Sokowatch rebrands to Wasoko as it raises $125M Series B from Tiger Global and Avenir

Informal retail is king in Africa, with hundreds of billions of dollars of consumer goods are sold through its channels yearly. Yet its industry remains highly fragmented as shop owners and kiosks still have issues around access to capital and getting goods regularly and on time from suppliers and distributors.

B2B retail and e-commerce platforms have primarily tried to fix these inefficient supply chains over the last couple of years and have received substantial investor backing since the pandemic.

It has been a hot sector for investors, and today’s news shows they aren’t slowing down in backing these startups just yet as Sokowatch, one of the major players in the space, announced that it has raised $125 million in Series B funding. The investment — which values the company at $625 million, as TechCrunch has learned — coincides with its rebrand to Wasoko.

In 2015, founder and CEO Daniel Yu launched Sokowatch in Kenya as an asset-light platform and a marketplace for distributing fast-moving consumer goods from suppliers to retailers. He told TechCrunch that this model wasn’t efficient because Sokowatch couldn’t guarantee that the goods were delivered to the customer when they made orders.

“We realized that to deliver the quality of service these shops deserved, we needed to get more involved,” said the CEO. “In managing the operations directly ourselves … we went from an asset-light backend distribution software platform to this market-facing platform that was out there delivering goods directly to shops themselves.”

At this point, Sokowatch was full-scale, asset-heavy, owning and leasing facilities in its distribution chain from warehousing to logistics. And what started in Kenya soon scaled into neighboring East African markets Tanzania, Rwanda and Uganda in 2018. While the company was due for a rebrand, Yu said it was still figuring out operations in this new integrated model.

However, its recent entry into Ivory Coast and Senegal somewhat forced the company’s hand. Yu believes Sokowatch is now ready for a rebrand as it enters its next phase of growth — moving from an East African player to a pan-African one.

“Sokowatch started as this kind of backend brand. We wanted a brand that could be more front and center for the African retailer and easily pronounced across all markets while reflecting our East African roots. So that’s why we’ve rebranded now to Wasoko, meaning ‘people of the market,'” he said.

Wasoko allows retailers from Kenya, Tanzania, Rwanda, Uganda, Ivory Coast and Senegal to order products from suppliers via SMS or its mobile app for same-day delivery to their stores and shops via a network of logistics drivers. The company also offers a buy now, pay later option for retailers who need working capital to order more goods.

Buy now, pay later offerings are the latest trend for B2B retail and e-commerce companies. They see it as a sticky option in an otherwise volatile space where retailers aren’t committed to one player, given non-differential offerings. To provide working capital to these retailers, the likes of TradeDepot and MarketForce raised impressive rounds with a significant debt component. But Wasoko chose not to go down that route; instead, it is financing its BNPL option from its balance sheet.

“We do buy now, pay later to our merchants and it’s a significant part of our business. But we’ve been able to do that on our own without raising any kind of separate debt facilities. But we’re looking at debt financing options,” Yu said.

In terms of competition, MarketForce, an asset-light platform, is also present in Uganda, Tanzania and Rwanda. TradeDepot, on the other hand, operates an asset-heavy model across Nigeria, Ghana and South Africa. What they have in common is a presence in Nigeria, arguably the largest market for informal retail in Africa.

“Our choice to expand to the Francophone West African markets, I think, reflects the strong growth that those countries have exhibited in the region overall. If you look at the past 10 years, both Senegal and Cote d’Ivoire have experienced solid year-on-year GDP growth,” said Yu when asked why Sokowatch hasn’t expanded into West African countries other than Nigeria.

“Whereas you look at a market like Nigeria, the reality is that growth has been volatile and in some years, in fact, negative. And on top of that, you have a lot of challenges in Nigeria’s macro-environment when it comes to the economy, currency and regulations.”

Informal retail across any African market is an untapped opportunity that gives any first-mover a ridiculous advantage. And though no B2B e-commerce player has a monopoly on the Nigerian market, it seems more saturated than other markets because of the number of players in it — from Sabi to Omnibiz and Alerzo. Less competitive markets like Ivory Coast and Senegal present an enormous opportunity for Wasoko.

“Any market that we look at is going to have a huge amount of demand for our services. And of course, the supply chains in these other markets are even less organized, less established, and therefore more fragmented with more inefficiencies,” Yu said. “We see the opportunity to take our model to be truly effective across Africa and expect that we’ll be able to leverage on our existing experience in our playbook for successfully launching and scaling our services now in six countries across the continent.”

Since launching in 2016, Wasoko has delivered 2.5 million orders to more than 50,000 active retail customers in its network. The company said its revenue has grown over 500% in the past year and 1,000% since 2019. TechCrunch learned that the African B2B e-commerce platform is processing $300 million in ARR/GMV across more than 150,000 monthly orders.

Wasoko’s 800 employees are shareholders of the company through its universal employee equity policy. The round of funding is good news for both employees and early backers who took a bet on Wasoko years ago as new investors Tiger Global and Avenir Growth Capital lead the new Series B round (the pair also co-led Flutterwave’s Series C investment last March).

“It was strategic. We’ve shared investors with Flutterwave since the early days; 4DX Ventures, for example, was an early investor in both Flutterwave and us,” Yu said when asked about the similarities between his and Flutterwave’s round.

“When it came to raising this round, I think being able to follow in their footsteps by working with these great global investors who had seen the great return that Flutterwave had brought them, I think helped smooth path for us as we reached the stage in our growth as well.”

For Tiger Global, this is the 10th deal and first outside fintech since entering Africa’s tech market in 2021. Wasoko is also its second e-commerce investment on the continent after leading Takealot’s $100 million in 2014 (Wasoko is B2B e-commerce, while Takealot is B2C).

