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Africa Roundup: Africa’s tech ecosystem responds to COVID-19

By Jake Bright

In March, the virus gripping the world — COVID-19 — started to spread in Africa. In short order, actors across the continent’s tech ecosystem began to step up to stem the spread.

Early in March, Africa’s COVID-19 cases by country were in the single digits, but by mid-month those numbers had spiked leading the World Health Organization to sound an alarm.

“About 10 days ago we had 5 countries affected, now we’ve got 30,” WHO Regional Director Dr Matshidiso Moeti said at a press conference on March 19. “It has been an extremely rapid…evolution.” 

By the World Health Organization’s stats Tuesday there were 3,671 COVID-19 cases in Sub-Saharan Africa and 87 confirmed deaths related to the virus, up from 463 cases and 8 deaths on March 18.

As COVID-19 began to grow in major economies, governments and startups in Africa started measures to shift a greater volume of transactions toward digital payments and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.

Kenya, Africa’s leader in digital payment adoption, turned to mobile money as a public-health tool.

At the urging of the Central Bank and President Uhuru Kenyatta, the country’s largest telecom, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency.

The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free for three months.

Kenya has one of the highest rates of digital finance adoption in the world — largely due to the dominance of M-Pesa  in the country — with 32 million of its 53 million population subscribed to mobile-money accounts, according to Kenya’s Communications Authority.

On March 20, Ghana’s central bank directed mobile money providers to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.

Ghana’s monetary body also eased KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers, according to a March 18 Bank of Ghana release.

Growth in COVID-19 cases in Nigeria, Africa’s most populous nation of 200 million, prompted one of the country’s largest digital payments startups to act.

Lagos based venture Paga made fee adjustments, allowing merchants to accept payments from Paga customers for free — a measure “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.

In March, Africa’s largest innovation incubator, CcHub, announced funding and engineering support to tech projects aimed at curbing COVID-19 and its social and economic impact.

The Lagos and Nairobi based organization posted an open application on its website to provide $5,000 to $100,000 funding blocks to companies with COVID-19 related projects.

CcHub’s CEO Bosun Tijani expressed concern for Africa’s ability to combat a coronavirus outbreak. “Quite a number of African countries, if they get to the level of Italy or the UK, I don’t think the system… is resilient enough to provide support to something like that,” Tijani said.

Cape Town based crowdsolving startup Zindi — that uses AI and machine learning to tackle complex problems — opened a challenge to the 12,000 registered engineers on its platform.

The competition, sponsored by AI4D, tasks scientists to create models that can use data to predict the global spread of COVID-19 over the next three months. The challenge is open until April 19, solutions will be evaluated against future numbers and the winner will receive $5,000.

Zindi will also sponsor a hackathon in April to find solutions to coronavirus related problems.

Image Credits: Sam Masikini via Zindi

On the digital retail front, Pan-African e-commerce company Jumia announced measures it would take on its network to curb the spread of COVID-19.

The Nigeria headquartered operation — with online goods and services verticals in 11 African countries — said it would donate certified face masks to health ministries in Kenya, Ivory Coast, Morocco, Nigeria and Uganda, drawing on its supply networks outside Africa.

The company has also offered African governments use of of its last-mile delivery network for distribution of supplies to healthcare facilities and workers.

Jumia is reviewing additional assets it can offer the public sector. “If governments find it helpful we’re willing to do it,” CEO Sacha Poignonnec told TechCrunch.

More Africa-related stories @TechCrunch

African tech around the ‘net

Africa turns to mobile payments as a tool to curb COVID-19

By Jake Bright

Africa is using digital finance as a means to stem the spread of COVID-19.

Governments and startups on the continent are implementing measures to shift a greater volume of payment transactions toward mobile money and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.

It’s an option facilitated by the boom in fintech that’s occurred in Africa over the last decade. By several estimates, the continent is home to the largest share of the world’s unbanked population and has a sizable number of underbanked consumers and SMEs.

But because of that, fintech — and startups focused on financial inclusion — now receive the majority of VC funding annually in Africa, according to recent data.

As COVID-19 cases began to grow in the continent’s major economies last week, the continent’s leader in digital payment adoption — Kenya — turned to mobile-money as a public-health tool.

The country’s largest teleco, Safaricom, implemented a fee-waiver on East Africa’s leading mobile-money product, M-Pesa, to reduce the physical exchange of currency in response to COVID-19.

