FreshRSS

🔒
✇ TechCrunch

VCs to antitrust officials: We’d rather take our chances

By Connie Loizos — February 19th 2020 at 21:00

Last week at Stanford, antitrust officials from the U.S. Department of Justice organized a day-long conference that engaged numerous venture capitalists in conversations about big tech. The DOJ wanted to hear from VCs about whether they believe there’s still an opportunity for startups to flourish alongside the likes of Facebook and Google and whether they can anticipate what — if anything — might disrupt the inexorable growth of these giants.

Most of the invited panelists acknowledged there is a problem, but they also said fairly uniformly that they doubted if more regulation was the solution.

Some of the speakers dismissed outright the idea that today’s tech incumbents can’t be outmaneuvered. Sequoia’s Michael Moritz talked about various companies that ruled the world across different decades and later receded into the background, suggesting that we merely need to wait and see which startups will eventually displace today’s giants.

He added that if there’s a real threat lurking anywhere, it isn’t in an overly powerful Google, but rather American high schools that are, according to Moritz, a poor match for their Chinese counterparts. “We’re killing ourselves; we’re killing the future technologists… we’re slowly killing the potential for home-brewed invention.”

Renowned angel investor Ram Shriram similarly downplayed the DOJ’s concerns, saying specifically he didn’t think that “search” as a category could never be again disrupted or that it doesn’t benefit from network effects. He observed that Google itself disrupted numerous search companies when it emerged on the scene in 1998.

Somewhat cynically, we would note that those companies — Lycos, Yahoo, Excite — had a roughly four-year lead over Google at the time, and Google has been massively dominant for nearly all of those 22 years since (because of, yes, its network effects).

✇ TechCrunch

Brilliant makes your smart home more manageable

By Frederic Lardinois — February 7th 2020 at 15:00

Controlling your smart home gadgets from your phone or by voice isn’t exactly a chore, but after setting up a bunch of smart lights, a Wi-Fi lock, thermostat and a few more smart devices, I came to miss the ability to control at least some of them with a physical switch. Add to that the simple fact that your visitors suddenly don’t have a clue how to turn off the lights and you may just want to go back to basic light switches. Thankfully, that’s something the industry has realized, too, and we’re seeing a few more smart hardware controllers now, too.

At CES this year, Brilliant announced a new smart plug and switch to complement its existing touchscreen smart home controller. The new hardware is still a few weeks away, but ahead of the launch, I got a chance to try out the existing Brilliant controller, which has been on the market for a while but has received numerous updates and support for new integrations ever since. One of the latest integrations is with Schlage’s Encode Wi-Fi lock, which I also tested.

The promise of the Brilliant Controls is that you will be able to control all supported smart home gadgets from the physical and touchscreen controls — and, of course, it also turns the light switches you replace with it into smart switches. It also comes with a built-in camera (with a privacy shutter) that you can use either for room-to-room video chats or to check up on your home while you are away. The video quality isn’t great, but good enough for its intended purpose.

Supported devices include Wemo smart plugs, Ring alarms, Sonos speakers, Philips Hue and Lifx lights, as well Schlage, Yale and August locks, among others. The number of integrations keeps growing and covers most of the major brands, but if you’ve bet on other systems, this isn’t the controller for you. It also comes with built-in Alexa support and works with the Google Assistant, too.

Depending on how you feel about working with electricity in your home, the physical installation of the Brilliant Controls (I tested the $299 single and $349 dual switches) is either a breeze or will cause you nightmares. If you’ve ever changed a light switch, though, the installation couldn’t be easier, and Brilliant offers both an in-depth printed installation guide and video tutorials.

My own experience was pretty straightforward, assuming that your home’s electricity system is relatively modern and conforms to today’s standards. Installing the single switch took me about half an hour and the more complex dual switch was ready to go in about 45 minutes or so — and that was the first time I changed a light switch in a few years. If you’ve never done this before, though, that rats nest of cables behind your switches may take a little bit to figure out, but thankfully, all electric cables in modern homes should be color-coded.

One nice feature here is that you first install the backplate, which has physical buttons to let you test your installation before you put on the actual touchscreen unit. That way, you don’t have to unscrew everything in case you did make a mistake.

As for the software side, once you put on the screen, the Android -based interface should pop up within a few minutes. From there, you go through the usual Wi-Fi setup procedure and most likely a software update. After that, you should be ready to go.

Managing the lights that are directly attached to the control from the touchscreen or the capacitive strips on the side (for the two-switch control and up) is easy enough. Adding your third-party devices to the system takes a little while, but isn’t too onerous either, and you’re only going to do it once, after all.

