In today’s BD Insider Perspective, Efayomi Carr, principal at Flourish Ventures, offers insights into overcoming financial challenges for startups, drawing from his experience as the former chief financial officer at Lori.
In this letter, we covered:
- the latest about Patricia’s $2 million cyber hack
- Saviu Ventures’ plan to back startups in Francophone Africa
- why Social media handles can’t be sued in Kenya
We also curated other noteworthy information, including job opportunities.
The big three
#1. Nigerian politician linked to $2 million cyber hack at Patricia
The news: The Nigerian Police Force (NPF) has detained Wilfred Bonse, a Nigerian politician, on charges related to his suspected involvement in a cyber hack that resulted in a $2 million loss at Patricia, a Nigerian-focused crypto exchange.
Know more: According to Olumuyiwa Adejobi, the police spokesperson, Bonse, a contestant in the recent gubernatorial election in Cross River state, is alleged to have collaborated in the laundering of ₦50 million. The funds purportedly stem from the fraudulent diversion of ₦607 million from Patricia’s Flutterwave account to his bank account, facilitated through a cryptocurrency wallet.
“The case involves criminal conspiracy, unauthorised modification of computer systems, network data, and the unlawful diversion of funds,” Adejobi added.
Why it matters: This arrest comes six months after Patricia reported a cyber hack where $2 million was compromised. Since the security breach, the crypto exchange has faced backlash from users eager to recover their funds.
In an effort to facilitate repayments, Patricia has made several decisions, including the conversion of users’ assets into its native token, Patricia Token. However, this move has been met with resistance from most users and social commentators.
Last week, Patricia relaunched its app and started repayment using funds that it recently raised.
“This is not all the money lost, but recovery from this would go a long way to soothe Patricia’s users,” according to Hanu Fejiro, the startup’s founder and CEO. “My commitment remains to Patricia users, Repayment started on the 20th of November, and it will continue. Until every user is reached.”
Zoom out: Adejobi assured that the National Cybercrime Center of the Nigeria Police will continue investigations in order to arrest other culprits that are at large.
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#2. Saviu Ventures secures €12 million to invest in Francophone Africa startups
The news: Saviu Ventures, a leading VC firm in Francophone Africa, reached the first close of its second fund Saviu II, backed by private investors and family offices, to continue investing in the region’s tech ecosystem.
Saviu II is the successor fund to Saviu I (€10 million). Saviu’s first fund invested between €250,000 and €500,000 in 12 startups, including Anka, Julaya, Zanifu, Lapaire and Paps, 82% of them from the Francophone region.
Following the first close, Saviu II has already made several investments, including in Waspito, a leading digital health platform in Cameroon; Rubyx, a fintech platform providing lending-as-a-service in Senegal; and Workpay, a SaaS HR and payroll solution in Kenya.
Why it matters: “The ecosystem in francophone Africa is now much more developed than it was in 2018, when there were fewer founders and no incubators. It’s still very far from what you see in Kenya or South Africa but it is much better now,” says Benoit Delestre, who founded Saviu Ventures in 2018 alongside Samuel Touboul.
While maintaining a sector-agnostic approach at the early stage, the VC firm’s latest fund will pivot its focus toward startups operating in specific sectors, with an emphasis on fintech, healthtech, and cleantech. Conversely, there will be a decreased emphasis on e-mobility, e-commerce, and e-logistics.
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#3. Kenyan court says social media handles can’t be sued
The news: A Kenyan court has dismissed a defamation suit filed by Cytonn Investments against Chris Orwa, a Kenyan YouTuber and Mwango Capital.
According to Techweez, Orwa posted a video on his YouTube channel, which Mwango Capital subsequently shared with its audience on X. Mwango Capital included a link to the YouTube episode.
In the video, Orwa lamented that his investments in Cytonn Investments were lost. “The video is defamatory, should come down otherwise we shall take appropriate steps,” Edwin Dande, CEO of Cytonn Investments, replied to Mwango’s X post at the time.