It’s the third African investment for Avenir Growth Capital following its checks in Flutterwave and Carry1st.

Wasoko’s round, which is coming two years after it closed a $14 million Series A, also welcomed participation from VNV Global; Binny Bansal, co-founder of Flipkart; and Sujeet Kumar, co-founder of Udaan; Quona Capital; 4DX Ventures; and JAM Fund.

Kumar, bringing in years of experience from running Udaan, the largest B2B retail e-commerce company globally, joins Wasoko’s board of directors.

The new investment, the second-largest non-fintech round in Africa after Andela and largest in the B2B retail e-commerce space, will allow Wasoko further drive geographic expansion and product growth across the continent.

Despite staying away from Nigeria for so long, the seven-year-old company said it is exploring expansion into the West African nation as well as Southern Africa while consolidating its position across its six current markets. It will also make hires and expand its product offerings to point-of-sale merchant systems, bill payments and social commerce, verticals it might build in-house or back and acquire companies that provide such services.

The latest list of YC-backed companies worth over $150M is the most geographically diverse yet

In 2018, Y Combinator released its first mega list of the top companies valued at $150 million or more that have gone through the accelerator.

Over the past four years, it’s updated the list to reflect the current status of its most valued companies. Valuation isn’t the best way to measure a startup’s success or real-life value, of course, and YC has always admitted that. Yet, as the accelerator points out, “it’s the most commonly available metric to compare companies in the startup world.”

Thus, the original list of 101 companies has ballooned to 267 companies as of February 2022 (YC list isn’t exhaustive; some founders opt out of being listed).

Many factors are responsible for this growth. One is the increasing size of YC cohorts and the acceptance of companies both within and outside the U.S. There were 141 companies from 24 countries in the winter 2018 batch, compared with 377 companies across 47 countries in the summer 2021 group. The second is that companies YC backed four to five years ago, after raising a series of venture capital rounds, are now commanding huge valuations that they didn’t have in 2018.

What this means is that more companies, particularly outside the U.S., have joined this desirable list. Case in point: No African company made the list in 2018. Now, there are six.

Of the 267 companies valued at $150 million or more, over 60 of them (private and public) are valued at $1 billion or more. The top 10 are Airbnb, Stripe, Coinbase, Instacart, DoorDash, Cruise, OpenSea, Faire, Brex and GitLab (OpenSea, Brex and GitLab represent the crème de la crème of the 11% that are remote companies).

YC says 16% of the companies in its current list (44 out of 267) are based outside the U.S., compared to its first list, which included just seven non-U.S. companies.

According to the accelerator, six new countries home to these companies are making their appearance for the first time: Algeria, Tunisia, Senegal, Chile, Brazil and Singapore. And of the companies that are new to the list, 28% are outside of the U.S.

Regions with the most growth from 2021 are India, Latin America and Africa, the accelerator notes. There are eight Latin American companies, with six new to the list; of Africa’s six representatives, five are new to the list; and India has 10 companies, of which three are making their entrance for the first time.

“We always said YC is founded on the principles that talent is globally distributed. It’s all about investing in the best founders that have a unique insight and are willing to crack on those problems,” Anu Hariharan, partner at YC Continuity Fund, the accelerator’s growth stage fund, told TechCrunch. “We don’t even have any presence anywhere outside the U.S., but the formula is working, which tells us that generational companies are being built everywhere, not just in the U.S.”

Asides from the U.S., no other country has more YC representatives than India. The South Asian nation is also responsible for producing the first company based outside the U.S. to be ranked in the top 10 most valuable private YC-backed companies: Razorpay. The fintech, which is 14th overall on the list, was valued at $7.5 billion after its latest round.

Razorpay was one of the earliest startups backed in India alongside Meesho (23rd), the second most valuable YC-backed company in India. Now, the country is home to over 100 YC-backed companies.

Hariharan, who is Indian American, said this progression is a ripple effect of the success of YC’s earliest companies in the country. According to her, when one or two YC-backed companies in a region begin to scale while raising huge amounts of capital, it inspires other founders to apply to YC. India accounts for the second-largest volume of applications to YC.

“What does it take fundamentally, to start a startup, it’s courage,” she said. “India has a large concentration of software developers, and they, of course, can start a company. But you need courage to start a company versus going and doing a job. So when they see their peers like Razorpay doing so well, you start seeing a lot more people saying, ‘Let me at least try and work on a startup,'” said the partner, whose YC Continuity Fund has backed Razorpay and newer Indian upstarts Groww (39th on the list) and Zepto (114th).

Other Indian companies on the list include Khatabook (110th), Instawork (115th), Clear, formerly Cleartax (127th), OkCredit (177th), Cashfree Payments (224th), and Fampay (264th).

The same phenomenon can be said for Latin America and Africa. Colombia’s Rappi, the super app valued at $5.25 billion and 21st on the list, and Nigeria’s Flutterwave, the payments company that recently reached a valuation of $3 billion and is 36th on the list, opened the door for other companies across both regions to get into YC.

Rappi and Flutterwave have been on the list since 2018 and 2019, respectively. Other companies in Latin America include Frubana (103rd), Kovi (143rd), Nowports (160th), Fondeadora (180th), Fintual (227th), Houm (232nd) and Belvo (255th).

In Africa, there’s Wave, the spinoff company of WorldRemit-subsidiary Sendwave at 54th, Reliance Health (204th), Stripe-acquired Paystack (233rd), Yassir (247th) and Kudi (263rd).

