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The Fintech Unicorns of The Federal Republic of Nigeria


Celebrations are in order because Nigeria turned 61 on 1st October 2021. In the “KINGS of Africa’s Digital Economy”, I recognized Nigerians for their hustle and that hustle has to date produced four of the leading fintech unicorns in Africa namely, INTERSWITCH, FLUTTERWAVE, CHIPPER CASH and OPAY. You can make that five if you count JUMIA which was the first billion dollar plus valued company (AKA a unicorn) in Nigeria.

ANDELA is now the sixth, it begun in 2014 as a training platform for junior developers in Nigeria, expanding into other African cities and now a marketplace for remote technical talent for US companies. On September 29th, 2021, ANDELA announced a $200M series E raise at a $1.5B valuation making it the latest unicorn from Nigeria. ANDELA was co-founded by Iyinoluwa Aboyeji (AKA “E”) and Jeremy Johnson who is now the CEO after E left to co-found FLUTTERWAVE making him the only Nigerian tech founder with two unirons under his belt. E is now the co-founder of FUTURE AFRICA which is democratizing access to early-stage capital for startups in Africa.

On 17th September 2021, news came out that IHS TOWERS, Nigeria’s leading Telecoms Tower Provider and the fourth largest in the world had filed papers with the Securities and Exchange Commission (SEC) to go public on the New York Stock Exchange. The expected valuation of the business was around $10 billion which would make it the largest Initial Public Offer (IPO) in African telecom history. MTN Group which owns 29% of the company valued at $2.9 billion is looking to sell down some of its shares as part of the listing.

PAGA, a payment processing company in Nigeria (similar to PAYPAL) started by Tayo Oviosu in 2009 is on track to potentially be the next unicorn as it processed $2.3 billion worth of transactions in 2020 and $8 billion during the past four years. The company is now expanding into Ethiopia and Mexico as part of its global growth plan. Another future unicorn is CNG TRANSFER founded during the pandemic by Emmanuel Tochi and Vincent Omulo, a Nigerian and Kenyan, respectively. The startup’s flagship product is www.Transfy.io – a cross boarder intra-African money transfer platform built on blockchain enabling Africans to transparently move money from one country to another at no cost. Within a year of launch they have already processed 100 million of Kenyan Shillings in Kenya alone while operational in Nigeria, Zambia, Botswana, South Africa, Rwanda and Ghana.

Nigeria doubles down as the most populous country and the largest economy on the continent. At the same time, it has not yet taken to Mobile Money like Kenya and Ghana even though Sub- Saharan Africa leads the world when it comes to Mobile Money according to the Global System Mobile Association (GSMA). In August 2021, the Central Bank of Nigeria (CBN) froze the bank accounts of Nigerian fintech platforms RISEVEST, BAMBOO, TROVE and CHAKA for six months. In the same month, the National Information Technology Development Agency (NITDA) of Nigeria fined online lending company, SOKO LOANS N10 million ($25,000) for various infractions against its users including invasion of privacy and the “erosion of trust in the digital economy”. This suggests that the established institutions are threatened by these new players because the measures being taken on these regulatory infractions are too severe.

Meanwhile MTN GROUP has gone into a partnership with FLUTTERWAVE allowing businesses that integrate Flutterwave in Cameroon, Côte d’Ivoire, Rwanda, Uganda and Zambia to receive payments via MTN’s Mobile Money (MoMo) with plans to expand this into other key markets across the continent. This seems to suggest that MTN is going to expand its MoMo efforts in Nigeria through the partnership.

In July the CBN had said that it will launch the pilot scheme of its digital currency, the “eNaira” on October 1st, 2021. eNaira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira. It serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments . The eNaira is going to force the local banks to start looking at fiat money and crypto currencies differently. This coincides with an interesting development in the banking sector where seven of the 23 CEOs of Nigerian banks are now female. Gender balance and equity has been an important topic in the male dominated banking sector recently so it is a welcome development to see Nigeria embrace this shift which will eventually serve the banking sector better. This though does not preclude the banking sector from the challenges presented by the fintechs who are busy eating their lunch. There is a tussle between the fintechs and the commercial banks with the regulator leaning towards the later. This seems to be playing out in the proposed realignment of the outdated 2007 NITDA Act which seems to have licenses, fees, fines and sentences for startups. Would the female leaders of these banks come up with a solution? Time will tell.

The Fintech City that is Nairobi


Nairobi is the leading Fintech ecosystem city in Africa according to the 2021 Global Fintech Rankings published on 8th July 2021 in which it jumped 26 places to the 37th position globally beating both Lagos and Accra. Kenya’s President, His Excellency Uhuru Kenyatta stated at a UK summit that “Nairobi International Financial Centre (NIFC) has come of age to be the leading financial hub on the continent”. Kenya is making a major incursion to position itself as the financial hub of Africa on the back of its fintech advantage as President Uhuru Kenyatta signed a $184 million deal with Dominic Raab, Secretary of State for Foreign, Commonwealth and Development Affairs and First Secretary of State of the UK during his three-day official visit to that country. Kenya’s leadership of the Fintech world in African gives it the impetus to be an international financial hub but the realization of that requires Nairobi to implement critical reforms that would drive growth and attract the relevant actors.

Last month, I wrote about how Ghana is leading the charge in Africa when it comes to “Fintechs, SMEs and Digitization” but as it turned out Kenya is the kingpin when it comes to Mobile Money. 87% of Kenya’s Gross Domestic Product (GDP) is held in transactions via mobile wallets and phones compared to 82% of Ghana’s GDP according to the Five Strategies for Mobile-Payment Banking in Africa report by Boston Consulting Group (BCG). The report found that after China, Kenya and Ghana have the second and third highest mobile payment usage in the world. The two countries accounted for a large chunk of the whopping $15T to $20T made in mobile transactions last year. According to Max Cuvellier of The Big Deal, Kenya also led in Africa VC funding in 2020 in terms of the per capita raised as depicted in the graph below.

