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Early bird ticket sales to Moonshot 2024 end tomorrow.
This year, we’re bringing together even more stakeholders in Africa’s tech ecosystem across 9 content tracks including governmental regulation/policy and emerging tech. Join 85 speakers and 4,000 guests in Lagos, Nigeria, from October 9–10, 2024. Get your early-bird tickets here!
Fintech
Kuda recorded $22 million in revenue in 2022
Kuda, the Nigerian neobank, has grown in leaps and bounds. The neobank almost tripled its revenue in 2022, recording $22 million up from $7.7million in the year before.
The neobank utilised targeted advertising to get well-paying customers to its doorsteps. In 2022, it recorded 4.9 million users. That number has since grown to become 7 million.
Its digital banking platform allows customers to make payments, access loans, and manage their wealth. It recorded $100 million in deposits in 2022, more than double the $41 million it recorded in 2021. Its business banking services also recorded an uptick, with customer deposits jumping from $102,000 to nearly $15 million. The business claims it offered its businesses payroll management services to over 100,000 businesses in the year in review.
While the bank launched in 2019 has rapidly gained traction, the journey to profitability for digital banks is often a marathon, not a sprint. Look at Revolut and Starling, the European neobank titans, who only recently turned a profit despite launching years ago. Even Nubank, the Brazilian unicorn, took eight years to become profitable. Of course, Brazil is not Nigeria, but the point stands: building a sustainable neobank is hard.
Although its 2022 losses outpace the previous year, Kuda Bank’s CFO, Frederic Bidet, insists that the company has enough cash—$33 million—to break even.
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E-commerce:
Jumia records reduced losses
Jumia CEO Francis Dufay is cutting more costs. In its earnings call yesterday, the CEO said that Jumia will now employ an asset-light model to fulfil deliveries. The company plans to establish new warehouses in Egypt and Ivory Coast which will be rented and not owned.
In its latest financial results, the company reduced its losses to about $20.2 million, compared to $38 million in the previous quarter. It also reported revenue of $36.5 million for the second quarter of the year. JumiaPay, the company’s primary receiver of transactions on its e-commerce platform also brought in positives. Transactions on the platform reached $1.9 million. This growth was driven by increased adoption of JumiaPay for deliveries and the success of cashback promotions introduced in the second quarter.
Jumia maintains a cash reserve of $45.1 million and total liquid assets of $92.8 million, 67% of which are dominated in USD to reduce the company’s vulnerability to currency fluctuations. The e-commerce company also recorded 2 million quarterly active users thanks in part to its search engine optimization (SEO) and customer relationship management (CRM) strategies.
Despite yesterday’s announcement of cost-cutting measures and improved financial performance, Jumia’s stock price took a significant dive, closing at $4.89 (from $10.59 on Monday). We’d give it some time though. The company’s Q1 earnings call, where it reported a 71% cut in costs, led to a sharp 150% YTD jump in share pricing, a high that peaked at $14.56 in July 2024.
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Creator Economy
Meta to pay Kenyan content creators
Meta has introduced two new monetisation options for Kenyan content creators: in-stream ads and ads on Facebook Reels.
Creators will earn a share of the ad revenue when ads appear on their content, similar to how revenue ad sharing on X (formerly Twitter) works.
Kenya has an estimated 17.8 million Facebook users, with popular content creators like Elsa Majimbo. However, many Kenyan creators still favour YouTube for content sharing due to its monetisation feature—more than 21.5 million creators create content on YouTube.
Facebook’s competing monetisation feature will allow eligible creators to earn money from sharing short-form video content. In-stream ads can appear before, during, or after on-demand videos, while ads on Facebook Reels integrate into original short-form content.
To qualify, creators must comply with Meta’s partner monetisation policies and content monetisation policies. The policies discourage creators from buying followers or using “engagement farming” tactics to artificially boost their metrics and qualify for ad revenue sharing.
Additionally, creators must produce content in formats that are eligible for advertising, such as videos and reels that meet Meta’s quality standards and community guidelines. Creators must also be up to 18 years old, and have a minimum of 5,000 followers to monetise in-stream ads.
Meta’s monetisation move is a broader strategy to compete with platforms like TikTok and YouTube. By offering monetisation options, Meta hopes to attract and retain African content creators on its platforms.
Startups
Mobius enters liquidation
Mobius Motors, a Kenyan automaker, has entered voluntary liquidation 14 months after announcing plans to build manufacturing units in Tanzania and Uganda.
Mobius entered the Kenyan car manufacturing market in 2013 selling cheap SUVs. But the problem is that Kenyans don’t buy new cars—even if they are produced locally. This is even true for how Africans generally buy cars. For example, of Kenya’s 130,000 annual car imports, only about 9,500 are brand new—even fewer Kenyans buy these new cars every year. In Nigeria, only about 15% of cars imported are new cars.
Buying a foreign second-hand car is cheaper, has resale value, and if you’re pressed for cash, it’s easier to sell. On the other hand, selling off a Mobius car no one has used or tested is not as easy.
This leaves local car-makers in a rut: they cannot compete on price, and as much as we dream of it, substituting imported cars for locally-made ones is a hard dance. It’s hard to imagine selling brand-new cars for cheap in the African market—given Mobius’s low sales, we likely have the answer we need.
Other local car-makers like Nigeria’s Innoson sell expensive cars; so when it has low sales, it recoups money from high margins. Morocco’s Laraki is even finding a new market by exporting its cars to Europe.
The argument is simple: don’t try to change market behaviour, adapt. Selling brand new locally-made cars is a hard place to compete in any African country.
Mobius’s financial woes were only one part of the problem, but the lack of sales, low realised profit, and Kenyans’ eroding purchasing power also contributed to its slow death. Mobius will sell its assets and join a growing list of Kenyan companies that have shut down operations this year.
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Crypto Tracker
The World Wide Web3
Source:
|
Coin Name |
Current Value |
Day |
Month |
|---|---|---|---|
 Bitcoin |
$56,130 |
+ 2.46% |
– 3.47% |
| Ether |
$2,473 |
+ 0.65% |
– 15.86% |
 Monero |
$148.01 |
+ 0.73% |
– 2.25% |
| Solana |
$145.43 |
+ 9.73% |
+ 8.95% |
* Data as of 00:05 AM WAT, August 7, 2024.
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Written by: Emmanuel Nwosu & Faith Omoniyi
Edited by: Muyiwa Olowogboyega & Timi Odueso
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