There’s no doubt that this new crop of multimillion- and billion-dollar companies from emerging markets will continue to grow considering YC’s intention to increase its batch to 1,000 startups and double down on these regions with its new sweetened deal. However, one would be too optimistic to think they’ll grow at a fast pace (the percentage of companies headquartered outside the U.S. last year was 14%, compared to 16% this year).

That said, although Y Combinator seems not to have cracked the code on the diversity front with respect to founders’ representation, it has made some headway in the geographic representation of its most valuable companies.

Game studios come together to grow industry in Africa

Ten game development studios in Africa have come together under one umbrella, the Pan Africa Gaming Group (PAGG), in an effort to unify the continent’s gaming sector, which is currently fragmented. The association is further envisioned to drive the uptake of gaming in the continent, and grow developer talent.

The announcement was made today against the backdrop of the Africa Games Week 2022, which is taking place in Cape Town, South Africa. The PAGG said they aim to grow the industry by two times annually, and to put Africa “on the map of the global game industry.”

The gaming studios in the new lobby are South Africa’s Sea Monster, Senegal’s Kayfo Games, Cameroon’s Kiro’o Games, Ghana’s Leti Arts, Tunisia’s Digital Mania, Ethiopia’s Qene Games, Kenya’s Usiku Games, Tanzania’s Khanga Rue,
DopeApps from Rwanda and Messeka Games, with more are expected to join soon. Collectively, the current members have developed more than 50 games.

The PAGG will bring together games developed by its members for publishing under Gara, an African game store, and AfroComix, a content hub for Afrocentric creative work. These channels will enable content distribution and monetization by allowing locally relevant payment options including mobile money and airtime billing. They also plan to increase the number of Africa’s next generation game developers through training and incubation, a function that has already taken off in Kenya, at the Nairobi Game Development Center.

“One of our core values is not just to build a collection of games, but to incubate Africa’s gaming industry of tomorrow. There is a wealth of incredible talent already on the continent, with more graduating every year from top-tier game development schools like Rubika. Most graduates though are relegated to doing remote work for overseas clients due to the lack of local gaming job opportunities. We’re going to fix that,” said Leti Arts CEO Eyram Tawia.

PAGG founders are hoping to grow the gaming industry in Africa by two times yearly. Image Credits: PAGG

The lobby will be governed by a founders’ council to be made up of top gaming entrepreneurs from the continent and joined by Peter Kihara (ex-Goldman Sachs and PWC) who will serve as the group financial officer and Jake Manion, the BAFTA-nominated director and former game director at Aardman Animation in UK, as the group creative director.

Each gaming studio will maintain its autonomy but will be involved in voting proposals or resolutions brought forth by the council. Dawit Abraham, the CEO of Qene Games (Ethiopia) will be the PAGG’s spokesperson.

The gaming industry in Africa is set to grow exponentially due a soaring interest amongst the youth, and as more people get connected to the internet. According to the 2021 GSMA mobile economy report, 303 million people, about 28% of the population in sub-Saharan Africa, are connected to mobile internet, a number that is set to grow to 474 million by 2025, creating an even bigger market for the gaming industry.

South Africa has the highest saturation of gamers across Africa with 24 million people(almost half of its population) playing, according to the Games Industry Africa report. Other major markets include Ghana, Nigeria, Kenya, and Ethiopia. In 2021, South Africa generated the most total annual gaming revenue at $290 million, followed by Nigeria ($185 million), Ghana ($42 million), Kenya ($38 million), and Ethiopia ($35 million).

Reports say African startups raised record-smashing $4.3B to $5B in 2021

Last year was record-breaking for African startups. I know I’m probably starting to sound like a broken record, but the astronomical growth is worth highlighting again and again.

In this piece, I spotlighted what influenced this venture capital growth — which, at the time, was pegged at a little over $4 billion. But similarly to years past, the total amount raised by African startups varies among different reports.

We first emphasized this issue in a 2019 piece: Did African startups raise $496M, $1B or $2B in 2019? Then, the disparities between venture funding studies were stunningly clear. 

The figures were closer together when we carried out another comparison in 2020, with each study reporting between $1.3 billion to $1.5 billion.

This year, we’ll be looking at figures from data-tracking publications: Briter Bridges, Partech and The Big Deal, and not media ones, for the sake of cohesiveness.

Methodologies

It’s important once again to underline that these deal-tracking publications use contrasting methodologies in their reports. From the type of deals reviewed to the definition of an African startup, each factor contributes to the disparities in numbers.

Briter Bridges, for instance, avoids using geography to define an African startup due to factors contributing to business identities like taxation, customers, IP and management team.

Partech Africa covers equity deals in tech and digital spaces and funding rounds higher than $200,000. It also defines African startups as companies with their primary market, in terms of operations or revenues, in Africa — not based on HQ or incorporation.

The Big Deal tracks funding rounds from $100,000 and above and doesn’t have a set definition of what makes up an African startup

How many deals and how much did African startups raise?

Briter Bridges: African startups raised $4.9 billion in total estimated funding — $4.65 billion disclosed and about $300 million undisclosed. It’s more than a 250% increase from last year’s total funding of $1.3 billion. This funding was raised from over 740 deals, up 25% from 2020.

Partech: $5.2 billion from 681 equity rounds, up 264% from 2020 figures of $1.4 billion. The firm said the number of deals it recorded almost doubled, increasing 92% year-over-year from 359 deals in 2020.

The Big Deal: $4.33 billion from 820 deals, up from 155% from 2020 numbers of $1.65 billion. The number of deals in 2021 grew 73% year-on-year from 244 deals in 2020.