Even though the World Bank recognized Ghana as the fastest-growing mobile money market in Africa over the last five years, I am focusing this essay on Kenya and the fintech city that is Nairobi. Next month I will focus on Lagos, Nigeria, followed by South Africa and then Cote d’Ivoire. This is an indirect way of taking the temperature of the KINGS countries I postulated in 2013 would be leading the digital economy in Africa. I later doubled down in my 2016 book chapter under the auspices of “Digital Kenya – An Entrepreneurial Revolution in the making” edited by Dr. Bitange Ndemo and Dr. Tim Weiss.

Back in 2007, Kenya was no startup nation, it was one of the few countries in the world without a submarine fiber cable connecting it to the rest of the world. Submarine fiber cables provide high speed backbone connection to the Internet. That year, Safaricom, introduced MPESA (Mobile PESA – PESA means money in Swahili) a mobile money innovation that allowed one to convert airtime value into electronic currency via a Short Messaging System (SMS). That same year, in the heat of the country’s election crisis, a Public Private Partnership (PPP) was setup by Dr. Bitange Ndemo who was Permanent Secretary at the Ministry of Information and Communications Technology (MICT) to launch the first submarine fiber cable project under the auspices of The East Africa Marine Systems (TEAMS). At the same time Erik Hersman, Ory Okolloh, Juliana Rotich and David Kobia joined forces to develop a platform to spot and report the election crisis and they called it Ushahidi which means “witness” in Swahili.

MPESA became popular during the election crisis because movement was restricted, banks were closed, and people needed an alternative way to transfer money. Since MPESA was the only option, this simple and unique innovation that originally started in Indonesia took off and became very popular in Kenya. This was made possible by the no objection stances that the Central Bank of Kenya (CBK) took to the innovation because of the lobbying that came from Safaricom but most importantly the fortitude of government officials like Stephen Nduati Mwaura who is recognized as the Father of MPESA. Mr. Mwaura was the leading official at the CBK who led the process to establish the no objection to MPESA.

Dr. Ndemo was the leading official at the MICT who lead the process for the establishment of the TEAMS submarine cable, in which I was an active participant, in 2007. The TEAMS cable went live in 2010 together with another private sector led cable SEACOM both built on the Open Access Model that I had developed with Russell Southwood and Anders Comstedt under the auspices of Spintrack AB for the WorldBank in 2005. Mr. Mwaura is to MPESA what Dr. Ndemo is to TEAMS. MPESA is the foundation of Kenya’s fintech and TEAMS is one of the rails on which that fintech innovation rides into the global information superhighway.

Ushahidi was the third successful innovation from 2007 that had no government involvement except the grit and fortitude of Erik, Juliana, Ory and David who took it global. Erik, Juliana, Ory and David needed a “home” for Ushahidi as they had to develop it from coffee shops around the city due to the absence of innovation hubs, so they decided to setup iHub (Innovation Hub) which was the first innovation hub in Kenya. The success of MPESA, TEAMS, Ushahidi and iHub laid the foundation for Kenya becoming a startup nation (aka Silicon Savannah) and Nairobi a leading Fintech city. In 2015, President Obama brought the Global Entrepreneurship Summit to Nairobi in recognition of that. Today MPESA is the biggest fintech in Africa with 50 million active monthly users although Safaricom’s dominance of the Kenyan market as a significant operator has long term negative implications for competition and a free market economy. Innovation hubs have become the new normal in Nairobi and have spread across the continent such that today there are about a thousand of them – these are the spaces in which digital innovations are being created.

Below are two of those fintech innovations that are making Nairobi the leading fintech city in Africa.
Cellulant is a leading Pan African fintech focusing on digital payments founded in 2002 by Ken Njoroge and Bolaji Akinboro – starting originally as a ringtone business. It has a payments platform called Tinng, which makes it easy for merchants and shoppers to collect and make payments with different localized payment methods in different countries. Cellulant boasts of offices in 18 countries, 35 partnerships with the largest mobile money operators across the continent and provides mobile banking and payments to 120 banks. It processed over $150m transactions valued at $8bn in 2020 and claims to process 12% of Africa’s digital payments. After having raised a total of about $55m to date, Ken stepped down and a new generation led by Akshay Grover the current CEO has taken over the reins charting a new path for the future.

SaveApp is the latest fintech in the Nairobi ecosystem as it only launched its flagship product Ukonga on 1st September 2021. Founded by Aziz Omar a second time founder, SaveApp’s flagship product Ukonga allows you to round up your spare change at any transaction point and save it for the future. They have partnered with Octagon Africa, UBA and Naivas Supermarkets to make this a reality. The savings culture in Africa is almost non-existent so the idea that Ukonga would enable the user to start saving at a push of a button is revolutionary in Africa. This innovation is not unique but the execution of it charts the path for Nairobi and Kenya to bring another world class company to the global stage as the leading fintech city in Africa.

Fintechs, SMEs and Digitization in Africa – Ghana leads the charge


Three leading Ghanaian fintechs; Hubtel, ExpressPay and IT Consortium joined forces to build Ghana government’s portal https://www.ghana.gov.gha digital services and payment platform for Small Medium Enterprises (SMEs), Startups and citizens to access government services at the click of a button. Despite being competitors, these tech ventures saw the need to collaborate as a unified front for the Ghana government to entrust them with the building of a national asset in a revenue sharing arrangement between them and the government, enabling a conducive environment for the delivery of essential government services to consumers and businesses. This represents a constructive case study on the Public Private Partnership (PPP) needed to accelerate the digitization agenda in Africa with Ghana setting the pace. The portal currently processes payments for government services offered by the Passport Office, Ministry of Foreign Affairs & Regional Integration, Lands Commission, Food and Drugs Authority, National Service Secretariat, National Information Technology Authority, Registrar General’s Department, and National Schools Inspectorate Authority. The Ghana.gov platform also serves the digitization and revenue-collection needs of other Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs).

