YoLa Fresh works with over a thousand retailers across Morocco and records up to $1 million in gross merchandise volume.
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Google is preparing to build what will be the first subsea fibre optic cable connecting the continents of Africa and Australia. The news comes as the major cloud hyperscalers battle it out for business dollars, with Google playing catchup with AWS and Microsoft’s Azure. Notably, Google’s announcement follows widespread outages across Eastern Africa, which have […]
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Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage in finding that fit. Data shows that a lack of expertise and business acumen in founders contributes to failed VC investments. The same principle applies […]
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It is estimated that about 2 billion people, especially those in lower- and middle-income countries, lack access to quality and affordable essential medicines. The situation is exacerbated by low-quality or even killer counterfeit drugs that fill the gap. This shortfall means diseases that are otherwise treatable or preventable end up causing distress and even death. This is the […]
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Jumia’s revenue and gross merchandise volume showed growth despite a decrease in quarterly active customers, according to its Q1 2024 report. Revenue increased by 19% year-over-year (57% in constant currency) to $48.9 million, while GMV surged by 5% year-over-year (39% in constant currency) to $181 million.
The quarterly active customers of the African e-tailer, on the other hand, declined by almost 5% from 2 million to 1.9 million due to cost-cutting measures such as reduced customer incentives and free shipping expenditures. However, this exercise led to a stickier and higher-quality customer base with increased repurchase rates. The average order value rose by 3% compared to Q1 2023, reaching $39.6 million. Interestingly, despite the decline in customer base, Jumia’s quarterly orders saw a 1.9% increase to 4.6 million. Jumia attributes this growth to continued improvements in its supply and product assortment.
“This quarter is special because we finally turned back to growth on GMV and orders. For a year and a half, very few people outside believed that we would be able to get Jumia to grow again with that level of cuts on marketing, staff, and everything. But it turns out we can with lower marketing and logistics costs and G&A,” CEO Francis Dufay said on a call with TechCrunch. “I mean, there are much fewer people at Jumia today who operate the business. We’ve lost about 40% of the workforce since late 2022. And still, we’re still growing. So that’s a very important achievement, and we believe we still have a lot of market potential to capture in our markets.”
The e-commerce company says its revenue increase was because of sales of larger ticket items, such as electronics and home and living items, alongside higher commissions and corporate sales. Similarly, GMV growth reflects efforts to enhance its product assortment, more efficient marketing spending, and reductions in customer incentives, with marketing expenses dropping 30% from Q1 2023.
In addition, this disciplined expense management and further streamlining of its logistics network reduced Jumia’s quarterly cash burn to $19.1 million from $22.0 million in Q1 2023. Consequently, its operating loss and adjusted EBITDA loss for the quarter dropped 71% year-over-year and 83% year-over-year to $8 million and $4 million respectively, showing a continuous effort from the company to significantly reduce costs and improve its gross margins until it reaches profitability.
A big driver in Jumia’s quest to reach profitability continues to be JumiaPay (the ratio of JumiaPay orders on physical goods went up from 20% to 32.5% in Q1 2024). The continued rollout of JumiaPay on delivery in Nigeria and Kenya to increase cashless orders positions JumiaPay as a stronger enabler of its overall e-commerce platform; JumiaPay saw its transactions reach 2 million, an increase of 52% year-over-year while recording a 10% year-over-year growth in total processing volume (TPV) at $45.4 million in Q1 2024.
Jumia, whose share price has increased 26% to $6.90 since its earnings call, reported that its liquidity position in Q1 2024 totaled $101.5 million, with $28.6 million in cash and cash equivalents and $72.8 million in term deposits and other financial assets. The company emphasized that 79% of its liquidity was denominated in USD, providing protection against fluctuations in local currency valuations (it incurred a $5.9 million cash loss due to currency translation related to devaluations in Egypt and Nigeria, two of its largest markets, during the quarter).
Amazon’s highly awaited entry into Africa has come to fruition, with the tech giant announcing the launch of its e-commerce marketplace in South Africa on Tuesday.
