing [expenses] and so on and so forth,” he said.

What’s new

Jumia exited several countries in 2019 — suspending e-commerce operations in Tanzania, Cameroon, and Rwanda. “We believe those countries have…potential in the long-term but decided to allocate our resources to the countries that best support our long-term growth and path to profitability,” said Poignonnec.

Jumia also saw lift in its JumiaPay digital finance product — and notably — is developing new financial services (including for SMEs) aided by its big financial investors, Mastercard and Axa.

Jumia launched an Axa money market fund product in Nigeria in 2019 and some promotional programs on Mastercard’s network, as noted in page 10 of its investor presentation.

 

Total payment volume on JumiaPay increased 57% year-over-year to €45.6 million in 2019 and JumiaPay was used for 29% of Jumia e-commerce orders.

This is significant, as the company has committed to generate more revenues from higher margin digital payment products and offer JumiaPay as a standalone service across Africa.

Since its founding in 2012, Jumia has been forced to adapt to slower digital payments integration in its core market Nigeria and allow cash-on-delivery payments, which are costly and more problematic than digital processing.

Poignonnec also acknowledged the company’s 2020 revenues could be negatively impacted by the coronavirus. “The recent…outbreak in China is likely to affect growth over the coming quarters, and here we are starting to face some challenges to fulfill our cross-border sales,” he said.

Share price

Surprisingly absent from Jumia’s earnings call (and the subsequent Q&A) was discussion of the company’s share price, which spiked then plummeted after its April 2019 NYSE listing.

The online retailer gained investor confidence out of the gate, more than doubling its $14.50 opening share price post IPO.

That lasted until May, when Jumia’s stock came under attack from short-seller Andrew Left, whose firm Citron Research issued a report accusing the company of fraud — which sent the company’s share price plummeting — from $49 to $26.

Then on its second-quarter earnings call in August, Jumia offered greater detail on the fraud perpetrated by some employees and agents of its JForce sales program. 

The company declared the matter closed, but Jumia’s stock price plummeted more after the August earnings call (and sales-fraud disclosure), and has lingered in single-digit value for several months.

That’s 50% below the company’s IPO opening in April and 80% below its high.

For the remainder of 2020, bringing back growth in GMV and building on positive metrics, such as attaining gross profit after fulfillment expenses, could revive investor confidence in Jumia and its share price.

It could also put the company in a better position to match competition — such as the Marketplace Africa e-commerce platform of MallforAfrica and DHL — and possible expansion in Africa of China’s Alibaba.

Sokowatch raises $14M to digitize Africa’s informal B2B supply-chain

Kenya based B2B e-commerce startup Sokowatch has raised $14 million in Series A funding toward its mission of revamping supply-chain markets for Africa’s informal retailers.

From Nairobi, the company has created a platform that connects merchants directly to local and multinational suppliers — such as Unilever and Proctor and Gamble — and digitizes orders, payments and delivery-logistics.

Since launching in 2016, and raising a $2 million seed round in 2018, Sokowatch has expanded within Kenya and into Rwanda, Tanzania and Uganda.

With its Series A, the startup plans to broaden its client services — from working-capital to data-analytics — and target new African markets, according to CEO Daniel Yu.

Sokowatch also doesn’t rule out using its infrastructure to someday enter business-to-consumer online retail.

For the moment, the startup’s primary business focus is to reduce costs and increase profit margins for small merchants.

“We’re looking to build out the largest B2B e-commerce network across Africa,” Yu told TechCrunch on a call.

Informal retail is still king in Africa — even with the emergence of shopping malls and well-funded e-commerce ventures, such as Jumia.

The size and potential of the continent’s informal sector has captured the attention of economists and startups. GDP revisions in several African countries have revealed outdated statistical methods were missing billions of dollars in economic activity. And one estimate by The International Labor Organization places more than two-thirds of Sub-Saharan Africa’s non-agricultural employment in the informal economy.

On the number of shops in that space, a 2016 study by global consultancy PwC estimated 90% of sales in Africa’s major economies come through informal channels, such as markets and kiosks.

By Yu’s account, too many of Africa’s local merchants are sacrificing capital and incurring opportunity cost due to inefficient supply-chain.

