The Flip’s Post

Last week, these 9 African startups collectively raised over $200 million: 5. z.systems z.systems is a retail tech startup transforming B2B trade and distribution across FMCG and other retail sectors. - Amount raised: $1M - Lead investor: MNF Ventures - Location: Morocco - Type of investment: Equity funding 4. PBR Life Sciences (Techstars '23) Sciences PBR Life Sciences is a healthcare data analytics startup leveraging AI and big data to provide pharmaceutical companies with actionable insights for better decision-making across African markets. - Amount raised: $1M - Lead investor: Launch Africa Ventures - Location: Nigeria - Type of investment: Equity funding 3. Juicyway Juicyway is a fintech startup focused on enabling seamless international payments for African entrepreneurs and individuals engaging with the global economy. - Amount raised: $3M - Lead investor: P1 Ventures - Location: Nigeria - Type of investment: Equity funding 2. Sourcefin Sourcefin is a fintech startup providing tailored financing solutions and supply chain support to small and medium-sized enterprises (SMMEs). - Amount raised: $8.2M - Lead investor: Futuregrowth Asset Management - Location: South Africa - Type of investment: Equity funding 1. TymeBank Tymebank is a digital banking platform offering accessible and scalable banking solutions across emerging markets. - Amount raised: $250M - Lead investor: Nubank - Location: South Africa - Type of investment: Equity funding Nigerian healthtech startup MyChekker secured funding from the Lagos Angel Network (LAN). Moroccan fintech Talaty also raised funds from Renew Capital and Witamax Invest to expand its AI-driven solutions in Francophone Africa. Truk Rwanda and Senegal’s Couvoir Amar received USD 1.55 million from Incofin Investment Management through its Nutritious Foods Financing Facility (N3F). ----------------- Want more insights and stories from entrepreneurs around the continent to help make building easier? Subscribe to our newsletter: https://lnkd.in/dFw3dXe

Is the VC-Fintech Model in Africa Broken? As the sun rises over Lagos, Adebayo, a young Nigerian fintech entrepreneur, stares at his computer screen. His brow furrowed in concentration and his startup, a mobile money platform to bring financial services to the unbanked, has just secured significant funding from a Silicon Valley venture capital firm. It should be a moment of triumph, but Adebayo feels a gnawing sense of unease. The numbers on his screen tell a troubling story: his company is spending $20 to acquire each new customer, yet the average revenue per user is a mere $7. Adebayo's predicament is not unique and not entirely true either. Across Africa, fintech startups are grappling with a challenging reality: the cost of customer acquisition often far outweighs the immediate returns. This scenario raises a critical question: Is Africa's venture capital-backed fintech model sustainable or fundamentally broken? VCs and the Promise of African Fintech The African continent has long been considered the next frontier for fintech innovation. With a large unbanked population and rapidly increasing mobile phone penetration, the potential for transformative financial services seemed boundless. Venture capitalists, enticed by the prospect of tapping into a market of over a billion people—half of them without any formal bank account—have poured billions of dollars into African fintech startups over the past decade. These investments have fueled remarkable innovations. From mobile money platforms that allow users to send and receive funds with a simple text message, to AI-powered credit scoring systems that enable micro-loans for small businesses, African fintechs have been at the forefront of financial inclusion efforts. This startup, BorderPal.co, makes it easy to launch a payment company without needing your own license or development team. However, as Adebayo's experience illustrates, translating these innovations into sustainable businesses has proven to be a formidable challenge. While Adebayo grapples with his early-stage startup's challenges, a major African fintech player with a customer base of 300,000 users has just raised a mammoth $150 million, which brings its total funding to nearly $600 million. Based on a customer acquisition cost and revenue per customer established earlier, the economics of this deal seem precarious at best... https://lnkd.in/ektDjU9f