In a statement, the e-commerce giant revealed that its localized platform, Amazon.co.za, will provide customers with access to a wide array of local and international brands spanning 20 product categories. Additionally, it promises same-day and next-day delivery, facilitated by over 3,000 pickup points, along with complimentary delivery for the first order and subsequent orders exceeding R500 (~$27).
The news comes two years after Amazon first revealed its intention to enter the continent with localized marketplaces in Nigeria and South Africa. The expansion, known as “Project Fela,” faced several delays, pushing back the initial launch dates for both countries. While the Nigerian launch, slated for February 2023, was put on hold, the South African debut, fixed for April 2023, was postponed to October and later this year. Last October, Amazon began onboarding independent sellers in South Africa and made hires in merchant development, software development, and operations, indicating its impending arrival.
“We are excited to launch Amazon.co.za, along with thousands of independent sellers in South Africa. We provide customers with great value, broad selection—including international and local products—and a convenient delivery experience,” said Robert Koen, managing director of Sub-Saharan Africa, Amazon, in a statement. “Building a strong relationship with South African brands and businesses—small or large—is incredibly important to us. We want Amazon.co.za to be the place where they can reach millions of customers.”
Amazon’s entry into the South African market introduces competition into an R55 billion (~$3 billion) industry largely dominated by Naspers-owned Takealot, which commands nearly half of all online sales in the southern African country. Walmart-owned Massmart is also gearing up for its own e-commerce push. The timing of Amazon’s launch also coincides with a surge in online shopping in South Africa following the pandemic, which has spurred increased investments from retailers in the e-commerce sector.
Cards are gaining ground in Egypt, with over 30 million in circulation (prepaid cards, particularly, are seeing more use than debit and credit cards combined). This surge in card usage, about 14% in the last four years, is primarily due to the incentives introduced by fintech companies and banks, attracting millions of Egyptian consumers who previously relied mainly on cash for their transactions.
The adoption of corporate cards tells a different tale. Businesses of all sizes have hesitated to embrace corporate cards because of limited access and inadequate spending controls over their usage.
Traditionally, banks have been the primary providers of corporate cards across the country; however, fintech companies are now entering the scene to boost adoption. Swypex, one such fintech that’s offering corporate cards and management tools for businesses, raised $4 million, which it will use to expand its business and technical capabilities of its platform.
Image Credits: Swypex
Around 3.8 million businesses in Egypt face challenges with complicated and rigid financial systems, according to a UNDP report. Like many across Africa, these businesses are using multiple disconnected methods to handle their finances, causing inefficiencies. Employee fraud is also a problem, with businesses losing an average of 5% of their revenues yearly to fraudulent activities that often arise from cash transactions like asset misappropriation and financial misreporting.
Yet, there are significant tailwinds from a regulatory perspective; for instance, Egypt’s apex bank, the Central Bank of Egypt (CBE), launched initiatives such as the Instant Payment Network (IPN) to reduce cash-based transactions and encourage digital payments.
Several fintechs in Egypt, including Swypex, are leveraging such initiatives to launch necessary financial services while adhering to the central bank’s guidelines. CEO Ahmad Mokhtar explained that the startup, founded in early 2022 but only emerging from stealth mode now, dedicated its first year to acquiring essential licenses, ensuring regulatory compliance, and collaborating with payment processors and bank sponsors. Swypex then rolled out the beta version to 100 customers last December.
“We spoke to hundreds of different businesses, from startups to SMEs to large corporations, enterprises, and publicly listed companies, to understand what their challenges were at different stages,” said Mokhtar, who launched the startup with Tarek Mokhtar (CPO) and Sasan Hezarkhani (CTO), on the problem Swypex is tackling. “We realized there were specific pains shared that haven’t been met for the last decade or two, like businesses predominantly using cash and losing visibility over their money or using banking services that were a little bit archaic, so they had to visit the banks a lot to sign physical papers and documents to get things moving for their businesses.”
