|Hi Q-MHI Africa readers!|
From e-commerce to edtech to fintech, Egyptian startups are emerging as the preferred destination for global and regional investment, threatening to overtake South Africa, Kenya, and Nigeria.
In June alone, Egypt’s startups came close to surpassing the $190 million they raised in 2020. Key deals include Cairo-based digital trucking marketplace startup Trella raising a $42 million funding round for expansion of its services; and Tejarra and MoneyHash, e-commerce and fintech startups, respectively, both raising undisclosed six-figure sums.
The funding deals were in addition to the National Bank of Egypt securing $100 million from the European Bank for Reconstruction and Development to help the country’s small and medium-sized companies work on energy efficiency and climate change mitigation. These make Egypt even more attractive as an investment destination, as South Africa and Nigeria struggle with power outages, a possible deterrent to some investors.
Egypt also seems to be reaping the rewards for efforts made in strengthening the startup sector in the past years, including a new law allowing the central bank to give out banking licenses to fintech and digital commerce firms. The sector is also one that has been prioritized in policy and through development partnerships.
Rahul Shah, an emerging markets finance and equity expert, told Q-MHI that this trend is expected to continue. “Elevated valuations in other markets are forcing international investors to take a closer look at African startups, where the risk-reward profile looks much more compelling,” he says. “We are likely to see more venture capital funding interest in the region. –Tawanda Karombo, Q-MHI contributor
STORIES THIS WEEK
A fast-food roast divides South Africans. Nando’s, one of the country’s biggest chains, is known for its spicy, satirical commercials, which take aim at the most powerful. Still, writes Aanu Adeoye, it surprised some—and outraged others—that its latest potshot was aimed at former South African president Jacob Zuma, who was sentenced to 15 months in prison this week. It was a moment in a speech long ago. Jacob Zuma, South Africa’s president at the time, was talking about the membership figures of the ruling African National Congress (ANC) at a party convention in 2015 when he encountered a number that twisted his tongue.
“Seven-hundred and sixty-nine, eight-hundred and…seven hundred—listen properly— seven-hundred and sixty-nine thousand, eight-hundred and twenty and seventy members, down from one hundred point two million in 2012,” Zuma said,
Startups are diversifying to scale up. African fintech startups are increasingly moving from focusing on niche areas such as payment, lending insurance, and investment to offering a wide range of services. Carlos Mureithi unpacks a new report on the strategy..Increasingly, African fintech startups are moving from focusing on niche areas such as payment, lending insurance, and investment, to offering a wide range of complementary services. This is according to a new report by Disrupt Africa, a website for news on African startups.
Almost 25% of the fintech startups tracked this year are operating in multiple categories. This is up from 15% in 2019 and 8% in 2017. The report is based on data from 576 fintech startups in Africa. The website defines fintech startups as those that disrupt traditional financial services and challenge incumbent service providers.
This diversification is driven by the startups’ need to expand, says Tom Jackson, co-founder of Disrupt Africa. Startups, especially those that are venture-backed where growth is a key performance indicator, are seeking growth and more customers, he says.
Business trumps morality in Africa’s cannabis industry. The prospect of legalized cannabis in Africa, unimaginable less than a decade ago, is accelerating, driven by the potential for much-needed revenue and the impact of the Covid-19 pandemic. Stephen Kafeero talks to the entrepreneurs and lobbyists pushing for more progressive views on the plant.The prospect of legalized cannabis in Africa, unimaginable less than a decade ago, is accelerating, driven by the potential for much-needed revenue and the impact of the Covid-19 pandemic.
Generations of Africans have faced the wrath of colonial era and morality laws surrounding cannabis use, with many involved in cultivating and selling the plant jailed, forced to operate underground, or had their livelihoods destroyed. But as governments search for more sources of revenue, this once-closed space is opening up, albeit not necessarily for smallholder growers or local consumption.
Developments in Western markets, where legalization is spreading rapidly, and the prospect of cashing in on the fast growing multi-billion dollar sector, are contributing to the sweeping reforms on the continent. At least 10 countries in Africa are enacting some form of legal framework for the product, while many others are pondering a move in a similar direction.
The EU takes a limited view of vaccine passports. Covishield is biologically identical to Vaxzevria, but made in India and distributed widely there and in Africa. Hasit Shah explains how millions of fully vaccinated Africans and Indians, who have taken the same vaccine as millions of Europeans, could remain locked out of the EU unless the rules change.Millions of fully vaccinated people in India and Africa could face challenges traveling to Europe under the EU’s new vaccine passport scheme, scheduled to take effect on July 1.
