Caleb Maru’s Post

Last week Africa’s biggest startup, Flutterwave, said it was going public. But are they really ready for it? Last week Olugbenga Agboola, Flutterwave’s CEO confirmed they’re going public on the NASDAQ. If Flutterwave goes public, we’ll have Africa’s second global tech IPO since Jumia. But this IPO has a lot more riding on it than an investor payday. Flutterwave is not just any company. It’s the biggest, loudest, and most documented startup on the continent. You could say it is the poster child for African tech: - It has raised $509 million to date and is valued at $3 billion. - It powers 1 million businesses and has processed over 400 million transactions worth $25 billion for clients like Uber, Wise and Microsoft. - Notable startups like LemFi, SendSprint, and Mira were started by ex-Flutterwave employees. For an African tech outsider looking in, Flutterwave is the golden goose. For the ecosystem, it’s a company to look up to. Flutterwave’s IPO will shine the spotlight on African tech - and will say a lot about the Africa opportunity. But it all hinges on a successful IPO. Flutterwave’s last raise was $250m at a $3 billion valuation - with global investors like Avenir, Visa Ventures, and Mastercard. These guys want to get their money back in multiples - and success looks like a bigger number on the public market. Is Flutterwave ready to return that money? Lets see.. Unlike in private markets, the public markets try to find out what you’re worth all the time. And those valuation multiples aren't as generous as when you’re public. For example, dLocal - an Uraguan payments company - raked in 650 million USD in 2023. It’s valuation today? 4.1 billion USD This means a company worth $3 billion would need to bring in ~500 million in revenue just to keep its valuation. On the high end, it’s been estimated that Flutterwave is close to the $100 million benchmark (PS - this is an estimate and if you have more accurate data let me know). Can Flutterwave get a return for its investors with their revenue? We doubt it. And this IPO is not just about Flutterwave and its investors getting payday. There's a lot more riding on it. Our first tech IPO, Jumia, didn’t turn out great. While it had a strong opening day, Jumia’s shares have dropped 70% from their listing price. One flop is bad, but two flops are a pattern - and a Flutterwave flop is bad for everyone. With global investor confidence in Africa counting on this IPO - it’s worth asking: ‘Is Flutterwave ready to go public?’ Let me know what you think in the comments 👇🏾 PS - we’re diving into Flutterwave’s IPO plans today in our newsletter. Grab it in your inbox here 💌 www.techsafari.io

This country has 150 million people and is the 10th largest in the world. And in 2021, it sent $49 billion to other African countries. Guess the country? Well, it’s not a country. It's the African diaspora. And it's the continent's secret weapon. African diaspora is a catch all for people of African origin living outside the continent. Whether you were born in Africa but moved for work - or if your grandparents are from Africa continent but you’ve never set foot - you’re a part of Africa’s diaspora. And Africa's diaspora are one of the most powerful forces on the continent. In 2021, African diaspora sent $49 billion back to Africa in remittances (money sent back to family and friends). In 6 African countries, those remittances made up over 10% of GDP - a lifeline to those countries. Africa’s diaspora is a hell of a resource for good. But while diaspora send billions in remittances, I cant shake the feeling that sending money is a low-leverage way to have an impact back home. And it begs the question: If you could mobilise 150 million people to contribute to, and support on the African entrepreneurs and businesses solving the continent's hardest problems - what would happen? What do you think of the world’s 10th largest country? And do you have ideas on how Africa’s diaspora can get more involved in supporting their home countries? Let me know in the comments 👇🏾 PS - I write a newsletter, Tech Safari, that helps thousands of Africa's diaspora learn about how tech is changing the continent. We’re a community that learns, supports and invests in tech startups across the continent. Want to join? Come along for the ride here: 💌 www.techsafari.io

In emerging markets, WhatsApp isn't just a messaging platform. It’s a shop, a bank, a news site, and a government portal. And building products and services on WhatsApp is a big opportunity. WhatsApp is the messaging platform of choice in emerging markets - used by 487.5 million in India and 118 million in Brazil. And it dominates African internet communication too, with: 93.5% penetration in Kenya 95.4% penetration in South Africa 91.9% penetration in Nigeria Why is WhatsApp dominating communication in emerging markets? Two reasons: 1) It's simple. Unlike Messenger (with stickers, games and marketplaces embedded) WhatsApp is built for anyone - even with low tech literacy - to start using. 2) It's data-lite. WhatsApp takes up less data than other apps - which lets countries with slower internet use the app. It's also cheaper than buying airtime (call credit). By design, it's the best communication tool for emerging markets. And that means building tools and products on WhatsApp is a huge opportunity. Case in point: Nigeria’s biggest bank, UBA Group, launched its chatbot, Leo. Today, it has over 12 million users across 20+ African countries. It lets users open bank accounts, transfer money, and buy airtime - all through WhatsApp. WhatsApp's user penetration and distribution in emerging markets make it the best platform to build on. Do you know companies that have built for WhatsApp? Let me know in the comments. 👇🏾 PS - In my newsletter today, I’m sharing three companies winning on WhatsApp. Sign up to get it here 💌 https://lnkd.in/gscEuzZG

