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.
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 .
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.
That 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 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.”
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.
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.
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.
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.
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/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.
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 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.
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.
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.
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.
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
Africa-focused fintech startup OPay has raised a $120 million Series B round backed by Chinese investors.
Located in Lagos and founded by consumer internet company Opera, OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.
OPay’s $120 million round comes after the startup raised $50 million in June. It also follows Visa’s $200 million investment in Nigerian fintech company Interswitch and a $40 million raise by Lagos-based payments startup PalmPay — led by China’s Transsion.
There are a couple of quick takeaways. Nigeria has become the epicenter for fintech VC and expansion in Africa. And Chinese investors have made an unmistakable pivot to African tech.
Opera’s activity on the continent represents both trends. The Norway-based, Chinese-owned (majority) company founded OPay in 2018 on the popularity of its internet search engine.
Opera’s web-browser has ranked No. 2 in usage in Africa, after Chrome, the last four years.
The company has built a hefty suite of internet-based commercial products in Nigeria around OPay’s financial utility. These include motorcycle ride-hail app ORide, OFood delivery service and OLeads SME marketing and advertising vertical.
“OPay will facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem. We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman Yahui Zhou, said in a statement.
Opera CFO Frode Jacobsen shed additional light on how OPay will deploy the $120 million across Opera’s Africa network. OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority. “That’s not something you do every day. We want to focus our services on things that have high-frequency usage,” said Jacobsen.
Those include transportation services, food services and other types of daily activities, he explained. Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.
Since its Series A raise, OPay in Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.
Beyond standing out as another huge funding round, OPay’s $120 million VC raise has significance for Africa’s tech ecosystem on multiple levels.
It marks 2019 as the year Chinese investors went all in on the continent’s startup scene. OPay, PalmPay and East African trucking logistics company Lori Systems have raised a combined $240 million from 15 different Chinese actors in a span of months.
OPay’s funding and expansion plans are also a harbinger for fierce, cross-border fintech competition in Africa’s digital finance space. Parallel events to watch for include Interswitch’s imminent IPO, e-commerce venture Jumia’s shift to digital finance and WhatsApp’s likely entry in African payments.
The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population — which makes fintech Africa’s most promising digital sector. But it’s becoming a notably crowded sector, where startup attrition and failure will certainly come into play.
And not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.
This places OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.
“The investment makes Interswitch one of the most valuable African fintech businesses with a valuation of $1 billion,” Interswitch said in a release to TechCrunch.
The Visa investment could create the first of two market distinctions for Interswitch — as it shouldn’t change the Lagos based company’s plans to go public.
“An 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 on background.
Interswitch did not reveal the amount of Visa’s investment and would not confirm Sky News reporting Monday that pegged it at $200 million for 20%.
Whatever the exact number, Interswitch’s confirmation of a $1 billion valuation marks another milestone in African tech.
Only one VC backed startup, turned later-stage company on the continent — e-commerce venture Jumia — has generated enough revenue and capital to achieve a ten-figure valuation.
For the near to medium-term, Interswitch could stand as Africa’s sole tech-unicorn, since Jumia’s volatile share-price and declining market-cap since an April IPO have dropped the company’s worth below $1 billion (for now).
Founded in 2002 by Mitchell Elegbe, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly paper-ledger and cash-based economy.
The company now provides much of rails for Nigeria’s online banking system that serves Africa’s largest economy and population. Interswitch offers a number of personal and business finance products, including its Verve payment cards and Quickteller payment app.
From its home-base of Nigeria Interswitch has expanded its physical presence to Uganda, Gambia and Kenya .
Interswitch also sells its products in 23 African countries and launched a partnership in August for its Verve cardholders to make payments on Discover’s global network.
Visa and Interswitch are touting the equity investment as a strategic collaboration between the two companies, without a lot of detail on what that will mean.
“The partnership will create an instant acceptance network across Africa to benefit consumers and merchants,” was the characterization offered in a press release.
Interswitch’s imminent IPO has been delayed for several years. CEO and founder Mitchell Elegbe told TechCrunch, “a dual-listing on the London and Lagos stock exchange is an option on the table,” in a January 2016 call.
In subsequent years, Elegbe and other Interswitch executives named Nigeria’s recession as a reason for the delay.
A number stories have surfaced, including Bloomberg News reporting in July, that the company was poised to go public on the LSE.
TechCrunch’s source close to the matter offered the latest indication that Interswitch will list on a major exchange by mid-2020.
With possible exits for backers Helios Investment Partners, TA Investments and IFC, Interswitch’s unicorn status and pending IPO could create more momentum for startup investment in Africa. VC to the continent has grown significantly over the last 5 years, but stands at just over $1 billion annually, per Partech numbers.
Interswitch could also be in a stronger position to offer more capital directly to the continent’s fintech startups by reviving its ePayment Growth Fund. The venture arm made two investments in 2015, but then went largely quiet.
Nintendo has a long history when it comes to exercise-driven games. I’m dating myself, but I can say I remember playing Track & Field on NES with the Power Pad. How far we’ve come! Ring Fit Adventure is a full-body workout for grown-ups, but fun, gentle, and ridiculous enough to forget it’s exercise.
The game and accessories were announced in September, coming as a complete surprise even considering Nintendo’s constant but hit-and-miss attempts at keeping its players healthy. What really threw people off was that this game actually looked like… a game. And so it is!
