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Top 10 African tech companies and capital raised in 2020
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Business News
Tech Startups should emulate Konga – EX Unilag VC
Prof. Oye Ibidapo-Obe, a former Vice-Chancellor of the University of Lagos has advised tech startups to emulate the new Konga.
He gave this charge in a recent engagement with budding entrepreneurs, business owners and other Ph.D. students in Lagos.
According to Prof. Ibidapo-Obe, Konga has sprung a surprise in the last six months, noting that the impact of the new owners of the business has been felt in the e-commerce landscape.
“The new Konga is a very good case study for tech start-up to emulate as it is obvious that there is a clear plan by the new investors. If we consider their omni channel strategy which is quite expensive, only a few Nigerian banks can match the fusion of online power with the number of stores being rolled out across the country, mostly in Lagos as I have seen.
He continued
“What we can learn from this is that, apart from strategy, planning and tact is very critical in the Third World. I am sure the former owners of the business will be amazed at the transformation the business had undergone within the last six months. A company like Konga has proven that Nigerians have the capacity to make things happen and though I am not sure what their figures look like today, I am sure it must have appreciated over 200 per cent,” he said.
Continuing, the Professor of Systems Engineering and Fellow of the African Academy of Science cautioned that startups must be seen to deliver on their promises and not just raising funds or using investor capital to fund flamboyant lifestyles.
“The Konga example shows that African entrepreneurs can hold their own and succeed. It is very important, however, for budding entrepreneurs or startups to go through an incubation period and excite their investors to inject more funds rather than being on negative and still asking for more funds. It has become fashionable for startups to keep looking to raise money without looking at the book balance while unconsciously signing off their equity.
“When entrepreneurs gradually liquidate equity, they must see a bigger future even as they continue to dissolve their shares. Modern investors are very smart and when they see that they are gradually getting a foothold in the business, they can see that you are gradually liquidating and their funds is at risk. This is why there is a high failure rate among startups as investors must, at a point, take a business decision not to put in more money because the owner has reduced his stake substantially that he has nothing to lose anymore.”
While noting the difficulty in gathering accurate statistics in Nigeria, Prof. Ibidapo-Obe observed that a lot of business decisions are based on assumptions. He, however, disclosed that the image of the new Nigeria will be built by the new breed of young Nigerian whiz-kids, irrespective of the current harsh economic climate.
“You must not be discouraged by the current economic and political situation in the country. Every country goes through it and Nigeria is no exception. Most importantly is the fact that, the country will emerge stronger from it and young, smart entrepreneurs will own the country in future and will create even more wealth in a short space of time than the present set of entrepreneurs,” he concluded.
Tech News
Top 10 African tech companies and capital raised in 2020
These are the top 10 tech companies and the capital they raised in 2020.
African startups raised over $1 billion in funding in 2020, with Nigerian startups raising 17% of this amount – 55.37million in Q1 2o2o and 28.35million in Q2 2020, according to Techpoint.
These are the top 10 rankings of the highest fundraisers for 2020.
Flutterwave
The startup provides digital payments infrastructure and services which enable global merchants, payment service providers, and pan-African banks to accept and process payments across various channels.
It raised a $35M Series-B round led by US venture capital firms Greycroft and eVentures in January 2020. The funding was invested in technology and business development to grow market share in the countries it operates in.
ChipperCash
The startup offers cross-border P2P payments services across 7 African countries. It raised $30m in a Series B funding round in November 2020 led by Ribbit Capital, an American based VC firm that invests in early-stage startups.
The funding was used to improve its products to include API payments solutions, crypto-currency trading options, and investment services and also expand its markets.
54gene
The startup is equalizing precision medicine by including underrepresented Africans in global genomics research. It raised $15M in a Series A funding round in April 2020 led by Adjuvant Capital – a life sciences fund backed by the International Finance Corporation, Novartis, and the Bill & Melinda Gates Foundation.
These new funds will be used to address the gap that exists in precision medicine for people on the African continent.
Aella Credit
The startup is a one-stop app for all your financial needs. Aella makes it super easy for anyone to borrow, invest, and make payments. It secured a $10 million debt financing round from a Singaporean company – HQ Financial Group.