Sokowatch is shifting that scenario, according to its CEO, and now serves over 15,000 small retailers across its operating areas.

“We…estimate that we save merchants at least 20% on supply-chain costs for the goods we supply,” said Yu.

Sokowatch AppSokowatch offers retailers an app to order products from its partner suppliers and maintains a fleet of vehicles, primarily three-wheel tuk tuks, for delivery.

“We handle all of our last-mile logistics exclusively ourselves,” said Yu.

The startup is also generating additional enterprise services. “As part of the product we are developing other tools for merchants to directly manage other aspects of their business, especially when it comes inventory and overall sales,” said Yu.

The data analytics Sokowatch creates for clients is also opening up working-capital solutions.

“We’ve been able to use that data to offer in-kind credit lines to many shops that can’t gain it from banks,” said Yu.

Quona Capital led Sokowatch’s $14 million Series A round, joined by Amplo, Breyer Capital, Vertex Ventures, Timon Capital and repeat investor 4DX Ventures.

Sokowatch Tuk TukThe startup joins other B2B oriented ventures that have drawn significant capital over the last 12 months.

Kenyan startup, and B2B food distributor, Twiga Foods raised $30 million in 2019 and announced it would expand to West Africa.

In August, Nigerian trucking logistics startup Kobo360 raised a $20 million Series A backed by Goldman Sachs. In November, East African on-demand delivery venture Lori Systems hauled in $30 million supported by Chinese investors and another Kenyan logistics company, Sendy, raised $20 million this January backed by Toyota.

Sokowatch wouldn’t name which countries in Sub-Saharan Africa it’s eyeing for expansion. The company’s CEO did confirm the startup could someday use the advantages of its platform to offer 3PL services or sell online directly to consumers in Africa.

“It’s within the power of our networks to do so” said Yu. “At the end of the day, we want to be the channel — both digital as well as physical — for transforming access to goods and services for these communities.”

These specialized Africa VC funds are welcoming co-investors

For global venture capitalists still on the fence about entering Africa, a first move could be co-investing with a proven fund that’s already working in the region.

Africa’s startup scene is performance-light — one major IPO and a handful of exits — but there could be greater returns for investors who get in early. For funds from Silicon Valley to Tokyo, building a portfolio and experience on the continent with those who already have expertise could be the best start.

VC in Africa

Africa has one of the fastest-growing tech sectors in the world, as ranked by startup origination and year-over-year increases in VC spending. There’s been a mass mobilization of capital toward African startups around a basic continent-wide value proposition for tech.

Significant economic growth and reform in the continent’s major commercial hubs of Nigeria, Kenya, Ghana and Ethiopia is driving the formalization of a number of informal sectors, such as logistics, finance, retail and mobility. Demographically, Africa has one of the world’s fastest-growing youth populations, and continues to register the fastest global growth in smartphone adoption and internet penetration.

Africa is becoming a startup continent with thousands of entrepreneurs and ventures who have descended on every problem and opportunity.

These specialized Africa VC funds are welcoming co-investors

For global venture capitalists still on the fence about entering Africa, a first move could be co-investing with a proven fund that’s already working in the region.

Africa’s startup scene is performance-light — one major IPO and a handful of exits — but there could be greater returns for investors who get in early. For funds from Silicon Valley to Tokyo, building a portfolio and experience on the continent with those who already have expertise could be the best start.

VC in Africa

Africa has one of the fastest-growing tech sectors in the world, as ranked by startup origination and year-over-year increases in VC spending. There’s been a mass mobilization of capital toward African startups around a basic continent-wide value proposition for tech.

Significant economic growth and reform in the continent’s major commercial hubs of Nigeria, Kenya, Ghana and Ethiopia is driving the formalization of a number of informal sectors, such as logistics, finance, retail and mobility. Demographically, Africa has one of the world’s fastest-growing youth populations, and continues to register the fastest global growth in smartphone adoption and internet penetration.

Africa is becoming a startup continent with thousands of entrepreneurs and ventures who have descended on every problem and opportunity.

Zero Motorcycles unveils new SR/S — a full-fairing 124 mph sport EV

California-based mobility startup Zero Motorcycles has a new e-moto in its lineup — the fully-faired SR/S, unveiled today in New York.