Ring Fit Adventure has you, the unnamed and (naturally) mute protagonist, journeying through a series of worlds and levels chasing after Dragaux, a swole dragon who’s infecting the land with… something. Maybe he’s not wiping down the equipment afterwards. Come on, man.
Playing with these virtual versions of the controllers gives you a real feel for how solid the motion detection is.
Anyway, you do this by using the Joy-Cons in a new and strange form: the Ring-Con and leg strap. The latter is pretty self-explanatory, but the ring must be explained. It’s a thick plastic resistance ring that you squeeze from the edges or pull apart. It detects how hard you’re squeezing it through the other Joy-Con, which slots into the top. (The strap and ring grips are washable, by the way.)
The two controllers combined can detect all kinds of movements, from squats and leg lifts to rotations, presses, balancing, and yoga poses. You’ll need them all if you’re going to progress in the game.
Each level is a path that you travel down by actually jogging in real life (or high stepping if you’re in goo), while using the Ring-Con to interact with the environment. Aim and squeeze to send out a puff of air that opens a door or propels you over an obstacle, or pull it apart to suck in distant coins. Press it against your abs to crush rocks, do squats to open chests — you get the idea.
I haven’t gotten this one yet, but it looks handy. I could use a stronger arm-based multi-monster attack.
Of course you encounter enemies as well, which you dispatch with a variety of exercises targeting different muscle groups. Do a few arm presses over your head for some basic damage, or hit multiple enemies with some hip rotations. Each exercise has you do a number of reps, which turn into damage, before defending against enemy attacks with an “Ab Guard.”
The ring and leg strap seem almost magical in their ability to track your motion in all kinds of ways, though some are no doubt only inferred or fudged (as when you lift the leg without the strap). A missed motion happened so rarely over thousands of them that I ceased to think at all about it, which is about the highest compliment you can give a control method like this. Yet it’s also forgiving enough that you won’t feel the need to get everything right down the millimeter. You can even check your pulse by putting your thumb on the IR sensor of the right Joy-Con. Who knew?
As you progress, you unlock new exercises with different uses or colors — and you soon are able to fight more strategically by matching muscle group coloring (red is arms, purple legs, etc) with enemies of the same type. It’s hardly Fire Emblem, but it’s also a lot more than anyone has every really expected from a fitness game.
The red guys are like, “yeah… do him first.”
In fact, so much care and polish has clearly gone into this whole operation that’s it’s frequently surprising; there are so many things that could have been phoned in an not a single one is. The exercises are thoughtfully selected and explained in a friendly manner; the monsters and environments show great attention to detail. There’s no punishment for failure except restarting a level — the first time I “died,” I expected a little sass from my chatty companion, Ring, but it just popped me back to the map with nary a word.
Throughout is a feeling of acceptance and opportunity rather than pressure to perform. You can quit at any time and it doesn’t chide you for abandoning your quest or not burning enough calories. If you decide not to do the warm-up stretch, Tabb just says “OK!” and moves on. When you perform a move, it’s either “good” or “great,” or it reminds you of the form and you can try again. Whenever you start, you can change the difficulty, which I believe is reps, damage, and other soft counts, since it can’t increase the resistance of the Ring-Con.
There’s no pressure to change your body and no gendered expectations; Your exercise demonstration model/avatar, Tabb, is conspicuously androgynous. Your character is a pretty cut specimen of your preferred gender, to be sure. And Dragaux himself is a sort of parody of oblivious, musclebound gym bunnies (“He’s working out while planning his next workout,” the game announced one time as he skipped an attack to do some bicep curls). But even he, Ring mentions at one point, used to be very insecure about his body. Importantly, there’s nothing about the game that feels targeted to getting a certain type of person a certain type of fit.
I’m not a trainer or fitness expert, but so far the variety of exercises also feels solid. It’s all very low-impact stuff, and because it’s resistance ring and body weight only, there’s a sort of core-strengthening yoga style to it all. This isn’t about getting ripped, but you’ll be surprised how sore you are after taking down a few enemies with a proper-form chair pose.
If you don’t want to play the adventure mode, there are minigames to collect and short workouts you can customize. Honestly some of these would make better party games than half the stuff on 1-2-Switch.
As I’ve been playing the game and discussing it with friends, I found myself wanting more out of the game side. I’m hoping Ring Fit Adventure will be a success so that Nintendo will green light a new, deeper version with more complex RPG elements. Sure, you can change your outfit here for a little extra defense or whatnot, but I want to take this concept further — I know the fundamentals are sound, so I’d like to see them built on.
It feels like until now there have been few ways to really gamify fitness, except the most elementary, like step tracking. The two separate motion controllers and the smart ways they’re used to track a variety of exercises really feel like an opportunity to do something bigger. Plus once people have bought the accessories, they’re much more likely to buy matching software.
My main criticisms would be that it’s a bit limiting at the beginning. There’s no choice to, for example, prioritize or deprioritize a certain type of exercise. I could probably stand to jog more and do arm stuff less, and I dreaded having to resort to squats for the first few worlds. And the constant instruction on how and when to do everything can be wearing — it would be nice to be able to set some things to “expert mode” and skip the tutorials.
The game and accessories will set you back $80. If you consider it simply as buying a game, it’s an expensive gimmick. But I don’t think that’s the way to think about it. The target audience here is people who likely don’t have a gym membership, something that can cost $50-$100 a month. As a fun and effective fitness tool that does what it sets out to do and does so in a praiseworthy way, I think $80 is a very reasonable asking price.