In 2022, Agnetta found her late husband borrowing money from the afterlife. His ghost racked up loans that landed her in court. Scammers had ‘hijacked’ his account - making transactions as if he were alive. The same year, Farah Bashir took an even bigger hit. Scammers hacked his M-Pesa account and breached his four linked bank accounts. They swiped $19,475 (Ksh 2.6 million), leaving him stranded in Johannesburg where he had travelled for work. Mobile money transformed Africa’s payment story - providing a cheap, easy way to send money using just a phone number. But, it also gave scammers a new way to steal. That year, four M-Pesa customers (including Agnetta and Faraha) sued Safaricom after getting scammed. These cases may sound unusual, but they’re not the only victims. Africa is the mobile money (fraud) center of the world. In Kenya, about half of users have lost money to fraud or sent it to the wrong person. In Senegal, about 32% of users have faced scams. While last year in Nigeria, there were 4,982 mobile money fraud cases - the highest ever recorded. So why is mobile money pulling in the scammers? Unsurprisingly, identity fraud is the most common type of mobile money scam. And as Bright Gameli explains: “Mobile money was built for usability and functionality, so providers kept the KYC simple. Now, identity fraud has gotten so bad that they’re even stealing from the dead too.” Agnetta’s late husband can relate. And it's not just mobile money users at risk. It’s everyone in the ecosystem: customers, agents, fintechs and now even banks. Today, banks are both victims and (unintentional) accomplices in mobile fraud. And they’re feeling the dangers. Lawsuit after lawsuit. One reputational hit after the next. And the losses are piling up: - In Tanzania, mobile fraud at commercial banks surged by 84% in Q4 2023, reaching over $647,000. - Last year, Wema Bank in Nigeria got hit with a $595,000 fraud. Now, they've kicked seven fintech partners off their payment platform - Last week Kenya's Equity Bank, uncovered a debit card fraud worth $2.1 million. The money was spread across 500 accounts (including mobile money wallets) to avoid detection. Africa is the mobile money center of the world. But with rising fraud, it could become the fraud center too. Tomorrow in our newsletter, we’re diving into Scamming the Unbanked - and companies helping banks bust mobile money fraud. Grab it in your inbox here 💌 www.techsafari.io

We're back Nairobi! 🇰🇪 🎉 Our next Tech Safari Mixer is up next Friday. We're bringing together entrepreneurs, investors, ecosystem players and tech curious in Nairobi. Location, speakers and partners to be announced this week. Keep your eyes peeled 👀 Details: Date 📅 Friday 3rd of May, 6pm onwards Location 📍 TBA on Registration Registration Link 🔗 https://lu.ma/nbomixer4 If you know anyone in Nairobi who should come along, tag them below 👇🏾 See you soon 👋🏾 PS: Capacity is limited so RSVP quick ⚡ https://lu.ma/nbomixer4

Last week WeBuyCars went public for $444 million. It's South Africa's biggest IPO in three years. Is the local IPO making a comeback? WeBuyCars (a South African car marketplace) is almost half a unicorn - but the company isn’t half as rare as one. Its business is just like Autochek Africa in Nigeria, Peach Cars KE in Kenya, and Sylndr in Egypt. And if WeBuyCars can pull off an IPO - why cant other African startups do it too? It turns out that Africa’s first set of founders went down the IPO road. Companies like Chams, Omatek, eTranzact and Mustek still live on stock exchanges in Nigeria and South Africa today. But between the first wave of IPOs and the arrival of VC money in Africa, local IPOs lost their appeal. In the last decade, only three tech companies IPO’d on the continent. And when the local markets can’t keep up, startups have to go global. Today, startups are chasing bigger bags — they want billion-dollar valuations and unicorn listings. Jumia was listed for $3 billion on the NYSE in 2019, and Flutterwave is considering an IPO on the same exchange next year. But the local stocks are rising. And we might be in different times now: - African exchanges are growing. The JSE in South Africa is the 17th-largest in the world. Ethiopia just started a new exchange that raised an oversubscribed $26 million from investors. - Local exchanges are bigger and better. African stock markets have grown 10x in the last 20 years, from $245 billion to $2 trillion in market cap. - VC funding has slowed down — it’s down 51% between last Q1 2023 and now. This funding winter means mature startups need to find new ways to raise money or return the bag. When local exchanges are growing and VC dollars are drying up, it might be time for a new exit plan. And the WeBuyCars IPO might be the start of that. This year alone, there are nine more listings expected on the JSE. That’s three times the number of listings in the past five years. Do you think the Local IPO will make a comeback for African startups? Drop a comment with your perspective 👇🏾 PS - In our newsletter today, going into whether the local tech IPO will make a comeback. Grab it in your inbox here 💌 www.techsafari.io

