👨🏿‍🚀TechCabal Daily – A new Chpter

For years, Tingo, a self-described agri-fintech, was considered an oddity. Despite what it said in press releases and its claims of hundreds of millions in revenue, no one in Nigeria’s tech ecosystem could tell you the first thing about the company. That’s almost always a red flag. 

It has a mobile telephone subsidiary, a food business, and also claimed to have a massive business with Nigeria’s small-scale farmers. While most people remained sceptical, being listed on the NASDAQ helped it escape scrutiny.

Things mostly stayed that way until the company’s CEO, Dozy Mmobuosi, was linked to a bid to buy an English football team in Sheffield. Things quickly fell apart from there. 

On Thursday, a New York judge ordered Mmobuosi and his companies to pay over $250 million in a civil suit instituted by the Securities and Exchange Commission (SEC). The SEC began investigating Tingo in 2023 and alleged that the company inflated its financial performance and was mostly hot air. 

While the company denied those allegations and even promised to respond, it had no legal representation in the civil action. Here’s what we wrote in June 2023, weeks after Hinderburg research first flagged issues with Tingo’s business: 

“Tingo also announced that it has engaged White & Case LLP, a leading international law firm, to conduct an independent review and report to its independent directors concerning allegations contained in the report published by Hindenburg on June 6, 2023.”

The company did not discuss the allegations on subsequent earnings calls and did not disclose whether the independent review yielded any reports.

Read all about Tingo here.

We all spend way too much time on social media, and Chpter, the Kenyan social commerce startup that turns any social media platform into a sales channel, thinks that’s just great. 

Founded in 2022 by Tesh Mbaabu, Mesongo Sibuti, Kuria Kelvin, and Mark Kiarie, Chpter was accepted into Norrsken’s accelerator programme in 2023 and participated in Safaricom’s Spark Accelerator in 2024. While it raised undisclosed amounts of money through both programmes, the startup is now happy to share details about some new funding. 

Chpter has raised $1.2 million in a pre-seed round led by Pani, a pan-Africa VC firm co-founded by former Cellulant CEO Ken Njoroge. Norrsken, Renew Capital and Techstars also invested. 

Read all about how the company plans to use the funding here.

On August 30, Amazon Web Services (AWS), one of the largest cloud service providers, hosted a summit in Johannesburg, South Africa to discuss the advancements of Generative Artificial Intelligence (Gen AI) in the country.

AWS powers most of the AI tech development in the country by some of its foremost innovators, like Dataprophet which uses machine learning models to detect faulty goods, or Capitec bank’s robocall-detection product that helps customers spot fraudsters.

Thanks to the wide adoption of its Amazon Bedrock solution, the cloud provider is now committed to making a follow-on investment of $1.7 billion by 2029 to increase renewable energy supply to its data centres.

Currently, AWS has two of its three data centres located in South Africa. At least one of them consumes about 1,000 megawatts-hour (MWh) of electricity. AI consumes data points that must be stored on servers and these servers need electricity to run. 

So AWS’s value proposition goes something like this: it will use that investment to generate more electricity to sustain the high demand for storage for these data points. In turn, companies will use AWS Bedrock which allows companies to build on existing Gen AI models, and scale their operations.

It’s a win-win deal for both AWS and South Africa as the country continues to push the frontiers for AI development in Africa.

Nigeria’s petrol subsidy, a decades-long government intervention that has defied all efforts at dismantling, was scrapped unceremoniously in May 2023. It was hailed as an important but poorly executed reform, but other problems like FX volatility and a government struggling to raise revenues have made follow-through difficult. 

The devaluation of the naira, for instance, has increased the cost of importing petrol and has ensured that a 3x increase in fuel price is no longer sufficient. Depending on who you talk to, the current landing price of petrol is ₦1,000 ($0.63)/litre, significantly higher than the ₦610 ($0.38) fuel currently retails for. It means the federal government has been paying subsidies for months.

Those subsidies have strained the government’s finances and caused late payments to fuel importers. Late payments lead to long fuel queues and Nigeria’s fuel scarcity, which has historically been seasonal, is now a feature in many major cities. 

It is creating headaches for individuals and businesses. Logistics operators are struggling to get fuel and sometimes paying above market price. They’re also passing on those costs to end users. The scarcity also makes life difficult for millions of people who generate their own power given the country’s unreliable power supply. 

Yet the situation may only get worse. 

On Sunday, the Nigeria National Petroleum Company Limited (NNPC) admitted that its debts to fuel importers are significant and the “financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.”

If you’re not versed in government speak, the NNPC, which reported ₦3.3 trillion ($2.07 billion) in 2023 profits in August, will likely use all of those profits to pay subsidies. And that may not even be sufficient. Some reports put the backlog of payments at $6 billion.

While NNPC continues to “engage with stakeholders,” Nigerians have to brace themselves for more queues and a possible fuel price increase.

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The World Wide Web3

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* Data as of 06:10 AM WAT, September 2, 2024.