The ruling: Last week, Kenyan magistrate B.M. Cheloti declared that the defamation suit lacked merit, affirming that the defendants—Mwango and Orwa—have the freedom to express their views on public matters. Cheloti stated, “I am of the opinion that the posting and/or publication made by the Defendants/Respondents amounted to fair comment as the same was not made out of malice to either cause embarrassment or injure the reputation of the Plaintiff”.
The magistrate further explained that since the respondent is a social media handle and not a limited liability company, it lacks the legal capacity to initiate or be subject to a lawsuit. Consequently, the case was dismissed without any cost imposed on the respondents. However, Cytonn Investments, the plaintiff, was directed to cover the necessary expenses incurred by the respondents.
Mwango Capital crowdfunded KES 69,546 ($458.20) for its legal fees.
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State of Funding in Africa
Last week, Surayyah Ahmad, a founding partner at TTLabs, and Sanusi Ismaila, the founder of CoLab Kaduna, jointly announced the launch of a $20 million fund through their Abuja-based venture capital firm, Aduna Capital. The fund is specifically designed to support and invest in tech startups located in Northern Nigeria.
Despite Nigeria being a prominent hub for venture capital in Africa, the majority of funding tends to flow towards startups situated in the southwest region of the country.
Through this fund, Surayyah and Sanusi want to promote a more inclusive investment landscape, particularly for startups in the Northern region.
Meanwhile, here’s a roundup of the funding activities of African startups in the past week.
Noteworthy
A roundup of some of the important stories about the African tech ecosystem:
- Why founders should ignore the noise and focus on the fundamentals: Flourish Ventures’ Efayomi Carr shares lessons for African startups from Apollo and Flutterwave, potential solutions to their challenges, and his long-term vision as a venture capitalist.
- Binance CEO CZ is the latest crypto boss found wanting by U.S law: Changpeng Zhao who served as the CEO of Binance has resigned from his position and has pleaded guilty to several infractions raised by the Department of Justice and other U.S. agencies.
- Nawah Scientific plans expansion outside Egypt: Following its US-FDA accreditation for food analysis, Egyptian healthtech startup, Nawah Scientific plans to expand into Nigeria and South Africa.
- Where to register your Nigeria startup? Nigeria has launched the Startup Support and Engagement Portal to enable its startup labelling process and the implementation of the Startup Act.
- Fez’s new UK logistics hub: Nigerian last-mile delivery startup, Fez Delivery has launched its UK-Nigeria Shipping service, marking a significant milestone in the company’s expansion.
Opportunities
Jobs
We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.
Product & Design
- Kuda — Product Designer, Lagos
- Interswitch — UI/UX Designer, Lagos
- Wakanow — Senior Product Manager, Lagos
Data & Engineering
- LemFi — Senior Backend Engineer, Remote
- Carbon — Senior Android Developer, Lagos
- Bankly — DevOps Engineer, Remote
Admin & Growth
- OldMutual — Marketing & e-Commerce Specialist, Lagos
- Moniepoint — Head of Marketing, Nairobi
- Kuda — PR Specialist & Copywriter, Remote
Other opportunities
- For African cybersecurity enthusiasts: Applications are now open for citizens of Commonwealth countries in Africa to join the Commonwealth Africa Cyber Fellowship programme.
- For Nigerian digital entreprenuers: The Social Innovation Driven Entrepreneurship wants to support digital-inclined startups solving local challenges in Adamawa, Edo, Enugu, Kaduna, Kwara, and Osun States. Learn more about the programme.
- For African startup founders: Applications for Techstars accelerator programmes in Tulsa, Atlanta, Boston, and Berlin, among other locations are ongoing. Become the next Techstars-backed startup from Africa.
You’ve come to the end of today’s letter. Thank you for reading.
Have a great week ahead!