Fintech and other sectors

A common theme in the three reports shows fintech leading the way, sector-wise.

Briter Bridges: In 2020, the publication reported that fintech companies accounted for 31% of the total VC funding. That number doubled to 62%. Other sectors include health tech (8%), logistics (7%), education (5%) and clean tech (5%).

Partech: According to Partech, fintech, as the top sector, represented 25% of total African funding raised in 2020. In 2021, fintech startups got 63% of the continent’s total investments. Completing the top five is logistics at 7%, edtech at 6%, e- and social commerce at 5%, and enterprise at 5%.

The Big Deal: African fintech startups received 53% of the total VC funding in 2021; it was 49% in 2020. According to the publication, the sectors making up the top five are energy, logistics/transport, retail, and education and jobs.

Nigeria and South Africa are in the top two; Egypt and Kenya switch

Like two years ago, 2021 showed the Big Four countries’ preponderance in terms of investment destination.

Briter Bridges: For its 2020 report, Briter Bridges chose to attribute funding to startups’ place of incorporation or headquarters. It was different from what other trackers used and it slightly altered the Big Four’s positions. But for its 2021 report, Briter Bridges reverted to the more generally accepted method of ascribing rounds to startups’ main offices in Africa.

The publication didn’t give specific numbers this time, but it said Nigeria, South Africa, Kenya, and Egypt received the most investments in that order.

Partech: Its 2020 report had Nigeria on top, with Kenya, Egypt and South Africa rounding up the top four. Ghana came fifth.

In 2021, Nigeria retained the first spot ($1.8 billion), South Africa was second ($832 million), Egypt came third ($652 million) and Kenya landed fourth ($571 million). Senegal took the fifth spot with $353 million, while Ghana was sixth ($167 million).

The Big Deal: Nigeria topped African VC investment destination at $1.5 billion, South Africa with $949 million, Egypt with $599 million, and Kenya with $411 million. Startups in Senegal received more than $222 million, placing the country in fifth.

More funding for female-founded startups, or not?

There’s never been a better year for female-led startups raising million-dollar rounds than in 2021. But unfortunately, their representation remains minute due to a faster-growing percentage of male-run startups.

Briter Bridges: In 2020, Briter reported that 15% of the funded startups had women as founders, co-founders or C-level executives.

What was that number in 2021? Briter doesn’t say, but it reveals more frightening stats that go almost a decade back: 3.2% of African VC total funding and 8.2% of deals have gone to all-female co-founded teams since it started keeping track in 2013.

Partech: The publication placed the percentage of investments raised by female-founded startups at 14% in 2020. That number slightly increased to 16%, while equity deals stood at 20%.

The Big Deal: According to the publication, female-founded startups received 18% of African VC funding. When narrowed down to just all-female founders, the number is 1%.

Mega-rounds chaos

The 2021 influx of cash created a record year for mega-rounds — deals that equal or exceed $100 million. They shoulder much of the investment raised on the continent. Still, despite their appeal, some of these rounds contribute to the distortion in end-of-year reports because of how these publications interpret their operations in Africa.

Briter Bridges: 55% of total funding in 2021 came from 13 mega deals. They include OPay, Chipper Cash, JUMO, Tala, TymeBank, MFS Africa, MNT-Halan, Wave, Zepz, Zipline, Andela, Flutterwave and TradeDepot.

Partech: 48% of total equity funding went to 14 megadeals from 12 companies. They include OPay, Zepz, Zipline, Andela, Wave, Flutterwave, Chipper Cash (x2), Tala, MNT-Halan, JUMO, TymeBank, PalmPay and an undisclosed round from one of these companies.

Some tech insiders don’t view companies such as Zepz, Zipline or Tala as African companies — some see them as international companies headquartered in the U.S. or the U.K. with Africa as one of their markets, unlike other companies that are headquartered in Africa or both Africa and the U.S.

Should their rounds be excluded from the reports, venture capital in African startups conservatively falls between $4 billion and $4.5 billion. If included, it touches $5 billion. Whatever the case, 2021 was a record-shattering year.

Senegalese logistics and delivery company PAPS raises $4.5M led by 4DX Ventures and Orange

Multinationals like Amazon and Alibaba have leveraged logistics infrastructure such as UPS and FedEx to create large businesses. It’s not the same in Africa, where few third-party infrastructure players exist to provide end-to-end logistics to e-commerce companies.

PAPS, a Senegal-based logistics and delivery company, is filling this gap in its region by offering customers various logistics services. Today the company is announcing that it has raised a $4.5 million pre-Series A round to expand its tech-enabled logistics solution across the Francophone region.

The round was co-led by pan-African venture capital firm 4DX Ventures and regional telecom operator Orange. Participating investors include existing funds Uma Ventures and Saviu Ventures and new investors Yamaha Motor, LoftyInc Capital, Proparco, Google Ventures, To.org, Kepple Ventures and Enza Capital.

Bamba Lo founded PAPS in 2016 to provide end-to-end logistics solutions for businesses with offline and online operations.

Initially, PAPS operated a consumer-to-consumer logistics model. However, it immediately pivoted after noticing how infrequent and disorganized most requests were. It was hard to precisely predict the delivery flows in the space, which is different from the B2B model, where deliveries are planned. 

The platform caters to small to large businesses, assisting them with their logistics needs, from storage and international transport to last-mile delivery.

PAPS also provides merchants with visibility features to track and know the status of deliveries from takeoff to the point of destination. Merchants can also schedule deliveries on the platform.

