₦airaland Forum

African e-commerce giant, Jumia, recently released its earnings report for the third quarter of 2021.

Despite sharing healthy numbers as a result of accelerated growth across core usage KPIs—including orders, annual active customers and gross merchandise volume (GMV)—the markets responded differently with the stock price dropping by 20%.

Before sharing details of the report, recall that Jumia changed the functional (default) currency of its financial report from euros to dollars in Q2 2021. This will continue into the foreseeable future.

Highlights from the report

Jumia’s adjusted EBITDA and operating losses in Q3 2021 went up by 94% and 93% year-over-year, respectively, to $52.5 million and $64 million. This increase in loss was driven by a hike in the company’s investment in sales & advertising and technology.

Sales and advertising expenses reached $24.0 million, up 228% year-over-year, while technology and content expenses increased by 27% to $9.4 million. This is a continuation of its return to aggressive advertising which slowed during the pandemic.

Commenting on this result, the company’s Co-CEOs Jeremy Hodara and Sacha Poignonnec said, “We believe that these investments are long-term in nature and that accelerating growth will ultimately contribute to profitability, leveraging the strong efficiency gains achieved throughout 2020 and the first half of 2021.”

Jumia ended the quarter with $185 million in cash and cash equivalents and $399 million in financial assets.

Historic number of quarterly orders

A major highlight from the report was that orders made on Jumia reached an all-time quarterly high of 8.5 million, representing a 28% year-over-year growth. It’s the fastest growth rate of the past seven quarters, according to the company. Closely related to that, Jumia’s annual active consumers reached 7.3 million and its gross merchandise value (GMV) reached $238 million, both up 8% year-over-year.

In the third quarter, FMCG inventories overtook fashion inventories as the fastest-growing category in terms of items sold. The former posted the highest ever volume number, almost doubling on a year-over-year basis.

The second-fastest-growing category was food delivery, growing by almost 40% year-over-year. This category posted its highest ever quarterly volume with over 2 million orders, surpassing the previous record registered in the fourth quarter of 2020.

Jumia noted that it saw growth momentum across all inventory categories, except phones & electronics. The company attributes this slowdown to a global supply disruption, including global chipset shortages.

JumiaPay and its fintech ambition

In the second quarter, JumiaPay—Jumia’s financial and digital services—posted its largest-ever quarterly GMV processed. The company followed by disclosing in its third-quarter report that JumiaPay processed 36% of all orders on Jumia, a significant feat considering that it competes with numerous payment options. Riding on that wave, JumiaPay has continued to grow as the company expands the range of services available to consumers on JumiaPay App.

In Nigeria for example, customers are now able to book bus tickets via the JumiaPay App, including a proprietary seat mapping selection that will be rolled out in other markets in the near future. In Egypt, JumiaPay added new consumers, including several universities which students can now pay their tuition fees online via the JumiaPay app as well as a major Arabic content streaming platform, Shahid.

Optimistic about its fintech ambitions for JumiaPay, the company shared a picture of its roadmap. In the near future, it plans to launch payment cards, savings, insurance and ‘buy now pay later’ offerings to consumers of JumiaPay. For merchants, it’s looking to roll out point of sale, QR Codes, consumer financing, and other offerings.

For its logistics service to third parties, Jumia reached a major milestone by recording $1 million revenue from this service. It delivered 2.9 million packages on behalf of 766 clients, this was a 123% increase on the 1.3 million packages that were delivered in Q2 2021.

The company also mentioned that it took part in impact initiatives such as Giga, a global initiative to connect every school in Africa to the Internet and every young person to information, opportunity and choice. It also partnered with Solar Taxi, a modern eco-friendly mobility company, to provide an affordable and eco-friendly delivery solution in Ghana.

The increase in losses incurred by Jumia in the third quarter wasn’t good news to some investors but the company sees it as a necessary path to achieving its goal of profitability and scale.

Source: https://techcabal.com/2021/11/17/jumia-all-time-high-quarterly-orders-fintech-ambition/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.221121

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Want to be a creator in Africa? Okay. But be wary; it’s going to take time, thick skin, and a little bit of what we at TechCabal like to call “the creative hustle”.

For years, Africa’s creative industry has been hampered by poor returns, leaving creators at the mercy of sponsors and algorithm-manipulated trends.

But fintechs like Chipper Cash stand to be a driving force behind fan-sponsored content that may change the way Africans create and consume digital media.

Where the money resides…

Twitter has been a space for clapbacks, online discourse, and creativity since its inception. On the third most popular social media platform in Africa, the continent’s Twitter users wield power so influential that Twitter began to build out its first Africa-based team in Ghana this year.

While Twitter is an impactful platform for creators, it has not always been a lucrative one. In a world where creators are waking up to the value of their content, monetisation has become more essential than ever, and social media platforms are finally catching on.

The digital content industry is predicted to skyrocket to a value of $38.2 billion by 2030. But developing content in an increasingly competitive market requires funding and return on investment that Africa’s creators are not seeing, which is “the quality of work creators produce,” said David I. Adeleke, Communications Lead and Managing Editor at Nestcoin, in an interview with TechCabal.

So when TikTok, a newer entry into Africa’s social media space, came on the scene, it offered a monetisation plan, out of necessity. To incentivise creators to pivot from the more popular social media platforms in Africa like Facebook, it rolled out its very own Creator Fund offering payouts to TikTok-ers once that reached 100,000 authentic views on the app.

Still, in a world where creators like Ryan Kaji, a 9-year-old from the US, made an estimated $29.5 million from YouTube and an additional $200 million from branded toys and clothing, Africa’s creatives are making far less money from their work.

The funding divide

YouTubers earn money directly from YouTube for ads inserted on top of their videos. They are paid on a cost-per-thousand-views (CPM) basis and accrue earnings when a viewer watches at least 30 seconds of a played ad or half the ad for a shorter advertisement.

Of the 10 countries with the highest CPM per video, Algeria is the only African country on the list. Algerian YouTubers receive $24.50 CPM. And, after earnings are garnered, YouTube takes a 55% cut, further reducing take-home pay.

According to Mike Otieno, co-founder of Wowzi, a seamless, Africa-focused, AI-driven influencer marketing platform, South Africa is the most mature market for paid creative content in Africa, with the nation’s influencers earning more, on the whole than other influencers throughout the continent.

