👨🏿‍🚀TechCabal Daily – Twiga raises $35 million

E-commerce

Three weeks ago, Twiga, a Kenyan startup that connects farmers to food vendors, closed a funding round to settle its debts and pay suppliers. However, the size and nature of the funding was not previously reviewed. 

New reports by TechCabal show that the startup received a $35 million convertible bond—debt that pays interest but can also be converted into equity. Twiga raised the funds from Creadev and Juven, two private equity investors who had previously invested in Twiga.

ICYMI: Twiga, previously cash-strapped, was sued by cloud service vendor Incentro, which asked a court to declare it bankrupt and force Twiga to repay its debts. The dispute is still being discussed privately between the two firms.

A CEO exit? While Twiga might have secured enough money to bring it out of the water, a new eruption is happening at the company. The company’s CEO, Peter Njonjo, announced his decision on Thursday to take a six-month sabbatical, raising fears that investors were trying to remove him.While some believe that Njonjo might be in the good books of the board, others say this could be Njonjo’s path to an exit. 

The development comes as a new twist to the startup’s recent struggles. It laid off 30% of its employees and changed its business model, relying on independent sales contractors instead of its in-house sales department.

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Fintech

The Securities and Exchange Commission (SEC) is serving up a legal feast for Dozy Mmobuosi, the CEO of Tingo Group.

The American financial watchdog has filed charges against Dozy Mmobuosi, and three affiliated entities of which he is the CEO—Tingo Group Inc, Agri-Fintech Holdings Inc, and Tingo International Holdings Inc. 

What are the charges? The charges encompass a range of offences, including insider trading, providing false information to auditors, failure to disclose the sale of millions of common shares, and violations of internal controls. 

Here’s what you need to know: Tingo Group gained public attention when Hindenburg Group, an American short seller, published an explosive report in June 2023, branding Tingo Group as an “exceptionally obvious scam with completely fabricated financials,” alleging that Tingo falsified reports about partnerships, projects, and expansions. Tingo denied the allegations, but the company’s share price crashed by 55% following the report.

In November, the SEC launched a formal investigation into Tingo Group, leading to the suspension of trading in the self-proclaimed agri-fintech company’s shares. It has now charged the company with fraud. 

Zoom out: One notable misrepresentation involves Tingo Group reporting $461.7 million in cash and cash equivalents for the fiscal year 2022, while its actual bank accounts held less than $50.

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Telecom

Safaricom is losing steam.

According to data from Kenya’s communications authority, Safaricom suffered a decline in market share across its mobile and broadband services for the third quarter of this year. The telecom lost 0.4% of its market share, reducing its position as market leader to about 44.1 million subscribers. 

Two quarters, two drops: This is Safaricom’s second loss of its market share position in two quarters. The report notes that Safaricom’s broadband subscriptions decreased by 0.9% to 61.9%. Airtel, however, has taken a slice of Safaricom’s market share, recording growth in both mobile and broadband subscribers. Airtel gained about 800,000 customers, bumping its market share to 28.2%. Safaricom, however, gained only 200,00 customers in the quarter. The report also notes that Telekom Kenya suffered a reduction in its market share from 3.8% to 3.1% with 2.1 million subscribers, signalling a heightened appetite from Airtel. 

Another side of the coin: While Safaricom might have dropped a portion of its market share, it maintains a dominant position in the mobile money market with a 97% share. Airtel Money trails behind with a 2.9% share, while Telkom’s T-Kash manages a paltry 0.1% market share.

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Cryptocurrency

To bring closure to its bankruptcy case, FTX Trading Ltd has revealed a proposal to repay billions of dollars to customers and creditors.

The crypto exchange proposes to liquidate most of its remaining crypto holdings and convert them into cash which will then be distributed to creditors and customers, according to a yet-to-be-determined formula. The proposal is slated for a vote by creditors next year. Following the creditor vote, the plan will be subject to final approval by US Bankruptcy Judge John Dorsey.

The backstory: In November 2022, FTX filed for bankruptcy after users pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal. This left many users unable to withdraw their funds, including several African companies. Nigerian crypto company Nestcoin was affected. Nestcoin consequently had to lay off staff, as most of the money it needed for its operations was trapped in the FTX collapse. FTX owed its 50 largest creditors almost $3.1 billion.

In December 2022, FTX founder Sam Bankman-Fried was arrested for “financial offences” against US and Bahamas laws and was facing about eight charges. Last month, he was convicted of orchestrating a massive fraud that led to the collapse of his FTX exchange.

Unanswered questions: While the reorganisation plan addresses several aspects, critical questions linger. Uncertainties include whether FTX will revive its defunct crypto exchange, the methodology for assessing the value of digital tokens, and the anticipated returns for creditors.

Social Media

TikTok is making a clean sweep.

The popular short video platform has said in its Community Guidelines Enforcement report that it removed 1.4 million videos posted by Nigerian users in Q3 2023.

Why? Nigeria contributes to the 136.5 million removed videos globally for policy breaches, covering areas like spam, fake accounts, and harmful content. Over seventy-three million spam/fake accounts, 348.7 million fake likes, and 211.3 million fake followers were removed. The report also highlighted an increase in the removal of ads for violating advertising policies, with a total of 1.3 million ads removed in Q3, compared to 962,574 in Q2.

Additionally, in September, the short video platform removed 4 million videos considered illegal or harmful in the European Union, as outlined in a report detailing its moderation policy. This action aligns with the mandates of the recently enacted European legislation on digital services.

What mandate? The obligation to publish such reports every six months stems from the recently implemented European Digital Services Act (DSA), which took effect in August and affects 19 large tech platforms, including TikTok.

Despite the cleanup, TikTok revenue keeps booming. Per data.ai, it became the first mobile app to generate more than $1 billion in worldwide consumer spending during a single quarter in Q1 2023.

Crypto Tracker

Source:

Coin Name	Current Value	Day	Month
Bitcoin	$42,612	+ 2.27%	+ 16.59%
Ether	$2,217	+ 0.08%	+ 13.16
BONK	$0.00002101	– 15.59%	+ 620.19%
Fusionist	$12.98	+ 6.95%	+ 6.95

* Data as of 00:02 AM WAT, December 19, 2023.

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Opportunities

• Deji Alli ARM Young Talent Award (DAAYTA) 2024 for Innovative Nigerian startups (₦12,000,000 in funding) is open for applications. DAAYTA is an ARM initiative, in partnership with TechnoVision’s TVC Labs, that aims at providing young Nigerians with an opportunity to develop innovative startup ventures that add economic value to Nigeria. Apply by January 16.
• Applications are open for the World Press Photo Contest 2024 for Photographers Worldwide (5,000 euros cash prize). The Contest recognises and celebrates the best photojournalism and documentary photography produced over the last year, selected by an international independent jury. Apply by January 11, 2024.
• Applications are open for the Mastercard Foundations Scholars Program 2023/2024 at the Carnegie Melon University Africa. The programme provides generous financial, social, and academic support for students whose talents and promise exceed their financial resources. Apply by January 15, 2024.

What else is happening in tech?

• Are next-gen battery companies on the verge of a culling?
• OpenAI overhauls ChatGPT content moderation ahead of the US elections.
• The man leading Kenyan content moderators’ battle against Meta

Written and edited by –

Mariam Muhammad, Faith Omoniyi & Kelechi Njoku

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