As of mid July, 2021, about 624,000 users have logged in to pay for 37 government services, comprising taxes, levies, royalties and stamp duties, directly into Ghana Revenue Authority (GRA) accounts.
Ghana’s Vice President, His Excellency Dr. Mahamudu Bawumia who launched the portal on 14th July 2021, opined that “Transactions will be recorded instantly avoiding any bribery and corruption regarding the quoted service.” According to Dr. Bawumia, “It is estimated that about 10 to 15 percent of revenue is lost through inefficiencies, theft or other accounting schemes. Going digital means, we can improve our revenue collection by an estimated $526 million annually.” Ghana will also derive expense savings of more than $7 million a year from the digitization mechanism, according to government projections. The Minister of Finance, Ken Ofori-Atta has recommended national awards for the three-tech firm at the launch saying, “if I had any power, I am sure the Order of the Volta will be conferred on each of them”.

A digitized government creates an enabling environment for a digitized private sector, research, academia, civil society, and citizens. Ghana, host of the African Continental Free Trade Area (AfCFTA) Secretariat, is leading this charge by awarding the national identification project to an African company, Margins Group. Margin was started in 1990 by Ghanaian entrepreneur, Moses Baiden and has been in the forefront of identity management. IT Consortium one of the innovative home-grown firms that built the Ghana.gov portal and recently celebrated its 20th anniversary, was founded by Ebow Annamuah Mensah and was later joined by Joojo Esua-Mensah, Ato Yawson, Franklin Eleblu and Romeo Bugyei, who is now the CEO. Hubtel, which was founded by Alex Bram, Ernest Apenteng and Leslie Gyimah in 2005 (and were later joined by Kwadwo Seinti as CTO), is a leading Fintech and e-Commerce platform. The company started as SMSGH selling Short Messaging System (SMS) for corporate communication. In 2012, Hubtel was listed by Forbes as one of the leading startups in Africa. That same year, ExpressPay was started by Curtis Vanderpuije, Kodjo Hesse, Kwei Hesse and William Tetteh as an eCommerce marketplace and a payment gateway provider in Ghana.

Last month, Hubtel partnered with MTN Ghana to help accelerate digitization of the informal sector through the provision of digital tools such as a year of free connectivity, access to Hubtel e-commerce smartphone, etc via the MTN Business SME campaign launched under the theme ‘MTN Business, Your Partner for Growth’. This constructive collaboration between South African telecom giant MTN and Hubtel, a leading fintech firm with operations in Kenya and South Africa, is a remarkable example of Africa’s growing intra-Africa trade, collaboration on innovation and digitation of businesses, worth replicating in other African countries. The African Guaranty Fund (AGF) has woken up to the fact that “SMEs are the Coca Cola and Nestle of tomorrow” so they have given lending facilities to Equity Bank and Rawbank to on-lend to the SMEs for their growth and digitization. At a special edition of the MTN Business Executive Breakfast Series, hosted on July 8, 2021 as part of events headlining the company’s 25th anniversary, I made the case that an Africa-wide integration of digital strategies by governments is critical for the Africa Continental Free Trade Area (AfCFTA) to work. Governments do not only need to digitize but they must simultaneously integrate these approaches to ensure interoperability, transparency and inclusivity.

The Bank of Ghana (BoG) through the Ghana Interbank Payments and Settlement Systems (GhIPSS) introduced the Universal Quick Response (QR) Code payment solution last year to simplify merchant payments and reduce the use of cash. The QR Code has been made available to banks and payment service providers, as well as SMEs to enhance business transactions. As an additional step, the BoG has also initiated processes for a pilot central bank digital currency to further move the Ghanaian economy towards a cash-lite environment. According to Dr. Maxwell Opoku-Afari, First Deputy Governor of the Bank, “We anticipate that the Bank’s Central Bank Digital Currency (CBDC) project which would be piloted from this September in a sandbox environment would further advance financial inclusion, promote the efficiency and stability of the payment system, and foster competition in the financial sector.” He continued, “Digital Currency is part of the central bank acknowledging the need for digital payment and digital delivery of financial services, this is formally to get into that space and be able to provide a platform on which we can add more value to digital transactions”. Emphasizing that ” mobile money transactions are not backed by cash and hence limits the value addition,” Dr. Opoku-Afari asserted that the central bank’s digital currency is fiat money, that it is cash on its own so that financial institutions like banks and fintechs will be able to create value addition on the digital cash. He however said “Cryptocurrency is not yet legal in Ghana and not regulated by the central bank. That technology is very laudable, and we have setup a team that is studying it”. Adding that the Central Bank’s approval for the use of the digital currency by Ghanaians will be determined by how successful the piloting of the CBDC goes. Many African economies have expressed their desire to issue electronic versions of their respective national fiat currencies. However, apart from Nigeria, which announced the launching of its digital currency, due to debut on October 1, 2021, in response to Ghana’s , no other African country has taken demonstrable steps toward piloting a CBDC. In essence, Ghana is leading the path for digitization on the continent and until the rest of the continent is digitized and fully integrated, Ghana’s leadership may be in vain – hopefully not.

Are Mobile Operators the next Fintech Startups?


Africa’s leading Mobile Network Operators (MNOs), MTN, Vodacom and Safaricom, have recently made bold plans to venture into the increasingly dynamic world of fintech. On 23rd June 2021, Safaricom launched its super app, which creates an ecosystem of mini apps from the network operator as well as third party apps that feed off the super app. A month prior to this development, Safaricom, the leading MNO in Kenya announced plans to release an Application Protocol Interface (API) for the super app to enable third-party app developers to build more products and services on top of the super app. This means the super app is going to be an app store that consolidates the reach of Safaricom.