The company’s CEO Sam Paschel pulled the cover off the two-wheeled EV, which is based on the platform of the company’s SR/F, released last year.

The new SR/S has similar stats to the SR/F: a 124 mph top-speed, up to 200 miles of range, 140 ft-lbs of torque and charge-time of 60 minutes to 95%, Paschel told TechCrunch at the debut.

ZERO SR/SZero’s latest EV is an IoT motorcycle and manages overall performance — including engine output and handling characteristics — through digital riding modes.

The major differences on the SR/S over the SR/F are the addition of the full-fairing, a more relaxed riding position (through re-positioning of the bars and pegs) and a 13% improvement in highway range, from improved aerodynamics.

The fairing brings around 20 pounds more weight to to the SR/S over the 485 pound SR/F.

On price, the base version of the SR/S is $19,995 — a dash over the SR/F’s $19,495 — and a premium SR/S (with a higher charging capacity) comes in at $21,995.

The SR/S starts shipping today to Zero’s global dealer network, which stands at 91 in the U.S. and 200 globally — the largest for any e-motorcycle company, according to Paschel.

He positioned the SR/S as more of a sport-touring machine, than the the SR/F, which has a naked-bike set up that includes a more aggressive riding position and less aerodynamics on the highway.

Zero’s latest entries — the SR/F and the SR/S — come at a time when startups are pushing the motorcycle industry toward electric, though its not evident there’s enough demand to buy up all the new models.

 

The American motorcycle market has been stagnant for over a decade and is becoming crowded with EV offerings. New motorcycle sales in the U.S. dropped by roughly 50% since 2008 — with sharp declines in ownership by everyone under 40 — and have never recovered, according to Motorcycle Industry Council stats.

In a bid to revive sales and the interest of younger riders, in 2019 Harley-Davidson became the first of the big gas manufacturers to offer a street-legal e-moto for sale in the U.S. — the LiveWire — which is a forerunner to an HD product-line of electric-powered two-wheelers.

Harley Davidson Livewire static 1

Harley Davidson’s EV debut, the LiveWire

Harley’s entry followed several failed electric motorcycle startups — Alta Motors, Mission Motors and Brammo — and put HD in the market with existing EV ventures, such as Zero.

That list is growing.

High-performance Italian EV company Energica has expanded marketing and sales in the U.S., along with Cake — a Swedish e-moto maker.  This year should also see e-moto debuts by California-based Lightning Motorcycles and Fuell, a French and American-founded company with plans to release the $10,000, 150-mile range Flow.

Zero appears to have created an edge up on Harley’s LiveWire — coming in at $10K less than the $29,799 HD — though its hard to know how they stacked up against each other in 2019 since e-moto sales stats aren’t reliably tallied in the U.S.

Zero doesn’t release their sales numbers (though I tried my darnedest to pry them out of CEO Sam Paschel).

Zero SR/S That price advantage over Harley’s LiveWire will carry over on Zero’s new SR/S, which could find its biggest competitor in the anticipated release of Damon’s Hypersport.

The Vancouver e-moto startup plans to go to market with its 200 mile per hour e-motorcycle debut. The $24,995 Hypersport is targeted toward Tesla owners and brings proprietary digital safety technology and adjustable ergonomics that are absent Zero’s offerings —  and pretty much anything else on the motorcycle market.

Time, burn-rate, and sales will tell which companies can find market-traction and turn a profit across all these new e-moto offerings.

Zero doesn’t release financials but among the startups, they could be furthest along. The company, with $120 million in VC in its rear-mirrors — per Crunchbase — has no plans to raise, according to Paschel.

“We don’t need it,” he told TechCrunch, adding that the venture’s biggest challenge in 2019 was keeping production up to speed with buyer demand for their SR/F.

Zero is likely hoping for that good kind of a problem with its new SR/S in 2020.

African crowdsolving startup Zindi scales 10,000 data scientists

Cape Town based startup Zindi has registered 10,000 data-scientists on its platform that uses AI and machine learning to crowdsolve complex problems in Africa.

Founded in 2018, the early-stage venture allows companies, NGOs or government institutions to host online competitions around data-oriented challenges.

Zindi opens the contests to the African data scientists on its site who can join a competition, submit solution sets, move up a leader board and win — for a cash prize payout.

