In the fast-evolving landscape of African tech, 2023 was a year brimming with headline-making moments.
From intersections in high places to the rise and fall of startups, the emergence of new waves, and significant acquisitions, the year has been a rollercoaster of innovation, setbacks, and pivotal shifts reshaping the continent’s tech ecosystem.
Charles Rapulu Udoh, a tech startup lawyer said 2023 was eventful for Africa’s most populous country tech. Adding that “We witnessed a massive realignment in the entire landscape. More particularly, the year was shaped by substantial layoffs, a hard-hitting funding crunch that saw startups sourcing funds in alternative markets like bonds and debt.”
“The demise of well-funded startups is also notable, triggering panic across the entire ecosystem. Startups like Zazuu, Pivo, 54Gene, and a host of others were consigned to oblivion. Notably, there was a major funding decline for Nigerian startups, with Egypt overtaking Nigeria in startup funding in the first half of the year,” he said.
According to WeeTracker, a business, startup & tech publication in Africa,
the 13 most-talked-about events that have captured the essence of African tech’s dynamic trajectory in the past year include.
The appointment of a tech minister in Nigeria
News of the appointment of ‘Bosun Tijani, CcHUB founder and a familiar figure in Nigeria’s tech startup and digital innovation ecosystem, as the country’s minister of communications, innovation, and digital economy was received with cheers among industry stakeholders.
The prevailing sentiment has the appointment of an industry insider and achiever as a coup for the vibrant Nigerian tech scene which has, at times, been held back by hostile policy championed by perceived outsider appointees.
The demise of 54gene
Reports emerged in September 2023 that 54gene, a genomics research company that had raised $45 million across three funding rounds, is calling it quits, to much shock from stakeholders and observers. The startup, which has had three CEOs in the last 12 months, said it “could not continue to operate financially.”
Ron Chiarello, the most recent CEO at the much-changed 54gene, confirmed that the once-celebrated startup is shuttering. Its demise comes after a relatively short existence laden with highs that some suggest also yielded problems that ultimately cratered the company.
Starlink’s Africa rollout
Starlink, a satellite internet constellation operated by SpaceX, one of the more audacious projects of the somewhat divisive billionaire, Elon Musk, became operational in multiple African countries this year to much fanfare, despite initial worrisome first impressions and regulatory disputes.
In Africa, Starlink’s broadband services promising high speed and low latency internet with a moveable plug-and-play kit, are available in Nigeria, Kenya, Mozambique, Rwanda, Malawi and Zambia, among others, with many more countries due to launch services in 2024.
Crypto ban reversal
Nigeria’s crypto scene is buzzing with excitement following the recent lifting of the ban on cryptocurrency imposed by the Central Bank of Nigeria (CBN) almost three years ago, citing security and fraud concerns. This game-changing move has set the stage for local startups to expand and innovate in the country’s evolving fintech landscape.
The suspension of the ban has reopened doors previously closed for crypto startups, many of which were sent reeling as the regulator yanked crypto firms off formal banking rails and the industry grappled with a downturn, exacerbated by the collapse of major crypto players, most notably FTX whose demise was a major blow to the industry.
A new African tech unicorn amid a drought
In February 2023, MNT-Halan—an Egyptian startup that combines fintech and e-commerce offerings raised $400 million in equity and debt financing to realize a post-money valuation of $1 billion which earns it unicorn status.
The feat ends a unicorn dry spell that has gripped Africa for over a year; the continent last minted a billion-dollar startup in November 2021, when Nigeria’s Chipper Cash soaked in a Series C extension of $150 million.
Nevertheless, the markets have taken a turn since then and news of valuation cuts at various startups, including Chipper Cash, means the quest for startup unicorns isn’t very popular in African tech these days.
Deception at Dash
Dash, a Ghanaian fintech startup that raised $86 million in multiple quick-fire raises, only to go bust a year after it gave the impression of meteoric growth as it closed a substantial seed round.
Dash went under in early October amid evidence of mismanagement and misappropriation of funds, falsification of data, and a culture of profligacy that its Founder Prince Boampong allegedly orchestrated.