“When we launched PAPS, the first thing we wanted to give to our clients was visibility on their transactions, they had to know when the driver has picked their goods up, where the goods are during transit, and when it arrives,” Lo, the chief executive, told TechCrunch on a call. “So that’s what we are trying to do to build — an infrastructure that can serve all B2B clients from warehousing and dispatching to the last-mile delivery.”

PAPS

Image Credits: PAPS

The Senegalese company owns the warehouses used to store clients’ goods and parcels. It also owns motorcycles, vans, cars and trucks to carry out inter- and intra-city logistics and deliveries. Additionally, the logistics company has a relay network of hubs close to its clients that act as delivery points.

The chief executive said that PAPS wants to create that infrastructure and an enabler for those businesses to access clients they cannot reach today because of logistics.

“The gap that we are filling is one that all these big corporations didn’t want it to address, which is the domestic market. No one addressed the domestic market except PAPS and that’s why we want to give quality and reliability,” he added.

PAPS clients span a range of industries, such as banking, telecommunications and pharmaceuticals (Lo said that the company currently handles distribution for 70% of all pharmacies in Senegal).

Major logistics players such as DHL and FedEx and consumer and business-focused e-commerce brands like Jumia, Glovo and Sokowatch also use PAPS for their operations in Senegal and Ivory Coast, the company said.

In a statement, PAPS claims to be the largest last-mile fleet in Senegal, making over 10 million deliveries across its two markets since inception. And according to Lo, the company’s delivery numbers are growing 150% year-on-year.

The company will use this pre-Series A round to strengthen its tech team, build out physical infrastructure to onboard more warehouses, hubs and fleets and extend its offering to more African companies.

Walter Baddoo, co-founder and general partner at 4DX Ventures, said in a statement, “We have been impressed with the Paps team’s execution thus far and their dedication to creating a truly innovative business in the logistics space. We believe technology has a critical role to play in modernizing Africa’s logistics infrastructure and we look forward to further partnering with Bamba and the paps team on this next phase of their growth”.

Taptap Send raises $65M to build cross-border remittances focused on the most underserved markets

Cross-border remittances — when people living and working abroad send money back home to friends and family — continues to be a huge part of how those living in developing countries, off the global financial grid, can be helped. The World Bank estimates that some $589 billion will be sent this way 2021, according to research from the World Bank, up 7.3% on 2020, as parts of the global economy started to claw back growth after a tough 2020 due to Covid-19.

In one development of that theme, today, Taptap Send — one of the startups building tools to manage these money transfers — is announcing $65 million in growth funding as it continues its mission to enable remittances specifically to the most overlooked countries.

The company’s hook is that it charges no fee for the transfer (it makes its cut via foreign exchange rates), and believes that its service is the easiest on the market to use, and it integrates with whatever mobile money wallets are already being used locally, meaning recipients do not have to add anything extra to their devices, or learn any new techniques, to be able to receive money via the service. At a time when the global economy has been under pressure, Taptap Send saw business grow eight-fold, the company said.

The Series B is being led by Spark Capital, with participation also from Unbound, Reid Hoffman and Canaan Partners (both of which led its previous round, a $13.4 million Series A earlier this year), Slow Ventures, Breyer Capital, Wamda Capital, Flourish Ventures, and additional unnamed investors from the Middle East, Africa, Asia and Latin America. The company has now raised more than $80 million, and while it is not disclosing its valuation, PitchBook data notes that it is $715 million as of this round (which appears to have closed earlier in the year).

There are dozens, maybe even hundreds, of companies playing in the cross-border remittances field, from incumbents like Western Union through a myriad of tech players, some of which have gone public and some of which remain privately held. Taptap Send believes that its unique place in the market is that it has built not just the easiest, but the most reliable system to initiate, manage and receive those transfers.

“It’s quite easy to say remittances are crowded, but you could have said that for social networking or videoconferencing before TikTok or Zoom came along,” said Michael Faye, the CEO who co-founded the company with Paul Niehaus. “Remittances are a deceptively simple product on the surface, with an exceedingly complicated execution under the hood. There are 1,000 parts to get right and when you do you can deliver more value to users via price, speed and reliability.” He notes that a lot of the remittance services have been less than reliable, another area to improve for those looking to be more competitive.

“Remittances is one of the most sensitive things a person buys. It’s not like a shirt that you can touch and feel,” he said. “In remittances you are entering payment information and waiting and hoping that the money is getting to someone who likely needs it quite urgently. You need to have the utmost trust to take that money and send to someone else.”

The founders have arrived at their understanding of the market based on a long history in the field, having previously founded GiveDirectly (for charitable cross-border transfers) and Segovia (focused on B2B transfers). Segovia was acquired by Crown Agents Bank in 2019, and theoretically the product of Taptap Send was spun out from that ahead of the deal.

Taptap Send has been steadily growing and adding more countries to its list of served markets. It currently covers some 20 countries for receiving money, some of the very poorest and/or least developed places in the world including Bangladesh, Cameroon, DRC, Ethiopia, Kenya, Madagascar, Morocco, Nepal, Nigeria, Pakistan, Republic of the Congo, Sri Lanka, Vietnam, Côte d’Ivoire, Ghana, Guinea, Mali, Senegal and Zambia.

Its growth, as with many other remittance providers, has been predicated on the rapid rise of mobile technology, and the fact that even in the poorest communities, people will have handsets that can be used to initiate transfers and act as proxy-bank accounts, even if they are not smartphones.

“The change has been profound, and the number of countries where these domestic wallets are popping up around the world is shifting dramatically,” Faye said.

The company was attractive to investors in part because of its growth during what has been a challenging time for the industry, and in part because of the team and its ethos of bringing financial inclusion tools to as wide and unsexy a swathe of the developing world as possible.