But, even with higher than average earnings, Caspar Lee, South Africa’s most-watched YouTuber, earns around 10% of Kaji’s YouTube earnings per year. Nigeria’s highest-earning YouTuber, Mark Angel Comedy, earns around 12.2% of that same figure. And Uganda’s most-watched creator on YouTube, musician Eddy Kenzo, earns around 1.6% of that.

The difference between creator revenues and earnings in countries like the US versus countries in Africa comes down to market size and potential, says Otieno.

“Markets with many big brands making a lot of money means more allocation to advertising budgets, which trickles down to creators. Thriving markets also tend to be hyper-competitive, so brands want to outdo each other.”

When bigger brands enter growing markets, they do so with a long-term outlook of the markets’ growth, spreading endorsement funding out over a longer period. Brands with smaller budgets, on the other hand, tend to place conversion as a top priority and aim to get a “maximum return for their buck,” remarked Otiento.

But forecasting a market’s potential growth does not account for the power and value that creators add to the creative ecosystem in the present.

Chipper Cash, an Africa-made cross-border payments company valued at $2 billion, is working to change this by giving creators the opportunity to receive direct revenue from the audience that loves and understands the true value of their creative content.

Twitter sponsors

Twitter joined the creator monetisation club in May with its very own Tip Jar function. Through the Tip Jar, users are now able to send money to their favourite online voices via PayPal, Venmo, or Cash App in-app integrations. But, as none of these payment apps is widely used throughout Africa, the region’s Tweeters were still limited in their ability to sponsor their favourite creators.

In October, Chipper Cash announced its all-new seamless integration with Twitter’s Tip Jar.

In an interview with TechCabal, Wiza Jalakasi, Vice President of Global Developer Relations at Chipper Cash, shared that the fintech company worked with Twitter to build out the platform’s tech to create a “cheap mechanism for tipping out creators”.

Twitter users will be able to receive payments via a QR code or direct link using their chipper.me link along with their username and an easily accessible button on mobile, using the Twitter Tips feature.

The integration will also support smaller microtransactions, with no charge for withdrawals.

Jalakasi believes that the app’s integration with Twitter will change the “fundamental misalignment of incentives” by getting rid of “unnecessary middlemen [such as brand sponsors] in the creative economy value chain” and help “expand monetisation pathways for African creators” at large.

So far, the Twitter-Chipper Cash integration is only supported for users in Nigeria, South Africa and Uganda.

Funding the fandom

It’s clear that fans of Africa’s top creatives are willing and ready to fund their faves. On Wednesday, Nigerian singer-songwriter, Davido, raised more than $338,000 via social media after posting his bank account information and asking fans and friends to send him a little bit of birthday cash.

“Fans funding creatives” has been a tried and true method in other parts of the world.

Chipper Cash’s Twitter integration is reminiscent of similar models used on China-made live-streaming apps. Fuelled by digital payment platforms like WeChat and Alipay integrated into the social media app itself, users were able to tip their favourite creators without leaving the app. Live stream tip functions were so successful in China that the market reached an estimated $4.4 billion in revenue in 2018 before the onset of the COVID-19 pandemic—which led to an additional surge in live stream viewing.

What user-generated tip culture has provided in China is a robust influencer culture with a robust, local, influencer economy that spans e-commerce, gaming, entertainment, and education.

China’s influencers wield so much power that, in a recent double-11 sale for the Chinese e-commerce giant, Taobao, a top influencer generated $1.67 billion in sales over a 12-hour period.

TikTok, born from the Chinese short video app, Douyin, has attempted to replicate this metric abroad and is now also offering gifts in the form of tips in select regions.

YouTube also began offering a similar system with its Super Chat function in 2021, from which it keeps around 30% of overall earnings gained. Payment also requires linking your credit card to Google Pay.

Twitter-unfriendly

But before Chipper Cash further expands throughout Africa, ideas about Twitter in certain countries will need a revamp.

Kenya is one of the fastest-growing economies in sub-Saharan Africa and a hotspot for tech innovation. In the country, Twitter is used as a vibrant space for social discourse. The unstoppable force that is Kenyans on Twitter (or KOT) has resulted in the relocation of a New York Times East Africa Bureau Chief and a rally to stop IMF loans to the country.

Otieno says that moments like this make popular creators on apps like TikTok and Instagram hesitant to shift towards using Twitter.

“Twitter guys are seen as noisemakers in Kenya, so it’s not somewhere people go to show love.”

However, Otieno believes that the integration of new app add-ons like Twitter Spaces and a clear monetisation scheme like Chipper Cash provides, creates an added benefit for creators to tweet and speak.

“If you speak to TikTok and Instagram influencers, they’ll say, ‘I don’t have a Twitter account. I just don’t understand that space.’ But Spaces gave Twitter more life. I think that influencers have started to become more receptive, and we will start to see more of a transition.”

Source: https://techcabal.com/2021/11/18/chipper-cash-twitter-integration/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.221121

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On Monday, October 25, a Federal High Court sitting in Abuja, Nigeria overturned an interim order placed in August which directed the Central Bank of Nigeria (CBN) to freeze the bank accounts of Nigerian fintech platform Risevest. In August, the CBN got a court order to freeze the bank accounts of Nigerian fintech platforms Risevest, Bamboo, Trove and Chaka for six months on the basis that they were involved in speculative activities that contributed to making the naira weaker to the United States dollars.

This court order means Risevest has been absolved from any claims that it was involved in speculative activities and cryptocurrency trading after the CBN prohibited it in February.

On the issue of Risevest being involved in trading cryptocurrency, the court even said the circular issued by the CBN isn’t enough basis to sanction Risevest.

The presiding judge on the case, Justice Taiwo O. Taiwo, in his judgement held that the CBN could not rely on a mere circular to freeze the bank accounts of a company using its accounts to trade in cryptocurrency.

“Being unknown to law, circulars cannot create an offence because it was not shown to have been issued under an order, Act, Law or Statute,” he said.

Risevest’s CEO, Eke Eleanya, told TechCabal that in addition to that, the cryptocurrency transaction being referred to was done in January while the circular came out in February.