I found the overall menu system a bit confusing, though, and takes a while to navigate. That especially becomes a problem when you want to program scenes (maybe to turn on all the different smart lights in your living room or bedroom). For this, you have to program both a scene that turns on all the lights, which take a few taps for every single one — and then a second scene that turns them all off. Because you can duplicate scenes, that second step is a bit faster, but I couldn’t help but think that there had to be a better solution for this. At the same time, though, this allows you to create pretty complex scenes. You can do most of this through the Brilliant app on your phone, too, which is probably the way to go as it’s a bit easier and faster.

Once everything is set up, though, the system is actually incredibly easy to use, and even your house guests who have never seen a smart plug will finally be able to turn your lights on and off (and yes, I’m aware that this shouldn’t be a problem in 2020, but here we are). I know it’s a bit of a cliche, but it pretty much just works.

One problem I’ve had with Brilliant is that the Controls are pricey, starting at $299 for the single switch and $349 for the dual switch. At those prices, you’re not going to put those into a lot of your rooms (unless you think that’s not that pricey, in which case, congrats). With the upcoming screen-less dimmer switches, which only require you to have a single control in your home and will retail for just under $70, that equation changes. We’ll give those new switches a try once they are available later this year.

 

✇ TechCrunch

Nigeria is becoming Africa’s unofficial tech capital

By Jake Bright — February 3rd 2020 at 04:17

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.

✇ TechCrunch

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

By Jake Bright — January 31st 2020 at 22:28

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 sector.

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.

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 tourist, 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. The Department of Homeland Security later provided TechCrunch with Wolf’s remarks and a summary on the measures.

The primary reason for the new restrictions, according to DHS, was that the countries did not “meet the Department’s stronger security standards.”

Secretary Wolf noted, “the restrictions are not permanent if the country commits to change.”

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 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 Africa expansion.

There are numerous examples of this new relationship.

In June 2019, Mastercard invested $50 million in Jumia — a Pan-African e-commerce company headquartered in Nigeria — before it became the first tech startup on the continent to IPO on a major exchange, the NYSE.

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

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

Facebook has senior management from Nigeria, such as Ime Archibong, and opened an innovation lab in Nigeria in 2018 called NG_Hub. 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 startup 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 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 U.S.-Nigeria Binational Commission Meeting, planned for 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.”

Update: This article was updated to include information provided by Department of Homeland Security.

✇ TechCrunch

2019 Africa Roundup: Jumia IPOs, China goes digital, Nigeria becomes fintech capital

By Jake Bright — December 30th 2019 at 09:53

2019 brought more global attention to Africa’s tech scene than perhaps any previous year.

A high profile IPO, visits by both Jacks (Ma and Dorsey), and big Chinese startup investment energized that.

The last 12 months served as a grande finale to 10 years that saw triple digit increases in startup formation and VC on the continent.

Here’s an overview of the 2019 market events that captured attention and capped off a decade of rapid growth in African tech.

IPOs

The story of the year is the April IPO on the NYSE of Pan-African e-commerce company Jumia. This was the first listing of a VC backed tech company operating in Africa on a major global exchange —  which brought its own unpredictability.

Founded in 2012, Jumia pioneered much of its infrastructure to sell goods to consumers online in Africa.

With Nigeria as its base market, the Rocket Internet backed company created accompanying delivery and payments services and went on to expand online verticals into 14 Africa countries (though it recently exited a few). Jumia now sells everything from mobile-phones to diapers and offers online services such as food-delivery and classifieds.

Seven years after its operational launch, Jumia’s stock debut kicked off with fanfare in 2019, only to be followed by volatility.

The online retailer gained investor confidence out of the gate, more than doubling its $14.95 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. The American activist investor’s case was bolstered, in part, by a debate that played out across Africa’s tech ecosystem on Jumia’s legitimacy as an African startup, given its (primarily) European senior management.

The entire affair was further complicated by Jumia’s second quarter earnings call when the company disclosed a fraud perpetrated by some of its employees and sales agents. Jumia’s CEO Sacha Poignonnec emphasized the matter was closed, financially marginal and not the same as Andrew Left’s short-sell claims.

Whatever the balance, Jumia’s 2019 ups and downs cast a cloud over its stock with investors. Since the company’s third-quarter earnings-call, Jumia’s NYSE share-price has lingered at around $6 — less than half of its original $14.95 opening, and roughly 80% lower than its high.