In May, MTN also announced plans to become a tech platform to rival the likes of Apple and WeChat as part of their Ambition 2025 which is currently being implemented. MTN, Africa’s leading telecom operator, is developing its Ayoba messaging platform into a super app that would include its Mobile Money (MoMo) application and video and music streaming services, largely inspired by the international success of WeChat, a powerful multi-purpose messaging, social media and digital wallet app. In April, Vodacom CEO sat down with CNN to discuss plans for building a super app in South Africa in partnership with Alipay. The new service will be integrated with Vodapay to create a financial services super app that will let users pay utility bills, transfer money and get connected with online merchants and suppliers. Although the partnership with Alipay was announced last year during the pandemic to bring the much-needed digital services to consumers under lockdown, it has taken almost a year for them to bring the service to life. This suggests that becoming a fintech startup is easier said than done.

In March, Liquid Telecom with operations in different African countries rebranded to Liquid Intelligent Technologies to show that it is now a one-stop-shop technology group. Very soon, the company would also launch a super app to allow consumers to access all its services through one platform. Although Orange, another MNO with operations in 18 African countries has not announced a super app, the company’s launching of Orange Bank Africa last year, in addition to their already existing Orange Money service, seems to play into the super app narrative. Airtel Africa has also not announced a super app although they had stella performances last year in the MoMo and data business.

Super apps act as a single point of entry for multiple consumer functions. The model emerged in Asia and allows a user to access a range of services — banking, ride-hailing, communication, hiring, trades, people, etc — all from within one app. Back in 2019, Cellulant from Kenya, a leading African fintech firm, also announced plans to launch a super app called Tingg. Super apps are trending not only in Africa. There is a global race to create the next super app that would rival the likes of WeChat, which has a billion users and now estimated to offer more than one million mini programs created by third parties. The other main player is Ant Group’s Alipay, which also has more than one billion users and offers 120,000 mini apps by third parties.

WeChat, owned by Tencent, the most valuable publicly-traded company in China, began making inroads in Africa in 2013 via South Africa’s Nasper, an early strategic investor in WeChat’s parent company. WeChat’s foray into Africa failed, with the company quietly exiting in 2017. Given that WeChat’s partnership with Nasper did not guarantee success, time would tell whether Alipay’s partnership with Vodacom would be successful. In 1994, Naspers, Koos Bekker and other partners launched MTN, which is currently Africa’s largest MNO. Major MNOs are all eager to become nimble fintech startups to compete with the agile young tech ventures, which begs the question, can old dogs learn new tricks? The answer could be yes because the MNOs have led the innovation in MoMo dating back to 2007, when Safaricom ushered in M-Pesa, a pioneering MoMo app into the Kenyan market, leading to a remarkable digital payment and mobile banking revolution across the entire African continent.

Today, all major MNOs have MoMo operations, which has become their new cash cow to the detriment of the banks. In some markets such as East Africa, the MNOs, including Safaricom, are operating “banking services” directly competing with traditional banks. In Nigeria, this has not been the case until the 3rd quarter of 2020, when the Central Bank of Nigeria (CBN) issued final approval to Glo, 9Mobile and Unified Payment subsidiaries to operate as Payment Service Banks (PSBs). In parts of West Africa, the banks, including Fidelity Ghana and Ecobank Ghana, managed to lobby the regulators to “force” the MNOs to work with them to deliver those banking type services. Back in East Africa, the question has been asked, “Is M-PESA transforming into a bank” with the launch of its super app? This question has led regulators and public policy makers in some countries to require the MNOs to separate their MoMo operations (classified as fintech) from their mainstream voice business. In some markets, the companies are also required to make some ownership of their fintech ventures available to the public through listing on the local stock exchange, just as they are mandated to list their voice businesses. In Kenya, there is a bill before parliament requiring the separation of M-PESA from Safaricom as a standalone fintech business.

The MoMo operations of the MNOs made the most significant returns under the pandemic because majority of transactions were done through their networks. Nigeria recorded $428B worth of e-transactions in 2020, 42% higher than in 2019. In Ghana, MoMo transactions outstripped cheques by $40B in the first quarter of 2021. This sent shock waves to the Ghanaian banking sector such that the banks are now forging collaborations as they fear for their future. In other news, Ghana is edging towards a state-backed digital currency to mitigate against the volatility of unregulated digital currencies, such as bitcoin (BTC). The value of M-Pesa transactions in Kenya grew by 32.9% year-on-year to $82B in 2020, whilst the volume of M-Pesa transactions grew by 14.9%, to 5.12 billion transactions. Orange’s MoMo service also saw an 18.9% increase in active users to total 19.6M customers by the end of June 2020. In Kenya, MoMo payment rate represents 87% of the country’s GDP; in Ghana the figure is 82%. These are the highest ratios in the world after China where mobile transfers represent 125% of GDP (this includes person-to-person transactions not included in GDP calculations).

On the contrary, South Africa where Vodacom and MTN reside, have not seen that much success with mobile money mainly because that country has a solidly entrenched banking system, with 70% of adults having a transaction account. Earlier attempts by both operators to introduce MoMo in South Africa failed but in February 2020, MTN relaunched its MoMo service with UBank and in December 2020, with the mobile telecom giant claiming 2 million new customers. Vodacom’s new Alipay app is their second attempt to carve out a fintech niche in South Africa, whilst Discovery Bank and Tyme Bank have launched exclusive digital offerings without the telcos. Things are clearly playing out quite differently in Southern Africa. Given that the MNOs are in a fist fight with the banks with regards to fintech, would the banks also seek to become innovative mobile startups now that the MNOs are becoming fintech startups?

Big Tech in African Fintech


I ended my May 2021 essay with the hypothesis “…leading fintechs might turn around and start acquiring the banks” and, sure enough, on the 12th of May 2021, the Competition Authority of Kenya in a gazette notice approved the acquisition of 84.89% stake in Century Microfinance Bank by Branch International Limited – a leading global fintech with operations in Kenya. One of the signs of a maturing ecosystem is home grown ventures mature into unicorns, gazelles and zebras, increased mergers and acquisitions and the entry of global tech giants hungry for a piece of the action – the subject of this essay and the final in this series to end the second quarter.