Eleanya also said Risevest is still engaging with the CBN to understand how best to comply with its regulatory requirements.

“The biggest feedback we’ve gotten so far is that the CBN is trying to prevent a lot of speculative activities and maintain control of the foreign exchange market. Their impression of us was that we were doing things that were outside of CBN’s reach,” Eleanya said.

Explaining how Risevest sources its foreign exchange, Eleanyasaid that Risevest works with payment processors partners like Flutterwave which have a global reach and uses credit lines in the US to make investments.

“So far, we’ve shown them that we’re not sourcing foreign exchange from official sources and reselling to the blackmarket to make a profit. We’re not contributing to the problem.”

This Risevest win comes a month after the Federal High Court gave a similar order that the bank account of fintech stock trading app, Bamboo, be unfrozen.

Source: https://techcabal.com/2021/10/27/risevest-wins-cbn-court-order-to-unfreeze-bank-accounts/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.281021

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Vendease was founded in January 2020 by four friends: Tunde Kara (CEO), Olumide Fayankin (COO), Gatumi Aliyu (CPO) and Wale Oyepeju (CTO), to solve Africa’s food supply chain problems by digitising procurement processes, storage operations and logistics, and offering flexible payment systems to help food businesses grow.

There are a lot of fragmented moving parts in running procurement for businesses in Africa, especially small food businesses. Food businesses are mostly vulnerable to substandard goods, fluctuating pricing system, expensive middlemen, wastage of productive time while restocking, and unreliable logistics.

Now, instead of going through the inefficient route of restocking food materials, restaurants can click to order and get all their food supplies within 24 hours on Vendease.

Building Vendease

Before Vendease, the co-founders, who have been friends for over six years, had forayed into different businesses together. They had even founded an adtech company that wanted to put ad screens in public buses and ride hailing cabs, but the business didn’t scale.

While growing up, Kara, ex-CEO of RED Media and Fayankin, ex-COO at Statecraft Inc., were actively involved in small-scale trading and procurement. Kara grew up on his civil servant father’s farm where they reared animals and grew crops, but the farm later folded up due to lack of access to the market.

Before leaving for university—and afterwards, occasionally during the holidays—Fayakin handled procurement for his family’s hotel business in Akure. Though Kara would go on to do different things after school and Olumide would become a procurement expert, having these early experiences from different perspectives was key to how they were able to quickly connect the dots when they came together to start Vendease.

Kara, who considers himself a foodie—somebody who loves to eat—had a light bulb moment when a food truck that sold “one of the best pork chops in the world” in the Lekki area of Lagos shut down due to its inability to cope with the price instability of food materials in Nigeria. The business was running at a loss and the owner told Kara he had to shut down.

Kara told his friends about the closure of his best pork chops spot. They all vented and, as usual, discussed the problem for a while, asking what if they could do something to help small food businesses like this to scale. But they soon forgot about it and went on with their lives.

The eureka moment that would lead to Vandease came when Fayankin and his wife won an online couple’s competition that sent them on an all-expense-paid getaway in one of the finest hotels in Lagos. While in the hotel, Fayakin overheard the manager of the hotel lamenting about the late delivery of items he had ordered for about two days. He engaged the manager and carefully registered all his troubles. He then asked the manager if he’d take an alternative if he saw one. The manager said yes and that’s how Vendease, which hadn’t been named, got its first customer.

“We stopped after the third successful errand. While running errands for this hotel, on the side, we were talking to other food business owners and learning a lot from the open market, and then we decided to build technology stacks that would help solve the problem at scale,” Kara told TechCabal.

They reached out to Gatumi who was then CPO at 54gene, Africa’s premier biotech company, and Oyepeju who was a serial techpreneur and has built technologies for a few global tech companies like IBM and MTN.

“We put a thesis together after a couple of months and analysed what the market size was, and what our market share would be if we were to kick off then. We took our thesis to local angels in the Lagos ecosystem and they gave us our first cheque to prove the business model based on our track records,” Kara said.

Pivoting into a more sustainable system

The initial idea was simple: enable food businesses to get their regular supply at the quality and price they wanted. So they built a marketplace to connect restaurants with manufacturers, vendors and farms. This way, restaurants could compare prices and buy according to their budget.

They entered the market with this product and, after a while, realised that they’d only digitised the traditional way of procurement. Their customers’ complaints on delayed fulfilment and poor quality still lurked around. So they started building proprietary tech and systems that would allow them to be active in the entire value chain, from the point of order to the point of last-mile fulfilment.

So how does a food supply operating system work?

Vendease doesn’t just allow food businesses place orders for food supplies and track them; they can also manage inventory, track expenses and gain access to credit facilities. The startup is moving towards becoming the only partner food businesses need to scale and stay in business.

According to Kara, the company has grown from a procurement marketplace to a full-fledged data company. In the space of 22 months of operations, the company has built a data bank that now gives near-perfect insights on how to serve their customers better.

“We now have an algorithm that can predict when and what our users are going to order. So we have our trained procurement officers on standby before our customers even make their orders. We can move ahead, and this is how we’ve been able to beat the 24 hours delivery time,” Kara said when asked how the company fulfils a promise of 24 hours delivery in a busy environment like Lagos.

Growth and traction

The startup is growing fast from a one-customer business to handling procurement for over a thousand food businesses in three Nigeria cities: Lagos, Ibadan and Abuja.

Because its algorithm was built on a tough market like Lagos, expanding and operating in Ibadan and Abuja was seamless.

In September 2021 alone, the startup said it has delivered approximately 100,000 metric tons of food and helped restaurants save approximately 5,000 man-hours in the last 9 months. This has helped the startup to hit a $12.9 million transaction volume in September.

The startup joined Y Combinator in the summer of 2020 and on Monday, October 25, it announced that it has closed a $3.2 million investment round from Global Founders Capital, Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC, Soma Capital. Early backers like Tayo Oviosu of Paga, John Obaro of Remita and Magic fund also participated.

Speaking on their investment in Vendease, Don Stalter, managing partner at Global Founders Capital, said, “As a backer of one of Africa’s very first unicorns, Jumia, we’ve seen a great deal of talent in the market—and Tunde and the Vendease team are best in class both in EMEA and globally. Their laser focus and rapid growth are unprecedented, and there’s a massive opportunity ahead.”