We’ve looked at a lot of fintech companies in the space, and think Taptap’s team and community-led approach are best in class,” said investor James Kuklinski of Spark Capital in a statement. “We couldn’t be more excited to be joining them on our mission to bring low-cost, accessible, cross-border financial products to underserved diaspora populations around the world.”

“I invest for scaled global impact and team, and Taptap is among the best combinations I’ve seen, ” added Reid Hoffman.

Equinix is acquiring Nigeria’s MainOne for $320M as it expands into Africa

Equinix announced today that it is acquiring MainOne, a West African data centre and connectivity solutions provider with a presence in Nigeria, Ghana and the Ivory Coast, for $320 million.

The acquisition is expected to close Q1 of 2022, subject to the “satisfaction of customary closing conditions including the requisite regulatory approvals.”

Equinix’s acquisition of MainOne follows a series of moves the global digital infrastructure player made last year when it expanded to India through the acquisition of GPX India for $161 million and acquired 13 data centres from Bell Canada for $780 million.

In a statement, Equinix acknowledged that acquiring MainOne is the first step in its long-term strategy to become an African carrier neutral digital infrastructure company.

“With more than 200 million people, Nigeria is Africa’s largest economy and, along with Ghana, has become an established data center hub. This makes the acquisition a pivotal entry point for Equinix into the continent,” the company said in the statement.

Funke Opeke started MainOne in 2010 after noticing the poor internet connectivity Nigerians had to deal with upon her return to the West African country from the U.S.

Armed with over $200 million in equity and debt investment, Opeke built MainOne as West Africa’s first privately owned, open access undersea high capacity cable submarine. It’s a 7,000-kilometer cable stretching from Portugal to West Africa with landings along Accra in Ghana, Dakar in Senegal, Abidjan in the Ivory Coast and Lagos in Nigeria.

MainOne also has 1,200 kilometers of terrestrial fiber network across southern Nigeria in Lagos, Edo and Ogun states. Connectivity to terrestrial sites extends across 65 PoPs (points of presence) in cities across Portugal, Nigeria, Ghana and the Ivory Coast.

MainOne’s services are used by over 800 business-to-business customers. They include major international technology enterprises, social media companies, global telecommunications operators, financial service companies and cloud service providers.

Having enabled connectivity for these businesses via three operational data centers, MainOne plans to open an additional facility in Q1 2022, a move that coincides with Equinix’s acquisition.

MainOne, which has a 500-person team, said its facilities generate approximately $60 million annualized revenue with a purchase multiple of approximately 14x EBITDA.

Upon closing, these facilities will add more than 64,000 gross square feet of space to Equinix, with 570,000 square feet of land for future expansions.

Globally, Equinix has 237 data centers across 27 countries. It also provides data center and interconnection services for over 10,000 of the world’s leading businesses, including more than 50% of Fortune 500 companies.

“The acquisition of MainOne will represent a critical point of entry for Platform Equinix into the expansive and rapidly growing African market. MainOne’s leading interconnection position and experienced management team represent critical assets in our aspirations to be the leading neutral provider of digital infrastructure in Africa,” said Charles Meyers, the president and CEO of Equinix in a statement.

“MainOne’s infrastructure, customer relationships, partner ecosystem and operating capability will extend the reach of Platform Equinix and bolster opportunities for customers in Africa and throughout the world.”

MainOne CEO Funke Opeke and the company’s management team will still continue to serve in their respective roles after the acquisition is finalized.

Opeke said the acquisition will accelerate MainOne’s long-term vision to grow digital infrastructure investments across Africa.

“With similar values and culture to what we have jointly built in twelve years, Equinix is the preferred partner for our growth journey. The MainOne team is excited about the partnership created through the acquisition, and we look forward to building our next chapter together,” she added.

Francophone African super app Gozem grabs $5M to expand and offer more services

Gozem, a super app that provides a host of services — including transport, e-commerce and financial services in Francophone Africa — has raised $5 million in Series A financing, the company confirmed to TechCrunch.

The Togo- and Singapore-based company received investment from AAIC, Thunes (TransferTo), Momentum Ventures (SMRT), Innoport Ventures (Schulte Group), CMC Ventures (National Express) and Liil Ventures (Mobility ADO).

It follows the $7 million raised in previous seed rounds via three tranches from investors such as U.S. firm Plug and Play Ventures, Launch Africa, BANSEA and Virtual Network. In total, the multi-vertical application has raised over $12 million.

Gozem was founded by Gregory Costamagna, Raphael Dana and Emeka Ajene. The startup kicked off operations in Togo in 2018 as a motorcycle ride-hailing service.

A plan to replicate the model of Grab and Gojek in Southeast Asia saw Gozem expand its transport verticals to include taxi and tricycle services across multiple cities in Togo and Benin.

As the pandemic hit, the platform halted its geographic expansion moves and went vertical. It introduced e-commerce and logistics plays, allowing merchants to list an inventory of products users want and get them delivered through its drivers.

Then the company launched an asset financing option for its drivers, employing a lease-to-own model for vehicles and associated equipment.

On a call with the founders, the chairman, Costamagna, said the three verticals work together to increase the disposable income of drivers. Gozem’s premise is that it creates a win-win situation wherein its drivers become the next middle-class population in Francophone Africa while its super app plans take effect flawlessly.

“So people [merchants, suppliers, companies] that find a lot of interest working with them [riders], will then work hard and provide a lot of different services to our customer base,” he said.

“And when we do this, we increase their disposable income by sending them more passengers, more delivery trips by adding more merchants on our platform and finding companies that want to use delivery services. We also reduce their cost of operation through asset financing because they have no formal alternative and it’s generally informal and expensive.”