Whilst the Branch acquisition was unexpected, it was unsurprising when Twitter announced on 14th April 2021 that they are setting up their Africa HQ in Ghana. On the very same day Amazon announced an investment of $280M in their new 70,000 square meter office complex in Cape Town as their African HQ. Even though Amazon has been in SA since Amazon Web Services (AWS) first established its presence in Cape Town in 2004 and later opened a Joburg office in 2015, this is the biggest investment in an African HQ by a tech company. They subsequently partnered with the South African Post Office (SAPO) to establish the Amazon model in Africa. In February 2021, global music streaming giant Spotify announced, it is now available in more than 80 emerging markets including Ghana, Kenya, Nigeria, Tanzania and Uganda. Even though Facebook has had an office in SA since 2015, Mark Zuckerberg’s visit to Nigeria in 2016 led to the opening of their second Africa office in Lagos in 2021. Amidst the pandemic last year came the big news, Stripe acquired 100% of Paystack a leading African Fintech – this was the strongest signal that big tech in coming into African Fintech. This is because the African fintech sector is heating up and big tech does not want to be left out.

In some ways, these could actually be seen as late comers to the party because even though some have been around much longer, in 2007, Google setup it first African office in Kenya hiring now Minister of ICT, Joe Mucheru to lead the charge even though it had some sales guys in SA dating back to 2006. Google has since built an extensive presence in Africa. Microsoft has also had presence in South Africa dating three decades back but in 2013, it launched its Microsoft4Afrika initiative in Kenya to start investing in start-ups, SMEs, partners and youth.

In 2019, Microsoft launched a $100M initiative to establish development centers over the next five years starting with Kenya and Nigeria and recently announced the establishment of two data centers to bring services closer to its users. That puts Microsoft in the forefront of initiatives aimed at the African tech ecosystem. In 2013, the International Business Machines (IBM) Corporation also opened a $100M research facility in Kenya followed by Oracle making its first Africa acquisition of Nimbula, a provider of private cloud infrastructure management software which was how Oracle entered the cloud business. In the same year, Chinese tech giant, Tencent, opened an Africa office in South Africa through Naspers (their shareholder) to operate WeChat Africa to somewhat unsuccessfully compete with WhatsApp. Tencent is now primarily responsible for the operations of the JOOX music entertainment app. Back in 2001, Naspers made a $34M investment in China’s Tencent Holdings for 33.3% which is now valued at more than $175B so Tencent could afford to have an Africa office. In May 2021, Dutch listed technology investor Prosus NV increased its stake in Naspers to nearly 50% in a share swap deal that will move part of their holdings in China’s Tencent to Amsterdam.

Even though Alibaba, another Chinese Internet giant does not yet have a formal Africa operation, it’s founder Jack Ma has made periodic visits to Africa since 2017 suggesting that they may setup an office soon especially since he stepped down to focus on philanthropic activities on the continent. The latest evidence of this is their partnership with Flutterwave. In 2019, Chinese owned Opera browser, launched Opay into the Nigerian market to make its debut into Africa with a $50M investment. Opay is now raising $400M at a $1.5B valuation – joining the unicorn club. In 2008, another Chinese tech manufacturer, Transsion opened offices in Nigeria and later other countries for the African market with a focus on low-cost phone brands like Tecno, Itel, Infinix, etc some of which it now manufactures in Ethiopia. It has recently setup Transsnet in a joint venture to focus on creating an application layer on top of their smart phones – for example, Boomplay for music and Palmpay for payments.

Finally, we have also seen the trend of the CEOs of some of these big tech companies visiting the continent to ascertain things for themselves. So far about eight of them have made multiple trips including then Google Chairman Eric Schmidt’s visit in 2013 to Kenya following which he wrote a detailed observation. With this much attention on Africa as the current nexus of global tech innovation, is it possible that some of the new Special Purpose Acquisition Companies (SPACs) that have raised soo much capital through the public markets (such as Tidjane Thiam’s Freedom Acquisition I Corporation) would also start looking at acquisition targets in Africa? especially when leading fintechs like Flutterwave have made it known that they want to go public.

The Unicornization of African Fintech


The first quarter of 2021 ended on a great note as two African fintech businesses gained unicorn status, a rare fit amidst a raging global pandemic which is finally being aggressively tackled by the speedy supply of much-needed vaccines. Such is the African story – a trail of surprises in the midst of uncertainty. On 18th March 2021, Airtel Africa announced it had received a $200M investment from TPG’s Rise Fund at a valuation of $2.65B making it the latest African unicorn. Exactly a week before, March 10th, 2021, Flutterwave from Nigeria also announced a $170M investment from Avenir Growth Capital, Tiger Global Management and others at a billion-dollar valuation. In the tech world hitting a billion-dollar valuation is a big deal – you earn the name Unicorn, a mythical animal that represents the statistical rarity of successful ventures coined in 2013 by Aileen Lee of Cowboy Ventures. Most global technology companies strive for unicorn status preferably before they go public. As of March 2021, there are about 614 unicorns globally with a total valuation of $20041B according to CB Insights. Given that the Africa tech ecosystem is maturing we are now seeing the manifestation of this mythical animal which is the subject of this essay to start the second quarter of a defining year.

These developments brought into sharp focus the uniconization of African fintech, ignited the debate whether unicornization abroad is the way to go for African tech ventures or whether according to Marieme Diop of the Dakar Network Angels, the focus should be on Gazelles (i.e. companies valued at $100M with $15M to $50M in revenues listed on the local stock exchanges) to boost the African market and create liquidity at home? There is yet a third animal in the African kingdom introduced by Keet van Zyl of Knife Capital who argues that Zebras are less spotted profitable sustainable businesses that have an impact stripe – they solve really meaningful problems. In my view we are going to have the manifestation of all three and even more as different entrepreneurs and investors pursue different approaches. After all Africa is large enough to accommodate many unicorns, gazelles, zebras, etc. What is important to all businesses is the need to build strong unit economics at the foundation as Reid Hoffman’s blitzscaling is now giving way to Tim O’Reilly argument. More importantly the recent crush of WeWork has everyone going back to the fundamentals – positive unit economics. This is more so apparent in the African context given the dynamics and challenges of operating in our markets, which led to the construct of the zebra and gazelle. Not so long ago the unicorn was a sought-after mythical construct in the African context, which has now been found.