The company plans to use the fund to expand into more African cities and build more technology stacks that will position it as the operating system of food supply.

Source: https://techcabal.com/2021/10/27/building-a-food-supply-operating-system-the-vendease-story/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.281021

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Like most Nigerian workers, Kola*, at his former job, used to be paid his salary in the country’s official currency: the naira—until he started working at a fintech company registered outside Nigeria. Now he gets paid in USD Coin (USDC), a Stablecoin tethered to the US dollar. With this switch in his salary’s currency, Kola was offered a juicy opportunity to exit a quagmire many young Nigerians find themselves in: they make more money than their parents did but in a currency that has fallen so low their paycheck doesn’t reflect in their purchasing power.

Nigeria, like many African countries, grapples with currency risk. Back in 2015, its current president, Muhammadu Buhari, campaigned on a promise to increase the value of the naira. But since the start of his presidency, the country’s currency has plunged badly because demand for the dollar continues to outstrip supply. This plunge in the value of the naira has been majorly fueled by Nigeria importing more goods than it exports. With declining oil prices forcing the Nigerian government to devalue its official currency twice in the past year, and by roughly 35% over the past five years, the resultant inflation has thrown over 7 million people into poverty in 2020 alone, according to the World Bank.

Since saving in naira is a dead plan, more Nigerians now save their earnings in foreign currencies. Data from the Central Bank of Nigeria (CBN) revealed that Nigeria had a total domiciliary account balance of ₦6.566 trillion as of March 2021, and when this figure is converted to dollars at the official rate of ₦410 per dollar, it translates to about $16 billion.

Volatile naira drives Nigerians to digital currencies

Nigeria’s weak currency has pushed its citizens into saving their money in foreign currencies, for wealth and value preservation. But even this is in limbo because uncertainties rule the country’s financial regulatory climate. Nigeria’s CBN has a long history of clamping down on individuals, groups and companies it suspects of being responsible for the slump in the value of the naira. Out of nowhere, the CBN banned the sale of foreign currencies to bureau de change operators—also called the parallel or black market—in the country, accusing them of creating an artificial foreign exchange scarcity. It also threatened to go after abokiFX, a website that collates the black market foreign exchange rates daily, asserting that there is only one acceptable exchange rate: the Investors’ and Exporters’ FX Window.

This has made a lot of people apprehensive, especially those with funds in their domiciliary accounts. Their fears were heightened after Ibrahim Obanikoro, a member of parliament, suggested in a tweet that the CBN close all domiciliary accounts for the next year.

In addition to saving in foreign currencies, Nigerians have turned to cryptocurrencies—digital currencies that are out of the reach of federal government control.

This newfound hunger for cryptocurrency has seen Nigeria emerge as the leading country, per capita, for Bitcoin and cryptocurrency adoption in the world, according to a report by Statista—despite government crackdown. In fact, the African continent has been the fastest adopter of cryptocurrency in the world. Chainalysis estimates that African countries collectively received around $105.6 billion worth of cryptocurrency between July 2020 and June 2021. For context, sub-Saharan Africa received an estimated $48 billion worth of remittances in 2019, about half of which went to Nigeria, according to a Brookings Institute study. Between July 2019 and June 2020, the volume of cryptocurrencies sent to Africa from outside the continent was the highest of all regions Chainalysis studied. With 96% of the crypto value coming from outside the continent, this suggests that more Africans are receiving remittances via crypto.

Digital money is the future of finance

In February this year, the CBN placed a ban on cryptocurrency in the country when it directed banks to close the accounts of persons or entities involved in cryptocurrency transactions. At the time, the Nigerian apex bank claimed that cryptocurrencies and digital currencies were largely used in terrorism financing and money laundering, citing the anonymity of their transactions.

But months after that, the government, seeing it couldn’t quench the fire of cryptocurrency in the country, bet on digital money as the future by launching a central bank digital currency (CBDCs) named eNaira and nicknamed “Project Giant”.

Digital money like cryptocurrencies, CBDCs and Stablecoins will play a significant role in the future of financial services. Cryptocurrency is gaining worldwide acceptance; Stablecoin, a peculiar type of cryptocurrency, has been labelled the “future of money” by the Harvard Business Review; and all these are in direct competition with CBDCs.

Rest of World reported on how Stablecoins have found a use case in volatile markets like Nigeria, where CBN’s regulations force Nigerians to spend limited amounts of US dollars via their dollar cards each month. In order to bypass this limitation, Nigerians have switched to using Stablecoins to make their payments.

Stablecoins, such as the Tether (USDT), Binance USD (BUSD) and USD Coin (USDC) are a form of cryptocurrency pegged to a traditional asset like the US dollar or gold. In sub-Saharan Africa, Stablecoin remittances can be up to 20 times cheaper than traditional money transfers. USDT and USDC transfer fees are often as low as 0–1%. Paxful, a leading cryptocurrency trading platform in the country, declares that 1.5 million Nigerian users, representing about 5% of the platform’s trading volume, use USDT, the most popular Stablecoin.

There is a growing adoption of Stablecoins like $DAI, $USDT, $BUSD and $USDC in Nigeria. Unlike such cryptocurrencies as Bitcoin and Ethereum, which are notorious for their volatility, Stablecoin, like CBDCs, is a non-interest coin. Stablecoins have seen rapid growth this year, with USDC, the second-largest Stablecoin in the world, reaching a market capitalisation of over $30 billion.

Salary alert…but in crypto

Just like Olaf Carlson-Wee, Coinbase’s first employee who was paid entirely in Bitcoin, as far back as 2013, for three years, Nigerians also want to be paid in crypto.

Earlier this year, in July, Timi Ajiboye, CEO and CTO of Helicarrier (formerly Buycoins), announced that the company’s employees would now be paid in USDC. Twitter went agog, with many presenting themselves to Ajiboye for employment at his company.

In a process Kola describes as “seamless” when he receives his salary in USDC, he converts to naira only the amount he plans to spend for the week. “I don’t withdraw my full salary at once because you never know what the exchange rate will be tomorrow. So, even if waiting would add ₦500 to my salary, I’d rather wait than withdraw all at once and have the naira in my account drop in value between when I withdraw it and when I spend it.”