Since Gozem started the lease model, it has provided up to 1,500 vehicles to drivers. Costamagna, in a statement, said the funding will help Gozem increase the figure to over 200,000 before 2025.

Gozem

Image Credits: Gozem

Now that Gozem is present across 13 cities, having moved to Gabon and Cameroon with over 800,000 registered users and completed more than 5 million trips, the founders say the company is setting sights on providing digital banking services and lending to its users.

It’s a model other super app companies across Africa have adopted in the past, such as Nigeria’s OPay (which has since shelved its super app plans to strengthen its financial services arm) and SafeBoda more recently. Other players like North Africa-focused Yassir are also looking to offer banking and payment services.

Gozem plans to use its existing network of marketplace users (drivers and merchants) as agents across all the cities it operates in. This way, individual users can exchange cash for mobile money via the Gozem app.

I think we have a fantastic differentiator. Generally speaking, our competitors are the telco, which offers mobile money services, and sometimes you have standalone digital wallets as well,” said Costamagna. “What we’re trying to offer is an integrated wallet solution that is included in a suite of different services. And so the key difference in the market is this.

Before Francophone Africa minted its first unicorn in the form of fintech startup Wave, which shed some light on the opportunities that abound in the market, Francophone Africa has been largely left out of the tech and startup disruption sweeping across other African regions, particularly in Nigeria, Kenya, South Africa and Egypt. It was the very reason why the founders started Gozem in the first place, they told me.

“Almost 95% of the money and the attention goes to always four, five countries in Africa … Nigeria, Ghana, Kenya, South Africa, Egypt,” said Dana. “But generally, Francophone Africa is a bit left on the side on all the significant traction. This is where we’ve seen the big opportunities in Francophone as a nice market.”

And having built companies in Singapore before Gozem, Dana and Costamagna brought Ajene on board, adding his on-the-ground African expertise to a team with vast knowledge of the Southeast Asian market.

Three years in, Gozem is now 250-staff strong in its four markets. The company will use the Series A financing to expand into more Francophone African countries, including the Democratic Republic of the Congo, Senegal and Ivory Coast. The company is also looking to improve its asset financing model while fully launching its financial services.

“Where we operate on the continent is kind of what some might call second-tier African markets. But we have an opportunity and believe in the model we’re pursuing. It’s really a wide berth where there’s lesser competition, as discussed across all our verticals. While we are operating in four countries, we want to be embedded across the region over the next year,” Ajene said.

Francophone African super app Gozem grabs $5M to expand and offer more services

Gozem, a super app that provides a host of services — including transport, e-commerce and financial services in Francophone Africa — has raised $5 million in Series A financing, the company confirmed to TechCrunch.

The Togo- and Singapore-based company received investment from AAIC, Thunes (TransferTo), Momentum Ventures (SMRT), Innoport Ventures (Schulte Group), CMC Ventures (National Express) and Liil Ventures (Mobility ADO).

It follows the $7 million raised in previous seed rounds via three tranches from investors such as U.S. firm Plug and Play Ventures, Launch Africa, BANSEA and Virtual Network. In total, the multi-vertical application has raised over $12 million.

Gozem was founded by Gregory Costamagna, Raphael Dana and Emeka Ajene. The startup kicked off operations in Togo in 2018 as a motorcycle ride-hailing service.

A plan to replicate the model of Grab and Gojek in Southeast Asia saw Gozem expand its transport verticals to include taxi and tricycle services across multiple cities in Togo and Benin.

As the pandemic hit, the platform halted its geographic expansion moves and went vertical. It introduced e-commerce and logistics plays, allowing merchants to list an inventory of products users want and get them delivered through its drivers.

Then the company launched an asset financing option for its drivers, employing a lease-to-own model for vehicles and associated equipment.

On a call with the founders, the chairman, Costamagna, said the three verticals work together to increase the disposable income of drivers. Gozem’s premise is that it creates a win-win situation wherein its drivers become the next middle-class population in Francophone Africa while its super app plans take effect flawlessly.

“So people [merchants, suppliers, companies] that find a lot of interest working with them [riders], will then work hard and provide a lot of different services to our customer base,” he said.

“And when we do this, we increase their disposable income by sending them more passengers, more delivery trips by adding more merchants on our platform and finding companies that want to use delivery services. We also reduce their cost of operation through asset financing because they have no formal alternative and it’s generally informal and expensive.”

Since Gozem started the lease model, it has provided up to 1,500 vehicles to drivers. Costamagna, in a statement, said the funding will help Gozem increase the figure to over 200,000 before 2025.

Gozem

Image Credits: Gozem

Now that Gozem is present across 13 cities, having moved to Gabon and Cameroon with over 800,000 registered users and completed more than 5 million trips, the founders say the company is setting sights on providing digital banking services and lending to its users.

It’s a model other super app companies across Africa have adopted in the past, such as Nigeria’s OPay (which has since shelved its super app plans to strengthen its financial services arm) and SafeBoda more recently. Other players like North Africa-focused Yassir are also looking to offer banking and payment services.

Gozem plans to use its existing network of marketplace users (drivers and merchants) as agents across all the cities it operates in. This way, individual users can exchange cash for mobile money via the Gozem app.

I think we have a fantastic differentiator. Generally speaking, our competitors are the telco, which offers mobile money services, and sometimes you have standalone digital wallets as well,” said Costamagna. “What we’re trying to offer is an integrated wallet solution that is included in a suite of different services. And so the key difference in the market is this.