Today, I'm thrilled to announce our Managing Editor at Tech Safari, Adrian Ephraim 🎉 He’s a South African award-winning journalist, leading teams at TechCabal, Mail & Guardian, IOL and Eyewitness News. And when he kicked off way back in 1999, he wrote for print media (newspapers) - way before my time. In 2000, he moved to Johannesburg to join the country’s largest daily newspaper The Star as a sub-editor. He covered sport at The Star, and travelled to the UK, the Caribbean, Australia, Malaysia and the Netherlands writing about cricket and motorsport. Soon, digital media called. He became Editor of IOL in 2009 - South Africa’s second-largest news website at the time, and nabbed awards for his writing - like SAB Sports Journalist of the Year and 2022 Vodacom Journalist of the Year (Sports). Eventually, Adrian’s interest in tech was stirred. As he grew in digital media, he watched as big tech companies made their presence felt on the continent. Facebook, Twitter and Google made their moves and had all become part of the media game. At the same time, founders in Africa were trying to make moves as the world zoomed forward. They embraced new technologies and tried to solve some of Africa’s most difficult problems - banking, logistics, e-commerce. Then, last year, he met a creator writing stories about tech in Africa (👋🏾). The creator had a problem - his team was growing, but no one had real media experience or knowledge on how to build a media company. Adrian decided to give a bit of advice. What started as a small project ended with Adrian gelling right in with the culture. And it wasn't long until Adrian was coaching, creating processes and building a team at Tech Safari. Today, I’m thrilled to welcome Adrian to the Tech Safari Team as our Managing Editor - to tell Africa’s tech story to the rest of the world. With almost more experience than the years I’ve been alive 😉 Adrian is building our foundation to ideate and tell Africa’s untold tech stories. Welcome, Adrian! Make sure to follow Adrian Ephraim to get more insights on African Tech 🌍 And subscribe to Tech Safari to read our stories in your inbox 💌 www.techsafari.io

Last week, fellow writer Jasiel clashed with Paul Graham - the founder of Y Combinator. And it all started with the word ‘delve’ Paul G - tech heavyweight and founder of the world's leading accelerator, Y Combinator - tweeted that he ignored an email because it had the word ‘delve’ in it. Paul’s belief? That language is only valid in its simplest form. And that “fancy” vocabulary - the kind of language used in former colonies in Africa, like 'delve' - are less worthy. Jasiel Martin-Odoom - a fellow writer and investor, hopped on X to make his point: That the world is not Silicon Valley, and language shouldn't be molded into the West’s perception of simple language. Paul G clapped back - calling our boy a dimwit for not making the distinction between simple writing and having a different vocabulary. While this might seem like a small Twitter clash, it's a bigger point. It’s one about Africa telling its own story and owning its narrative. And if we stop scrolling X for a second to think about the deeper meaning of Jasiel’s tweet: - How we write informs and shapes opinions. - As Africans, we need to own our narrative. - We should tell stories in our own words. While we’re all for simple writing, so many of our stories in Africa are complex. They require context you can only get from being on the ground. They have complicated, nuanced histories for each of our 54 countries. And while the West values simple language that fits nicely into a Twitter thread or LinkedIn post - our stories can't always do that. Sometimes, to understand startup regulation in Nigeria, you need a 1,500 word deep dive from Abraham Augustine. Or if you want to know where the Future of Work is going (it's Africa), you need to listen to Justin Norman's ten-episode podcast on the future of work. Our narratives aren't simple. But we need to own them and make them about our own realities. Jasiel stepping up to Paul G is about more than just delving into simple language - it's about Africa’s responsibility to own its narrative in tech. Otherwise, we’ll have Silicon Valley dictate them for us. What do you think of Jasiel and Paul’s Twitter exchange and the African tech narrative? Let me know in the comments 👇🏾 PS - In my newsletter this week, we’re diving into the evolution of African tech media - and how content creators are driving the narrative forward. Grab it in your inbox here 💌 www.techsafari.io

