Flutterwave vies to buy British fintech Railsr
Flutterwave and a consortium of existing Railsr shareholders are vying to buy the British company amid a tough environment for fintech funding, Sky News learns.
Greetings!
Glad to be back with The Briefing. And sure you enjoyed your holiday as much as you can. The year is already packed with many events - from the upcoming Nigerian election to alleged news about the Governor of the Apex bank - Emefiele, seeking asylum and how hazy the African startup space looks, in terms of funding, hiring and firing, especially scaling by customer acquisition and revenue.
Fundings for African startups in 2022 saw great progress from what was transacted in 2021. According to an article by Tech Cabal; “The continent closed the first half of 2022 at $3.5 billion, a 133% increase from the first half of the previous year.” Side by side with other markets, the 2022 H1 African Venture Capital Activity Report pointed out that “… the United States saw a contraction of -25% in startup funding compared to Q2 2021, while Germany and France saw contractions of -39% and -15%, respectively”.
With the massive funding that poured into African startups, the global recession didn’t slow down and this gave startup founders the cause to start looking for ways to cut costs in order to have a longer runway for their cash. 2022 gave us loads of mass lay-off news. And from how it looks, it will continue through 2023. Braze yourself.
But, one part of the whole loop is less talked about in the general start-up funding and firing news - ‘customer acquisition cost’. The cost of acquisition is getting costlier while the consumer buying power is on the decline. Unless a startup is selling them essentials - food and shelter for B2C and for B2B, help them save costs and make more money.
The growing inflation is eroding consumers’ purchasing power.
What this means is that beyond cutting costs by layoffs, the marketing budget will be affected and a leaner customer acquisition strategy will be tested (experimented). Hopefully, startups don’t over-cut costs and refuse to experiment. To win in 2023 as a business, understand how you can help your customers to save costs and/or make more money.
Sam.
Quick Stats.
In five African countries, the average level of daily spending was still below $2.50 per person in 2018. In the vast majority of countries on the continent (about 40), the average level of daily spending did not exceed $5 per day.
In other news.
Why African insurers must adopt ESG 1 for sustainable growth – ICEA LION Group CEO
At the recent 2022 Insurance Directors’ Conference, which was held in Lagos, under the theme Transforming the Insurance Industry through ESG Principles: Directors’ Roles, Philip Lopokoiyit, Chief Executive Officer (CEO), ICEA LION Holdings, issued the clarion call. “In order to promote and encourage African insurance market operators, he emphasized that the proclamation is “an Africa-focused initiative.” As insurance players become change agents in light of the greatest crisis confronting humanity, he continued, “It is a convening tool that communicates their readiness to build ESG principles and solutions within their organizations.” CSRToday
mPharma donates N35m drugs to Nigerian hospitals
As part of its commitment to CSR, mPharma, Africa’s top patient-centred technology-driven healthcare company, has provided medicines worth N35 million (about $76,000) to all of Nigeria’s publicly funded hospitals. Lagos, the Delta, the Rivers, and Abuja are among the states. The donations were given to specific hospitals that cater largely to low-income patients and have high patient traffic. Gregory Rockson, the CEO of Pharma said that patients with a variety of illnesses, such as hypertension, diabetes, malaria, and infectious diseases, who are unable to afford the medications required for their treatment, will be given access to the donated drugs free of charge. CSRToday
Ghana’s Jetstream raises $13m to grow cross-border commerce across Africa
Jetstream Africa is an e-logistics company founded in Tema, Ghana and operating across 14 African countries. Its core product, pre-financed logistics, enables businesses to rapidly book and monitor door-to-door logistics, financing, insurance and other trade support services online. The startup raised a US$3 million seed round in 2021 and has now progressed to Series A with a US$13 million investment. New investors include French development institution Proparco through the Digital Africa Bridge Fund, ASC VC, Octerra, Cauris, Senegal’s Wuri Ventures, Seed9, The MBA Fund, W Fund and family offices. Existing investors Alitheia IDF and Golden Palm also participated in the round. Disrupt Africa
Binance Is Bleeding Assets, $12 Billion Gone In Less Than 60 Days
Binance, the world’s largest cryptocurrency exchange, is struggling to hold onto assets. In the wake of the collapse of rival FTX, investors have been pulling their crypto in recent weeks, and despite assurance from CEO Changpeng Zhao that the situation had stabilized, outflows are accelerating. Customers withdrew a net $360 million on Friday, according to data from crypto data firm Defillama. A Forbes investigation revealed that, in fact, Binance lost 15% of its assets since a Twitter posting by Zhao (widely known as CZ) on the same day as he downplayed the Nansen report withdrawals. Forbes
African payments giant Flutterwave vies to buy British fintech Railsr
Railsr - which was previously known as Railsbank - is fielding offers from potential buyers including Flutterwave, which has attracted a multibillion-dollar valuation. News of the rival offers for Railsr comes as expectations grow of a wave of consolidation in the fintech sector as companies struggle to access sufficient standalone funding to survive. Railsr itself raised a bridge funding round late last year which was designed to provide enough capital to see it through to a sale. Railsr has raised well over $100m in equity funding, with backing from investors including Visa. Sky News
What we are reading.
Tony Elumelu Foundation Appoints Chris-Asoluka CEO
3 organisations that grant startup funding to budding founders in Africa
Yemi Alade emerges Spotify’s “Equal Africa Artiste” for January
Digital Payment: Interswitch strengthens play in Sierra Leone, Africa
About The Briefing.
The Briefing is a quick bite briefing of African tech and business activities trending. The writers’ opinion on one huge trending topic that matters, followed by “In Other News” and “What We Are Reading”
This Briefing by Sam.
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