That’s despite the fact that they’ll have taken a vaccine that, on the face of it, is already authorized in the EU, as well as by the UK and the World Health Organization.
The problem? The EU is making a distinction between one brand of the AstraZeneca jab, named Vaxzevria, and its identical, but Indian-made version Covishield. The latter, manufactured under license by India’s Serum Institute, is not one of the vaccines listed for the EU’s new digital travel pass.
India has administered nearly 300 million doses of Covishield, while the global, multi-agency Covax program that serves many African countries managed to get hold of about 30 million jabs before supply issues led to restrictions. The move could also exclude travelers from other countries that make local versions of the AstraZeneca vaccine, such as South Korea.
Decolonizing aid. African NGOs and intermediary firms in the local private sector provide essential services, yet continue to be exposed to highly politicized and opaque bid processes. Amma Gyampo argues that leaders in philanthropy, development finance, and corporate sustainability should take on a more entrepreneurial and radical approach to funding development initiatives.In recent years, there have been growing calls for more diversity in international funding destined for Africa.
There has also been debate over how the continent can encourage more local African asset owners to invest in impactful, sustainable, and profitable sectors of the productive economy, like its burgeoning tech ecosystem.
According to Devex, “organizations led by Africans tend to get less money—with more strings attached—compared with those led by others.” For the African tech sector alone, insights from TechCabal illustrate that “only two out of 10 investors who participated in VC deals in Africa between 2014 and 2019 were local.”
This rolling conversation has been sparked by the notoriously high proportion of venture capital that goes to white founders operating in Kenya, for example, and due to the controversial positioning of companies like Jumia, as “African.” Furthermore, there has been a lot of pushback against a heavy-handed reporting culture of mistrust which, in practice, constrains rather than enables the recipients of international grant funding from big philanthropy and development financing, hindering their ability to run their innovative initiatives and interventions.
CHARTING THE COST OF INTERNET SPEED IN AFRICA
High internet prices in Africa are rarely matched by fast connection speeds. And a new report finds that even though there are instances where internet speeds on the continent might be faster than those elsewhere, customers are still paying exorbitant rates for their connections.Speedcheck analyzed the mobile broadband speeds experienced by the users of its service in 89 countries in five continents and compared this to the cost of data in each of the countries. The result is a speed-price index (SPI). The higher the index, the more value for money for mobile internet users, Carlos Mureithi reports.
MDaaS Global, the Nigerian healthtech company, has announced a $2.3 million seed extension to scale its operations and launch SentinelX, a digital health solution product. The funding was led by Newtown Partners via the Imperial Venture Fund, with participation from CRI Foundation, FINCA Ventures, Techstars, and Future Africa, among others.The idea for MDaaS came when co-founder and CEO Oluwasoga Oni was tasked alongside his classmates at MIT to develop an idea that could impact a billion lives. Coming from a medical background, he chose the one he could relate to.
“I wanted to solve the problem close to me and my dad in my early years. He had a 30-bed hospital and struggled so hard to find medical equipment that was good for him and also at a good rate,” he said to TechCrunch.
Oni started MDaaS with Opeyemi Ologun, Genevieve Barnard Oni and Joseph McCord. With their connections in the U.S., the founders began connecting secondary medical equipment marketplaces in the U.S. to Nigeria. They would import equipment, provide service support and deploy to hospitals via rent, lease or outright sale.
The founders did this for a while until they realized that the core problem wasn’t providing equipment pieces; it was a matter of necessity. The money doctors spent on the pieces of equipment was more than the earnings from patients. Therefore it just didn’t make financial sense for doctors to own the equipment.United States.
MDaaS decided to revert to an aggregation model where they would look at a clinically underserved area, build a centralized diagnostic center and aggregate demand from small, medium-sized hospitals within that community. They launched the first center in the Nigerian southwestern city of Ibadan. The startup subsequently got into Techstars and has since added six other centers across other cities in Nigeria.
Zeepay, a Ghanaian fintech startup, has announced a $7.9 million Series A funding round to aid its expansion process. which was made up of both hybrid of equity and balance sheet funding. I&P led the former, with support from ARK Holdings and GOODsoil VC. Absa Bank Ghana led the balance sheet lending, with participation from First National Bank Ghana.
