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Welcome to TC Daily! In today’s digest, Interswitch is restarting its venture capital arm, four African companies have received millions of dollars in funding, and Trace Group acquires Okuhle Media.
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French TV company, Trace
Group has acquired a majority stake in South African production company, Okuhle Media for an undisclosed sum. Founded in 2003, Okuhle Media produces audiovisual content for a number of platforms including TV stations and streaming platforms in Africa, Europe and other regions.
Originally started by five producers, the media company has grown to a 78-staff strong business. With the acquisition, Trace is boosting its local content offerings and is doubling down its plans to build Trace Academia, an educational platform. The Okuhle Media team will develop courses for the platform that is set to launch in November 2020. The team will also develop content for Trace’s TV channels and streaming platform, TracePlay.
This is Trace’s second major
acquisition since 2016 and possibly its first known acquisition since 2018 when US-based fund, TPG Growth, acquired a majority stake in the company. In 2016, Trace acquired Kenya-based Buni.TV, a video-on-demand company that cleared the way for the launch of TracePlay. TPG invested in Trace believing the company is strategic as consumption of mobile and digital increased in Africa.
Elves, an Egyptian company, has raised $2 million from Sawari Ventures and with
participation from other existing investors.
Elves is an interesting company. It founded in 2017 as an “AI-powered concierge service.” It allows people to communicate with human assistants who help them fulfil tasks like grocery shopping, flight bookings, hotel reservations, buying movie tickets, delivery pick-ups, among many others.
The service was originally offered via Facebook Messenger. It has since migrated to its own app where 90% of customer requests now come from. Elves says customer behaviour has changed since the outbreak of the pandemic. At the start of the year, flight bookings, hotel reservation and other ticket sales were major revenue drivers. Over the last couple of months, revenues from these activities have suffered due to the pandemic.
Elves shifted its focus to online shopping, receiving grocery orders and delivering them to customers. “Groceries has become very big for us so we’ve automated it, signed up more than 40
grocery partners, jam-packed it with exclusive deals and we’re going in a big way,” Elves CEO, Karim Elsahy told Menabytes.
Since 2017, the company has raised $5 million and will use its latest funding to improve its AI technology and possibly grow its team.
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YOCO’S PANDEMIC INNOVATION
As a fintech company, Yoco is one of those companies digitising finance, helping small businesses receive payments while gathering data on their transaction activities.
Yoco’s business is simple. It issues pocket-size card machines to small businesses, enabling them to accept bank card payment from customers. The six-year-old South African company has grown quickly boasting about 80,000 merchants at the start of 2020.
But when the pandemic hit, in-person shopping waned globally, especially in South Africa where the government lockdown measures were significant. As South Africa recorded the worst spread of Covid-19 in Africa, the government extended the lockdown, limiting retail to essential services.
With people isolating at home, businesses
switched to e-commerce and received payments online. Yoco’s business model, which had been hinged on card payments, suffered. It needed an online alternative and it needed it fast. For this week’s edition of The BackEnd, TechCabal’s Alexander Onukwue spoke with Yoco. His article explains what the company did to keep growing.
CHINA’S YUAN IN AFRICA
Mastercard, Visa, Interswitch, American Express and Discover are the most famous brands of bank cards in circulation globally. In the last ten years, another company has joined the group, China UnionPay.
UnionPay is China’s homegrown rival to Mastercard and Visa. It has issued over 7 billion cards in Mainland China and has been given de facto monopoly over local currency payments by the country’s central bank.
In the early 2010s, China has had a growing ambition for its domestic currency, the yuan also called the Renminbi. It wants the yuan to become a top currency for international payments. At the start of the
decade the yuan was responsible for just 1% of global cross border payments.
This is changing. In the last few years, UnionPay has started an international expanded to support the growth of the yuan for global payments. In Africa, it has struck deals with banks and other fintechs to issue UnionPay cards to customers and support its cards used by Chinese tourists. In my
article, I map out what deals UnionPay has secured on the continent and how it is helping the yuan.
Nigerian financial service technology company, OPay has announced a partnership with leading global digital payments platform WorldRemit, to offer international money transfers 24/7 from over 50 countries directly into OPay mobile wallets in Nigeria. Learn more here: https://operapay.com/remittance/
Nigerian fintech, Interswitch is reactivating its startup venture capital arm after years of inactivity. The company’s CEO, Mitchelle Elegbe told TechCrunch: “we’ve just
certified a team and the plan is to begin to make those kinds of investments again.”
Interswitch first launched its venture arm in 2015 with the creation of the $10 million ePayment Growth Fund. In February 2015, it made its first investment; an $850,000 investment in Africa Courier Express (ACE), a logistics company founded by former Jumia Nigeria Managing Director, Tunde Kehinde. The fund invested in a second company before going quiet.
At a breakfast chat with entrepreneurs in November 2019, Elegbe said that he shut down the fund, citing, although vaguely, governance issues with startups. “Every man, every woman is under authority,” he told the guests at the chat, “this idea that ‘I am a founder, I must have control’, is a very dangerous mindset.”
This time around, Elegbe says Interswitch “will be very selective in the companies we invest in.”
“They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have.”
Similar to the venture arms of other global
fintechs, Interswitch will leverage its network and connections to other companies, improving growth potential for its future portfolio companies.
FUNDING FROM DFIs
As part of its quarterly funding activity, the United States International Development Finance Corporation (DFC) has invested $3.6 billion in 39
projects, including companies, to advance development in emerging markets. This is an incredible funding activity with three African startups as beneficiaries.
Copia, a Kenyan-based e-commerce startup received $5 million in equity funding. Kasha, a Rwandan e-commerce platform focused on women’s healthcare and beauty products, secured $1 million equity funding. And 4G Capital, a neobank for micro and small businesses in Africa, also received $2.9 million loan guaranty from the DFC.
“These projects will help stabilize communities across the world and prepare them to thrive in the years ahead,” DFC Chief Executive Officer, Adam Boehler said in a press release.