The highest purse so far has been $12,000, according to Zindi co-founder Celina Lee. Competition hosts receive the results, which they can use to create new products or integrate into their existing systems and platforms.

It’s free for data scientists to create a profile on the site, but those who fund the competitions pay Zindi a fee, which is how the startup generates revenue.

Zindi’s model has gained the attention of some notable corporate names in and outside of Africa. Those who have hosted competitions include Microsoft, IBM and Liquid Telecom .

The South African National Roads Agency sponsored a challenge in 2019 to reduce traffic fatalities in South Africa. The stated objective: “to build a machine learning model that accurately predicts when and where the next road incident will occur in Cape Town…to enable South African authorities…to put measures in place that will…ensure safety.”

Attaining 10,000 registered data-scientists represents a more than 100% increase for Zindi since August 2019, when TechCrunch last spoke to Lee.

The startup — which is in the process of raising a Series A funding round — plans to connect its larger roster to several new platform initiatives. Zindi will launch a university wide hack-competition, called UmojoHack Africa, across 10 countries in March.

“We’re also working on a section on our site that is specifically designed to run hackathons…something that organizations and universities could use to upskill their students or teams specifically,” Lee said.

Lee (who’s originally from San Francisco) co-founded Zindi with South African Megan Yates and Ghanaian Ekow Duker. They lead a team in the company’s Cape Town office.

For Lee the startup is a merger of two facets of her experience.

“It all just came together. I have this math-y tech background and I was working in non-profits and development, but I’d always been trying to join the two worlds,” she said.

ZindiThat happened with Zindi, which is fully for-profit — though roughly 80% of the startup’s competitions have some social impact angle, according to Lee.

“In an African context, solving problems for for-profit companies can definitely have social impact as well,” she said.

With most of the continent’s VC focused on fintech or e-commerce startups, Zindi joins a unique group of ventures —  such as Andela and Gebeya — that are building tech-talent in Africa’s data-scientist and software engineer space.

If Zindi can convene data-scientists to solve problems for companies and governments across the entire continent that could open up a vast addressable market.

It could also see the startup become an alternative — on many a project — to more expensive consulting firms operating in Africa’s large economies, such as South Africa, Nigeria and Kenya .

 

After VCs spend millions Nigeria restricts ride-hail motorbike taxis

Nigeria’s commercial hub of Lagos has shaken up its transportation order.

At the center are the West African country’s motorcycle taxis — referred to locally as okadas — which face newly enforced regulatory restrictions on their movement.

That’s creating speedbumps for Nigeria’s two-wheel ride-hail startups, operating in Africa’s most populous nation with the continent’s largest economy.

Ventures Max .ng, ORide, and Gokada have received millions from American, Japanese, and Chinese investors to shift the continent’s motorcycle-taxi markets to on-demand mobility.

The three startups have been in a race for capital and market share — with the streets of Lagos serving as a competition course for developing platforms that can scale in Africa.

Gokada raised $5.3 million in May. Max.ng raised a $7 million Series A round in June 2019, with Yamaha on board, to pilot renewable energy powered e-motos in Africa.

Motorcycle-taxi business ORide rattled competitors in Nigeria in 2019 when its Chinese owned parent — Opera — rallied $170 million in VC for Opera’s digital service verticals in Nigeria, including ORide.

Fueled by fresh capital, the bright colored helmets of these ride-hail startups buzzing through Lagos traffic have become a backdrop in the city of 21 million.

That flow of motorcycle taxis (and traffic at large) slowed on February 1, when the municipality that governs Lagos — Lagos State — began enforcement of its 2018 Transit Sector Reform Law.

Source: Google Maps

The legislation is actually meant to improve multiple facets of transportation in Lagos, which is notorious for gridlock, but may have done the inverse — particularly around okadas.

TechCrunch reached out to Lagos State Government for clarification on the Transit Sector Reform Law, but hasn’t heard back.

The Governor of Lagos State, Babajide Sanwo-Olu, invoked safety and security concerns as a reason for the okada restrictions at an event to launch more water-boat taxis in Lagos on February 5.

In a statement via email, ORide’s Senior Director of Operations, Olalere Ridwan, said the rules entail “a ban on commercial motorcycles…in the city’s core commercial and residential areas, including Victoria Island and Lagos Island.”

