👨🏿‍🚀TechCabal Daily – A micro retreat

Layoffs

In 2019, Microsoft launched its Africa Development Centre with one goal in mind: recruiting world-class African engineering talent. The development centre was Microsoft’s 7th globally and the first on the continent. 

The development centre was launched with much fanfare, with Microsoft promising to pour over $100 million worth of investment into the centre over the next four years. The tech giant also set an ambitious goal to recruit 500 full-time engineers by the end of 2023. 

At the time of its launch, Microsoft was among the first global tech companies to recruit talent from the continent. The centre would go on to employ 120 engineers and 200 total staff members over the next five years before the eventual layoff of its entire engineering team. 

“A workforce adjustment”: Yesterday, Microsoft announced that it was letting go of its entire engineering team. The company chalked up this decision to “organisational and workforce adjustments” as it “continues to prioritise and invest in strategic growth areas for our future and in support of our customers and partners.”

Affected employees will receive severance packages of two-month salary and continued health insurance. 

Is Microsoft making a retreat? There are speculations as to whether Microsoft might be retreating from Nigeria, as macroeconomic headwinds have caused several businesses—Procter & Gamble, GSK Plc, and Bayer AG—to retreat. Nigeria, Africa’s most populous country, is faced with an ailing currency, an FX shortage, and an increasing inflation rate, which have reduced the purchasing power of its people, making it tougher for businesses to grow. 

The layoffs also occur within the broader context of Microsoft layoffs globally. Last year, Microsoft laid off about 10,000 people. In January, the tech giant cut 1,900 jobs in its gaming division. So far, over the past two years, the company has shed over 16,000 jobs globally.

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M&As

Fintech led mergers and acquisitions figures across the continent in the first quarter, contributing 5 out of 12 of the total M&A conducted on the continent. Mastercard’s acquisition of a small slice—a 3.8% stake—in MTN’s fintech arm for $200 million was the poster child for these acquisitions.

Fintechs across the continent are not resting on their horses.

An $85 million acquisition: South Africa’s publicly listed company, Lesaka Technologies, is in the process of acquiring payment platform Adumo for R1.59 billion ($85 million) in cash and equity. According to local media, the deal will be completed in the third quarter of 2024.

Launched in 2019, Adumo provides POS devices, integrated payments, and reconciliation services to merchants and consumers. The company claims to process over R24 billion ($1.3 billion) annually and has 23,000 merchants and 240,000 consumers using its services, respectively.

What’s in for both companies? Lesaka is South Africa’s largest payment switch company, not owned by a bank. The acquisition of Adumo will help Lesaka stamp its foothold in new African markets, including Namibia, Botswana, Zambia, and Kenya. The acquisition will also enable Lesaka to offer its widely used card-acquiring POS device company, Kazang, in these new markets where competitors like YOCO are absent.

Adumo is Lesaka’s latest acquisition. In February, fintech acquired data analytics and merchant service company Touchsides—which was formerly owned by Heineken—for an undisclosed sum.

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Layoffs

In more news about layoffs, B2B e-commerce company Alerzo has downsized its workforce for the fourth time. 

In 2022, Alerzo effected its first-ever layoffs by firing over 200 workers across its warehouse operations teams after it digitised their roles. By March 2023, it laid off another 400 staff as it closed 14 warehouses across Nigeria. Eight months later, in November 2023, it laid off 100 workers across its warehouse teams for similar reasons.

Now, TechCabal has confirmed from sources close to the business that Alerzo’s fourth round of layoffs happened in February 2024. 

This time, the company cut at least 70 jobs in a bid to cut costs and extend its runway. The layoffs largely affected people who worked in the warehouse and junior employees at the front offices. This happened despite the e-commerce company raising an undisclosed amount of capital twice last year. 

Why is this happening? Insiders suggest the layoffs were a cost-saving measure to extend how long Alerzo will stay in business but the company maintains the decision was made to digitalise operations and build a long-term sustainable business model.

