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It’s kind of rare to hear African founders talk about their failure at all or with sobriety. Delivery platform DropX recently shut down and the founder, Praise Alli-Johnson, wrote about what went wrong in the business, and why.
Also, if you were laid off from a tech startup this year, please take this survey.
Mobility
Ride-hailing drivers protest Ghana’s new tax
Ghana’s ride-hailing scene faces a bumpy road as drivers push back against a new tax on commercial vehicles.
The country’s revenue authority is set to implement a Vehicle Income Tax (VIT), slated to launch in January 2024, requiring drivers to pay quarterly taxes based on their earnings.
Tax details: Per Ghana’s Revenue Authority, ride-hailing vehicles fall under “Class A” and will pay 12 Ghana cedis quarterly, totalling 48 GHC annually. Also, ride-hailing companies like Uber, Bolt, and Yango will need to verify drivers’ VIT compliance before allowing them on the platform.
Drivers cry foul: Drivers say the proposed VIT will put a strain on their already-burdened incomes, asserting that the tax should be paid by ride-hailing companies rather than individual drivers.
This isn’t Ghana’s first attempt at taxing ride-hailing companies. In April, a levy was introduced by Ghana’s Driver and Vehicle Licencing Authority (DVLA) on every trip. However, the move faced public backlash. In September 2019, online drivers halted their services collectively, expressing their objection to what they deemed as “modern-day slavery” imposed by operators of ride-hailing applications. The drivers accused ride-hailing companies of lowering trip fares despite consistent increases in fuel prices, negatively impacting their earnings.
Zoom out: Notably, Ghana has a low tax-to-GDP ratio compared to other African countries. Per a report by the Organisation for Economic Co-operation and Development (OECD), Ghana’s tax-to-GDP ratio in 2021 (14.1%)—its highest ever—was lower than the average of the 33 African countries in 2023 (15.6%).
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Funding
iSchool raises $4.5 million
iSchool has raised $4.5 million in a funding round. The funding round was led by VentureWave Capital, an Irish VC with contributions from OneStop Capital UK, Website Investment Network, and Oraseya Capital, the Venture Capital arm of the Dubai Integrated Economic Zones Authority.
iSchool will use the funding to expand into six new countries in the MENA region and scale its online learning platform across sub-Saharan Africa.
iSchool: Launched in 2018, the edtech platform teaches AI, VR, app development, game development, and web development to students aged between 6 and 18 via gamified classes.
Muhammad Gawish, Ebrahim Youssef, Mustafa Abdelmon’em and Osama Ghareb—co-founders of iSchool—set out to build a solution for the 100 million students that lack access to technology education curricula or programmes in the MENA region.
Zoom out: iSchool claims it has over 26,000 live learners and has delivered over 1,000,000 hours of training to its students across 35 schools.
In addition to expanding into six other countries in the MENA region, iSchool expanded its global access by planting itself in Ireland. The team in Ireland will support its online coding education offering.
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Layoffs
Cowrywise denies layoffs as five employees depart the company
Cowrywise, a Nigerian fintech app known as a diverse investment platform, is shaking things up, with five departures across its marketing, engineering, and customer success teams.
While the Y Combinator-backed company insists that these role terminations were not layoffs but part of an annual “performance review”, insiders close to the company say the layoffs were due to “internal restructuring and evolving business needs”.
Also, another source with knowledge of the matter says Cowrywise will evolve in the coming years and will become more of a finance company than a fintech company.
Generous exit packages: The affected employees were provided with exit packages that included an unconventional move of paying three months’ salaries instead of the standard one month, challenging the typical practice associated with performance-related dismissals.
While the company insists the terminations weren’t layoffs, numerous tech companies have recently taken similar measures, shedding light on the challenges faced by startups amid the country’s current macroeconomic conditions. Last week, Chipper Cash cut 15 jobs in its fourth round of layoffs, six months after the company axed nearly a dozen roles.
Regulation
South Africa’s Competition Commission seeks feedback
The Competition Commission is seeking feedback on its inquiry—Further Statement of Issues (FSOI)—into differences between South African media publishers and major tech companies (Apple, Facebook, Google) through the Media and Digital Platforms Markets Inquiry (MDPI).
After reviewing the initial submissions, the commission added six more themes in which the FSOI will investigate.
ICYMI: Six months ago, the commission—which is responsible for regulating competition practices in South Africa—examined the competition between popular online platforms, like Google and Facebook. Now the commission is back with its findings and what it thinks needs to be changed.
What did it find? It acknowledged that the rise of digital platforms has significantly impacted traditional news media organisations and their revenue streams in recent years. But it also maintained that there are reasons to believe that the existence of market features within digital platforms that distribute news media content restricts and impedes competition.
Also, the commission found that Google’s strong dominance and business approach makes it difficult for smaller platforms to get noticed and gain users.
The commission recommended that Google implement new “site units” to display smaller websites that are relevant to searches.
Zoom out: The MPDMI has given a January 22, 2024 deadline for comments on the recently added themes that will help with its gathering of evidence, conclusions and recommendations.
TC Insights
Funding tracker
This week, Egyptian e-health startup Chefaa raised $5.25 million in funding. The funding round was co-led by South Africa’s Newtown Partners and Japan’s Global Brain and featured GMS Capital Partners LLC, Verod-Kepple Africa Ventures, and M3.
Here are other deals for the week:
- Egypt-based ed-tech startup iSchool raised $4.5 million in a funding round led by VentureWave Capital. Other contributors include OneStop Capital UK, Webit Investment Network, and Oraseya Capital.
Before you go, please participate in our pivotal survey exploring the impact of layoffs on African tech. It should only take at most three minutes of your time.
That’s it for this week!
Follow us on Twitter, Instagram, and LinkedIn for more funding announcements. You can also visit DealFlow, our real-time funding tracker.
Crypto Tracker
The World Wide Web3
Source:
|
Coin Name |
Current Value |
Day |
Month |
|---|---|---|---|
 Bitcoin |
$43,955 |
+ 0.87% |
+ 20.89% |
| Ether |
$2,245 |
+ 2.43% |
+ 15.68% |
 Injective |
$41.19 |
– 2.38% |
+ 179.78% |
| BNB |
$271.39 |
+ 4.56% |
+ 20.15% |
* Data as of 00:02 AM WAT, December 22, 2023.
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