With the addition of Airtel Money and Flutterwave, Africa now has six fintech unicorns making fintech the leading sector in Africa’s digital economy. The other four are Fawry, a local Egyptian payment company that listed on the Egyptian Stock Exchange in 2019, that started as a gazelle and became a unicorn last year at the height of the pandemic. This is a strong case study that highlights a firm’s ability to start as a gazelle (or zebra) and become a unicorn. Unicornization through acquisitions was successfully demonstrated by Vodacom and Safaricom that completed the acquisition of MPESA, which has more than 41.5M customers across Kenya, Tanzania, Lesotho, Democratic Republic of Congo, Ghana, Mozambique and Egypt processing more than $12B in transactions, from Vodafone last year during the pandemic. Interswitch also gained unicorn status with the $200M investment from Visa that valued the firm at a billion dollars. Finally, there is the debatable “Africa unicorn”, Jumia (an e-Commerce company which could fall in the fintech category) who debuted on the New York Stock Exchange (NYSE) in the second quarter of 2019 but has since been in and out of unicorn status. It is no surprise that the unicornization of the African continent started with fintech enterprises since every economy thrives on payment for goods and services and the innovation in Mobile Money (MoMo) changed the dynamic in Africa significantly. In the past, commercial banks have struggled to introduce electronic payment systems like debit and credit cards, however MoMo from the Mobile Network Operators (MNOs) came from nowhere as a surprise in Kenya. During the 2007/8 election violence in the country, MoMo suddenly became the only efficient means to make payments and MPESA (M for “Mobile” and “PESA” for Money in Swahili), the Safaricom brand took off. It has since been replicated by many MNOs and successful global fintech startups such as Stripe. The global GSMA 2021 MoMo report has Africa leading in growth.

Airtel Africa’s variant is Airtel Mobile Commerce BV (“AMC BV”), a wholly owned subsidiary of Airtel Africa Plc which trades as Airtel Money – the entity into which the TPG Rise Fund invested. Airtel Africa (originally Celtel which was acquired by Zain and then sold to Bharti Airtel of India) brought in Chidi Okpala from United Bank for Africa (UBA) in 2012 to join Airtel as the founding CEO of Airtel Money. Chidi was the right man for the job, having spent twelve years at UBA and Accenture with extensive knowledge and hands-on experience. This was a brave move which panned out well, resulting in a roll out across 17 countries. At the time of Chidi’s departure from Airtel Money in December 2015, he had set the business on the right footing, with 30M customers and $2B in monthly transactions. Today, Airtel Money is a unicorn and according to Chidi “I am delighted with the exceptional foundational work myself and team did back then, and the current phenomenal work being done by the current team.” Chidi has since gone on to launched Asante Financial Services, which he hopes to make a unicorn by 2025. He reckons that his Airtel Money experience prepared him for the Asante journey giving him the first taste of entrepreneurship albeit within a larger corporate.

Olugbenga Agboola (aka “GB”), Co-Founder and CEO of the second unicorn, Flutterwave, had a similar career path. He started as an Applications Engineer at Paypal (under the Paypal Mafia..;-) with a brief stint at Google Wallet Product Management then moved into the banking sector in Nigeria where he held positions with GT Bank, Standard Bank and then at Access Bank as their head of digital factory and innovations. While at Access Bank he saw the fragmentation in payments across Africa and together with his co-founder, Iyinoluwa Aboyeji (aka “E”) who had then exited his first startup, Andela, joined forces to start Flutterwave. It is important to know that while GB had come from a corporate executive background, joining forces with E who came from a pure entrepreneurial background was a perfect fit. E started as the founding CEO and later handed the reigns over to GB in October 2018 who, in turn, has done a great job of taking the company to unicorn status within three years. According to GB “Covid-19 played a big part in our growth because we were able to quickly onboard more customers”. He reckoned that “people who might not have said yes to online payments have now said yes because of the pandemic.” This confirms my earlier claim in a previous essay that the pandemic is speeding up the digitalization of the economy in Africa. Chidi and GB are both corporate executives who turned into entrepreneurs and from my previous essay they come with unique strengths which in the case of Flutterwave combining with E’s straight up entrepreneurial genes may be partly the reason they got to unicorn status faster .

However, in his excellent oped, Dr. Israel Ovirih a Lagos-based investment banker, serial entrepreneur and tech-evangelist outlines the critical ingredients for getting to unicorn status.
1. How big is the problem, or the pain and how serious is it? What are the products, services and derivatives created by the startup to alleviate or eradicate the pain? Are they being properly product-ized? Or service-tized? Is it being done in a creative and innovative manner?
2. The GRIT in the founding team and leadership, which dovetails into measuring their unflinching commitment, smartness and, if you like, the do-or-die optimism which drives the dream and its execution.
3. The amount of traction they have gained and how clear their roadmap is, in the face of the various contradictions in the local legislation or policy.
4. The present financial health of such startups and how healthy they are capable of becoming, considering their Value Proposition and Execution Story to date.
5. Finally, the strength of the market; local, regional, continental and indeed global.

The last point has a strong bearing on whether a company can become a unicorn, gazelle or remain a zebra as the market which some call the “Hand of God” is the ultimate determinant.