The new capital raised from Singapore is expected to facilitate the credit company’s effort to provide financial inclusion to many more of the people who are currently unbanked across Nigeria, West Africa, and other emerging markets.
Helium Health
The startup has become the leading provider of full-service technology solutions for healthcare stakeholders in Africa. It raised a $10 million Series A round in April 2020.
Global Ventures and Africa Healthcare Master fund (AAIC) co-led the investment round. Helium plans to use the latest funding round to hire and expand to North and East Africa, including Kenya, Rwanda, Uganda, and Morocco.
Kuda Bank
The startup provides a full banking service on your smartphone. It secured a US$10 million seed round in November 2020 – the biggest seed round ever to be raised in Africa, led by Target Global with participation from Entrée Capital and SBI Investment.
The funding will be used to help accelerate its growth plans and keep up with customer demand. Specifically, funds will be used for key hires, product development, and to expand operations across Africa.
Trade Depot
The startup is a Nigerian B2B eCommerce company that utilizes an end-to-end distribution platform aimed at connecting the world’s top consumer goods companies directly to retailers in Africa.
It raised $10-million in a pre-Series B equity round co-led by Partech, International Finance Corporation, Women Entrepreneurs Finance Initiative (We-Fi), and MSA Capital in July 2020.
The new investment will enable Trade Depot to continue connecting international brands with small businesses in Nigeria, expand into other African cities, launch a suite of financial products, and credit facilities aimed at supporting its retailers.
Field Intelligence
The startup is helping governments and businesses make good on the promise of healthcare in the fastest-growing parts of the world by making the pharmaceutical supply chain radically simple, affordable, and easily accessible.
It raised a $3.6 million Series A round in March 2020, led by Blue Haven Initiative, with investors including Newtown Partners via the Imperial Venture Fund and Accion Venture Lab.
The investment will be used to scale Shelf Life expansion throughout Nigeria and Kenya, as well as the development of additional services for Shelf Life clients and their patients.
MedSaf
The startup connects suppliers to hospitals and pharmacies directly to make the pharmaceutical supply chain more efficient. The health start-up raised $3.5M in a seed funding round in December 2020. It will use this funding to expand to other African countries.
Auto Chek
the company is an automotive technology company that aims to build solutions for the African market. It raised $3.4 million in pre-seed funding round in November 2020, co-led by TLcom Capital and 4DX with inclusion from Golden Palm Investments, Lateral Capital, Kepple Africa Ventures.
Autoochek will use the investment to grow its Nigerian and Ghanaian markets, invest in its tech, and grow its team.
Despite the ravaging impact of Covid-19, Nigerian tech start-ups raised millions of dollars in funding. We hope to see more investors in the first quarter of 2021.
Economy & Politics
FG receives N144 billion in dividends from NLNG in 2020
NLNG, paid the Federal Government a dividend of N188 billion in the fiscal year ended December 2020.
Nigeria Liquified Natural Gas Company, NLNG, paid the Federal Government a dividend of N144 billion in the fiscal year ended December 2020.
This is according to the information contained in the Ministry of Finance Budget implementation report for the period of January 2020 to December 2020 and presented by the Minister for Finance Dr. Zainab Ahmed.
During the year, the Federal Government budgeted a sum of N80.3 billion as its share of dividends from NLNG, however, the actual sum received as its share was N144 billion, N63.2 billion more or 79% higher than projected.
The year 2020 was a difficult year for the government as the fall in crude oil prices and the economic shutdown that was triggered by the Covid-19 Pandemic dented projections and ravaged revenues.
READ: NLNG says Train 7 project will surge production capacity to 30 million MPTA
NLNG Dividend Bliss
The dividend received from NLNG was a major bright spot in the government’s revenue performance for the year.
- During the year, the government projected revenue of N5.36 trillion but only received N3.9 trillion in revenues representing a shortfall of N1.4 trillion or 27% for the year.
- The huge dividend windfall received in 2020 is a stark contrast from 2017 when Nigeria just exited a recession triggered by falling oil prices and a sharp exchange rate devaluation.
- In that year, the Federal Government’s share of dividends from Nigeria Liquefied Natural Gas (NLNG) dropped by as much as $687 million, from $1.04 billion in 2015 to $365 million in 2016, a 65% drop.