Mokhtar said Swypex provides businesses with an “unlimited” number of corporate cards for their employees. The platform enables these businesses to set smart controls to manage spending, such as setting different limits and specifying usage permissions for ATM withdrawals and online transactions. After transactions, employees can upload receipts, invoices and spending details, which are consolidated into a centralized dashboard with integrated data from the government’s e-invoicing platform. In addition to ERP and accounting software integrations, Swypex offers businesses a streamlined and comprehensive overview of all expenses and spending in a single location.
“Businesses using our platform can see analytics around the distribution of spend on each department, merchant, individual and category level,” said Tarek Mokhtar, the company’s chief product officer.“We also categorize all the expenses on the platform to give profound insight into a business’s financial health and each line item, which will help businesses make more data-driven decisions based on the real-time visibility we provide them with.”
Swypex’s competition in the corporate card space across Africa includes YC-backed companies like Boya and Bujeti. In Egypt, it’s banks such as HSBC and National Bank. Mokhtar argues that Swypex is a better option for businesses because it allows for more customization in its offerings and provides a broader range of features and services, including unlimited card issuance and advanced controls. “Our focus on things like user experience and instant controls over these cards like blocking them, and having all of that automation built in, is fundamentally new to the market,” the CEO said.
The 2-year-old all-in-one financial management platform, which offers businesses its first three cards for free, generates revenue from interchange fees, floats and FX markups.
Accel, the storied venture capital firm making its first investment across the MENA region (though it has backed an African money transfer app), led the $4 million seed round in Swypex. Investors who participated in the round included Foundation Ventures, The Raba Partnership, and other angel investors.
It’s significant for a startup just emerging from beta only after a few months, especially in a challenging funding climate where traction and revenue are priorities. But there are good reasons why it attracted investment even before its official launch: Swypex’s potential to address a sizable market (it’s targeting a portion of the card and payments market worth over $10 billion and expected to grow at a 10% CAGR over the next three years), as highlighted by Mokhtar, along with the founders’ backgrounds in developing products at scale for global companies like Twitter, PlayStation and Spotify.
“As the payments space continues to digitize, the opportunity to provide modern fintech products to Egyptian businesses has become even more important,” said Richard Kotite, vice president at Accel, in a statement. “Ahmad, Tarek and Sasan have spotted a gap in the market for a comprehensive B2B solution that addresses many of the key pain points businesses regularly face while driving a step-change in efficiency. We see a real opportunity for Swypex to become a fintech champion across the Middle East. The team is technically experienced and highly ambitious, and we are delighted to be joining them on this journey.”
The logistics industry in Nigeria, like any informal sector, struggles with poor infrastructure and other inefficiencies, making it difficult for businesses — both large and small — to move and store goods.
Many startups have tackled middle-mile and last-mile delivery challenges, but one untapped area is providing an end-to-end fulfillment solution. Renda, a three-year-old startup, fills this gap by simplifying order fulfillment and retail distribution for businesses in Africa. It has secured a $1.9 million pre-seed round, money it will use to improve its offerings; to expand into more cities in Nigeria and Kenya, the two markets where it’s currently present; and grow its partnership network across these markets.
Ingressive Capital, a pan-African early-stage VC, led the round’s $1.3 million equity portion. Other participants included Techstars Toronto, Founders Factory Africa, Magic Fund, Golden Palm Investments, Reflect Ventures and Vastly Valuable Ventures. Additionally, Founders Factory Africa and SeedFi contributed $600,000 in debt funding.
The startup aggregates and provides access to end-to-end infrastructure that optimizes order fulfillment for businesses. Its solution allows them to access flexible storage, monitor and manage inventory, process and fulfill orders, manage deliveries and returns, and receive and reconcile cash on delivery in real time.
CEO Ope Onaboye, in a conversation with TechCrunch, explained that Renda uses an asset-light approach. Similar to companies like Flexport and ShipBob, Renda does not own its own assets. Instead, Renda partners with various providers in the chain — from warehousing and other storage companies through to those making deliveries on trucks and bikes and the companies needed to take payments since so many transactions are done in cash — allowing solutions tailored to each client’s needs without owning a fleet of assets.
