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African payment startup Chipper Cash raises $13.8M Series A

By Jake Bright

African cross-border fintech startup Chipper Cash has closed a $13.8 million Series A funding round led by Deciens Capital and plans to hire 30 new staff globally.

The raise caps an event filled run for the San Francisco based payments company, founded two years ago by Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled.

The two came to America for academics, met in Iowa while studying at Grinnell College and ventured out to Silicon Valley for stints in big tech: Facebook for Serunjogi and Flickr and Yahoo! for Moujaled.

The startup call beckoned and after launching Chipper Cash in 2018, the duo convinced 500 Startups and and Liquid 2 Ventures — co-founded by American football legend Joe Montana — to back their company with seed funds.

Two years and $22 million in total capital raised later, Chipper Cash offers its mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya.

“We’re now at over one and a half million users and doing over a $100 million dollars a month in volume,” Serunjogi told TechCrunch on a call.

Chipper Cash does not release audited financial data, but does share internal performance accounting with investors. Deciens Capital and Raptor Group co-led the startup’s Series A financing, with repeat support from 500 Startups and Liquid 2 Ventures .

Deciens Capital founder Dan Kimmerling confirmed the fund’s lead on the investment and review of Chipper Cash’s payment value and volume metrics.

Parallel to its P2P app, the startup also runs Chipper Checkout: a merchant-focused, fee-based mobile payment product that generates the revenue to support Chipper Cash’s free mobile-money business.

The company will use its latest round to hire up to 30 people across operations in San Francisco, Lagos, London, Nairobi and New York — according to Serunjogi.

Image Credits: Chipper Cash

Chipper Cash has already brought on a new compliance officer, Lisa Dawson, whose background includes stints with the U.S. Department of Treasury’s Financial Crimes Enforcement Network and Citigroup’s anti-money laundering department.

“You know in the world we live in the AML side is very important so it’s an area that we want to invest in from the get go,” said Serunjogi.

He confirmed Dawson’s role aligned with getting Chipper Cash ready to meet regulatory requirements for new markets, but declined to name specific countries.

With the round announcement, Chipper Cash also revealed a corporate social responsibility component to its business. Related to current U.S. events, the startup has formed the Chipper Fund for Black Lives.

“We’ve been huge beneficiaries of the generosity and openness of this country and its entrepreneurial spirit,” explained Serunjogi. “But growing up in Africa, we’ve were able to navigate [the U.S.] without the traumas and baggage our African American friends have gone through living in America.”

The Chipper Fund for Black Lives will give 5 to 10 grants of $5,000 to $10,000. “The plan is to give that to…people or causes who are furthering social justice reforms,” said Serunjogi.

In Africa, Chipper Cash has placed itself in the continent’s major digital payments markets. As a sector, fintech has become Africa’s highest funded tech space, receiving the bulk of an estimated $2 billion in VC that went to startups in 2019.

Africa Top VC Markets 2019

Image Credits: TechCrunch

Those ventures, and a number of the continent’s established banks, are in a race to build market share through financial inclusion.

By several estimates — including The Global Findex Database — the continent is home to the largest percentage of the world’s unbanked population, with a sizable number of underbanked consumers and SMEs.

Increasingly, Nigeria has become the most significant fintech market in Africa, with the continent’s largest economy and population of 200 million.

Chipper Cash expanded there in 2019 and faces competition from a number of players, including local payments venture Paga. More recently, outside entrants have jumped into Nigeria’s fintech scene.

In 2019, Chinese investors put $220 million into OPay (owned by Opera) and PalmPay — two fledgling startups with plans to scale first in West Africa and then the broader continent.

Over the next several years, expect to see market events — such as fails, acquisitions, or IPOs — determine how well funded fintech startups, including Chipper Cash, fare in Africa’s fintech arena.

Africa Roundup: DHL invests in MallforAfrica, Zipline launches in US, Novastar raises $200M

By Jake Bright

Events in May offered support to the thesis that Africa can incubate tech with global application.

Two startups that developed their business models on the continent — MallforAfrica and Zipline — were tapped by international interests.

DHL acquired a minority stake in Link Commerce, a turn-key e-commerce company that grew out of MallforAfrica.com — a Nigerian digital-retail startup.

Link Commerce offers a white-label solution for doing online-sales in emerging markets.

Retailers can plug into the company’s platform to create a web-based storefront that manages payments and logistics.

Nigerian Chris Folayan founded MallforAfrica in 2011 to bridge a gap in supply and demand for the continent’s consumer markets. While living in the U.S., Folayan noted a common practice among Africans — that of giving lists of goods to family members abroad to buy and bring home.

With MallforAfrica, Folayan aimed to allow people on the continent to purchase goods from global retailers directly online.

The e-commerce site went on to onboard more than 250 global retailers, and now employs 30 people at order processing facilities in Oregon and the U.K.

Folayan has elevated Link Commerce now as the lead company above MallforAfrica.com. He and DHL plan to extend the platform to emerging markets around the world and offer it to companies who want to wrap online stores, payments and logistics solution around their core business.

