Spotlighting the African startups in Y Combinator’s Summer 2022 batch
Out of 146 applications from around the globe, 5 African startups have been accepted into Y Combinator’s Summer 2022 (YC S22) batch. The accelerator behemoth listed 4 startups on its startup directory two days ago and added one more African startup to the directory yesterday.
In 2009, Y Combinator launched its incubation machinery in African startups with PetaSales. Since then, it has accepted 95 African startups across diverse sectors and regions, most of which were founded in 2020. Now, the accelerator company has listed five African startups for its next batch, most of which were founded in 2021.
Per Y Combinator, the selected startups will each receive a total investment of $500,000 as part of the new standard deal the company announced in January 2022.
Two of the 5 startups are from Nigeria—Pivo Technology and Chowdeck; Garage Mobility is from Ghana; Patika is from Kenya; and Moneco is based in France—although its founders are Africans.
Notably, Chowdeck and Garage Mobility are 2 players in the logistics sector, while the other 3 startups provide services related to financial technology.
A deeper dive Into the startups
Pivo Technology was founded by Ijeoma Akwiwu and Nkiru Amadi-Emina, 2 women with a history of running supply chain businesses. In 2021, they launched Pivo Technology to power supply chain SMEs by providing quick and flexible financing options, starting with lending.
Pivo’s business model is magnified when you consider how SMEs in Nigeria—especially those operating within large manufacturing supply chains—contributed $250 billion to Africa’s economy in 2019. As a fore player in that sector, Pivo is positioning itself to be a neobank for trade in Africa.
Granted, the competition in Africa’s credit market has increased exponentially, especially with big players like Flutterwave foraying into the scene. However, Pivo seems to be playing in an unrivalled sub-niche: lending in the supply chain sector.
Pivo entered the market with Pivo Capital, a credit-focused financial services platform for supply chain SMEs. With Freight Carriers, the startup makes financial services easily accessible for truck owners and truck drivers by providing a platform that brings together a bank account and payment solutions for these businesses.
For Pivo, they’ve barely scratched the surface with their current products. Products like Invoice Factoring and Pivo Plus, which include insurance and corporate compliance offerings, are already in the testing phase.
Chowdeck, an on-demand food delivery service and marketplace, was launched in October 2021 by Femi Aluko and Olumide Ojo, 2 engineers who held key engineering roles at Paystack, and Lanre Yusuf, ex-engineering lead at Crown Interactive.
Chowdeck operates in Lagos, Africa’s most populous city with over 18 million people. With an extensive array of restaurants on its platform, Chowdeck is able to offer users a wide variety of local and international meals which are readily delivered to their customers in the nick of time.
According to Chowdeck, a unique offering for restaurants on its platform is assured exposure and growth.
Chowdeck prides itself as a startup birthed on the cusp of a massive change in consumer behaviour towards food ordering. Several social and economic factors have caused a significant change in the way Lagosians approach food services. Amongst other things, it was tapping into this expanded market that resulted in Chowdeck’s rapid growth. As of H1 of 2022, the startup claims to have delivered over 60,000 meals in Lagos, within 6 months.
Of all the latest African startups listed in YC’s startup directory, Patika is the only one not from West Africa. The Kenyan fintech startup was founded a year ago by Phelix Juma and Sidney Rema, with a mission to enable small businesses in Africa to track customer debt, facilitate repayments and manage cash flow.
The cofounder and CTO, Phelix Juma, described Patika as a solution to end the traditional methods of debt tracking and repayments monitoring. According to him, these inefficient and time-wasting methods cause as much as 60% of debts to be paid late, while losses in bad debts result in as much as $2,000 annually.
“We are automating previously manual processes like phone call-based repayment reminders, billing, payments and reconciliations with a vision to grow into a full-stack neobank for Africa’s small businesses,” Juma wrote on LinkedIn
According to the Kenyan National Bureau of Statistics, SMEs in Kenya contribute 45.5% of Kenya’s gross domestic product and employ 86% of the Kenyan population. Despite this, 1,000 SMEs in Kenya die every day, and inadequate bookkeeping has been cited as a key contributor to their failure.
With Patika’s expression of its ambitions to become a full-stack neobank for Africans, we can expect the startup to launch more products that help SMEs to grow and scale, and access credit and full business automation software.
Garage Mobility was founded in 2021 by Cedric Foudjet and Gwanygha’a Gana. The Accra-based startup operates as a wholesale auto parts distributor in Africa.
Every year, $25 billion of auto parts is sold on the continent by about 2 million active retailers. Garge Mobility is playing in this field by aggregating motor parts from the biggest suppliers and distributors in the world and processing an efficient supply chain system that delivers these parts to retailers directly.
Gana described the birth of Garage Mobility as an experience-based occurence. According to him, his people in his hometown of Cameroon had to buy motor parts for more expensive prices in the local market, and this arose from a dysfunction in the supply chain system of the motor parts sector.
“I used to buy and ship auto parts to my dad in Cameroon and realised that the landing cost once those parts arrived in Cameroon was still cheaper than buying locally,” Gana said in a post seen by TechCabal.
“We realised that this issue was due to inefficiencies across the supply chain for parts distribution. Garage aims to solve this problem by building a wholesale marketplace that will power the $25 billion after-sales market in Africa.”
Moneco is a neobank targeting migrant communities in Europe. The startup was founded this year by Bilal Dahlab, Shams Radjabaly, and ex-Paystack employee and CoinAfrique co-founder, Kuassi Jimmy Kumako.
Moneco launched operations this year with a service targeted at the African diaspora, which constitutes the largest migrant community in the region. The startup claims to have a social impact spin to their business model, in that they are working to make banking seamless and more affordable for underserved communities in Europe.
The Paris-based startup is so far the only startup in the S22 batch that was accepted into Y Combinator in the same year they launched operations. Some of the services its users can access are free remittances, a payment card, and a current account. However, the company says that its long-term vision is to be a one-stop shop where all users’ financial needs can be addressed.
“Moneco allows you to save, spend, and send money at the lowest costs,” the company’s website reads.