In this letter, we explore:
- Kenya’s visa-free regime for Africans
- the shuttering of African logistics startups
- MarketForce withdrawal from three markets—Nigeria, Rwanda & Tanzania.
The big three!
#1. Karibu! Kenya says ‘Jambo’ to African visitors, ditches visas
The news: On Saturday, the Kenyan government took a significant step toward enhancing continental trade by declaring the removal of visa restrictions for all African citizens, with the new policy set to take effect after December 31, 2023.
Why it matters: “It is time we realise the importance of trading among ourselves and allowing goods, services, people and ideas to move freely across the continent,” Ruto said. He further noted that trade within East African Community nations had experienced substantial growth, owing to the elimination of visa requirements and tariffs.
Since assuming the presidency, Ruto has consistently advocated for African leaders to contemplate the elimination of visa constraints. At the African Continental Free Trade Area summit held in Nairobi earlier this year, he emphasised, “We must remove any impediments to the movement of people around our continent.”
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President Ruto making the announcement. Source: NTV
Know more: Besides the recent relaxation of visa requirements for select African countries, including Djibouti, the Democratic Republic of Congo, and South Africa, Kenya had previously taken steps to facilitate continental travel into the country. In November 2017, former President Uhuru Kenyatta introduced a visa-on-arrival program for all African visitors.
As we eagerly await the potential ripple effect of his recent decision on leaders across the continent, we remain committed to keeping you informed about the impact of this move on Kenya’s economic landscape.
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#2. In 2023, African logistics startups dominate the shutdown scene
The news: Last week, the South African logistics startup, WhereIsMyTransport had to shut down, due to its inability to secure additional funding. According to BD African Startups Graveyard, the predominant trend in startup closures on the continent this year has been led by logistics-related ventures, including mobility and e-commerce.
Among the at least 14 African startups that have closed down this year, seven were operating within these sectors. Besides WhereIsMyTransport, the impacted startups were based in either Kenya or Nigeria.
Drive in: “African logistics startups face substantial challenges, including high capital requirements, soaring operational costs, elusive customer loyalty, and fierce competition from industry giants,” according to Mashary Keya, a Strategy Advisor at WYLDE International.
“To thrive in this landscape, startups must diversify revenue streams, leverage technology for efficiency, form strategic partnerships, and cultivate customer loyalty through tailored one-stop-shop services and competitive pricing,” he added.
Zoom out: Before its closure earlier this year, Hytch, a Nigerian logistics startup that initially started as a ride-hailing service, transitioned its focus to fulfilment operations, serving startups like Famasi.
“We built the traction. We had good traction and processed thousands of deliveries, but we couldn’t close out the round. We were already building something no one was doing, without any operational cost,” Laolu Onifade, co-founder of Hytch told Bendada.com in February.
Like Hytch, several other logistics startups that have closed down attributed it to a lack of funding.
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#3. MarketForce halts operations in Nigeria, Rwanda and Tanzania
The news: MarketForce, a B2B e-commerce startup, has reportedly ceased operations in three out of its five markets. The Kenyan WallStreet, which initially broke the news, did not explicitly clarify the cause for this downsizing; nonetheless, the startup has encountered challenges in fundraising recently.
As stated by co-founder and CEO Tesh Mbaabu, the company will currently concentrate on its Kenyan and Ugandan operations, exiting from Nigeria, Rwanda and Tanzania. Furthermore, MarketForce has put its expansion into Ethiopia and Ghana on hold.
“We have restructured the business to operate profitably now, and we have seen good progress. We have moved from fast growth to sustainable growth, and last quarter we recorded the highest revenue ever, despite all the challenges,” Mbaabu told TechCrunch in May. “Last year we were at a negative contribution margin, which means we were losing money for every order we delivered; but going into quarter one of this year we are gross profitable.”
What we know: As part of MarketForce’s efforts to streamline its operations, its super app RejaReja, which facilitates direct ordering of fast-moving consumer goods (FMCGs) from distributors and manufacturers for informal retailers (mom-and-pop stores), is currently limited to Uganda.
Additionally, the startup plans to launch its social commerce platform, Chpter, in Kenya, allowing merchants to convert social media conversations into increased sales. “We are figuring out more profitable and high-margin segments and that is why we decided to make a move into social commerce,” said Mbaabu.
State of Funding in Africa
An increasing number of cleantech startups are securing investments to address electricity challenges in Africa. Just last week, Husk Power Systems secured $103 million in a Series D funding round to drive rural electrification and promote renewable energy solutions throughout the continent, commencing with Nigeria.
This substantial funding round is arguably the largest of its kind within the mini-grid industry. It’s worth noting that back in July, another cleantech startup Nuru, based in the Democratic Republic of Congo, also raised $50 million in a Series B round to support its mission of delivering 24-hour electricity through mini-grids in the country. Similarly, startups like Solarise Africa and WidEnergy have also garnered funds for similar endeavours.
Find below a summary of how four African startups collectively secured about $104 million in funding over the past week.
Note: $0K means undisclosed
M&A
- Ecentric Payment Systems, a leading retail payment processor in South Africa and 17 other African countries, has acquired Thumbzup, in an undisclosed deal.
Noteworthy
Here are other important stories in the media:
- Exploring the Google Pixel 8 and Pixel 8 Pro: Jolomi wrote an in-depth review of Google’s Pixel 8 series which boasts of enhanced design, AI-powered camera features, and the longest-ever Android update support.
- Fraud loss at Absa Kenya: In 2022, Absa Kenya lost $716, 565 to fraud attempts, the most common of which was ‘card not present’ fraud. The bank was able to recover $393,213 of the total losses.
- What happened to Patricia’s escrow trustee? Due to a breach of agreement, Nigerian SEC-licensed trust company, DLM Trust says it has temporarily paused its appointment with Patricia to oversee the repayment of $2 million in customers’ assets lost in a hack last year. However, the crypto exchange maintains that repayments will continue as announced.
- African VCs and startups are eyeing the Middle East for new capital, but there’s a catch: Middle Eastern investors and LPs may require recipients to deploy funds within the region, Tage Kene-Okafor writes.
Opportunities
Jobs
We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.
Product & Design
- PressOne.Africa — Product Manager, Lagos
- Kuda — Product Designer & Graphic Designer, Lagos
- Bankly — Product Operations, Unspecified
Data & Engineering
- LemFi — Senior Android Engineer & Technical Support Lead, Nigeria
- Carbon — Senior iOS Engineer, Lagos
- Brass — Senior Backend Engineer, Lagos
Admin & Growth
- Kuda — Copywriter, Lagos
- Sudo Africa — Growth Specialist, Abuja
- WhoGoHost — Head of Marketing, Lagos
Other opportunities
- Women Who Code fellowship: Because She Can has opened applications for their annual fellowship providing laptops, mentorship and internships to women in tech, targeting 10 awards this year. Apply by November 25.
- Interested in becoming a technical talent? The Nigerian Federal Ministry of Communications, Innovation & Digital Economy is accepting applications for its 3 Million Technical Talent Program. Learn more about the program.
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Have a great week ahead!