Before Francophone Africa minted its first unicorn in the form of fintech startup Wave, which shed some light on the opportunities that abound in the market, Francophone Africa has been largely left out of the tech and startup disruption sweeping across other African regions, particularly in Nigeria, Kenya, South Africa and Egypt. It was the very reason why the founders started Gozem in the first place, they told me.

“Almost 95% of the money and the attention goes to always four, five countries in Africa … Nigeria, Ghana, Kenya, South Africa, Egypt,” said Dana. “But generally, Francophone Africa is a bit left on the side on all the significant traction. This is where we’ve seen the big opportunities in Francophone as a nice market.”

And having built companies in Singapore before Gozem, Dana and Costamagna brought Ajene on board, adding his on-the-ground African expertise to a team with vast knowledge of the Southeast Asian market.

Three years in, Gozem is now 250-staff strong in its four markets. The company will use the Series A financing to expand into more Francophone African countries, including the Democratic Republic of the Congo, Senegal and Ivory Coast. The company is also looking to improve its asset financing model while fully launching its financial services.

“Where we operate on the continent is kind of what some might call second-tier African markets. But we have an opportunity and believe in the model we’re pursuing. It’s really a wide berth where there’s lesser competition, as discussed across all our verticals. While we are operating in four countries, we want to be embedded across the region over the next year,” Ajene said.

Francophone African super app Gozem grabs $5M to expand and offer more services

Gozem, a super app that provides a host of services — including transport, e-commerce and financial services in Francophone Africa — has raised $5 million in Series A financing, the company confirmed to TechCrunch.

The Togo- and Singapore-based company received investment from AAIC, Thunes (TransferTo), Momentum Ventures (SMRT), Innoport Ventures (Schulte Group), CMC Ventures (National Express) and Liil Ventures (Mobility ADO).

It follows the $7 million raised in previous seed rounds via three tranches from investors such as U.S. firm Plug and Play Ventures, Launch Africa, BANSEA and Virtual Network. In total, the multi-vertical application has raised over $12 million.

Gozem was founded by Gregory Costamagna, Raphael Dana and Emeka Ajene. The startup kicked off operations in Togo in 2018 as a motorcycle ride-hailing service.

A plan to replicate the model of Grab and Gojek in Southeast Asia saw Gozem expand its transport verticals to include taxi and tricycle services across multiple cities in Togo and Benin.

As the pandemic hit, the platform halted its geographic expansion moves and went vertical. It introduced e-commerce and logistics plays, allowing merchants to list an inventory of products users want and get them delivered through its drivers.

Then the company launched an asset financing option for its drivers, employing a lease-to-own model for vehicles and associated equipment.

On a call with the founders, the chairman, Costamagna, said the three verticals work together to increase the disposable income of drivers. Gozem’s premise is that it creates a win-win situation wherein its drivers become the next middle-class population in Francophone Africa while its super app plans take effect flawlessly.

“So people [merchants, suppliers, companies] that find a lot of interest working with them [riders], will then work hard and provide a lot of different services to our customer base,” he said.

“And when we do this, we increase their disposable income by sending them more passengers, more delivery trips by adding more merchants on our platform and finding companies that want to use delivery services. We also reduce their cost of operation through asset financing because they have no formal alternative and it’s generally informal and expensive.”

Since Gozem started the lease model, it has provided up to 1,500 vehicles to drivers. Costamagna, in a statement, said the funding will help Gozem increase the figure to over 200,000 before 2025.

Gozem

Image Credits: Gozem

Now that Gozem is present across 13 cities, having moved to Gabon and Cameroon with over 800,000 registered users and completed more than 5 million trips, the founders say the company is setting sights on providing digital banking services and lending to its users.

It’s a model other super app companies across Africa have adopted in the past, such as Nigeria’s OPay (which has since shelved its super app plans to strengthen its financial services arm) and SafeBoda more recently. Other players like North Africa-focused Yassir are also looking to offer banking and payment services.

Gozem plans to use its existing network of marketplace users (drivers and merchants) as agents across all the cities it operates in. This way, individual users can exchange cash for mobile money via the Gozem app.

I think we have a fantastic differentiator. Generally speaking, our competitors are the telco, which offers mobile money services, and sometimes you have standalone digital wallets as well,” said Costamagna. “What we’re trying to offer is an integrated wallet solution that is included in a suite of different services. And so the key difference in the market is this.

Before Francophone Africa minted its first unicorn in the form of fintech startup Wave, which shed some light on the opportunities that abound in the market, Francophone Africa has been largely left out of the tech and startup disruption sweeping across other African regions, particularly in Nigeria, Kenya, South Africa and Egypt. It was the very reason why the founders started Gozem in the first place, they told me.

“Almost 95% of the money and the attention goes to always four, five countries in Africa … Nigeria, Ghana, Kenya, South Africa, Egypt,” said Dana. “But generally, Francophone Africa is a bit left on the side on all the significant traction. This is where we’ve seen the big opportunities in Francophone as a nice market.”

And having built companies in Singapore before Gozem, Dana and Costamagna brought Ajene on board, adding his on-the-ground African expertise to a team with vast knowledge of the Southeast Asian market.

Three years in, Gozem is now 250-staff strong in its four markets. The company will use the Series A financing to expand into more Francophone African countries, including the Democratic Republic of the Congo, Senegal and Ivory Coast. The company is also looking to improve its asset financing model while fully launching its financial services.

“Where we operate on the continent is kind of what some might call second-tier African markets. But we have an opportunity and believe in the model we’re pursuing. It’s really a wide berth where there’s lesser competition, as discussed across all our verticals. While we are operating in four countries, we want to be embedded across the region over the next year,” Ajene said.