The company acknowledged the recent workforce reduction in February, stating it had a larger team of nearly 1,500 employees at the time. While expressing regrets over the layoffs, the company emphasised its efforts to reduce the number of employees affected. “All those who were laid off were still given severance packages and had health benefits extended for an additional three months,” Alerzo told TechCabal.

The e-commerce startup, founded in 2018 by Adewale Opaleye, secured early funding in 2020 with a $525,000 pre-seed round followed by a $5 million seed round later that year. The company’s success continued in 2021 with a $10.5 million Series A round. 

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Startups

Kenyan agritech startup iProcure has filed for bankruptcy.

The news: The startup, which raised about $17.2 million across 10 funding rounds, is filing after it failed to secure further investment. Sources close to the business also say iProcure is now unable to pay its debts estimated to be over $1.5 million. 

Co-founder and director of the company, Stefano Carcoforo, informed a Kenyan court that the startup now requires bankruptcy protection because it’s unable to settle its debts.

“The company has lately been unable to meet its financial obligations on a day-to-day basis. At that point, the company approached its shareholders and other potential investors to pump in more investments to enable the company to trade normally in the market.

That failing to attract more investment, the company sought the protection of the law under the Insolvency Act of 2015, by appointing a qualified administrator under the law, to manage the company’s affairs and property of the company,” Carcoforo told the court.

The supply chain which connects suppliers and retailers in the agricultural sector was also placed under administration in April. This means a licensed insolvency practitioner will be designated to either restructure the business and negotiate with creditors or sell its assets, settle debts, and close down the business.

An administrator has been appointed: Makenzi Muthusi, the KPMG administrator, has now been assigned to take charge of the company’s offices, assets, and operations, and also supervise the management of claims from undisclosed creditors.

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Crypto Tracker

Source:

Coin Name	Current Value	Day	Month
Bitcoin	$61,672	– 1.56%	– 13.47%
Ether	$2,997	– 0.43%	– 18.84%
Ethena	$0.89	– 1.49%	– 34.05%
Solana	$149.07	– 2.86%	– 17.06%

* Data as of 06:15 AM WAT, May 9, 2024.

Opportunities

• Applications are open for the 5th edition of Wema Bank’s startup-focused tech competition, Hackaholics, themed “Meta-Idea: DigiTech Solutions for Africa’s Prosperity”. The edition will be executed over six months, touring 10 universities across Africa and challenging the youths to pitch unique, innovative, and practical Digi-Tech solutions to positively impact the acceleration of progress, development, and prosperity in Nigeria and across the African continent. The best innovators in Africa will be awarded ₦70 million. Apply here.
• Applications are now open for the DAAD Leadership for Africa Master’s Scholarship Programme. The programme aims to support the academic qualification and advancement of young refugees and national scholars from Burundi, Kenya, Rwanda, South Sudan, and Uganda at higher education institutions in Germany. Applicants will get a chance to learn a German language course for 6 months before study begins, and a Tuition-free M.A. or M.Sc. degree programme at a public or state-recognized university in Germany starting September/October 2025. Apply by June 7, 2024.
• The 2024 African Business Heroes Competition is open for application. It aims to identify, support, and inspire the next generation of African entrepreneurs who are making an impact in their local communities, working to solve the most pressing problems, and building a more sustainable and inclusive economy for the future. Finalists get grant funds of up to $300,000, global recognition and exposure and targeted and practical training programs. Apply by May 19.

Here’s what you should be looking at

• Jumia’s share price jumps after Q1 2024 that saw it cut losses by 71%
• Kenya’s DTB shakes up leadership as it targets 10 million customers by 2026
• Starlink could come to Botswana as the government reportedly meet Starlink executives
• eTranzact expands into Uganda

Written by: Faith Omoniyi & Towobola Bamgbose

Edited by: Timi Odueso

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