Even with Jumia’s post-IPO rocky road, the continent’s leading e-commerce company still has heap of capital and is on pace to generate over $100 million in revenues in 2019 (albeit with big losses).

The company plans reduce costs by generating more revenue from higher-margin internet services, such as payments and classifieds.

There’s a fairly simple equation for Jumia to rebuild shareholder confidence in 2020: avoid scandals, increase revenues over losses. And now that the company’s publicly traded — with financial reporting requirements — there’ll be four earnings calls a year to evaluate Jumia’s progress.

Jumia may not be the continent’s standout IPO for much longer. Events in 2019 point to Interswitch becoming the second African digital company to list on a global exchange in 2020.  The Nigerian fintech firm confirmed to TechCrunch in November it had reached a billion-dollar unicorn valuation, after a (reported) $200 million investment by Visa.

Founded in 2002 by Mitchell Elegbe, Interswitch created much of the initial infrastructure to digitize Nigeria’s (then) predominantly cash-based economy. Interswitch has been teasing a public listing since 2016, but delayed it for various reasons. With the company’s billion-dollar valuation in 2019, that pause is likely to end.

“An [Interswitch] IPO is still very much in the cards; likely sometime in the first half of 2020,” a source with knowledge of the situation told TechCrunch .

China-Africa goes digital

2019 was the year when Chinese actors pivoted to African tech. China is known for its strategic relationship with Africa based (largely) on trade and infrastructure. Over the last 10 years, the country has been less engaged in the continent’s digital-scene.

china africa techThat was until a torrent of investment and partnerships this past year.

July saw Chinese-owned Opera raise $50 million in venture spending to support its growing West African digital commercial network, which includes browser, payments and ride-hail services.

In August, San Francisco and Lagos-based fintech startup Flutterwave partnered with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

In September, China’s Transsion  — the largest smartphone seller in Africa — listed in an IPO on Shanghai’s new STAR Market. The company raised ≈ $394 million, some of which it is directing toward venture funding and operational expansion in Africa.

The last quarter of 2019 brought a November surprise from China in African tech. Over 15 Chinese investors placed over $240 million in three rounds. Transsion backed consumer payments startup PalmPay raised a $40 million seed, stating its goal to become “Africa’s largest financial services platform.”

Chinese investors also backed Opera-owned OPay’s $120 million raise and East-African trucking logistics company Lori Systems’ (reported) $30 million Series B.

In the new year, TechCrunch will continue to cover the business arc of this surge in Chinese tech investment in Africa. There’ll surely be a number of fresh macro news-points to develop, given the debate (and critique) of China’s engagement with Africa.

Nigeria and fintech

On debate, the case could be made that 2019 was the year when Nigeria become Africa’s unofficial capital for fintech investment and digital finance startups.

Kenya has held this title hereto, with the local success and global acclaim of its M-Pesa mobile-money product. But more founders and VCs are opting for Nigeria as the epicenter for digital finance growth on the continent.Nigeria naira

A rough tally of 2019 TechCrunch coverage — including previously mentioned rounds — pegs fintech related investment in the West African country at around $400 million over the last 12 months. That’s equivalent to roughly one-third of all startup VC raised for the entire continent in 2018, according to Partech stats.

From OPay to PalmPay to Visa — startups, big finance companies and investors are making Nigeria home-base for their digital finance operations and Africa expansion strategies.

The founder of early-stage payment startup ChipperCash, Ham Serunjogi, explained the imperative to operating there. “Nigeria is the largest economy and most populous country in Africa. Its fintech industry is one of the most advanced in Africa, up there with Kenya  and South Africa,” he told TechCrunch in May.

When all the 2019 VC numbers are counted, it will be worth matching up fintech stats for Nigeria to Kenya to see how the countries compared.

Acquisitions

Tech acquisitions continue to be somewhat rare in Africa, but there were several to note in 2019. Two of the continent’s powerhouse tech incubators joined forces in September, when Nigerian innovation center and seed-fund CcHub acquired Nairobi based iHub, for an undisclosed amount.

CChub ihub Acquisition

The acquisition brought together Africa’s most powerful tech hubs by membership networks, volume of programs, startups incubated and global visibility. It also elevated the standing of CcHub’s Bosun Tijani across Africa’s tech ecosystem, as the CEO of the new joint-entity, which also has a VC arm.

CcHub CEO Bosun Tijani1

CcHub/iHub CEO Bosun Tijani

In other acquisition activity, French television company Canal+ acquired the ROK film studio from Nigerian VOD company IROKOtv, for an undisclosed amount. The deal put ROK founder and producer Mary Njoku in charge of a new organization with larger scope and resources.

