BD Insider, Letter 121

Virtual dollar cards have been the rave since last week Friday when Union54, a leading card-issuing API startup announced that it was going to pause its service to build a more “resilient product”. Union54’s CEO Perseus Mlambo said that “the pause on service is part of a necessary compliance audit” which will take place within two weeks.

Not many people know what exactly is going on. But we’ve graciously written a detailed piece that currently ranks as a Top Story on Google Search. You will find the link to the piece in the noteworthy from African press section below.

For this week’s newsletter, Letter 121, we will touch on:

• Kora’s response to money laundering allegations in Kenya
• Why ECOWAS Court declared Nigerian Twitter ban illegal
• inDriver’s regulatory compliance engagement with Lagos authorities
• the latest African Tech Startup Deals (in PNG and a live format)
• job opportunities, events, and more.

Kora’s money laundering allegations in Kenya

The allegation: A Kenyan High Court ruled that Sh29.5 million ( ~ $250,000) in Kora’s Equity Bank account is money meant for laundering, according to the Asset Recovery Agency (ARA).

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Kora wasn’t the only implicated Nigerian company in the recently announced suit filed by the ARA, Kandon Technologies Limited was the second.

Kora’s response: Following Kora’s expansion to Kenya in 2021, the deposit of $250,000 was shareholders’ fund meant for obtaining a payment service provider and remittance operator licence in Kenya.

“As part of the capital requirements from the Central Bank of Kenya (CBK) for obtaining a payment service provider and remittance operator license, Kora deposited the sum of $250,000 in its freshly opened bank account. In line with CBK requirements, this amount was left untouched pending the granting of our license.”

Zoom out: Kora’s response seems plausible. Because every jurisdiction with a National Payment System’s act has a capital requirement clause for entities looking to be a part of their payment system. In Nigeria, the equivalent of a PSP licence is the PSSP Licence which has a capital requirement of ₦100 million (~ $250,000).

Kora and Kandon (formerly Fliqpay), are not the only Nigerian companies to be entangled in allegations from Kenya’s ARA. The ARA had previously alleged that an already embattled Flutterwave was fostering money laundering in Kenya. Flutterwave denied the allegation.

It’s unclear what the motivations of the Kenyan Agency are, but Flutterwave CEO and Kora’s Head of Marketing and Communications think it’s political and malicious, respectively.

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Why ECOWAS Court declared Nigerian Twitter ban illegal

The news: Following a suit (ECW/CCJ/APP/23/21) by Socio-Economic Rights and Accountability Project (SERAP) and 176 concerned Nigerians, the ECOWAS Court of Justice in Abuja, on Thursday (July 14, 2022) ruled that the suspension of Twitter’s operations in June 2021 by the Nigerian government is illegal.

ECOWAS Court declaration: In its ruling, the court said it is unlawful and inconsistent with the provisions of Article 9 of the African Charter on Human and Peoples’ Rights and Article 19 of the International Covenant on Civil and Political Rights, both of which Nigeria is a state party.

“In suspending the operations of Twitter, the President Buhari administration violates the rights of SERAP and 176 concerned Nigerians to the enjoyment of freedom of expression, access to information and the media, as well as the right to a fair hearing,” the court held.

The ECOWAS Court ordered the Buhari administration to bear the costs of the proceedings and directed the Deputy Chief Registrar to assess the costs accordingly and also take necessary steps to align its policies and other measures to give effect to the rights and freedoms, and to guarantee a non-repetition of the unlawful ban of Twitter.

SERAP previously feared that “if [its suit] is not urgently granted, the Federal Government will continue to arbitrarily suspend Twitter and threaten to impose criminal and other sanctions on Nigerians, telecommunication companies, media houses, broadcast stations and other people using Twitter in Nigeria, the perpetual order sought in this suit might be rendered nugatory.”

Flashback: The statement announcing the ban (which was attributed to the Minister of Information and Culture, Lai Mohammed) cited the persistent use of Twitter for activities that are capable of undermining Nigeria’s corporate existence as the reason for the suspension. The ban was lifted after seven months following Twitter’s agreement to fulfil the six conditions stipulated by the Nigerian government, which include (but are not limited to): tax payments and registration with the Corporate Affairs Commission.

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inDriver’s ongoing regulatory compliance engagement with Lagos authorities

The news: After operating in Lagos for three years, inDriver, a global ride-hailing company is currently in talks with the Lagos state government to ensure regulatory compliance.