“Right now the focus is on Africa…but we’re taking this global,” Folayan said.

Another startup developed in Africa, Zipline, was tapped by U.S. healthcare provider Novant for drone delivery of critical medical supplies in the fight against COVID-19.

The two announced a partnership whereby Zipline’s drones will make 32-mile flights on two routes between Novant Health’s North Carolina emergency drone fulfillment center and the nonprofit’s medical center in Huntersville — where front-line healthcare workers are treating coronavirus patients.

Zipline and Novant are touting the arrangement as the first authorized long-range drone logistics delivery flight program in the U.S. The activity has gained approval by the U.S. Federal Aviation Administration and North Carolina’s Department of Transportation.

The story behind the Novant, Zipline UAV collaboration has a twist: The capabilities for the U.S. operation were developed primarily in Africa. Zipline has a test facility in the San Francisco area, but spent several years configuring its drone delivery model in Rwanda and Ghana.

Image Credits: Novant Health

Co-founded in 2014 by Americans Keller Rinaudo, Keenan Wyrobek and Will Hetzler, Zipline designs its own UAVs, launch systems and logistics software for distribution of critical medical supplies.

The company turned to East Africa in 2016, entering a partnership with the government of Rwanda to test and deploy its drone service in that country. Zipline went live with UAV distribution of life-saving medical supplies in Rwanda in late 2016, claiming the first national drone-delivery program at scale in the world.

The company expanded to Ghana in 2016, where in addition to delivering blood and vaccines by drone, it now distributes COVID-19-related medication and lab samples.

In addition to partner Novant Health, Zipline has caught the attention of big logistics providers, such as UPS — which supported (and studied) the startup’s African operations back to 2016.

The presidents of Rwanda and Ghana  — Paul Kagame and Nana Akufo-Addo, respectively — were instrumental in supporting Zipline’s partnerships in their countries. Other nations on the continent, such as Kenya, South Africa and Zambia, continue to advance commercial drone testing and novel approaches to regulating the sector.

African startups have another $100 million in VC to pitch for after Novastar Ventures’ latest raise.

The Nairobi and Lagos-based investment group announced it has closed $108 million in new commitments to launch its Africa Fund II, which brings Novastar’s total capital to $200 million.

With the additional resources, the firm plans to make 12 to 14 investments across the continent, according to Managing Director Steve Beck .

On-demand mobility powered by electric and solar is coming to Africa.

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, launched an electric taxi service and charging network in Zimbabwe this week with plans to expand across the continent.

The South Africa-headquartered company is using Nissan Leaf EVs and has developed its own solar-powered charging stations. Vaya is finalizing partnerships to take its electric taxi services on the road to countries that could include Kenya, Nigeria, South Africa and Zambia, Vaya Mobility CEO Dorothy Zimuto told TechCrunch.

The initiative comes as Africa’s on-demand mobility market has been in full swing for several years, with startups, investors and the larger ride-hail players aiming to bring movement of people and goods to digital platforms.

Uber and Bolt have been operating in Africa’s major economies since 2015, where there are also a number of local app-based taxi startups. Over the last year, there’s been some movement on the continent toward developing EVs for ride-hail and delivery use, primarily around motorcycles.

Beyond environmental benefits, Vaya highlights economic gains for passengers and drivers of shifting to electric in Africa’s taxi markets, where fuel costs compared to personal income is generally high for drivers.

Using solar panels to power the charging station network also helps Vaya’s new EV program overcome some of challenges in Africa’s electricity grid.

Vaya is exploring EV options for other on-demand transit applications — from mini-buses to Tuk Tuk taxis.

In more downbeat news in May, Africa-focused tech talent accelerator Andela had layoffs and salary reductions as a result of the economic impact of the COVID-19 crisis, CEO Jeremy Johnson confirmed to TechCrunch.

The compensation and staff reductions of 135 bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to Johnson.

More Africa-related stories @TechCrunch  

African tech around the ‘net

Vaya Africa launches electric ride-hail taxi network

By Jake Bright

Vaya Africa, a ride-hail mobility venture founded by Zimbabwean mogul Strive Masiyiwa, has launched an electric taxi service and charging network in Zimbabwe with plans to expand across the continent.

The South Africa headquartered company has acquired a fleet of Nissan Leaf EVs and developed its own solar powered charging stations.

The program goes live in Zimbabwe this week, as Vaya finalizes partnerships to begin on-demand electric taxi and delivery services in markets that could include Kenya, Nigeria, South Africa and Zambia.

“Zimbabwe is a sandbox really. We’ve moved on to doing pilots with other countries right across Africa,” Vaya Mobility CEO Dorothy Zimuto told TechCrunch on a call from Harare.

Vaya is a subsidiary of Strive Masiyiwa’s Econet Group, which includes one of Southern Africa’s largest mobile operators and Liquid Telecom, an internet infrastructure company.

