👨🏿‍🚀TechCabal Daily – Copia’s coping mechanism

Shutdowns

“Markets take the stairs up and the elevator down.”

This saying, attributed to wealth manager Tim Egart, rings true for Copia, the Kenyan e-commerce platform that aims to revolutionise rural retail. Despite raising money from big-name VCs like DFC and GoodWell Investments, the Kenyan B2C startup could not crack the razor-thin margins of the e-commerce business.

Here’s what Adonijah and Kenn wrote about the startup:

“Copia, once a darling of venture capitalists—including the DFC and GoodWell Investments—received $123 million in funding but failed to turn a profit. The company sought to turn informal rural kiosks into a multi-billion digital retail platform, linking customers directly to fast-moving consumer goods (FMCG) manufacturers to lower product costs.”

On May 24, the business entered into administration after failing to raise new capital. 

“Copia Global, the parent company of Copia Kenya, was unable to attract capital on terms that were amenable to all existing stakeholders, funders, and investors. Copia Global is now winding down, leaving the Copia Kenya business in a new position to raise capital directly,” Copia said in a statement sent to TechCabal. 

As the company seeks to raise new funds in Kenya, it is taking steps to cut costs. 

Copia Kenya has now shuttered its business divisions in Central and Eastern Kenya. Naivasha, Machakos, Meru, Embu, Kericho, and Eldoret were the six markets affected by the new decision. 

While the company announced plans to lay off over 1,000 staff on May 16, staff working in spots across the affected markets have been sent home pending a decision from the company. 

The Financial Times has ranked Moniepoint as Africa’s fastest-growing fintech based on its absolute and compound growth rate. Read more about it here.

Streaming

Canal+, a French media group, has been trying to buy MultiChoice since the beginning of the year. Its Initial offer of $2.5 billion—and an improved $2.9 billion—was rejected. However, by increasing its ownership in MultiChoice to over 35%, it is expected to formally offer to buy all remaining shares. It has since upped its ownership to 40.8%.

You see, South African laws say that once a company has a 35% stake in another company, it has to make a mandatory buyout offer. And Canal isn’t new to these rules. Way back in 2016, around the same time Blackberries and man buns became a thing, it perfected a hostile takeover of France-headquartered Gameloft by buying over 30% of the company first, before convincing other shareholders to sell their stakes. It might be taking the same route with MultiChoice.

After months of back and forth, in April, Canal+ offered MultiChoice $2.9 billion which MultiChoice again rejected because the latter company felt it was worth more. An independent board created by MultiChoice evaluated Canal+’s offer price for the remaining shares. 

This board, reviewed by Standard Bank, has now concluded the price offered by Canal+ is fair and reasonable for MultiChoice shareholders. It recommended that shareholders wait until the offer becomes final before approving it.

A key challenge is regulatory approval. Several government bodies in and outside of South Africa need to give the green light before the deal can proceed.

Additionally, South Africa’s ownership rules, the Electronic Communications Act limits foreign companies from owning more than 20% of the voting rights in a South African broadcaster, which creates a challenge for Canal+’s full acquisition of MultiChoice.

Both companies have confirmed to be working together to find a structure that satisfies both the regulations and maintains MultiChoice’s commitment to black economic empowerment.

The Canal+ offer is expected to close by April 22, 2025.

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Mobility

When South Africans were asked about their ride-hailing preference, Bolt took the top spot. The Estonian mobility startup, which launched in the country in 2016, is doing all it takes to keep its top spot. 

In recent times, Bolt has faced criticism for the misconduct of its drivers in the country. Those drivers have been accused of harassment and sexual assault, sparking a social media outrage.

Emmanuel Mudau, a former Bolt driver, was sentenced to two life sentences and two 15-year terms for rape, kidnapping, and assault. Another driver in Cape Town was taken into custody and charged with allegedly stabbing two young women following a dispute over their drop-off location.

The ride-hailing firm has now responded to this claim by blocking over 6,000 drivers involved in such misconduct over the past six months.

“The company will continue to permanently block drivers and riders who have been reported for misconduct from accessing the platform,” Bolt said in a statement. 