ORide posted a map of the restrictions on Twitter, with an explanation the company was complying with the rules and would cease operations in the designated areas. Reps from Max.ng and Gokada also confirmed they had followed suit.

Per local news, and Nigerian reporting on Twitter, the motorcycle taxi limitations have thrown off some inherent order in Lagos’s disorderly transit grid — overloading other mobility modes(such as mini-buses) and forcing more people to pound pavement and red-dirt to get to work.

For the country’s ride-hail startups, the regulatory constraints are weighing on operations and revenues, according to Max.ng CTO Guy-Bertrand Njoya.

“Are we highly concerned? Yes, we are,” he told TechCrunch on a call from Lagos.

“We haven’t shut down operations, but because the drivers can’t operate in the main commercial areas, their income generation ability is significantly reduced…and our business depends on the success of our drivers,” said Bertrand.

Gokada CEO Fahim Saleh confirmed the company is still operating passenger services, but may transition its business away from ride-hailing, depending on the outcome of the regulatory process.

“If the transport option is no longer available to our drivers, we’ll go full on to logistics,” he said, noting shifting to more goods delivery has always been a part of Gokada’s long-term strategy.

Saleh recognized the concerns Lagos State regulators have for motorbike-taxi safety. “To the government’s credit, the informal sector is pretty risky with their habits and there’s no oversight,” he said.

But Gokada’s CEO underscored ride-hail startups — with mandatory driver training, new motorcycles, helmet requirements and an ability to track data — are making motorcycle passenger taxis safer in Nigeria.

“The government has good intentions, but they need the private sector to really bring in innovative ideas and technology to this market,” Saleh said.

The sudden regulatory enforcement and downturn in business has forced some unity among the Nigeria’s ride-hail competitors. Max .NG, ORide, and Gokada have formed an industry association to engage Lagos State on motorcycle-taxi regulations.

“We are hopeful that government remains supportive of companies like ours in a manner that addresses their key policy focus, while supporting entrepreneurs,” said Max.ng CFO Guy-Bertrand Njoya.

The situation between the Lagos State Government and motorcycle-taxis could have ramifications for Nigeria’s tech sector beyond Lagos’s ride-hail sector and transit grid.

The affair could serve as a test for startups in the country on engaging government effectively toward their interests. It could also demonstrate the ability (or inability) of regulators in Nigeria to support fledgling digital markets.

It’s worth noting that Lagos State is Nigeria’s largest commercial region, responsible for roughly a third of the country’s GDP. A greater share of Nigeria’s economy is being driven by tech-related industries — with much of the country’s startup activity occurring in Lagos — and Nigeria becoming Africa’s unofficial tech capital.

Even with the recent upswing in VC to Nigeria’s startups, founders still speak of the tough sell they face convincing global investors to back them.

If Lagos State — viewed as the most tech friendly region in Nigeria — squashes the country’s well-funded okada ride-hail sector, VC pitches for the country’s founders could become more difficult.

Africa Roundup: Trump’s Nigeria ban, Paga’s acquisition and raises — Fluterwave $35M, Sendy $20M

The first month of the new-year saw Africa enter the fray of U.S. politics. The Trump administration announced last week it would halt immigration from Nigeria — Africa’s most populous nation with the continent’s largest economy and leading tech sector.

The presidential proclamation stops short of a full travel ban on the country of 200 million, but suspends immigrant visas for Nigerians seeking citizenship and permanent resident status in U.S.

The latest regulations are said not to apply to non-immigrant, temporary visas for tourist, business, and medical visits.

The new policy follows the Trump’s 2017 travel ban on predominantly Muslim countries. The primary reason for the latest restrictions, according to the Department of Homeland Security, was that the countries did not “meet the Department’s stronger security standards.”

Nigeria’s population is roughly 45% Muslim and the country has faced problems with terrorism, largely related to Boko Haram in its northeastern territory.

Restricting immigration to the U.S. from Nigeria, in particular, could impact commercial tech relations between the two countries.

Nigeria is the U.S.’s second largest African trading partner and the U.S. is the largest foreign investor in Nigeria.