Masiyiwa has become one of Africa’s Gates, Branson type figures, recognized globally as a business leader and philanthropist with connections and affiliations from President Obama to the Rockefeller Foundation.

Working with Zimuto on the Vaya EV product is Liquid Telecom’s innovation partnerships lead, Oswald Jumira.

The initiative comes as Africa’s on demand mobility market has been in full swing for several years, with startups, investors, and the larger ride-hail players aiming to bring movement of people and goods to digital product models.

Ethiopia has local ride-hail ventures Ride and Zayride. Uber’s been active in several markets on the continent since 2015 and like competitor Bolt, got into the motorcycle taxi business in Africa in 2018.

Over the last year, there’s been some movement on the continent toward developing EV’s for ride-hail and delivery use, primarily around two-wheeled transit.

In 2019, Nigerian mobility startup MAX.ng raised a $7 million Series A round backed by Yamaha, a portion of which was dedicated to pilot e-motorcycles powered by renewable energy.

Last year the Government of Rwanda established a national plan to phase out gas motorcycle taxis for e-motos, working in partnership with EV startup Ampersand.

Vaya Mobility CEO Dorothy Zimuto, Image Credits: Econet Group

The appeal of shifting to electric in Africa’s taxi markets — beyond environmental benefits — is the unit economics, given the cost of fuel compared to personal income is generally high for most of the continent’s drivers.

“Africa is excited, because we are riding on the green revolution: no emissions, no noise and big savings… in terms of running costs of their vehicles,” Zimuto said.

She estimates a cost savings of 40% on the fuel and maintenance costs for drivers on the ride-hail platform.

At the moment, with fuel prices in Vaya’s first market of Zimbabwe at around $1.20 a liter, the average trip distance is 22 kilometres for a price of $19, according to Econet Group’s Oswald Jumira.

With the Nissan Leaf vehicles on Vaya’s charging network, the cost to top up will be around $5 for a range of 150 to 200 kilometres.

Image Credits: Vaya Africa

“It’s the driver who benefits. They take more money home. And that also means we can reduce the tariff for ride hailing companies to make it more affordable for people,” Jumira told TechCrunch .

The company has adapted its business to the spread of COVID-19 in Africa. Vaya provides PPE to its drivers and sanitizes its cars four to five times a day, according to Zimuto.

Vaya is exploring EV options for other on-demand transit applications — from delivery to motorcycle and Tuk Tuk taxis.

On the question of competing with Uber in Africa, Vaya points to the reduced fares offered by its EV program as one advantage.

The CEO of Vaya Mobility, Dorothy Zimuto, also points to certain benefits of knowing local culture and preferences.

“We speak African. That’s the language we understand. We understand the people and what they want across our markets. That’s what makes the difference.” she said.

It will be something to watch if Vaya’s EV bet and local consumer knowledge translates into more passenger flow and revenue generation as it goes head to head with other ride-hail companies, such as Uber, across Africa.

Andela CEO confirms staff cuts as layoffs hit African tech

By Jake Bright

Africa-focused tech talent accelerator Andela has let go 135 employees, CEO Jeremy Johnson confirmed to TechCrunch.

Senior staff at the company — with offices in New York and four African countries — will also take salary cuts of 10% to 30%.

The compensation and staff reductions are a result of the economic impact of the COVID-19 crisis and bring Andela’s headcount down to 1,199 employees. None of Andela’s engineers were included in the layoffs.

Backed by $181 million in VC from investors that include the Chan Zuckerberg Initiative, the startup’s client-base is comprised of more than 200 global companies that pay for the African developers Andela selects to work on projects.

There’s been a drop in the demand for Andela’s services, according to its CEO.

“The vast majority of our customers have stayed with us. But new business has slowed down dramatically,” Johnson told TechCrunch on a call.

“Like any venture-backed startup, we’re built for growth. And so if growth is gonna slow dramatically, your [cost] burden has to come down.”

Andela Nigeria Office

Andela’s Nigeria office (Image Credits: Andela)

The company is also preparing for the possibility of hard economic times moving forward.

“We already know this is going to have a material impact on pace of growth. And as a result of that, we’ve got to make sure we’re prepared to weather the storm,” Johnson said.

The American CEO noted the latest measures weren’t entirely due to external factors. They also connect to a strategic direction change for the company, the details of which will follow, according to Johnson.

Andela’s staff cuts mark the first notable round of layoffs in African tech coming from one of the continent’s best funded and most visible startups (by press volume).

The company launched in 2014 with co-founders who included Nigerian entrepreneur Iyinoluwa Aboyeji and American Christina Sass. Aboyeji has since departed and Sass stepped down as Andela president in 2019, but maintains an advisory role with the company.

In Africa, Andela has offices in Nigeria, Kenya, Rwanda and Uganda. The company cut 400 junior engineers in September, but that announcement came with news it had attained a $50 million run rate as a Series D startup.

News of Andela’s recent layoffs broke late afternoon Lagos time on Tuesday, after CEO Jeremy Johnson announced the cuts on an all-hands staff call.

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