Zipline, the healthcare drone delivery startup with African roots, has raised $250 million in new funding, shooting its valuation to $2.75 billion. The investment was led by Baillie Gifford with support from Temasek, Katalyst Ventures, Fidelity, Intercorp, Emerging Capital Partners and Reinvest Capital. It will be used to build out the infrastructure for new contracts in Ghana, Nigeria, and the United States.Zipline made a name for itself first in Rwanda and then in Ghana, where it delivered blood, vaccines, life-saving medications and other essential supplies using autonomous electric drones. The company, which launched in 2014, is vertically integrated – meaning it designs and manufactures the unmanned drones, the logistics software, and the accompanying launch and landing system.
Zipline CEO Keller Rinaudo told TechCrunch that this was more by necessity than design, noting that when the company first started developing its drone tech, it quickly realized that off-the-shelf components weren’t reliable or didn’t integrate well.
“Over time Zipline has had to basically rip every single thing out of the system, whether it was the flight computer [. . .] or the battery pack, or the aircraft itself. And we’ve had to build every single one of those things completely from scratch.”. The company’s currently working with the Federal Aviation Administration to move from operating under an emergency waiver – granted by regulators during the pandemic – to a full commercial operating certification. One advantage Zipline may have over competitors in the FAA’s certification process is that it has many thousands of hours of safe flight data to show that it’s system is sound. It would be one of the first drone delivery companies to receive such a certification.
In the long run, Zipline may start to focus on other industries, but for now it’s laser focused on healthcare, Rinaudo said. He noted that in the last few months alone the company has signed service contracts for five new distribution centers in Nigeria and four in Ghana, as well as “multiple new service contracts” with hospital systems in the United States. This latest funding round, led by Baillie Gifford and with support from returning investors Temasek and Katalyst Ventures, and new investors Fidelity, Intercorp, Emerging Capital Partners and Reinvest Capital, will be used to build out the infrastructure for these new contracts.
Rinaudo said the aim is for Zipline to serve the majority of single-family detached homes across the United States over the coming three years or so.
“The fact that so many big companies like Toyota and Walmart are starting to make big bets in this instant logistics space, I think is a pretty clear sign that people realize this is coming,” Rinaudo said. “There’s a tidal wave of transformation coming. The exciting thing about it is that it’s going to totally transform the way that healthcare systems work, it’s going to totally transform the way that economic systems work, and it’s going to make it possible for logistics to serve people equally.”
Strive Masiyiwa, the Zimbabwean billionaire founder of Econet Global, knows who is responsible for Covax’s inability to deliver on its promises: Rich countries. “This was a deliberate global architecture of unfairness,” Masiyiwa, who was tasked to help procure vaccines for the African Union (AU), said on June 23 at a summit on vaccine equity. Annalisa Merelli writes on Masiyiwa’s comments, which capture Covax’s failings on the continent so far.
OTHER THINGS WE LIKED
US groups are funding “anti-gay therapy.” Major hospitals in Uganda are offering conversion therapy to LGBTQI+ folks, an openDemocracy investigation found. While these clinics have received US funding, it remains unclear if it was used on this widely condemned initiative, Khatondi Soita Wepukhulu reports.
At Mulago, Uganda’s biggest public hospital, a receptionist at an HIV clinic for marginalised and ‘most at risk’ populations, including LGBT people, said that an undercover reporter’s 17-year-old gay brother could “quit” his same-sex attraction.
“Whoever wants to quit homosexuality, we connect them,” she said – to external counsellors, who have included Pastor Solomon Male, a locally known anti-gay campaigner. She also gave our undercover reporter the phone number of a man who “was once a patient here” and “was once a homosexual but isn’t anymore”.
The USAID aid agency – which says it supports LGBTQI+ inclusive development – gave the Most At Risk Populations Initiative (MARPI) that runs this clinic a $420,000 grant in 2019, ending this September. (It is unclear if any of this money went to this specific clinic.)
It is just one of several examples of health centres in Uganda where our undercover reporters caught staff providing, or providing referrals for, controversial anti-gay ‘therapies’.
Our investigation identified similar support for ‘anti-gay’ counselling activities at three hospitals in the Uganda Catholic Medical Bureau (UCMB) network. This network received more than $1m from USAID between 2019 and this April, though it is unclear whether the specific hospitals identified in this investigation received any of this money.
At one of these hospitals – Nsambya, Uganda’s biggest private health facility – staff referred our reporters to the private office of Cabrine Mukiibi, on the outskirts of Kampala, who mixed Freudian theories, biblical quotes and anti-gay insults in his diagnosis.