“We are very sensitive to any local regulation in the ride-hailing sector pertaining to each market,” Evgeny Kalinin, inDriver’s Business Development Manager Africa said in a press statement shared with Benjamindada.com. However, inDriver declined to provide additional comments about its deliberations with the Lagos authorities or to answer why they were operating without a license.

Lagos is the company’s first Nigerian operational base, but inDriver operates in four other African countries—Kenya, Uganda, South Africa, and Tanzania. During its Ugandan launch in July 2019, inDriver’s Chief Marketing Officer Egor Fedorov said that “Africa is going to be a big market for us because there’s a lot of cities and high population [areas] that still don’t have access to ride-hail applications”.

Background: In BD Insider, Letter 116, we reported that inDriver and Rida have been listed by the Lagos authorities as “unlicensed operators that the residents should be wary of.”

As of May 2022, the Lagos Commissioner for Transportation, Frederic Oladeinde said only eight e-hailing cab operators—Lagos Ride, Uber, Bolt, Let Me Run, Global Taxi, Zoom Run, Treepz (Plenty Waka), and Shuttlers— are licensed to operate in the state.

The Lagos state’s guidelines for e-hailing business operations [pdf] (issued in August 2020) mandate operators with less than 1,000 drivers to pay a ₦10 million licencing fee, while those with more than 1,000 drivers are meant to pay ₦25 million. However, after a meeting with operators in the same year, the state government reduced the fee by 20%.

BD African Funding Tracker

African startups jointly raised over $13.04 million last week. Kenya’s Persistent Energy’s $10 million Series C was the highest amount. Per country, Nigerian startups raised more funds and as usual fintech startups topped last week’s funding list.

Mergers and acquisitions:

• Nigeria’s Bloc acquired Getwallets, the wallets-as-a-service provider that has now pivoted to a payments orchestration company, Orchestrate for an undisclosed fee.
• In North Africa, Swvl has announced an agreement to acquire Urbvan, a mobility platform that provides tech-enabled mobility services in Mexico.

✍ Noteworthy from African Press

Here are some of the key stories we read (and wrote) in the previous weeks:

• What’s up with virtual dollar cards in Nigeria? And what’s the alternative. Benjamin wrote extensively about the issue.
• After securing a Global Talent Visa (GTV) to the UK, you need to sort out eight things to settle down effectively. Imole Oluyemi (GTV 2020) gives insight into these themes.
• Kuda Bank users will now be charged a ₦50 stamp duty on deposits of ₦10,000 and above. Why? Read this explainer.
• A bored Chinese woman spent years falsifying Russian history on Wikipedia.
• South Africa’s Rapid Payments Programme will create a cheaper instant payment environment. It will also make digital payment king over cash.
• Moe Odele, Founding Partner at Vazi Legal talks about compliance and the legal tech landscape in Africa.  

BD Trivia of the Week

Remember, you stand a chance to win a free feature for your favourite startup when you answer the question correctly on Twitter.

BD Trivia always comes up on Friday, so be on the lookout.

Opportunities

Jobs

Every week, we carefully curated opportunities in Product & Design, Data & Engineering, and Admin & Growth.

Product & Design:

• Chipper Cash — Senior Product Manager (Nigeria)
• Sendwave — Head of Product
• Okra — Technical Product Manager

Data & Engineering:

• Lazerpay Finance — Senior Backend Engineer and DevRel Advocate
• Paystack — Senior Automation Engineer (Africa)

Admin & Growth:

• SmartCash PSB — Lead, e-Commerce and Partnerships (Nigeria)
• Mono — Content Marketer (Nigeria)
• Visa — Marketing and Digital Director

Other opportunities:

• For female (under)graduates: Afriguild is accepting applications for Web3 Africa Women Fellowship.
• For women (and men): Apply for Stutern’s African Tech Sis Scholarship to get 50% off to learn Product Design, Frontend, and Backend Engineering.
• For Lagos-based fintech and proptech startups: The ARMS Labs Lagos Techstars Accelerator Program is now accepting applications from early-stage African fintech and Proptech startups
• For Nigerian graduates: Applications for Flutterwave Graduate Trainee Development Program for Engineering and Non-Engineering tracks are open.

️ Events:

• Attend the Technext GAT (Government and Tech) Summit: July 28, 2022 at Oriental Hotel, Victoria Island, Lagos.
• Register to attend the GetEquity Startup Festival: July 29-30, 2022 at Landmark Event Centre, Victoria Island, Lagos.

Thanks for reading.

You can get in touch with us by emailing hello@benjamindada(dot)com and we’d reply within the hour.