Q1 has wrapped up, and the pulse of Africa’s tech scene is buzzing with early insights. Here's a snapshot: - $466 million was raised by 121 startups through $100k+ deals (excluding exits), marking a -27% decrease in QoQ and half of the amount raised in Q1 2023. - 87% of this funding found its way to startups headquartered in the Big Four, with Nigeria and Kenya claiming a lion’s share of 60%. - Equity dominated with 71% of disclosed funding, while debt made up 28%. Notably, equity remained steady, but disclosed debt funding sharply declined compared to Q4 2023. - In a concerning trend, funding patterns continued to skew towards male-founded and male-led ventures with less than 1% allocated to start-ups without at least one male founder, and 6.5% to female CEOs Click here for more insight: https://lnkd.in/dD2sJuvD

Moove from South Africa is empowering mobility entrepreneurs in Africa with access to finance and vehicle ownership. Learn how this South African fintech is driving economic growth. #Moove #Fintech #SouthAfrica

African startups raised about 80% more compared to week 36. Securing over $68.4 million in grant, equity & debt deals. Here's the funding tracker for week 37 (9th - 15th Sept. 2024): 4. Talk360 Talk360 is the international calling app used by more than 5 million people worldwide. ・Amount raised: $1.4 million ・Lead investor: HAVAÍC ・Location: South Africa ・Type of investment: Equity financing 3. Field Field streamlines the pharmaceutical supply chain, making it cheaper and more efficient. ・Amount raised: $11 million ・Lead investor: Bill & Melinda Gates Foundation ・Location: Nigeria ・Type of investment: Grant 2. Paymob Paymob is a technology platform that offers payment solutions to support digital financial service providers in Africa and the Middle East. ・Amount raised: $22 million ・Lead investor: EBRD Venture Capital ・Location: Egypt ・Type of investment: Equity financing 1. FlapKap FlapKap provides financing solutions that help SMEs boost their inventory and digital ads with fast cash and the option to pay later. ・Amount raised: $36 million ・Lead investor: BECO Capital ・Location: Egypt/UAE ・Type of investment: Equity & debt financing Additionally, Egyptian foodtech company Brottini sold a minority stake to Entlaq for an undisclosed amount. Meanwhile, Egypt-based climatetech NoorNation received an undisclosed investment from KBW Ventures. Want more insights and stories from entrepreneurs around the continent to help make building easier? Subscribe to our newsletter: https://lnkd.in/dFw3dXe

Africa’s fintech startups are in trouble.  After years of over-inflated valuations, startups are not making enough money to keep up with the early interest from investors.  Here’s how we got into this situation:  Public and private companies in Africa have been evaluated by the same revenue multiples—the same set of criteria used to work out their value.  This is a mistake.  Public and private companies in financial services are different in significant ways:  • Public companies are listed on stock exchanges and affected by market sentiment and economic changes, making them more stable. Private companies get their value from investment rounds, making their revenue multiples more volatile—reflecting expectations rather than performance.  • Public companies’ financial data is easily available, making valuation comparisons simple. Potential investors for private companies are often forced to make estimates, as their data is generally not available. • Though public companies are more established, their revenue multiples are often lower than private companies because they grow more slowly. Investors bet on the high performance of private companies in the future, giving them higher multiples without concrete evidence.  Key differences in consumer-based and business-based financial services also play a role in the skewed multiples for startups. Consumer financial services like mobile payment apps and lending apps are very different to B2B payment solutions and business lending services. The growth potential, market perception, and investment risks are distinct, so investors can’t apply the same metrics from one to the other.  At the moment, African startups are getting revenue multiples of 6x and above. This means that a ‘6x-revenue’ company is valued at six times its annual revenue, and a ‘12x-revenue’ at 12 times.  But, to get enough liquidity back into the continent’s ecosystem, we need to return at least $25 billion of capital.  This means African startups need revenue multiples of more than double of what they’re getting now.  The tough news is that the option for this level of revenue multiple no longer exists in Africa. African consumers’ spending power is low and getting lower. How can tech startups expect them to pour $25 billion into their companies?  Do you think Africa’s fintech startups are in trouble?  #Raise #RaiseSignals #Valuation #RevenueMultiples