Many outside Africa aren’t aware that Nigeria’s Nollywood is the Hollywood of the continent and one of the largest film industries in the world (by production volume). Canal+ told TechCrunch it looks to bring Mary and the Nollywood production ethos to produce content in French speaking African countries.

Other notable 2019 African tech takeovers included Kenyan internet company BRCK’s acquisition of ISP Surf, Nigerian digital-lending startup OneFi’s Amplify buy and Merck KGaa’s purchase of Kenya-based online healthtech company ConnectMed.

Moto ride-hail mania

In 2019, Africa’s motorcycle ride-hail market — worth an estimated $4 billion — saw a flurry of investment and expansion by startups looking to scale on-demand taxi services. Uber and Bolt got into the motorcycle taxi business in Africa in 2018.

Ampersand Africa e motorcycle

Ampersand in Rwanda

A number of local and foreign startups have continued to grow in key countries, such as Nigeria, Uganda and Kenya.

A battle for funding and market-share emerged in Nigeria in 2019, between key moto ride-hail startups Max.ng, Gokada, and Opera owned ORide.

The on-demand motorcycle market in Africa has attracted foreign investment and moved toward EV development. In May, MAX.ng raised a $7 million Series A round with participation from Yamaha and is using a portion to pilot renewable energy powered e-motorcycles in Africa.

In August, the government of Rwanda announced a national policy to phase out gas-motorcycle taxis altogether in favor of e-motos, in partnership with early-stage EV startup Ampersand.

New funds

The past year saw several new funding initiatives for Africa’s startups. Senegalese VC investor Marieme Diop spearheaded Dakar Network Angels, a seed-fund for startups in French-speaking Africa — or 24 of the continent’s 54 countries.

Africinvest teamed up with Cathay Innovation to announce the Cathay Africinvest Innovation Fund, a $100+ million capital pool aimed at Series A to C-stage startup investments in fintech, logistics, AI, agtech and edutech.

Accion Venture Lab launched a $24 million fintech fund open to African startups.

And Naspers offered more details on who can pitch to its 1.4 billion rand (≈$100 million) Naspers Foundry fund, which made its first investment in online cleaning services company SweepSouth.

Closed up shop

Like any tech ecosystem, not every startup in Africa killed it or even continued to tread water in 2019. Two e-commerce companies — DealDey in Nigeria and Afrimarket in Ivory Coast — closed up digital shop.

Southern Africa’s Econet Media shut down its Kwese TV digital entertainment business in August.

And South Africa based, Pan-African focused cryptocurrency payment startup Wala ceased operations in June. Founder Tricia Martinez named the continent’s poor infrastructure as one of the culprits to shutting down. A possible signal to the startup’s demise could have been its 2017 ICO, where Wala netted only 4% of its $30 million token-offering.

Africa’s startups go global

2019 saw more startups expand products and business models developed in Africa to new markets abroad. In March, Flexclub — a South African venture that matches investors and drivers to cars for ride-hailing services — announced its expansion to Mexico in a partnership with Uber.

In May, ExtraCrunch profiled three African founded fintech startups — Flutterwave, Migo and ChipperCash — developing their business models strategically in Africa toward plans to expand globally.

By December, Migo (formerly branded Mines) had announced its expansion to Brazil on a $20 million Series B raise.

2020 and beyond

As we look to what could come in the new year and decade for African tech, it’s telling to look back. Ten years ago, there were a lot of “if” questions on whether the continent’s ecosystem could produce certain events: billion dollar startup valuations, IPOs on major exchanges, global expansion, investment from the world’s top VCs.

All those questionable events of the past have become reality in African tech, even if some of them are still in low abundance.

There’s no crystal ball for any innovation ecosystem — not the least Africa’s — but there are several things I’ll be on the lookout for in 2020 and beyond.

Two In the near term, start with what Twitter/Square CEO Jack Dorsey may do around Bitcoin and cryptocurrency on his return to Africa (lookout for an upcoming TechCrunch feature on this).

I’ll also follow the next-phase of e-commerce in Africa, which could pit Jumia more competitively against DHL’s Africa eShop, Opera and China’s Alibaba (which hasn’t yet entered Africa in full).

On a longer-term basis, a development to follow is how the continent’s first wave of millionaire and billionaire tech-founders could disrupt 21st century dynamics in Africa around politics, power, and philanthropy —  hopefully for the better.

More notable 2019 Africa-related coverage @TechCrunch

❌