M-KOPA goes big
Defying the subdued fundraising climate, M-KOPA raised a total of $255 million in new debt and equity from Standard Bank and Sumitomo Corporation among others to fund its expansion in Sub-Saharan Africa, M-KOPA revealed back in May 2023.
Founded in 2011, M-KOPA started its operations in Kenya and has expanded to Uganda, Nigeria, Ghana, and South Africa most recently, and says it has, to date, helped 3 million customers to access over $1 billion in credit to buy items like smartphones, solar power systems and health insurance.
Bitmama snaps up embattled Payday
Talks of acquisition between Bitmama Inc., a blockchain payments platform, and Payday, a virtual card service provider, which had been on the front burner in recent months, came to fruition earlier in December, drawing contrasting reactions.
After prior talks with other potential suitors reportedly fell through, Payday agreed a cut-price deal to be snapped up by the fledgling crypto startup; giving Payday, a once highly-rated, fast-rising fintech that seemingly flamed out as quickly as it had risen, a new home.
Wasoko & MaxAB joining forces
Wasoko and MaxAB, among Africa’s prominent retailer-facing e-commerce players from Kenya and Egypt, respectively, signed a preliminary merger agreement to create a combined company that they say aims to propel the transformation of Africa’s informal retail sector.
The merger, touted as the largest in African tech history, comes as a boost for the sector in the midst of what has been a torrid year dotted with fundraising difficulties and upheavals at various startups looking to digitise the supply of everyday goods to retailers across Africa.
Flutterwave, the African fintech specialising in payment solutions, advanced with its ambitions for an initial public offering (IPO) after being cleared of allegations of financial misconduct in Kenya. The company also did some internal reshuffling as its IPO inches closer, seeing some executives step away while hiring six new executives drawn from top global firms like PayPal, Binance, CashApp, Western Union, etc.
There was some worrying news, however. In 2023, Flutterwave was reported to have suffered a major security breach where hackers stole N2.9 billion ($3.7 million) from its accounts. Although the company has issued public denials of the issue, court documents revealed that Flutterwave’s legal counsel sought police assistance to recover funds from 107 bank accounts in 27 banks that allegedly received money from the illegal transfers.
Ride-hailing vehicle financing caught up in a jam
The rent-to-own model for ride-hailing services, spearheaded by companies like Moove and LagRide, heralded as a beacon of empowerment, came under scrutiny and criticism in 2023.
With drivers defaulting on payments citing a difficult environment exacerbated by fuel scarcity and subsequent pump price hikes in Nigeria, Moove resorted to impounding vehicles of defaulters earlier this year. This drew discontent among drivers grappling with taxing daily instalments and working conditions that barely leave them enough to survive. The ire went as far as drivers going on strike in protest.
Crisis turns boon for Nigerian fintechs
At the start of 2023, a sudden currency redesign by the Central Bank of Nigeria triggered a four-month cash crunch, leaving Nigerians grappling with limited access to funds. Several months later, the return of cash scarcity has led to chaos at ATMs and long queues at banks during this festive season.
PoS operators, Nigeria’s version of mobile money agents that typically enable cash-in/cash-out transactions across virtually every neighbourhood, are often fingered as culprits colluding with banks to hoard and trigger cash scarcity at ATMs and banking halls, and exploiting this by jacking up withdrawal fees at their posts.
To eschew the hassle, Nigerians are flocking to digital payment channels and fintech startups like Moniepoint, OPay, and PalmPay, among others, are some of the biggest winners.
The Tingo tales
The tech and finance world has been rocked by recent developments that have placed a controversial Nigerian businessman and obscure Nigerian subsidiaries of a purported booming business empire on the receiving end of criminal proceedings.
Deeper details of the allegations of misconduct and fraud reveal a sham as blatant as it is baffling, shedding further light on discrepancies and findings of dubious claims first uncovered by WT and subsequently exposed by a US investment research firm that had gone short on the Nigerian-born US-listed company that went public via a reverse merger.
Last month, the US Securities and Exchange Commission (SEC) brought charges against Mmobuosi Odogwu Banye ( Dozy Mmobuosi), the CEO at the helm of Tingo Group and its affiliated entities, standing accused of orchestrating ‘massive fraud’ artificially inflating revenues, assets, and purported user numbers.