Mukiibi, who is also a staff counsellor at Nsambya, stated that sex without procreation “becomes evil” – before recommending what he called “exposure therapy”, telling our undercover reporter to “get a housemaid” that her supposedly gay teenage brother can “get attracted [to]’’, one who is “between 18 and 20 years of age”.
A spokesperson from the US embassy in Kampala, Anthony Kujawa, said that ‘conversion therapy’ goes against “the policy of the United States to pursue an end to violence and discrimination on the basis of sexual orientation, gender identity or expression, or sex characteristics”.
In response to questions from open Democracy, Kujawa explained that US funding for UCMB was supposed to support the capacity of Catholic health facilities involved in HIV and AIDS care. He said: “USAID does not fund or promote anti-LGBTQI+ conversion therapy and will investigate any report that a USAID funded partner is doing so.”
Rosco Kasujja, director of mental health at Makerere University’s school of psychology and head of the Uganda Clinical Psychologists Association, called open Democracy’s findings “disturbing”. He blamed the lack of a national regulator for psychologists, which could ensure that all patients receive quality care.
“It’s really frustrating that we don’t have any power,’’ he said, in reference to his association’s voluntary and non-binding standards. “People are playing by their own rules and [we] can’t do anything about it.”
Nigeria nets a Biafra separatist. While the Nigerian government focused on tackling separationist group IPOB for years, its master planner Nnamdi Kanu has been operating beyond its jurisdiction. This week, however, the UK resident was somehow arrested and arraigned in a Nigerian court for charges including treason. The details, as The New York Times reports, are murky.The leader of a group that has called for the independence of Biafra from Nigeria appeared in court again on Tuesday after having jumped bail and disappearing for several years, Nigeria’s justice minister said.
Nnamdi Kanu founded the outlawed Indigenous People of Biafra (IPOB) movement that has called for civil disobedience to achieve a separate state for ethnic Igbos in southeast Nigeria.
Kanu and his group have been accused of fomenting violence and of being behind a recent spate of attacks.
Why was Nnamdi Kanu arrested?
The 53-year-old went on trial in 2015, but fled in 2017 after being released on bail. Justice Minister Abubakar Malami said that Kanu was arrested on Sunday, but did not give details of the location.
“Nnamdi Kanu has been intercepted […] He has been brought back to Nigeria, in order to continue facing trial after disappearing,” Malami said in a statement. Kanu faces charges “bordering on terrorism, treasonable felony, managing an unlawful society, publication of defamatory matter, illegal possession of firearms,” he added.
Kanu’s lawyer Ifeanyi Ejiofor confirmed the account, saying that his client had been “brought before the Federal High Court […] though without our knowledge.” Biafra independence is a sensitive topic in Nigeria
The separatist leader founded IPOB in 2013 while living in London. The movement called for civil disobedience to force the government to allow a referendum on independence.
However, his stance took a turn in 2015 during the World Igbo Congress in Los Angeles when he said: “We need arms and we need bullets.” He was arrested later that year on a trip to Nigeria.
More than a million people died, mostly Igbos, during a 30-month civil war that was triggered by a unilateral declaration of independence for Biafra in 1967.
The region has seen a surge in attacks in recent months, with some 130 police officers killed in this year alone. In May Nigeria’s security forces launched an operation to quell the violence which many fear may lead to a new war.
The fall of a billionaire Gucci Master. Widely known for his flamboyant lifestyle on Instagram, Ramon Abbas, a.k.a. Hushpuppi, was extradited to the US in 2020 after his cover as an internet fraudster was blown. In Bloomberg, Evan Ratliff chronicles the Nigerian’s ruthless Business Email Compromise (BEC) methods, and the larger problem of phishing.
An African ski resort gets creative to stay afloat. Afriski Mountain Resort, one of Lesotho’s biggest tourist attractions, is pivoting as the pandemic slowed the flow of tourists to a trickle. The Guardian’s Silence Charumbira describes how ingenuity has revived the resort and its workers. Masiane Nthina made her way nervously from the kit room to the slopes. Shuffling with skis on her feet for the first time is not easy.
Nthina, an intern at the Lesotho Tourism Development Corporation, lives close to Afriski Mountain Resort, but had never visited it. She had always viewed the resort as the preserve of the elite and thought that on her meagre wages she could not afford to go.
“I used to see the resort on social media and would even pass by on my way to Mokhotlong, but had never visited Afriski,” she says. “It’s a wonderful experience and I would do this again without a second thought, given an opportunity.”
