TechCabal Daily – New rules

Nigeria’s Securities and Exchange Commission (SEC) has made new rules which will affect Nigeria’s investment-tech platform.

In the last couple of years, platforms that allow Nigerians to buy stocks on stock exchanges in America have become popular. They partner with companies like Drivewealth, a cloud-based, API-driven brokerage infrastructure that handles the trading on their behalf.

Yet, in December 2020, there was some sign of regulator trouble when the SEC barred an investment-tech platform, Chaka. It ordered Chaka to stop advertising to the public and said their activities were outside the commission’s regulatory purview.

It was unclear at the time why the SEC took issues specifically with Chaka and were quiet on the rest of the investment-tech platforms. But there was also some talk by the commission on possible regulations.

New rules: “The Commission categorically states that by the provisions of Sections 67-70 of the Investments and Securities Act (ISA), 2007 and Rules 414 & 415 of the SEC Rules and Regulations, only foreign securities listed on any Exchange registered in Nigeria may be issued, sold or offered for sale or subscription to the Nigerian public. Accordingly, CMOs who work in concert with the referenced online platforms are hereby notified of the Commission’s position and advised to desist henceforth.”

What’s next: Look out for our analysis of the new rules as well as how investment-tech companies are responding to this new regulatory threat.

Twitter, LinkedIn and just about everyone else has developed their own version of Clubhouse. But in new reports, one of the listed players attempted to buy the audio social networking company in the past.

According to Bloomberg, Twitter held talks to buy Clubhouse for $4 billion way before its current attempt to raise extra funding. There are no details yet about why the talks did not go forward at the time but reports say that the deal is dead in the water.

For Clubhouse, moving forward is a push for a new funding round that’s valuing the company at $4 billion. That quadrupled its valuation price from January when it raised $100 million in a Series A round.

Who else is developing a “Clubhouse?” Twitter, Facebook, Slack LinkedIn and Spotify

Read more here

This week was a slow week for African startups in terms of funding. However, Sawari Ventures has closed a $71m (EGP1bn) fund targeting tech-focused companies in North Africa, so we can expect more announcements from that end soon.

Here are the other funding news of the week:

• Egyptian fintech, Paymob raised an additional $15m to complete its $18.5m Series A round. This was led by Global Ventures.
• 5 African startups were selected as winners of the GSMA Innovation Fund. They are Ensibuuko (Uganda), ScholarX (Nigeria), Africa 118 (Ethiopia), Wid Energy (Zambia) and Zonful Energy (Zimbabwe). The startups will receive between £100,000 to £250,000 in equity-free grants.
• Pricepally, a Nigerian eCommerce startup closed an undisclosed round led by Samurai Incubate and Launch Africa Ventures.
• 14 Ghanaian startups were selected for the MEST Express Accelerator and will have the chance to receive up to $10,000 in equity-free grant funding.

That’s it!

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