According to Onaboye, this approach has helped Renda build an extensive partnership network enabling its clients to expand quickly across the country. The platform has over 300 warehousing and storage partners, more than 3,000 delivery assets, including trucks, vans and bikes, and 2,000+ cash collection partners.
“The beauty of Renda is that we do not own any assets. We don’t own any delivery or warehousing assets ourselves. Instead, we leverage existing resources across the country. We aggregate storage spaces and warehouses that may be underutilized and connect them with businesses needing storage solutions,” said the CEO, who founded the company with Bimbo Onaboye. “Similarly, we onboard delivery assets, including vans, trucks and bikes, that may be sitting idle and make them available to businesses for managing deliveries. Whether businesses want to handle their deliveries or entrust them to us, Renda provides the platform to streamline operations efficiently.”
Renda’s customer base has evolved since its launch in 2021. Initially serving small businesses, the logistics startup now serves e-commerce businesses, FMCG manufacturers, agriculture companies and manufacturers nationwide. Its current clientele includes OmniRetail, Jumia, M-KOPA and Dangote, highlighting the diverse range of businesses that use its solution for their logistics needs.
Prioritizing enterprise-level entities, typically higher-value clients that commit to contracts lasting 12 to 24 months over small businesses, has benefited Renda’s business. For instance, the startup, in addition to achieving profitability, saw its revenues grow 450% year-on-year, the CEO claims. “This is not something we did overnight because we had to build those relationships and infrastructure around it. But the good thing is that we’ve built a solid management and leadership team with experience from well-capitalized logistics and e-commerce startups,” he added.
Renda’s revenue model revolves around five key drivers: storage, fulfillment, vehicle booking, deliveries and cash collection. For storage, clients pay based on square meters or per year. Fulfillment services are charged per item processed; vehicle booking incurs a daily fee; deliveries are charged per item delivered, and cash collection fees are based on a percentage of the collected cash.
Logistics is inherently challenging, especially in Africa, due to its fragmented and informal nature. Businesses with logistical needs previously had to rely on informal warehousing or delivery agents before logistics platforms, most of which offered solutions in the middle or last mile, came along.
According to Onaboye, such businesses initially used these services separately but have realized they’re better off with a solution that offers fulfillment beyond the middle or last mile and integrates all aspects of their logistics operations over time. Haul247, Amitruck, and Leta are similar providers across Africa.
“Our goal is to simplify the process for businesses by providing a comprehensive platform to access all the services they need to expand across Nigeria and Africa without engaging multiple providers. It’s a challenging task, but once we establish a solid platform and master the aggregation model, scaling becomes much easier,” said the CEO, who noted that the complexity of building such a platform is also a moat for Renda.
The logistics platform has third-party teams that manage storage and fleet operations. They are responsible for the onboarding, verification, quality assurance, monitoring and evaluation processes of Renda’s storage and delivery partners. In addition, Onaboye draws from his background of owning a verification company that provides background check services to help with this process.
Once these checks are complete, Renda partners and drivers can manage their operations on dedicated apps and dashboards. The startup also provides apps for consumers and in-house admin purposes.
As the startup moves into the next phase of growth, it plans to introduce an embedded finance product for its partners, particularly drivers. This product will allow drivers to access loans weekly, which will be deducted from their payouts. Onaboye says this service provided on the app will address the immediate financial needs of drivers, such as vehicle repairs. According to the CEO, health insurance and fuel assistance are other services Renda has in the pipeline for its drivers. He also said the startup plans to use AI to automate its processes like helping partners save logistics costs and optimize routes.
The idea for Renda came about when Onaboye noticed the inventory and delivery challenges a friend faced when starting a business selling items from her house. Since its launch, the startup has helped over 500 businesses and reached more than 100,000 customers across 15 states in Nigeria. Renda, which claims to have processed more than 250,000 orders, expects its expansion into Kenya in late 2023 to serve as an entry into other markets across East Africa.