Increasingly, the nature of the business relationship between the two countries is shifting to tech. Nigeria is steadily becoming Africa’s capital for VC, startups, rising founders and the entry of Silicon Valley companies.

Recent reporting by VC firm Partech shows Nigeria has become the number one country in Africa for venture investment.

Much of that funding is coming from American sources. The U.S. is arguably Nigeria’s strongest partner on tech and Nigeria, Silicon Valley’s chosen gateway for entering Africa.

Examples include Visa’s 2019 investment in Nigerian fintech companies Flutterwave and Interswitch and Facebook and Google’s expansion in Nigeria.

On the ban’s impact, “U.S. companies will suffer and Nigerian companies will suffer,” Bosun Tijani, CEO of Lagos based incubator CcHub, told TechCrunch .

Nigerian entrepreneur Iyinoluwa Aboyeji, who co-founded two tech companies with operations in the U.S. and Lagos — Flutterwave and Andela — posted his thoughts on the latest restrictions on social media.

“Just had an interesting dinner convo about this visa ban with Nigerian tech professionals in the U.S. Sad …but silver lining is all the amazing and experienced Nigerian talent in US tech companies who will now head on home,” he tweeted.

Notable market moves in African tech last month included an acquisition, global expansion and a couple big raises.

Nigerian digital payments startup Paga acquired Apposit, a software development company based in Ethiopia, for an undisclosed amount.

The Lagos based venture also announced it would launch its payment products in Mexico this year and in Ethiopia imminently, CEO Tayo Oviosu told TechCrunch

The moves come a little over a year after Paga raised a $10 million Series B round and Oviosu announced the company’s intent to expand globally, while speaking at Disrupt San Francisco.

Paga will leverage Apposit — which is U.S. incorporated but operates in Addis Ababa — to support that expansion into East Africa and Latin America.

Paga has created a multi-channel network to transfer money, pay-bills, and buy things digitally. The company has 14 million customers in Nigeria who can transfer funds from one of Paga’s 24,411 agents or through the startup’s mobile apps.

With the acquisition, Paga absorbs Apposit’s tech capabilities and team of 63 engineers.  The company will direct its boosted capabilities and total workforce of 530 to support its expansion.

On the raise side, San Francisco and Lagos-based fintech startup Flutterwave (previously mentioned) raised a $35 million Series B round and announced a partnership with Worldpay FIS for payments in Africa.

FIS also joined the round, led by US VC firms Greycroft and eVentures, with participation of Visa and African fund CRE Venture Capital .

The company will use the funding to expand capabilities to provide more solutions around the broader needs of its clients. Uber, Booking.com and Jumia are among the big names that use Flutterwave to process payments.

Last month, Africa’s logistics startup space gained another multi-million-dollar round with global backing.

Kenyan company Sendy — with an on-demand platform that connects clients to drivers and vehicles for goods delivery — raised a $20 million Series B led by Atlantica Ventures.

Toyota Tsusho Corporation, a trade and investment arm of Japanese automotive company Toyota, also joined the round.

Sendy’s raise came within six months of Nigerian trucking logistics startup Kobo360’s $20 million Series A backed by Goldman Sachs. In November, East African on-demand delivery venture Lori Systems hauled in $30 million supported by Chinese investors.

The company plans to use its raise for new developer hires, to improve the tech of its platform, and toward expansion in West Africa in 2020.

Sendy’s $20 million round also includes an R&D arrangement with Toyota Tsusho Corporation, to optimize trucks for the West African market, Sendy CEO Mesh Alloys told TechCrunch.

More Africa-related stories @TechCrunch

African tech around the ‘net

Nigeria is becoming Africa’s unofficial tech capital

Africa has one of the world’s fastest growing tech markets and Nigeria is becoming its unofficial capital.

While the West African nation is commonly associated with negative cliches around corruption and terrorism — which persist as serious problems, and influenced the Trump administration’s recent restrictions on Nigerian immigration to the U.S.

Even so, there’s more to the country than Boko Haram or fictitious princes with inheritances.

Nigeria has become a magnet for VC, a hotbed for startup formation and a strategic entry point for Silicon Valley. As a frontier market, there is certainly a volatility to the country’s political and economic trajectory. The nation teeters back and forth between its stereotypical basket-case status and getting its act together to become Africa’s unrivaled superpower.