- The N144 billion received in 2020 topped the amount received from signature bonuses only N78.2 billion and complimented the N192 billion received by VAT.
- It is the most effective form of revenue generation for the government.
READ: NLNG signs 10 year sales deal with Eni
NLNG Controversies
Back in July Nairametrics reported that the House of Representatives planned to investigate the alleged illegal withdrawal of $1.05 billion from the NLNG account by NNPC without its knowledge and appropriation.
- They had accused the NNPC of illegally tampering with the funds at the NLNG dividends account to the tune of 1.05 billion dollars thereby violating the nation’s appropriation law.
- NLNG is a company jointly owned by Nigerian owned NNPC(49%), Shell (25.6%), Total (15%), and ENI (10.4%).
- The company is located in Bonny Island and has six trains with a total capacity to process 22 million tonnes of LNG a year and as much as 5 million tonnes of natural gas liquids.
- NLNG currently accounts for about 7% of the total LNG supply in the world. Nigeria is ranked as the 4th exporter of Natural Gas in the world.
READ: NLNG signs supply agreement with Galp Trading SA
Upshots: The FG is targeting a revenue of N208 billion from NLNG as dividends in 2021. If this materializes, it will be a significant payout in dividend (in naira terms) competing with the N238.4 billion expected from VAT.
- Important to note that the recent devaluation of the naira will increase the naira value of dividends and other government revenue, as it did in 2020.
- The government also targets N6.6 trillion in revenue for the period under review.
Updated: An earlier version of this article captured the dividend as N188 billion instead of N144 billion. It has now been corrected.
Coronavirus
COVID-19 Update in Nigeria
On the 16th of January 2021, 1,598 new confirmed cases and 7 deaths were recorded in Nigeria
The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record significant increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 108,943 confirmed cases.
On the 16th of January 2021, 1,598 new confirmed cases and 7 deaths were recorded in Nigeria.
To date, 108,943 cases have been confirmed, 85,367 cases have been discharged and 1,420 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 1.13 million tests have been carried out as of January 16th, 2021 compared to 1.03 million tests a day earlier.
COVID-19 Case Updates- 16th January 2021,
- Total Number of Cases – 108,943
- Total Number Discharged – 85,367
- Total Deaths – 1,420
- Total Tests Carried out – 1,135,535
According to the NCDC, the 1,598 new cases were reported from 24 states- Lagos (461), FCT (206), Plateau (197), Rivers (168), Kaduna (116), Anambra (53), Ogun (49), Ebonyi (47), Edo (42), Sokoto (32), Imo (31), Katsina (31), Oyo (30), Akwa Ibom (27), Delta (16), Kano (16), Abia (15), Niger (15), Ondo (11), Bayelsa (10), Borno (9), Kebbi (8), Ekiti (7), Jigawa (1).
Meanwhile, the latest numbers bring Lagos state total confirmed cases to 39,723, followed by Abuja (14,544), Plateau (6,617), Kaduna (6,121), Oyo (4,679), Rivers (4,382), Edo (3,246), Ogun (2,831), Kano (2,577), Delta (2,102), Ondo (2,070), Katsina (1,723), Enugu (1,583), Kwara (1,566), Gombe (1,489), Nasarawa (1,269), Ebonyi (1,206), Osun (1,186), Abia (1,129), and Bauchi (1,107).
Borno State has recorded 859 cases, Imo (841), Sokoto (677), Benue (653), Akwa Ibom (615), Bayelsa (608), Niger (547), Adamawa (540), Anambra (513), Ekiti (466), Jigawa (425), Taraba (258), Kebbi (248), Yobe (207), Cross River (169), Zamfara (162), while Kogi state has recorded 5 cases only.
READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government
Lock Down and Curfew
In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.
The movement restriction, which was extended by another two weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.
On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.
On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.
Governor Babajide Sanwo-Olu of Lagos State announced the closed down of the Eti-Osa Isolation Centre, with effect from Friday, 31st July 2020. He also mentioned that the Agidingbi Isolation Centre would also be closed and the patients relocated to a large capacity centre.
Due to the increased number of covid-19 cases in Nigeria, the Nigerian government ordered the reopening of Isolation and treatment centres in the country on Thursday, 10th December 2020.
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