Kola says he can convert his crypto, using his company’s product, a cryptocurrency trading app, within two hours. He is unbothered by persistent news around the steady drop of the naira. He isn’t completely insulated from the naira crash, though, as a Nigerian living in Nigeria. But, he notes: “At least my salary’s value isn’t dropping as fast as it would have if I was earning in naira.”

A colleague of Kola’s, Deji*, who receives his base pay and benefits in USDC as well, reveals that all employees were kept in the loop right from when the company decided that that was the route it would take regarding employee compensation. As a fintech company, there was no need to convince anyone on the team about how Stablecoins would protect them from the steady fall of the naira.


The problem with crypto-salaries

At Kola’s company, individual contract staff, who make up a majority of its workers, are responsible for remitting their taxes. To help the employee with this process, an internal document containing information on tax and pension calculations and payments has been circulated around the company. This is the company battling the challenge that comes with paying employees in crypto, as legal barriers in many countries prevent this. Some of the barriers include the non-recognition of cryptocurrency as a legal tender and the challenge of calculating taxes when employees are paid in cryptocurrency.

For instance, it’s still risky to pay employees in crypto in the US because the currency is recognised by the Inland Revenue Service (IRS) as a property and not a legal tender. A piece of legislation, the Fair Labour Standards Act—a major custodian of employee rights—backs this position. The act states that employees must be paid in “cash or negotiable instrument payable at par”.

While legal systems around the world need more time to develop regulations that cater for crypto adoption, US-based Coinbase announced last week that it is launching a new direct deposit service, “Get paid in crypto,” that will let nearly anyone in the US receive all or part of their wages in cryptocurrencies. There are high hopes for the success of this rollout because if even a fraction of Coinbase’s millions of US customers sign up, the service will contribute, in no small way, to making crypto mainstream in the broader American workforce.

Some countries are already making progress with creating laws that define the payment of workers in cryptocurrency. For example, since 2019, New Zealand has made it legal to receive salaries in cryptocurrency and be taxed accordingly.

But in Nigeria, paying employees in crypto remains illegal. Nigeria’s primary legislation on the relationship between an employer and employees, the Nigerian Labour Act—established in 2004—renders any contract where part or all of a worker’s wages is made payable in another manner apart from legal tender illegal, null and void.

Despite these legal constraints, Nigerian employers in technology startups continue to make smart moves to create value for their employees and the move towards remunerating employees in crypto is one that’s unlikely to go away anytime soon.

*Names have been changed.

Source: https://techcabal.com/2021/10/19/whos-afraid-of-crypto-salaries/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.271021

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Over the past few years, tech solutions such as ride-hailing, carsharing, and vehicles-on-demand have helped to address some problems created by rapid urbanisation in Nigeria’s transportation sector. However, fundamental problems remain in the commercial transport vehicle leasing market.

In Nigeria, owning a vehicle is a luxury that many can’t afford. Hence, the majority of taxis and danfo—the privately run yellow and white mini buses that serve as unofficial public transport in Nigerian cities—are leased to drivers, who have to deliver rental fees to the owners either daily, weekly or monthly.

Inefficiencies within the largely informal space allow for fraudulent activities, from drivers defaulting on agreed payments to dubious investors leasing out unroadworthy vehicles. mygarage.africa is an online platform tackling these challenges by digitising the entire value chain in this market, from the way owners and verified drivers connect, to how the vehicles are maintained and rental fees collected.

Typically, the average Nigerian wanting to go into the commercial transport vehicle leasing business would rely on the recommendation of close acquaintances and without any form of guarantee on rental fees to be paid.

“Most times it’s based on only trust and drivers that get the vehicles often come up with excuses for why they can’t pay despite your agreement,” mygarage.africa co-founder Sylvester Chude told TechCabal. “We’ve seen an incident where a driver claimed his mother died on two occasions just to avoid paying the owner.”

How mygarage.africa works

mygarage.africa was created by Envio, a mobility-focused software-as-a-service (SaaS) startup founded by Chude, along with three other co-founders, in 2018. Launched in Abuja last October, the digital platform allows owners to create virtual garages to list vehicles for commercial rent or vehicle finance lease and connect with verified drivers.

A telemetry device—designed by Envio, leased to car owners, and installed by partner tracking companies—is fixed in the cars to generate data on the maintenance and roadworthiness of the vehicles while in use. Periodically, owners get automated reports on the inspections from support partners via a mobile application.

In addition, mygarage.africa has a billing gateway that guarantees rental fees. The system alerts the driver ahead of the agreed date for the next rental fee to be paid. If a driver defaults on the payment, the telemetry device disables the car engine and prompts the owner. But as soon as payment is made, the engine is restored. Envio makes money by charging a platform fee every time a car owner gets paid.

“Insurance can cover theft but won’t cover default on rental fees or misuse of the vehicle by the driver. What we’re bringing to the table is discipline, keeping drivers on their toes and preventing investors from losses,” Chude said.

Before Envio, CEO Chude spent nine years as managing director at CoTrac, one of Nigeria’s largest vehicle tracking device makers.

Chude’s work at CoTrac opened his eyes to the possibilities of developing home-grown vehicle monitoring solutions, including the use of local servers and the manufacturing of tracking equipment.

But why start Envio, when there are several vehicle tracking devices flooding the Nigerian market? Chude believes that while these products have their entry points into the market, they do not fully capture the entire needs of car owners and drivers like mygarage.africa.

“These days, vehicles have advanced computer systems from which we can source data on their health. With that data, our advanced system can shut down the vehicle or fine a driver if, for instance, he drives against traffic or his license has expired,” he explained.

Expansion to Lagos and beyond

Having gained popularity in Nigeria’s capital city, with the Envio device installed in over 1,000 vehicles so far, mygarage.africa is launching in Lagos, the country’s commercial hub, this month ahead of a planned nationwide and pan-African expansion.

“We’re very ambitious because what happens in Nigeria most likely happens in other countries in Africa. The majority of cars used for public transport aren’t owned by the drivers,” Chude said.

However, in the way of mygarage.africa’s growth are significant challenges. For one, Envio has had to grapple with the costs associated with being a pioneer in the commercial mobility-focused SaaS space in Nigeria. According to the CEO, the company is currently raising $1 million to improve its technology and inventory, due to the huge size of the addressable market.