This year, however, she and others living near the resort are being offered incentives to hit the slopes as the Covid pandemic threatens business during the winter season.Nestled in the Maluti mountains in Butha-Buthe in the north-east of Lesotho, 125 miles (200km) from the capital, Maseru, Afriski is one of only two skiing resorts in southern Africa. The other is in the Eastern Cape province of South Africa.
The resort is 3,200 metres above sea level, where sub-zero temperatures are normal. The area receives snowfall for most of the year, although it is coldest during the winter, from May to August. A snowmaking system, fed by a storage dam at the top of the mountain and a 1,000-metre pipeline and pump, is on hand in case snow does not fall.
Since it was established in 2000, Afriski has been one of Lesotho’s biggest tourist attractions, hosting about 27,000 foreign visitors a year, mostly from South Africa, which surrounds Lesotho. The resort is the main employer in the area, but tourism has been hard hit by the pandemic and last year the resort received just 10% of its normal visitor numbers. The pandemic “has certainly thrown us a curveball and one we definitely did not expect to be circling for this long”, says marketing manager Robyn Moon.
The company says it lost an estimated 40m South African rand (£2m) because of the pandemic, while several small local businesses that supplied the resort with vegetables and other food, as well as services, such as musicians and photographers, collapsed when orders dried up. The resort had to lay off about 30% of staff, including managers, at the start of the pandemic.
The rise in fame of an Ivorian artist. Aboudia has been producing art since 2005, drawing inspiration from the streets of Abidjan. Misunderstood and oft-ignored, his work initially received only a lukewarm response. But Artsy’s Ayodeji Rotinwa explores the changing tides are now leading to bidding wars by collectors.
Aboudia, who is 37, has some experience with lukewarm reception. In 2005, fresh from graduating from the Institut Des Arts in his home city, Abidjan, no gallery would show his work. He couldn’t break through to collectors, and many of his contemporaries didn’t understand the meaning and substance behind his paintings. “According to them, my work wasn’t good,” explained Aboudia via email. Drawing inspiration directly from the streets of Abidjian, Aboudia recreates the city’s graffiti onto his canvases and paints childlike figures representing the community’s underserved young people. “There aren’t many things more important than kids,” explained Aboudia in a recent short film produced by Christie’s. “Before talking about anything else we have to speak about these children that are the pillars of an entire country, an entire nation, and the entire world.”
Using found material—cardboard, charcoal, fragments of magazine ads, or newspapers—Aboudia transposes Nouchi, the colloquial language of the Ivory Coast that is a mixture of several Ivorian languages and French, onto his canvases. This alchemy is tied together by an explosive use of color and the use of symbols and imagery: voodoo iconography, Dan masks from Liberia, or Igbo masks from Nigeria. The result is work that often feels combustible. Aboudia’s paintings reflecting on the armed conflict during the 2010 Ivory Coast presidential election are what first brought him under the international spotlight. Western media would often illustrate coverage of the conflict using Aboudia’s works which showed his childlike figures amid skulls, AK-47s, and rocket launchers and surrounded by tanks and shelled buildings all washed in dark, ominous palettes of browns, greys, and the odd green. The combustible energy of Aboudia’s paintings was at fever pitch here.
“Aboudia is a very instinctive artist,” said Cécile Fakhoury, Aboudia’s gallerist in Dakar, Abidjan, and Paris. “He is painting what he is seeing and feeling. His work is very immersive. You can see a kind of repetition, but every move is very sincere. A lot of people are touched by his work because it can be dark, it can be hopeful.” “His work is uniquely Ivorian in that he draws his inspiration from local Nouchi street culture and traditional forms of voodoo, and addresses problems of social inequality in his capital city Abidjan,” said Bell. “While his themes are drawn from West Africa, his loose style and dynamic visual language translates to audiences internationally. Over the last 10 years, Aboudia has evolved into an iconic contemporary artist of his generation.”
The economics of Africa. A three-day webinar hosted by the African Economic Research Consortium, the African School of Economics, and Northwestern University will focus on a range of continent-focused topics, from taxes to financial literacy to bureaucracy. (July 7-9)
New markets for women-owned businesses. “Rise to the challenge” is the theme for this year’s conference for the WEconnect female-owned company network, which will focus on opportunities and challenges presented by AfCFTA, financing, and more. (July 7-8)Supporting Black-led startups. Google’s Black Founders Fund Africa will provide funding, technical, and business support to 50 early-stage startups, in conjunction with the Co-Creation Hub. (July 7) This brief was produced while listening to “Mali Nialé” by Oumou Sangaré (Mali)