Image Credits: Flickr

The company announced that all person-to-person (P2P) transactions under 1,000 Kenyan Schillings (≈ $10) would be free for three months.

The move came after Safaricom met with the country’s Central Bank and per a directive from Kenya’s President Uhuru Kenyatta “to explore ways of deepening mobile-money usage to reduce risk of spreading the virus through physical handling of cash,” according to a release provided to TechCrunch from Safaricom.

Kenya has one of the highest rates of mobile-money adoption in the world, largely due to the dominance of M-Pesa in the country, which stands as Africa’s 6th largest economy. Across Kenya’s population of 53 million, M-Pesa has 20.5 million customers and a network of 176,000 agents.

M-PESA Sector Stats 4Q 2019 per Kenya’s Communications Authority

With all major providers in Kenya there are 32 million subscribers, which means roughly 60% of the country’s population has access to mobile-money.

Ghana is also using digital finance as a monetary policy lever to reduce the spread of COVID-19

On March 20, the West African country’s central bank directed mobile money providers to waive fees on transactions of GH₵100 (≈ $18), with restrictions on transactions to withdraw cash from mobile-wallets.

Ghana’s monetary body also eased KYC requirements on mobile-money, allowing citizens to use existing mobile phone registrations to open accounts with the major digital payment providers, according to a March 18 Bank of Ghana release.

The trajectory of the coronavirus in Africa is prompting more countries and tech companies to include mobile finance as part of a broader response. The continent’s COVID-19 cases by country were in the single digits until recently, but those numbers spiked last week leading the World Health Organization to sound an alarm.

“About 10 days ago we had 5 countries affected, now we’ve got 30,” WHO Regional Director Dr Matshidiso Moeti said at a press conference Thursday. “It’s has been an extremely rapid…evolution.” 

Source; World Health Organization

By the World Health Organization’s stats Monday there were 1321 COVID-19 cases in Sub-Saharan Africa and 34 confirmed deaths related to the virus — up from 463 cases and 10 deaths last Wednesday.

The country with 40% of the region’s cases is South Africa, which declared a national disaster last week, banned public gatherings and announced travel restrictions on the U.S.

Unlike Ghana and Kenya, the government in Africa’s second largest economy hasn’t issued directives toward mobile payments, but the situation with COVID-19 is pushing fintech startups to act, according to Yoco CEO Katlego Maphai.

The Series B stage venture develops and sells digital payment hardware and services for small businesses on a network of 80,000 clients that processes roughly $500 million annually.

Image Credits: Jake Bright

With the growth in coronavirus cases in South Africa, Yoco has issued a directive to clients to encourage customers to use the contactless payment option on its point of sale machines. The startup has also accelerated its development of a remote payment product, that would enable transfers on its client network via a weblink.

“This is an opportunity to start driving contactless adoption,” Maphai told TechCrunch on a call from Cape Town.

In Nigeria — home to Africa’s largest economy and population of 200 million — the growth of COVID-19 cases has shifted the country toward electronic payments and prompted one of the country’s largest digital payments startups to act.

Lagos based venture Paga made fee adjustments, allowing merchants to accept payments from Paga customers for free — a measure “aimed to help slow the spread of the coronavirus by reducing cash handling in Nigeria,” according to a company release.

Parts of Lagos — which is connected to Nigeria’s largest commercial hub of Lagos State — have begun to require digital payments in response to COVID-19, according to Paga’s CEO Tayo Oviosu .

“We’re seeing some stores that are saying they are not accepting cash anymore,” he told TechCrunch on a call from Lagos.

Cash only Nigeria Paga

Image Credits: Paga

Paga already offers free P2P transfers on its multi-channel network of 24,840 agents and 14 million customers. The startup, that recently expanded to Mexico and partnered with Visa, will also allow free transfers up to roughly 5000 Naira (≈ $15) from customer accounts to bank accounts, to encourage more digital payments use in Nigeria.

Paga’s CEO believes the current COVID-19 crisis will encourage more digital finance adoption in Nigeria, which has shown a cash-is-king reluctance by parts of the population to use mobile payments.

“I think it will help move the needle, but it won’t be the final straw that breaks the camel’s back,” he said.

Time and research will determine if efforts of African governments and tech companies to encourage digital payments over physical currency yield results in halting the spread of COVID-19 on the continent.