“Considering we’re starting the journey in Africa, it’s expensive for us as we make some mistakes but eventually learn from them,” he said. “We’re currently raising, and need to have as many of these devices as possible to give out to many car owners.”

Being able to convince Nigerians to adopt the solution has also proved to be difficult. This, according to Chude, is because it’s new and even harder for those who have had a bad experience in the commercial transport vehicle leasing business. A lot of consumer education is needed.

Regardless, Timothy Nunu, an early investor in Envio and co-founder, is upbeat about the company’s prospects.

“This is a home-grown solution to a local problem, but it’s software and adaptable to several other markets. We have very good traction, a clear revenue model, and the problem being solved is obvious.”

Timothy Nunu has more than a decade of professional experience that cuts across the energy and financial services industries. He worked at some of the world’s leading investment banks, including Morgan Stanley, Citi, and Barclays Capital before moving on to found Timproxy, a Lagos-based energy company with a focus on oil and gas, marine, and power industries.

Why the decision to pivot into the startup space, invest in Envio, and even go on to oversee the startup’s strategy and operations?

The co-founder believes that Nigeria’s transport vehicle leasing business promises a high and viable return on investment (ROI) for investors willing to bet against the risks present within the sector and his experience in other areas apart from technology has helped in building Envio.

“The only problem in the sector is the risk and our technology reduces that exposure significantly,” he said. “In addition to the technology, however, a lot goes into formulating strategy. There are issues of supply chain and logistics, procurement, quality management, and other areas in which I have experience and help the team with.”

Beyond serving individual drivers and car owners, Envio sees real growth opportunities in working with transport unions, taxi aggregators, and e-hailing startups such as Uber and Bolt. These can offer the mygarage.africa technology on lease to car owners en masse while platform fees will be shared between all parties.

“Taxi businesses and e-hailing can’t reach full potential if downstream issues like fraudulent deals in car leasing aren’t addressed. Our accelerated growth depends on how many of these business partners we can work with,” Chude said, likening his company to Microsoft that provides software for laptops to function.

“We’re trying to create a standard, check fraud, bring accountability and transparency in this space,” Nunu adds. “It’s not just about flooding the roads with cars. The quality of people that will drive them matters and our system checks both the drivers and everyone in the system.”

Source: https://techcabal.com/2021/10/26/mygarage-africa-is-digitising-how-commercial-transport-vehicles-are-leased-in-nigeria/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.271021

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After two years of operation, DHL Africa is shutting down its pan-African online retail platform, e-Shop, at the end of the month.

“We are no longer accepting orders and this service will be closed effective October 30th, 2021. All orders in process will be shipped or refunded. Sorry for any inconvenience this may have caused,” a message on the Africa eShop website reads.

Launched in 2019, eShop was designed to help global retailers sell goods to Africa’s consumer markets.

Through the platform, consumers in Africa could shop directly from more than 200 US- and UK-based online retailers, with purchases delivered to their door by DHL Express.

Being a global leader in express logistics, DHL appeared to be well-positioned to connect African consumers with global brands, and an early-stage boom suggested that presumption was correct.

Within seven weeks of operations in 11 countries, DHL expanded the platform to nine more countries across the continent. This followed “impressive growth” in the usage of the Africa eShop app, Hennie Heymans, CEO of DHL Express Sub-Saharan Africa (SSA) said at the time. By August of 2019, the platform had been rolled out to 34 countries across SSA.

Once considered a threat to leading e-commerce players in Africa, DHL’s eShop offered relatively faster delivery compared to its peers but was also one of the most expensive platforms for international shopping, some of its users told TechCabal.

However, for reasons not stated, eShop has now been delisted from mobile application stores and some features on the platform have been disabled as DHL moves to shut down the service on October 30.

It is not immediately clear if the company is closing its eShop operations in other regions too, such as the Middle East and North Africa (MENA).

TechCabal reached out to DHL Africa for answers but has yet to receive a response at the time of publication.

Hi, unfortunately the eShop is closing 30 October. How can we assist you?

— DHL Africa (@DHLAfrica) October 21, 2021

A white-labeled product

While the Africa eShop appears to be a standalone e-commerce platform owned by DHL, that isn’t the case.

The eShop service was developed using Link Commerce, a white-label solution for e-commerce in emerging markets, owned by Nigerian company MallforAfrica.

Retailers can plug into Link Commerce’s platform to create a web-based storefront that manages payments, procurement, and logistics to sell online.

Being a white-labeled product, DHL’s Africa eShop website and offerings are very similar to that of MallforAfrica.

DHL’s eShop (top) and MallforAfrica have similar websites and offerings. Image credit: TechCabal
DHL has been a logistics partner for MallforAfrica since 2018 and that was not the first time both parties would come together to create an e-commerce platform.

In July 2018, the two companies co-launched Marketplace Africa, an e-commerce site for local African artisans to sell their products to buyers in any of DHL’s over 200 delivery countries.

Last year, DHL bought a minority stake in Link Commerce as it looked to expand its logistics customer base in Africa.

Source: https://techcabal.com/2021/10/26/dhl-africa-eshop-shutdown/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.251021

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Financial Services Innovators has called on the Nigerian government to embrace the language of technology to unite its citizens.

The Executive Director, FSI, Mrs Aituaz Kola-Oladejo, made the call at this year’s FSI and Nigeria Association of Computing Students’ Innovative Challenge, tagged ‘#TechonDemand’, hackathon, a statement on Monday by FSI read.

“Technology’s language is neutral and can become a force to unite Nigerians,” Kola-Oladejo said. “Government support and that of industry leaders in the private sector are highly desirable to promote innovation in our communities, particularly among the youths whose huge potential is yet to be fully harnessed.

“Our cause, the Campus Ambassadors Programme, launched with the TechonDemand hackathon, is one that speaks to nation-building. Through collaboration, we would achieve digital, financial, social and economic inclusion.”

FSI is a shared infrastructure for the financial services industry to foster innovation and support startups.

The FSI and NACOS challenge held virtually from October 1 to 9, and physically from October 12 to 14, 2021, was organised to provide solutions in the digitisation of key sectors.

