👨🏿‍🚀TechCabal Daily – A star’s exit

Happy new week! ☀️

Before you dive into today’s edition, please take a minute or two to move TC Daily from your Promotions folder into your Main/Primary folder so you don’t miss any of our important coverage. On mobile, click the button on the top-right corner and select “Move”, and on desktop, just drag and drop this email.

Thank you!

Techstars Lagos shuts down

Last week, Techstars, one of the world’s most active accelerators shutdown Techstars Lagos. Launched in 2022 in partnership with ARM Labs, Techstars Lagos aimed to support and accelerate the growth of early-stage technology startups in Nigeria. 

It invested $2.4 million across 24 companies including CDCare, Jump n Pass, and GetEquity, with each startup receiving up to $120,000 in funding.

Despite its modest pace of dealmaking, it’s calling a close to its time in Lagos. Depending on who you speak to, there are two theories for why Techstars Lagos is closing. The first is that its partnership with ARM abruptly ended. It is unclear what the terms of the partnership were so this theory is a little shaky.

The other theory is that Techstars is tweaking its strategy.

“We are focusing on the biggest tech ecosystems and phasing out some accelerator programmes in a few smaller venture markets,” the company said in a February interview.

That move may be tied to a need to improve cost discipline.

Techstars made a loss in 2023 and laid off 7% of its workforce as part of possible moves to rein in cost.

Read Moniepoint’s Case Study on Funding Women

After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges.

Fitch Ratings, one of the world’s top credit rating agencies, has raised Egypt’s credit status from a ‘B-’ to a ‘B’ rating. According to Fitch, this is a ‘stable’ outlook for Egypt’s economy.

The rating, which is usually relied upon by investors to buy bonds and make lending decisions to a country, was due to several state-backed projects which stabilised growth in the country. Inflation in Egypt has also moderated in 2024, offering some relief to the country’s economy.

Getting a credit upgrade like Egypt will lower the borrowing cost for any country, yet, it doesn’t automatically mean they’re off the hook. For Egypt, which suffered a debt crisis in 2023 after going on a borrowing spree, the fundamentals—like its high debt-to-GDP ratio, reliance on imports, and its limited foreign cash reserves—still show the underlying issue for the country. Egypt has also been impacted by regional conflicts that have reduced tourism activity and tanked the earnings by at least 25%. 

In 2024, Egypt has shifted its strategy to power projects and attracting foreign direct investment (FDI) through its partnerships with companies like Siemens and Huawei. 

Inflation in Egypt has slowed from 35.7% to 26.4% since the start of the year, likely impacting the country’s consumer price index (CPI), which tracks the price changes of consumer goods. The CPI itself declined from 29.8% to 26.4% between January and September 2024. This has freed up disposable income for consumers that spend money on activities that bring back money to the government.

The upsides seem high for investors, as Egypt has shown more commitment this year to avoid a default.

In 2023, Piggyvest shared a savings report that surveyed 100 respondents. That survey and the subsequent report aimed to show how Nigerians are spending, managing and saving money.

This year, the savings report is more ambitious, surveying 10,000 people and showing us that things have gotten a lot more dire.

Data analysts may argue that the sample size could be bigger and may ask questions of the methodology, yet the report throws up some useful insights.

The report revealed that only 1 in 100 Nigerians spends ₦1 million ($609) or more in a month. Additionally, the report claimed that nearly 65% of Nigerians earn less than ₦100,000 ($61) a month.

With headline inflation squeezing pockets, it’s no surprise that Nigerians aren’t saving as much as 2023. 

Read the report here.