African Corporate Executives turn to Tech Entrepreneurship: Part 2


Three significant news items went on the global wire on 25th February 2021 as follows;
1. Liquid Telecom, a member of the Econet Group that has laid more than 70,000km of fiber optic cable across Africa, raised $840M financing package (US$620M bond and a US$220M equivalent term loan in Rand). This was Liquid Telecom’s second bond issue and it was 5.5 times oversubscribed with JP Morgan Chase & Co, Standard Chartered Plc and Standard Bank Group Ltd as joint global bookrunners.
2. Convergence Partners, a leading Pan African Private Equity fund entered into an agreement with Nasdaq listed Inseego (INSG) to acquire 100% of their subsidiary Ctrack’s operations in Africa and the Middle East.
3. Ecobank Nigeria, the largest country operations of Ecobank Transnational Incorporated (ETI), issued a London listed $300M bond that was 3 times oversubscribed and drew significant international interest with Citibank, Mashreq, Renaissance Capital and Standard Chartered Bank as joint lead managers and bookrunners.

These stories are significant because these companies are owned by a vanguard of African corporate executives turned entrepreneurs who have built their respective ventures into global success stories such that these news items are first in their class (Liquid Telecom is majority owned by Strive Masiyiwa from Zimbabwe, the shares of Convergence Partners is controlled by South African Andile Ngcaba, ETI was co-founded by Gervais Djondo from Togo and Adeyemi Lawson from Nigeria and built as the first indigenous Pan-African bank by Nigeria’s Arnold Ekpe). Gervais, Adeyemi, Andile, Strive and Arnold worked in government and corporate Africa at the highest level before becoming leading lights for the new generation of top-performing African entrepreneurs. Accordingly, in this concluding segment to end the first quarter of 2021, I present the stories of Ghana’s Marcia Ashong, Kenya’s Aziz Omar and Ivory Coast’s Alexandre N’Dore highlighting their unique strengths at the end.

As Adesuwa Okonbo Rhodes advocates for more tables in this quote “I believe the way to effectively provide women with more seats at the table is for us to create our own tables. More women succeeding as capital allocators means more women getting funded, more mentors, more torchbearers, more examples to follow. We don’t need more seats, we need more tables!” which ended part one of this essay, Marcia Ashong, CEO of TheBoardroom Africa, has being getting more women at the tables in corporate boardrooms since launching her venture in January 2016 in Ghana. Prior to this Marcia was in Ivory Coast heading the country operations for a major oil service company with responsibility for over 100 employees and contractors. According to Marcia, leadership ladders are shaped like pyramids: women are well-represented at the bottom, and yet, based on her experience, as one ascends women become more scarce and, for her, it was obvious that the problem started with the structure of corporate boards. There is a strong link between the diversity of a board and the collective intelligence that leads to improved decision-making and better governed entities” Marcia said. Women bring openness to new perspectives, collaboration, inclusiveness, strength in ethics and fairness and, as such, the lack of women in the corporate boards has tremendous implications on governance standards and business performance. They have placed more than 37 women on boards of which 25% are first timers and graduated over 100 women in their governance programme.

Aziz Omar started in the international NGO world then moved to government earlier in his career. Aziz’s day of reckoning came in early 2011 when he faced the loss of an employment opportunity in the Kenyan government because his appointment letter was stuck in the post office and by the time, he got it, the job was already offered to someone else. That led him to co-found and build the world’s first mobile postal office known as MPost. Aziz and his team have grown MPost to a stage where his co-founder has taken over the management of the operations. In the middle of the pandemic (January 2021) Aziz launched his second venture SaveApp – a platform that allows one to roundup their spare change and save it. Clients can later redeem those savings via instant gratification options like promotional vouchers or convert them into retirement savings through direct pension contributions. Launching a new venture in a pandemic speaks to the enormous experience and grit that Aziz had gained from his previous ventures. According to him “We believe as a company that our solution targeting SMEs and Africa’s grow youth in regard to micro-pensions and savings seeks to guarantee Africa’s socio-economic development and the move to a more digital future”.

Alexandre N’djore started his corporate career at MTN Cote D’Ivoire as Logistics Manager, was there for almost three years and then moved to Millicom which owns the Tigo mobile brand. At Millicom he rose through the ranks and became head of digital operations in Tanzania. Tigo Kilimo, a platform he had built for farmers got one of them almost in tears because the poor farmer had been able to multiple his income threefold through the platform. He then built Tigo Bima which went viral, quickly accumulating over 562,000 users in just 18 months with zero budget for advertising. Realizing that he could do this on his own, Alex left Tigo to start Digitech, an insuretech platform in January 2016 that allows the purchasing and processing of insurance digitally. The company which offices in Seychelles and South Africa has leading insurance and reinsurance companies such as Sanlam who have sold more than 10,000 policies and CICA-RE who have processed 7M policies for 200 companies from 14 countries worth 55MUSD on their platform.

The journey from the corporate world to entrepreneurship, as outlined in the aforementioned case studies, comes with three distinct advantages;

1. Experience – Corporate exposure gives former executives tremendous business experience, enabling them to avoid costly mistakes. They would have also learnt the ropes of business using the corporate cheque book, so those expertise and experiences give them a competitive advantage in the entrepreneurship arena. That experience may also compromise or retard their business ability to think outside the box and take potential game-changing risks, so it is a two-edged sword.
2. Savings – Most of them have savings from their previous corporate salaries, which often serve as handy and helpful temporary cushion in the rocky startup universe. and finally
3. Networks – Middle and top-tier corporate life facilitates the building of extensive business networks, which are indispensable in building and growing a successful business venture.

Africa’s COVID19 platform for the new normal


President Obama’s chief of staff, Rahm Emanuel once said “you never want a serious crisis to go to waste. It provides the opportunity to do things that were not possible to do before”. When the COVID-19 crisis hit the global north the fear was that it would be most devastating in Africa with Bill Gates predicting that ten million lives would be wiped out by the virus. But he was wrong because African leaders did what was not possible before – they locked down their countries and instituted adherence to the protocols of social distancing and washing of hands. These preventive measures and the sudden change of behavior slowed down the virus’s serious impact in Africa. According to Harvard Health preventing the spread of the virus is rooted in behavioral change. Starting up new behavior in the new normal was what the US and Europe could not do but Africa was able to – in record time and so was Asia. Latin America is facing the consequence of not starting up the new normal.