“The hackathon was focused on four key sectors, which were financial services, health, transportation and education sectors fraught with challenges of cash dominance, inefficient processes and inclusion.

“The students were to create innovative solutions to solve these problems within their suburban communities. This, in itself, helps to create an innovative mindset in students as well as foster an innovative culture on campuses. It also aligns with our goal to raise responsible leaders and democratise innovation,” Kola-Oladejo added.

According to her, FSI commenced the tech talent chase with the innovative challenge in collaboration with NACOS.

“This is one of our Campus Ambassadors initiatives to prepare students for the challenges ahead,” she hinted.

With the rate of unemployment in the country, Kola-Oladejo said the reality implies no white-collar jobs for Nigerian graduates joining the labour market yearly.

“To change this narrative, FSI commenced an initiative that will help the youth create jobs for themselves, instead of waiting endlessly for non-existent ones. We decided to intentionally create a pipeline of tech talents that will either be employable by the financial services sector to address the skill gap, given the recent brain drain and mass exodus of Nigerian talents to the western world or talents transiting to become tech entrepreneurs.

“We received tremendous support from the Nigeria Inter-Bank Settlement System, Wema Banķ, Sterling Bank, Flutterwave, Capricorn Digital, Techcabal, Future Africa and AXA Mansard,” she noted.

Stakeholders, who made presentations at the three-day event, reiterated the need for investment in infrastructure and human capital development, as well as the promotion of indigenous content in the Information and Communications Technology sector to boost Nigeria’s economy, thereby supporting Kola-Oladejo’s call.

“We [have] realised that our greatest assets are our people. You do not need to start thinking of jobs after graduation. For you, the computer students, this is an opportunity to key into this,” the Director-General, National Information Technology Development Agency, Kashifu Abdullahi, said.

Assistant Director, Central Bank of Nigeria/Head of the Digital Financial Services Unit, National Financial Inclusion Secretariat, Stephen Ambore, who was one of the judges for the challenge, said, “The TechonDemand hackathon is an excellent example of how to effectively bridge this gap” of harnessing talents in providing solutions to real-world problems, which is a bit challenging.

“This platform provided by FSI has gone a long way in harnessing talents to address pressing problems in the Nigerian economy.

Wakanda, AAU and STEMInnovators teams emerged as the top three winners of the competition and were awarded N1m, N500,000 and N300,000 prize money respectively. Also, FutureTrek, The Bells Team, Start Vest, GodHands, Halal Invest, Team KPT and Adashi, who took 4th to 10th positions, also got a consolation prize of N100,000 each.

Team Wakanda presented a DigiPay, a USSD-based payments collection system, to clinch the star prize, labelling the solution as a collection system that can allow merchants and associations in higher institutions to collect electronic payments from customers and members.

“The solution will enable the collection of payments for goods sold online, in physical stores or via social media, as well as for the collection of payments for associations in higher institutions,” the team added.

Source: https://techcabal.com/2021/10/26/fsi-urges-government-to-use-tech-for-unity-nation-building/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.251021

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Apple’s second fall event, tagged “Apple Unleashed”, happened on Monday October 18 and everybody and their uncles have been talking about the exciting series of updates released at the event.

Unlike its September event that opened with drone-captured California landscapes in the company of live music, this recent event opened in a small garage with instrumental music, composed from a combination of simple sounds from the Mac, AirPods and HomePod.

Apple released two new Macbooks: the MacBook Pro 16-inch (2021) and MacBook Pro 14-inch (2021). The tech company went further to silence its critics with the two biggest surprises of the day: two new M1 chips—the Apple M1 Pro and M1 Max—which will power the new MacBooks and promise tremendous performance improvements over the silicon chips in previous MacBooks.

In a beautiful transition between Tim Cook and Zain Lowe, Apple also revealed the Music Voice Plan, a new subscription category for Apple Music that allows users to seamlessly use Siri with Apple Music.

The tech giant also introduced AirPods 3 and some new HomePod mini colours.

And in a move that looks like a joke but isn’t, Apple wants to sell its users a microfibre cleaning cloth for $19. But that’s Apple doing what it does best.

Here is a detailed list of everything that was announced.

Apple Music subscription plan

Apple is undoubtedly bullish on music and how its users experience sounds. The fall event started off with the introduction of Apple Music Voice Plan, a new subscription offering that allows users to seamlessly enjoy Siri with Apple Music.

Siri will now have custom playlists dedicated to various moods and settings and featuring several notable artists. The new Voice Plan will allow subscribers to listen to their favourite music at an affordable price.

This feature will kick off in 17 countries before expanding to more regions. As you might have guessed, no African countries are included in the kick-off regions.

The new Voice Plan will begin at just $4.99 a month, which is way lesser than the individual and family plan that are $9.99 and $14.99 respectively.

New colours for Apple HomePod Mini Smart Speaker

Aesthetics—that’s the simplest way to describe this update. Even though Apple won’t be giving us colour variations in Mac, as demanded by lots of users, it has added new colours to the HomePod. They are now available in orange, yellow and blue.

AirPods 3

Airpods 3 was one of the most anticipated products on the list, and it was launched with new features. It has the same design as the AirPods Pro and is loaded with spatial audio along with new low-distortion drivers, with sweat and water resistance.

It has a battery life of over six hours and arrives with MagSafe and wireless charging. The new AirPods selling price starts at $179 and will be available from next week.

M1 Pro And M1 Max Chips

Earlier in this article, we called these updates the two biggest surprises of the night. We didn’t get just one horsepower processor; we got two. Apple is generous and we appreciate that.

These two processors are like the SSC Tuatara of computer chips; they are, by far, the strongest and fastest processors from Apple—and from any company—to date.

These two chips power the newly released Mac.

New 14″ and 16″ MacBook Pros

MacBook Pro

In our review of iOS 15, we mentioned that Apple is listening to its users now more than ever. And that’s evident in this new update. The new Apple Silicon-powered MacBook Pros, in 14″ and 16″ variations, have a lot of the things people want. Some things they want them to add and some they want them to bring back.

There are more ports (HDMI and SD card reader), MagSafe charging, real function keys and no-touch bar, along with what they promise is blistering speed with extreme energy efficiency.

The two devices come with a 1080p camera, studio-quality mics, more powerful sound system, and large beautiful Mini-LED displays. Some critics likened it to a notebook with a superman ability.