🌍💡 𝐴𝑓𝑟𝑖𝑐𝑎𝑛 𝑠𝑡𝑎𝑟𝑡𝑢𝑝𝑠 𝑟𝑎𝑖𝑠𝑒𝑑 $2.01𝐵 𝑖𝑛 2024 𝑑𝑒𝑠𝑝𝑖𝑡𝑒 𝑓𝑢𝑛𝑑𝑖𝑛𝑔 𝑑𝑖𝑝 African startups raised $2.01 billion across 182 deals in 2024, representing a 30.7% decrease from 2023's $2.9 billion, with funding activity heavily concentrated in the second half of the year, which accounted for $1.3 billion. Kenya led the funding landscape with $418.9 million (20.8% of total), followed by South Africa ($352.78 million) and Nigeria ($331.52 million), while equity financing dominated with $1.12 billion, complemented by $712.9 million in debt funding and $168.1 million in mixed arrangements. Fintech maintained its dominance, securing $882.43 million (43.9% of total funding), followed by mobility ($300.42 million) and CleanTech ($294.8 million), with emerging sectors like AI ($10.6 million) and Edtech ($22.35 million) showing modest growth. Despite a decline in overall funding and deal volumes since 2023, the strong second-half performance, particularly in July 2024 ($478 million) and December 2024 ($294.6 million), indicates renewed investor confidence and growing interest in sectors other than fintech. #AfricanStartups #VentureCapital #TechInnovation

Exciting Opportunity for Investors! Greetings! My name is Lawrence, and I am the co-founder of Jeld Investment Ltd., a promising fintech startup based in Kenya. Although our company is registered under this name, we operate our online platform under a different brand, which I’m not disclosing here since we’re still in the process of securing the necessary licenses. Our site is currently online for testing purposes, and I look forward to introducing it to you once we officially launch. Our platform offers a range of financial services, including a savings platform, a bookkeeping tool, and a loaning feature that’s soon to be launched. We have already developed most of these features and have initiated discussions with the Capital Markets Authority regarding the licenses required for full operation. As a startup, we’re seeking investment to help us cover essential expenses, such as licensing, staffing, and marketing, to bring our vision to life. In return, we’re offering equity in our company to those interested in joining us on this journey. For further details, please feel free to message me directly or reach out via email at lmwangi@gmail.com #Fintech #Startup #Kenya #Chamas #FinancialInclusion #InvestorsWanted #Innovation #Entrepreneurship #EquityOpportunity #EmergingMarkets #FinancialServices #BusinessGrowth #InvestmentOpportunity #DigitalTransformation #AfricaTech #TechStartups

LittleFish's expansion beyond South Africa and neighboring markets has garnered significant support from key investors. TLcom and Flourish Ventures are backing the startup, highlighting confidence in its growth trajectory. TLcom's move into South Africa aligns with its strategy to diversify investments across Africa's key markets, having previously supported tech giants in Nigeria, Kenya, and Egypt. This expansion positions TLcom to tap into South Africa's thriving tech ecosystem, attracting attention from investors globally. TLcom's investment in LittleFish emphasizes the firm's commitment to financial inclusion and the transformative power of fintech in Africa. This strategic partnership provides LittleFish with the resources and strategic guidance necessary to scale operations and achieve its goal of facilitating connections between banks and SMEs across the continent. Exciting times lie ahead for LittleFish as it embarks on this journey with seasoned investors by its side.

To foster FinTechs supporting financial inclusion in Africa, Visa invested in 4 startups that are solving key challenges around access and information thereby enabling financial empowerment for individuals, businesses, and their communities. 1. Workpay: HR Tech Firm from Kenya 2. OkHi Smart Addressing from Nigeria 3. Oze from Ghana offering smart embedded tools for SMEs 4. ORDA solving the challenges for food businesses and restaurants across Nigeria, Kenya and South Africa #financialinclusion #innovation #breakingdownbarriers #startup