This founder tried building a remittance app to send money back to Africa - until he stumbled on a bigger problem: business-to-business (B2B) payments. Meet, Dickson Nsofor. Back in 2018, he wanted to solve a problem he was familiar with — sending money to Africa from abroad. So he started Kora - initially a cross-border payments startup that helped diaspora send money to Africa. Kora grew quickly - adding users and raising money to scale. Until he realised: cross-border payments are tricky. And (just like African SMEs), Kora went through it. Dickson had to: - Deal with different payment providers on both sides - Keep up with regulations in every transacting country - Settle funds in record time Only then could he take a cut off the top. And while it was easy for them to settle payments with customers, it was hard to settle money with businesses. Dickson had issues getting paid by his partners in different countries. And even harder was getting paid on time. Kora had stumbled onto an even bigger problem: B2B payments. While we hear all about B2C payments, B2B payments are the bigger side of money movement. Five times bigger, in fact. And because the size of transactions is larger, B2B payments are complicated. If you’re a person trying to pay a business, you can do that in seconds. But Dickson’s own words, “It was faster for a business to drive money from Nigeria to Ghana than to do a wire transfer”. And by building the infrastructure of a remittance company, he had the tech to help businesses manage their payments instead of just consumers. So, Kora pivoted. Instead of helping the diaspora remit money, he helped businesses track payments and get paid faster. Today, Kora helps businesses manage payments from end to end. Instead of managing payments by messages, word of mouth and pen and paper, business owners can track invoices, settlements and get paid on a dashboard. And now they power payments for thousands of businesses in Nigeria, Ghana and Kenya - to help them get paid, faster. “What we’ve built is a seamless payment infrastructure for African businesses. And with this, we’ll finally be able to build a future without financial barriers in Africa,” Kora helps business owners focus on chasing money, not chasing invoices - helping African companies take on the $25 billion dollar late payment problem. What do you think of Dickson (and Kora’s) story? Let me know in the comments 👇🏾 PS - today on Tech Safari we’re diving into B2B payments in Africa. Grab the edition in your inbox here 💌 www.techsafari.io

Africa’s digital economy is booming. But there’s a $25 billion dollar problem: Late payments. Africa’s payment story has come a long way - with fintechs and mobile money helping more than 222 million consumers pay for goods digitally. In fact, in 2023 nearly $400 billion moved digitally across the continent. So now, it’s much easier for consumers to trade. But what about when: A processed foods manufacturer needs to get raw materials from a supplier on the other side of the world? Or a Nigerian pharmaceutical distributor has to do business with a drug manufacturer in India? Or a small trucking company needs to get paid by its clients locally? The other, bigger side of payments we don't hear about is payments between businesses (B2B payments). And this side of the coin is five times bigger than business to consumer (B2C) payments) But because the size of transactions is larger, B2B payments are complicated. If you’re a person trying to pay a business, you can do that in seconds. But if you’re a business trying to get paid by other businesses… take a deep breath. It's going to be a while until you see that money: Invoices take weeks to months to complete, because of slow invoice approvals and payment cycles. Payment channels (like paper checks and wire transfers) are slow and stressful. Some take days to settle even after approvals. Multiple clients/creditors owe you money at once and they’re all around the world. For most businesses, this is a recipe for disaster. Because long payment cycles = cash-starved businesses And Africa's SMEs survive on razor-thin profit margins. They count on their thin margins to pay their bills, stock up on supplies, and pay their staff. After covering all that, they barely have any cash to fall back on. So it's a problem when 87% of small African businesses suffer from late payments. In South Africa, a survey of 500+ small and medium-sized businesses found that 91% felt the pinch of late payments: - 20% struggled to pay staff - 21% had trouble paying suppliers - 38% would hire more staff or increase salaries if paid on time - While 29% would invest in technology to tackle late payments In what's called Invoice Factoring, businesses exchange their unpaid invoices for cash at a discount to stay keep afloat. And in 2021, $25 billion worth of invoices were factored in Africa. Most of is only accessible for medium and large-sized businesses. But what happens for the small businesses when: - nobody can lend you money - your profits barely register - your debtors drag their feet to pay you? If you’re lucky, you stay alive - and stay small. But if you’re not, you bite the dust. Do you know any startups that are solving late payments for SMEs? Let me know in the comments 👇🏾 In our newsletter this week, we’re diving into the problem of late payments and a company helping African businesses get paid - on time. Sign up to grab it here 💌 www.techsafari.io