“Joining forces with Renda as an investor is a strategic move for us. Renda’s technology solution addresses a critical need in the African manufacturing and e-commerce ecosystems, offering seamless access to fulfillment infrastructure,” said Maya Horgan Famodu, founder and partner at Ingressive Capital. “We are particularly impressed by their track record of empowering businesses to thrive in this market and financials from the start of their business. With the current high inflation and skyrocketing prices for shipping and storage, there has never been a better time for Renda. We are doubling down our focus on marketplaces and solutions that promote commerce and strengthen African currencies by facilitating exports.”
Productive Use of Renewable Energy (PURE) technologies, especially those in the solar irrigation and cold chain segment, saw increased investor interest last year, despite a 43% funding slump recorded in the global off-grid solar sector.
The global association for the off-grid solar energy industry, GOGLA, says PURE technologies raised $65 million in 2023, double the previous year, owing to growing investor interest in the segment. Among the startups that raised funding in the sector last year is Figorr, which offers storage and transportation of temperature-sensitive products.
PURE technologies include appliances and products like solar-powered water pumps, refrigerators, cold rooms and agri-processing equipment that allow improved or new revenue-generating activities, mostly in the agriculture sector.
Laura Fortes, GOGLA senior Access to Investment manager, told TechCrunch the technologies are attracting interest due to their transformative impact on livelihoods through innovation.
“These solutions mitigate climate change, enhance resilience and offer increased income opportunities for beneficiaries, including smallholder farmers and health clinics. By replacing outdated diesel water pumps and fossil-fuel-dependent coolers, especially in the face of climate change, they bolster resilience and small farmer incomes,” said Fortes.
Overall, the off-grid solar sector raised $425 million last year across 158 deals, with $281 million being debt. Sun King, d.light, Engie Energy Access, M-KOPA, Zola and Bboxx accounted for 58% of the total investments. This shows that most of the funding went to startups or scale-ups with a presence in Africa, where these ventures provide products and solutions to address lack of energy access.
Globally, 75% of the population has no access to electricity, 46% of those being from Africa. Yet, equity investment in household solar startups remained low in what GOGLA says signals a concerning failure to nurture new companies focused on electricity access that will be crucial for achieving electrification goals.
“2023 investment data shows that without more de-risking instruments and concessional financing, off-grid solar will not reach the scale needed to achieve global development goals. While many examples of successful blended finance structures that are catalytic already exist, we need more of them to multiply industry funding by seven,” said Fortes.
Food is significant to Nigerians, with households spending nearly 60% of their income on it, the highest globally, according to official reports. This strong affinity for food, coupled with the rise of online shopping, sets the stage for Nigeria’s food delivery market to potentially reach $2 billion to $3 billion by 2032.
Despite the promising market size, there isn’t a clear leader yet. However, Lagos-based Chowdeck, backed by Y Combinator and armed with a $2.5 million in seed investment, aims to make its mark in a space that has burned heavyweights like Jumia and Bolt.
Founded by Femi Aluko, Olumide Ojo, and Lanre Yusuf, Chowdeck offers consumers the convenience of ordering food and having it delivered to their doorstep within an average of 30 minutes. CEO Aluko shared that the inspiration for launching the startup came from his experience of quick deliveries and exceptional customer service during a work trip to Dubai.
Aluko explained, “Ordering food in Nigeria would usually take one or two hours. But each time I ordered food during my three-month stay in Dubai, I consistently received it on time. If there were any delays, the restaurant would call me to apologize. It was impressive to see, and I wondered if we could replicate the same level of service in Nigeria.” In the first half of 2023 alone, Nigerians spent over ₦60 trillion on food and household items, per the country’s top agency for official statistics.
Aluko and his co-founders initially experimented with the concept by using a few bikes and partnering with two restaurants. After refining their approach, they officially launched the first version of the product in October 2021. Since then, the platform has experienced significant growth, with more than 3,000 riders joining and over 500,000 users (Aluko says over 100,000 are active on the platform).