After a successful digital industry response to COVID-19 project in South Africa, Andile Ngcaba requested an online meeting with a group of African technology entrepreneurs and software engineers to discuss the COVID-19 pandemic and its impact on the African continent. During this online meeting we discussed ways in which we could leverage technology to solve the pandemic across the continent. Andile muted that he is building of an Ubuntu driven Cloud Native Platform that will be host to African Tech Volunteers. The platform will showcase COVID-19 innovations by African entrepreneurs. After this meeting Andile got a group of software engineers together and began building Combat COVID-19 Africa. The platform allows for Africans to combat the pandemic through sharing, collaboration and resource allocation. We continued to have these meetings discussing different functions the platform should have and how it can be adopted all over the continent. The Cloud Native platform uses Kurbenetes as an orchestrator and Tensorflow for the Machine Learning Framework.

The CombatCovid19 Africa (CCA) startup was born through an open participatory process and was later described by the ATU Secretary General Mr. John OMO as a “platform of platforms”. Andile charged the team “we would be flying this aircraft whiles building it” and they launched unto it – working twenty hours a day from March 15th and by the end of April they had a Minimum Viable Product (MVP) for use. According to Andile “this is a cloud native platform built on Open Source principles and systems”. It is the birth of Africa’s indigenous knowledge and digital platform with cloud resources, virtual machines and deep learning frameworks. He has emphasized the need for a large open source community in Africa to help drive innovation around the continent. Today the platform is widely adopted with 44 countries and 263 cities on it so we would soon be showcasing Africa’s ingenuity and innovation – celebrating the entrepreneurs and engineers who made this possible in record time. It is an African platform built by African that has gone global virally with no markeing spend or advertising.

Some of the platforms running on the platform are; Covi-ID – a privacy-preserving, open-source platform that uses QR codes to share health credentials from South Africa. Existing track and trace solutions to fight COVID-19 depend critically on widespread adoption of smartphone usage, but 55% of users in Africa do not own a smartphone. Alternative methods to obtain geo-location data, including cell tower triangulation are imprecise and likely to be ineffective so QR codes are one way to go.
AfrikanCreate is a free online volunteer platform for African creatives to share ideas and collaborate on relief projects aimed at addressing COVID-19 challenges. These creative works by volunteers on the platform is used in campaigns to provide messages of hope to affected communities. Echoing messages of encouragement to the people that are working in the front lines of the pandemic. Of course, other people may not be as expressive but do want to share their creative perspective on what is happening around them, this is the platform for that, as long as it raises awareness or education about the pandemic to make the situation bearable.
OurEC is a food donation and volunteer platform for people living in the Eastern Cape of South Africa. The platform connects individuals who wish to donate food, medication and clothing with underprivileged communities around the province. It does this through what it describes as District Committees (DCs), who are groups of volunteers that represent the different districts in the province. Angolan entrepreneurs led by Julio Chilela of Angola Cables have designed an artificial intelligence application that helps the government track potential COVID-19 cases. They were able to predict close to 85% of new cases in Angola.

In the Democratic Republic of Congo (DRC) one of the solutions developed is www.stopcoronavirus.cd aimed at raising awareness about COVID-19 in the country. A second application developed by some of our platform volunteers from the DRC is a smartphone application called STOP Coronavirus that offers users tips on how to prevent the virus. In Botswana some of our volunteers were involved in helping build a COVID-19 dashboard for the government, they also built a digital platform for applying for movement permits in the country.

According to Andile, Africans are future proofing the continent from pandemics and other tougher challenges ahead. His vision of an open source driven Africa is clear when one looks at how this platform is actively enabling open source solutions. Another initiatives on the platform is Open Source Africa, a platform aimed at developing the open source ecosystem on the continent. This initiative will help with knowledge sharing, whilst also reducing costs for companies that wish to adopt open source around the continent. The open source initiative will also allow entrepreneurs deploying open source solutions to be more flexible and agile when developing. This initiative will lead to the increased use of OpenStack around the continent for cloud computing. Andile also believes that advocating for more open source projects around the continent will reduce the barriers to entry for young entrepreneurs looking to deploy solutions by using community version of open source technology online. Lastly, Andile believes that open source allows companies to attract more talent, this is because professionals in the technology space can see that is where the industry is headed, so they are embracing it.

Other startups have risen to the occasion, like the online COVID-19 self-assessment chatbot developed by the Nyaho Medical Centre in Ghana in collaboration with ClearSpace Labs on their Serenity health platform. It basically allows you to take a self-assessment at home and also get virtual care so that you only go the hospital if necessary – reducing the pressure on the limited medical facilities to take care of COVID-19 patients.

Given the numerous innovations we were seeing, on May 27th, 2020, Andile and I partnered with Teresa Clarke of www.africa.com to host the first Africa online pitch competition under the auspices of “Brilliant African Innovations Against COVID-19”. Through the Angel Fair Africa platform, Africa.com shortlisted six leading African innovations from the KINGS countries to pitch in a virtual environment. Laud Basing of Incas Diagnostics from Ghana who has built a rapid COVID-19 diagnostics kit won the first prize followed by a tie of Mary Mwangi from Data Integrated, Kenya who has built a passenger app for public transport to ensure social distancing, online ticket purchasing, etc. and Dr. Wale Adeosun from Wellvis, Nigeria who built a COVID-19 self-assessment platform with a link to patient care. The other three innovations in the competition were, AfrikanCreate by Aya Dlova from South Africa, Maisoin by Dede Tounkara from Cote d’Ivoire and Epione Health by Jessica Chivinge from South Africa.

All these platforms and applications are being built by young Africans who have taken to digital. It is important to emphasize that Africa has more digital native than any other continent or put differently Africa’s young people present the largest digital demographic dividend of the 21st century. Responding to Rahm Emanuel, they are not wasting the pandemic haven taken the opportunity to do things that were not possible before. Who would have thought that African entrepreneurs whom the odds were stuck against would be starting up the new normal? But as Nelson Mandela once said, “it always seems impossible until it is done”.