SEPTEMBER 13, 2020
This newsletter is a weekly in-depth analysis of tech and innovation in Africa that will serve as a post-pandemic guide. Subscribe here to get it directly in your inbox every Sunday at 3 pm WAT.


Since conversations around exits kicked off on here, exits and acquisitions have increased in Africa’s startup and tech environment. Even though they are not always completely hassle-free, exits are a
necessary and welcome development for Africa.

Earlier in the week, CEO and co-founder of Luno, Marcus Swanepoel announced that the crypto exchange had been acquired by the Digital Currency Group (DCG). Details of the deal were not made public.

Regardless, this is good news for the South Africa-founded company. But most importantly, considering that it was founded in, and has a huge presence in the continent, this acquisition raises the question of market opportunity in Africa.

How big is cryptocurrency around here?

Before we dip into a highlight of this question, catch up on older episodes of The Next Wave newsletter, subscribe, and then come along for this ride.


An unlikely catalyst
On a hot afternoon in mid-2016, Cyril (not real name) was introduced to an investment scheme that promised 100% returns through some complicated structure and a network of other “helpful individuals.”

Cyril had
heard about similar investments as they were trending in Nigeria at the time, but with this one, something else caught his attention:

“There was mention of Bitcoin, a digital currency that we had to buy as a store of value that did not depreciate. It was my first time hearing it and it really caught my attention, I invested.”

Terrible mistake, Cyril. That investment turned out to be MMM; a ponzi scheme that swept through Africa from late 2014, and still hovers around in bits and pieces till today.

The ‘investment’ crashed, of course, and Cyril and a lot of other Africans from Nigeria to Ghana, Kenya, and South Africa lost a ton of money. But most people heard about Bitcoin for the first time. Cyril is still a crypto trader today; over 4 years later.

There is no way to correctly measure its effect, but MMM surely galvanized the awareness of bitcoin in Africa.

[READ: Bitcoin’s rise in African markets is driven by an old Russian ponzi scheme]

Independent of this exposure, there has been increased activity in the continent. There is a lot of mostly inconsistent data scattered here and there about the actual size of the market in Africa, but the disparity between most of them leaves much to be desired.

Africa is coming up
In August 2020, peer-to-peer bitcoin trading volumes topped $95 million globally. Here is an excerpt from’s analysis of this volume:

“The Sub-Saharan Africa region comes second with $18.3 million worth of bitcoin have being [sic] traded between peers in the period under review. A further breakdown of the $18.3 million reveals that
Nigeria leads the Sub-Saharan Africa region. According to the data, Nigerian peer to peer bitcoin trading volumes topped an equivalent of $9.8 million. The figure is slightly below the $10.3 million recorded in the week earlier. Kenya is a distant second with $3.2 million worth of trades while South African peer-to-peer trading volumes topped $2.8 million. The Sub-Saharan Africa data also shows that the region’s $18.3 million is the highest ever recorded.”

Most of this increase was spurred by lockdowns across the world, but if this is anything to go by, crypto is picking up on the continent. Majorly considered an investment, it is used to hedge against the volatility of African currencies, and hyperinflation in a few cases.
Another major reason for this has been an increase in mobile penetration and platforms that put the action right in the palm of users reducing accessibility and entry barriers.

[READ: The BackEnd: How a four-person team built Sendcash for Bitcoin-to-naira transfers]

“Africa will define the future (especially the bitcoin one!),” Jack Dorsey, November 2019.

Upon visiting Nigeria, the CEO of Twitter and Square was visibly excited at the prospects of crypto on the continent.

I asked a current player what they thought of Dorsey’s statement and the industry in general, and they had a very interesting take:

“Crypto is the future of payments in Africa, but this future is still a bit far off,
and for those of us that know and are being honest, this is a long term game. There is a lot of infrastructure that has to be built; education, information, tech, and even fixing
unfavourable government policies. A lot of that work has begun in earnest and is kicking off in high gear, but it is important to
note that it is a lot of work that will take some time.”

Pleading anonymity, they said Africa’s economy is also directly tied to the proliferation of cryptocurrency on the continent.

“Africa currently has a large volume of crypto trade, but people cannot or will not care to buy crypto if they are still struggling at the bottom of Maslow’s pyramid.”


More African women should be using the internet.
As digital tools and access increasingly become apparent as fundamental human rights, and also drive economic growth, they’ve also held out hope as potential tools to bridge gender or economic gaps across the globe.
This article tells us to give more African women access, simple.

Y Combinator and Africa. This year, American seed-stage startup accelerator, Y Combinator will be 11 years in Africa. From a brief history of it’s African foray to some hot tips, this article from the TC FactSheet series explains why and how African startups apply to Y Combinator.


With the uncertainty caused by the pandemic, an entirely new audience in Africa is looking at cryptocurrencies for the first time. They’re beginning to think beyond the tried and tested way of managing money, and exploring new ways to get the most out
of their money. Africa is one of, if not the most promising region for the adoption of cryptocurrencies due to its unique combination of economic and demographic trends.

However, inadequate infrastructure combined with various misconceptions has hampered widespread adoption until this point. If the major stakeholders within the crypto community can fill this knowledge gap and build out the necessary infrastructure, we could see a strong rise in the mainstream adoption of cryptocurrencies in Africa.

Owen Odia, Country Manager for Nigeria, Luno

Every week, we will ask our readers, stakeholders, and operators in Africa’s tech ecosystem what they think the new normal will look like, and will share their thoughts here. You can share yours with with ‘The Crystal Ball’ in the subject line.

TC Insights

Double Trouble
Chuks Eze has two children in universities
abroad. His daughter Ada is a medical student in Russia and his son is studying for a Masters degree in Cyprus.

Sending them money for their living expenses has been a hassle this year. Eze typically uses Western Union, a popular international money transfer service. But with a spending limit set by the Central Bank of Nigeria, Eze has to work around the system. He splits the amount he wants to send to his children among his friends. His friends then proceed to remit the funds to his children.

Nigeria usually sets a dollar spending limit to manage its foreign exchange crisis. Banks are famous for raising and dropping dollar spending limits. This makes paying for services in dollars very difficult especially for tech companies who depend a lot on international software services.

Like many other African countries, Nigeria depends on remittances from its diaspora community. In 2019, remittance flow to Sub-Saharan Africa was worth about
$48 billion. With $23.8 billion, Nigeria is the largest recipient of remittance flows followed by Ghana ($3.5 billion) and Kenya ($2.8 billion). Remittances, $1.3 billion, accounted for 34% of South Sudan’s GDP, the highest in the region.

There has however been a drop in remittances this year owing to the pandemic. Job losses and income cuts are some of the reasons that have contributed to a reduction in remittances. This has impacted foreign exchange liquidity within Nigeria’s banking industry.

Remittances to
Sub-Saharan Africa are expected to drop by a quarter this year. With falling oil prices, Nigeria’s forex crisis could worsen. This could force the central bank to further drop the dollar spending limit.

If you are a founder in Africa, please fill our investor list here and let us know who gave
you your first check. Get TechCabal’s reports and send us your custom research requests here.

Best wishes for a great week

Stay safe and please observe all guidelines provided by health experts.

You can subscribe to our TC Daily Newsletter; the most comprehensive roundup of technology news on the continent, and have it delivered to your inbox every weekday at 7 am WAT.

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– Victor Ekwealor, Managing Editor, TechCabal

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