It is a unique case-study of mobile finance in Africa being employed to impact human behavior during a public health emergency.

African fintech firm Flutterwave raises $35M, partners with Worldpay

By Jake Bright

San Francisco and Lagos-based fintech startup Flutterwave has raised a $35 million Series B round and announced a partnership with Worldpay FIS for payments in Africa.

With the funding, Flutterwave will invest in technology and business development to grow market share in existing operating countries, CEO Olugbenga Agboola — aka GB — told TechCrunch.

The company will also expand capabilities to offer more services around its payment products.

More than payments

“We don’t just want to be a payment technology company, we have sector expertise around education, travel, gaming, e-commerce, fintech companies. They all use our expertise,” said GB.

That means Flutterwave will provide more solutions around the broader needs of its clients.

The Nigerian-founded startup’s main business is providing B2B payments services for companies operating in Africa to pay other companies on the continent and abroad.

Launched in 2016, Flutterwave allows clients to tap its APIs and work with Flutterwave developers to customize payments applications. Existing customers include Uber, Booking.com and e-commerce company Jumia.

In 2019, Flutterwave processed 107 million transactions worth $5.4 billion, according to company data.

Flutterwave did the payment integration for U.S. pop-star Cardi B’s 2019 performances in Nigeria and Ghana. Those are two of the countries in which the startup operates, in addition to South Africa, Uganda, Kenya, Tanzania, Zambia, the U.K. and Rwanda.

Flutterwave Cardi B Nigeria“We want to scale in all those markets and be the payment processor of choice,” GB said.

The company will hire more business development staff and expand its developer team to create more sector expertise, according to GB.

“Our business goes beyond payments. People don’t want to just make payments, they want to do something,” he said. And Fluterwave aims to offer more capabilities toward what those clients want to do in Africa.

GB Flutterwave disrupt

Olugbenga Agboola, aka GB

“If you are a charity that wants to raise money for cancer research in Ghana, or you want to sell online, or you’re Cardi B…who wants to do concerts in Africa…we want to be able to set up payments, write the code and create the platform for those needs,” GB explained.

That also means Flutterwave, which built its early client base across global companies, aims to serve smaller African businesses, including startups. Current customers include African-founded tech companies, such as moto ride-hail venture Max.ng.

Worldpay partnership

The new round makes Flutterwave the payment provider for Worldpay in Africa.

“With this partnership, any Worldpay merchant in Europe or the U.S. can accept any African payment. If someone goes to pay Netflix with an African card, it just works,” GB said.

In 2019, Worldpay was acquired for a reported $35 billion by FIS, a U.S. financial services provider. At the time of the purchase, it was projected the two companies would generate revenues of $12 billion annually, yet neither has notable presence in Africa.

Therein lies the benefit of collaborating with Flutterwave.

FIS’s Head of Ventures Joon Cho confirmed the partnership with TechCrunch. FIS also backed Flutterwave’s $35 million Series B. US VC firms Greycroft and eVentures led the round, with participation of Visa, Green Visor and African fund CRE Venture Capital.

Flutterwave’s latest funding brings the company’s total investment to $55 million and follows a year in which the fintech venture announced a series of weighty partnerships.

In July 2019, the startup joined forces with Chinese e-commerce company Alibaba’s Alipay to offer digital payments between Africa and China.

The Alipay collaboration followed one between Flutterwave and Visa to launch a consumer payment product for Africa, called GetBarter.

Flutterwave and African fintech

Flutterwave’s $35 million round and latest partnership are among the reasons the startup has become a standout in Africa’s digital-finance landscape.

As a sector, fintech gains the bulk of dealflow and the majority of startup capital flowing to African startups annually. VC to Africa totaled $1.35 billion in 2019, according to WeeTracker’s latest stats.

While a number of payment startups and products have scaled — see Paga in Nigeria and M-Pesa in Kenya — the majority of the continent’s fintech companies are P2P in focus and segregated to one or two markets.

Flutterwave’s platform has served the increased B2B business payment needs spurred by the decade of growth and reform that has occurred in Africa’s core economies.

The value the startup has created is underscored not just by transactional volume the company generates, but the partnerships it has attracted.

A growing list of the masters of the payment universe — Visa, Alipay, Worldpay — have shown they need Flutterwave to do finance in Africa.

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