Chowdeck’s remarkable growth is evident, especially in a competitive market where, at its launch, major players like Jumia Food and Bolt Food already had a strong foothold with thousands of customers.
Additionally, given the industry’s reputation for thin profit margins and infrastructural challenges like traffic and poor roads causing delays in delivery times, the key question was how Chowdeck intended to navigate these obstacles and carve out its niche.
Later entrants in a market have the advantage of learning from the experiences of earlier players. Unlike its predecessors, Chowdeck recognized the importance of maintaining positive unit economics from the outset. While other food delivery platforms often relied on high discounts, Chowdeck opted for a different approach: optimizing its business model to ensure sustainability by minimizing discounts and only offering them on behalf of its partner restaurants when necessary.
“We took the time to figure out the right economics for our delivery business, which is why we’re not big on offering unrealistic discounts,” explained Aluko, a former principal engineer at Stripe subsidiary Paystack. “This approach kept us focused on selling and targeting the right customers rather than trying to capture everyone, which could’ve compromised our economics and marketing strategies.”
By the end of 2023, Jumia Food and Bolt Food had exited the Nigerian market citing various business reasons, leaving Glovo as Chowdeck’s main competition. Both exits partly contributed to Chowdeck’s twofold user growth within the last six months.
Aluko stresses that Chowdeck’s appeal lies in its convenience. While not necessarily the most cost-effective option, he added that Chowdeck targets customers who prioritize time and are willing to pay for fast deliveries.
The startup’s delivery system relies on factors such as geotagging, offering diverse vehicle options from bicycles to motorbikes, and enforcing strict regulations on vendors and riders. (For example, vendors must accept orders within a five-minute window; failure to do so leads to order cancellation and decreased priority for the vendor.)
Similarly, Chowdeck employs automated processes to streamline customer-rider connections, utilizing in-house data for daily demand forecasting and required supply assessment. If, for instance, an average rider completes eight deliveries daily and the platform anticipates 10,000 deliveries, at least 1,250 riders need to be available for that day.
Chowdeck’s logistics setup not only benefits small food vendors and larger quick-service restaurants like Burger King and Chicken Republic but also extends to supermarkets such as ShopRite and pharmacies. The startup, operating across eight cities, has applied lessons from its flagship business to launch delivery services in supermarket/grocery and pharmacy verticals. In 2023, Chowdeck had more than 1,500 active vendors across the three verticals; additionally, it introduced a relay service for intra-city package movement in Lagos.
Last year, the platform’s annual gross merchandise value (GMV) across these verticals stood at over ₦7 billion ($5.8 million). That October, it hit a milestone, crossing the ₦1 billion ($830,000) mark for the first time. By March 2024, it had doubled that figure, reaching ₦2.4 billion ($2 million). Lagos generates 80% of Chowdeck’s volumes, while the remaining 20% comes from other cities: Abuja, Port Harcourt, Ibadan, Benin City, Ilorin, Abeokuta and Asaba.
Chowdeck, with a take rate of 24%, saw its revenues surge by 1,200% between 2022 and 2023, according to Aluko.
As a fast-growing business, Chowdeck intends to use the newly raised capital to improve its operational efficiency and extend its reach to more cities across Nigeria. Yet, the on-demand delivery service is also committed to leveraging the investment to better the experience for its customers, vendors, and particularly delivery riders, whose earnings currently exceed three to five times Nigeria’s monthly minimum wage, Aluko noted.
“After a few months of building Chowdeck, it was clear the level of impact we were going to have and teething problems we could solve at scale in the country, especially around earnings,” remarked Aluko. “For many people, including us, it was interesting to see our riders getting paid between ₦100,000-200,000 monthly ($83-$170) regularly and profitably.”
The seed round attracted investment from notable backers, including YC, Goodwater Capital, FounderX Ventures, HoaQ Fund, Levare Ventures, True Culture Funds and Haleakala Ventures. Founders such as Simon Borrero and Juan Pablo Ortega (of Rappi), Shola Akinlade and Ezra Olubi (of Paystack) also joined the investor list.
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