The upside of that pendulum is why — despite its problems — so much American, Chinese and African tech capital is gravitating to Nigeria.

Demographics

“Whatever you think of Africa, you can’t ignore the numbers,” Africa’s richest man Aliko Dangote told me in 2015, noting that demographics are creating an imperative for global businesses to enter the continent.

Trump to halt immigration from Africa’s top tech hub, Nigeria

The Trump administration announced Friday it would halt immigration from Nigeria, Africa’s most populous nation with the continent’s largest economy and leading tech hub.

The restrictions would stop short of placing a full travel ban on the country of 200 million, but will suspend U.S. immigrant visas for Nigeria — along with Eritrea, Kyrgyzstan and Myanmar — starting February 21.

That applies to citizens from those countries looking to live permanently in the U.S. The latest restrictions are said not to apply to non-immigrant, temporary visas for tourists, business, and medical visits.

The news was first reported by the Associated Press, after a press briefing by Acting U.S. Homeland Security Secretary Chad Wolf. AP reporting said the stated reason for thew new restrictions was that the countries, such as Nigeria, did not meet security standards.

TechCrunch has asked the U.S. Department of Homeland Security for a clarification on that and full details of the latest restrictions.

The move follows reporting over the last week that the Trump administration was considering adding Nigeria, and several additional African states, to the list of predominantly Muslim countries on its 2017 travel ban. That ban was delayed in the courts until being upheld by the U.S. Supreme Court in 2018.

Restricting immigration to the U.S. from Nigeria, in particular, could impact commercial tech relations between the two countries.

Nigeria is the U.S.’s second largest African trading partner and the U.S. is the largest foreign investor in Nigeria, according to USTR and State Department briefs.

Increasingly, the nature of the business relationship between the two countries is shifting to tech. Nigeria is steadily becoming Africa’s capital for VC, startups, rising founders and the entry of Silicon Valley companies.

Recent reporting by VC firm Partech shows Nigeria has become the number one country in Africa for VC investment.

Much of that funding is coming from American sources and the U.S. is arguably Nigeria’s strongest partner for tech and Nigeria, Silicon Valley’s chosen gateway for Africa expansion.

There are numerous examples of this new relationship.

In June 2019, Mastercard invested $50 million in Jumia — an e-commerce company headquartered in Nigeria with broader Africa presence — before it became the first tech startup on the continent to IPO on a major exchange, the New York Stock Exchange.

One of Jumia’s backers, Goldman Sachs, led a $20 million round into Nigerian trucking-logistics startup, Kobo360 in 2019.

Software engineer company Andela, with offices in the U.S. and Lagos, raised $100 million, including from American sources, and employs 1000 engineers.

Facebook opened an innovation lab in Nigeria in 2018 called NG_Hub and Google launched its own developer space in Lagos last week.

Nigerian tech is also home to a growing number of startups with operations in U.S. Nigerian fintech company Flutterwave, whose clients range from Uber to Cardi B, is headquartered in San Francisco, with operations in Lagos. The company maintains a developer team across both countries for its B2B payments platform that helps American companies operating in Africa get paid.

MallforAfrica — a Nigerian e-commerce company that enables partners such as Macy’s, Best Buy and Auto Parts Warehouse to sell in Africa — is led by Chris Folayan, a Nigerian who studied and worked in the U.S. The company now employs Nigerians in Lagos and Americans at its Portland, Oregon processing plant.

Africa’s leading VOD startup, iROKOtv maintains a New York office that lends to production of the Nigerian (aka Nollywood) content it creates and streams globally.

Similar to Trump’s first travel ban, the latest restrictions on Nigeria may end up in courts, which could delay implementation.

More immediately, the Trump administration’s latest moves could put a damper on its own executive branch initiatives with Nigeria. Just today the U.S. Assistant Secretary of State for African Affairs Tibor Nagy — who was appointed by President Trump — posted a tweet welcoming Nigeria’s Foreign Affairs Minister Geoffrey Onyeama to the State Department Hosted Nigeria Bicentennial, planned to start Monday.

The theme listed for the event: “Innovation and Ingenuity, which reflects the entrepreneurial, inventive, and industrious spirit shared by the Nigerian and American people.”