The price starts at $1,999 for the 14-inch and $2,499 for the 16-inch. The basic models come as standard with the M1 Pro, 16GB of Unified Memory and a 512GB SSD. The 16-inch comes with the 10-core CPU instead of the 8-core in the 14-inch.

“It looks like Apple intentionally released simple iPhone upgrades to lead their competitors on. Intel did their social experiment ads and capitalised on the inefficiency of Apple; then Microsoft had their event boasting about how they have built the best PC in Surface Studios, combining a cool form factor,” Dumebi Iwuchukwu, design lead at Big Cabal Media, and of course an Apple fanboy, said in his unusual slack rants.

“Now Apple has blown them out of the water with better chips. The 64gb video memory is the most futuristic innovation from Apple so far; plus all these happened amidst a global chips shortage.” he reluctantly concluded.

The prices of the two devices go up as their specs thicken. For instance, there’s an addition of $500 on 14-inch for the M1 Max with 24-core GPU; 32-core GPU adds $700. You can jump up to 32GB of Unified memory but for another $400, and there is a range of SSDs available, 2TB, 4TB, and 8TB for a whopping $2,400 more.

The fully specced out 16-inch comes in at $6,099.

Insane. At this point, we’ll have to agree with Dumebi that Apple has blown its competition out of the waters with these updates, or can you tell us what can beat this in the world?

Source: https://techcabal.com/2021/10/21/apples-new-releases/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.251021

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In a deal subject to approval from the Central Bank of Nigeria, MFS Africa has signed an agreement to acquire Capricorn Digital, one of Nigeria’s largest digital solutions and distribution companies with a 90,000-strong agent network across the country, for an undisclosed amount.

As the largest fintech interoperability hub in Africa, MFS Africa connects banks, telcos, and money transfer operators across over 35 countries via a single integration point. Paga, MTN mobile money, Ecobank, and Safaricom are among the operators integrated on the hub, with an estimated 320 million mobile money customers interacting across various digital wallets without transaction fees associated with switching platforms.

Capricorn, under its SME-focused brand, Baxi, operates an ecosystem of digital payment services. Its solution is built to help Nigerians with everyday payment needs; including utility bill payments, airtime purchases, pay-TV and data subscriptions, withdrawals, and money transfers. The company delivers these services through its retail network of agents and merchants in some of the remotest locations across Nigeria, and via its BaxiBox POS, BaxiPay, Baxi MPoS Device, and BaxiRIMS products.

The 100% cash acquisition, MFS Africa’s third in five years, sees the pan-African payments giant expand into Africa’s largest economy, where its presence to date has been limited given the country’s small number of mobile wallets. Capricorn will be called MFS Africa but its core product, Baxi, retains its name.

Both parties declined to disclose the value of the deal but on a call with TechCabal, Capricorn Founder and CEO, Degbola Abudu, said the deal is the second-largest of its kind in Nigeria’s fintech space, behind the $200 million Stripe paid for Paystack last year.

MFS Africa was founded in 2009 by Dare Okoudjou, a Beninese national, while Nigeria-born Abudu started Capricorn in 2014, with Folu Majekodunmi. The acquisition creates a larger, more versatile company that fuses interoperability between money operators and a super-agent network reaching the mass market.

A pan-African march

MFS Africa’s big vision is to have a presence in all 54 African countries, serving 500 million people and millions of small businesses, according to Okoudjou.

“If you have a phone or POS, it should be enough to transact with the rest of Africa and the world,” he tells TechCabal. “We’re building the foremost, currency-agnostic, real-time hub for payments on the continent, to enable people transfer money the way they can call each other.”

Often, MFS Africa’s continental expansion plan has involved partnering with money operators and making minority investments in other fintech companies across Africa, as in the case of Julaya, Maviance, and Numida.

However, Okoudjou explains that the company opts for full acquisition when both parties consider that more effective for achieving their shared long-term ambitions.

Why an acquisition?

Similar to Beyonic, a Ugandan fintech startup MFS Africa bought in June 2020 also for an undisclosed amount, acquisition talks with Capricorn evolved from a minority investment to a full buyout.

“The more we spoke with Dee, the more we realised what we could achieve with a full acquisition instead of being only investors in which case there could be misaligned incentives.”

Okoudjou further explains that the need to “bolster our presence in Nigeria” given its unique market features—the prevalence of offline payment touchpoints over mobile-first transactions—drove MFS Africa’s interest in Capricorn.

“In other markets, one or two partnerships with mobile money operators could see us reach 60% of digital payment users in the country,” he says. “However, mobile money isn’t that widely adopted in Nigeria. Instead, agent networks such as Capricorn’s have grown rapidly.”

While MFS Africa can service SMEs online through Beyonic, for instance, Baxi enables the company to reach offline merchants in Nigeria and beyond.

For Abudu, the future of the mobile payments landscape in Africa is a game of few, where consolidation is the way forward, and attempting to scale alone would require more capital expenditure and a longer time to execute.

“It’s a good time to partner with a company that brings a real pan-African presence and we see synergies across our operations. They offer a wide range of value-added products and services like cross-border payments while we have access to SMEs in Nigeria, one of the biggest markets in Africa,” he says. “We believe that we’ve barely scratched the market’s potential. The deal brings many things that allow us to grow very quickly.”

Following the acquisition’s close, MFS Africa will build Baxi into a key node on its digital payment network, allowing customers to make cross-border payments to and from Nigeria, similar to what it’s done with mobile money operators across Africa. MFS Africa will also expand Baxi’s proposition for offline SMEs to select markets within its footprint.

“We’ve been able to build a large business with relatively small capital but now we want to be able to compete, not just in Nigeria but also across Africa,” Abudu says. “The deal with MFS Africa gives us leverage to take Baxi and the model that’s been so successful in Nigeria to other African countries.”

MFS Africa plans to engage with Nigeria’s central bank and other regulators to seek any other additional licenses needed to operate its full-service offerings—such as remittance, micro-lending, insurance—while also exploring commercial partnerships in the country.

Source: https://techcabal.com/2021/10/20/mfs-africa-acquires-baxi/?utm_source=nairaland_reshare&utm_medium=referral&utm_id=nairaland.251021

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