Bolt’s action comes after it received threats of litigation for failing to hold its drivers to good standards. An attorney group also claimed it would launch a civil claim against Bolt for failing to protect passengers. 

Only time will tell if Bolt’s recent actions are enough to regain the trust of South African riders.

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Telecoms

Spectrum relates to the radio frequencies allocated to the mobile industry and other sectors for communication over the airwaves.

Companies like MTN in Nigeria are willing to spend millions for exclusive access, as evidenced by its $273 million bid for a 3.5GHz band license. However, there’s a catch: spectrum use is often subpar.

Imagine a national operator holding onto spectrum in certain areas but not deploying it—perhaps due to legitimate operational reasons. While understandable, this creates a missed opportunity from a national perspective. This resource could be used to bridge the digital divide, bringing connectivity to underserved communities.

The key challenge? Encouraging efficient spectrum use and policies to ensure the use of the hoarded spectrum. 

To stop companies from hoarding spectrum, the Independent Communications Authority of South Africa (ICASA) used a financial penalty system called the “Administrative Incentive Pricing scheme” in April 2012. This system makes holding onto unused spectrum more expensive.

The financial pressure to use spectrum efficiently has been effective for companies. Telkom, a state-owned telecoms company for instance, saw a significant rise in spectrum fees in 2013 due to the administrative incentive pricing scheme from R37.5 million ($2.06 million) to R922 million ($49 million)

This also played a role in Sentech returning unused spectrum in the 2.6GHz and 3.5GHz bands that same year, as holding onto it became ten times more expensive.

The minister of communications Mondli Gungubele, has published a new policy including the “use-it-or-lose-it” rule. This means companies must use the airwaves they have licenses for, or they could be taken away. Companies will also get to choose the technology they use to deliver their services on the allocated spectrum. This ensures they can adapt to new advancements.

Minister Gungubele outlined several measures to promote economic development through better spectrum utilization: Market-based solutions such as spectrum trading, sharing, and “subletting” are now permitted, with ICASA’s approval, to ensure public benefit. ICASA will establish clear rules for spectrum trading between licensees. These rules will prevent any single company from hoarding excessive spectrum or stifling competition.

This policy is subject to review at the minister’s discretion. This ensures the policy stays up-to-date with evolving technologies and market conditions.

Events

• TechCabal is set to announce its first set of speakers for the second edition of its Moonshot Conference which is set for October 9–11, 2024, at the Eko Convention Centre, Lagos, Nigeria. Moonshot will assemble Africa’s biggest thinkers, players and problem solvers on a global launchpad for change. If you want to join the stakeholders in Africa’s tech ecosystem for three days of insightful conversations, then get an early-bird ticket at 20% off. 


• HR Crunch is an event for young professionals, fresh graduates, and entrepreneurs to gain insights from industry experts and network. The event features panel sessions centered around Fashion and Arts, Sports and Health, Media and Entertainment, and Recruitment Technology. All registrants can participate in interactive Q&A sessions, engaging games, and other inclusive activities. There are two ticket options available: attendees and job seekers. Both tickets offer the same perks, but job seeker tickets include access to a speed job interview, providing a unique opportunity for career advancement. Tickets are free at https://tix.africa/discover/hrcrunch.


• Are you an impact-driven business in Nigeria ready to scale? Apply now for the third cohort of the develoPPP Ventures programme! The develoPPP Ventures programme offers you: EUR 100,000, technical support (Needs assessments of organisation & matching of consultants or experts to support identified challenges, consultants are paid by develoPPP), and access to a wide pool of equity investors at the develoPPP pitch event unlocking the opportunity to showcase shortlisted startups to key investors for valuable feedback. Apply here and register for the webinar for June 2nd, 2024 at bit.ly/develoPPPCohort3Webinar.

Here’s what we’ve got our eyes on

• Uganda holds interest rates to calm inflation as the shilling steadies
• ‘Unicorn’ is a bad word: Iyin Aboyeji’s Accelerate Africa pushes revenue-driven growth
• As it enters its third year, e-commerce enabler Sabi creates a lane of its own

Written by: Faith Omoniyi & Towobola Bamgbose

Edited by: Timi Odueso

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