April was an eventful month across the African startup ecosystem. In Kenya, one major B2B startup announced a shutdown of services. However, there was good news elsewhere as E-mobility startup BasiGo secured more funding while Bolt Kenya announced a new partnership. A Tanzanian fintech is opening up offices in New York as Drone deliveries take foot in Africa. Here is a roundup of major news from the startup scene as the month ends.
MarketForce RejaReja Shuts down
Kenyan B2B e-commerce company MarketForce announced it closing its B2B e-commerce business dubbed RejaReja. RejaReja has operated for 2 years and was tailored to serve small informal merchants. This news comes soon after MarketForce withdrew the service from all its markets, including Nigeria and Kenya, save for Uganda.
At one time, RejaReja had more than 800 people on its payroll and served 270,000 small traders. MarketForce had raised $42.5 million, including $40 million debt-equity in a Series A round in 2022 at over $100 million valuation, to fuel the business.
“The B2B distribution business that was RejaReja became unsustainable for a few reasons. Firstly, the retail FMCG market has razor-thin margins, which means that at a unit level, we struggled with profitability. The segment is also highly price elastic, which means the price wars are consistent,” said co-founder Tesh Mbaabu.
NALA to Open New York Offices
NALA is a remittance payment processing platform licensed in the UK and United States. Benjamin Fernandes, the company’s Founder & CEO, recently announced that the United States is now the biggest revenue market for the fintech. In addition, Nala will soon open its New York offices.
The start-up makes it possible for residents of the United Kingdom, the European Union (EU), Canada and the United States to send money to 9 African countries. The countries are Kenya, Uganda, Tanzania, Rwanda, Nigeria, Ivory Coast, Senegal, Cameroon, and Ghana.
Y Combinator Selects Kenyan Travel Startup Triply for W24 Batch
In April, Y Combinator, the Silicon Valley accelerator that helped launch Airbnb, Dropbox, and Coinbase, announced its W24 cohort. A Kenyan startup Triply (formerly Tripitaca), is part of the cohort. The travel tech startup is the only Kenyan company among three African startups selected for this round. The other two are Nigerian fintech companies Cleva and Miden.
Triply, founded in 2021 by Peter Wachira, empowers travel businesses and entrepreneurs across Africa. Y Combinator’s investment includes $125,000 for a 7% stake in Triply, with the potential for additional funding.
Verod-Kepple Africa Ventures Closes $60 Million Debut Fund to Fuel African Startup Growth
The pan-African venture capital firm, Verod-Kepple Africa Ventures (VKAV), closed its first fund at $60 million. VKAV was able to invest in a select group of up to 21 high-growth-potential companies across the African continent.
The closing of the fund was bolstered by fresh backing from esteemed investors, including Nigeria’s SCM Capital (formerly Sterling Capital Markets Limited), Taiyo Holdings, and C2C Global Education Japan.
This significant capital injection by VKAV is particularly timely, addressing a critical need for growth-stage funding (Series A & B) for African startups amidst a period of overall investment decline.
Formed in 2021, VKAV is led by partners Satoshi Shinada, Ryosuke Yamawaki, and Ory Okolloh.
“Over the last few years, we have seen a growth in pre-seed and seed funds, and we felt there are not enough funds at the growth stage of investing to get these companies to the next level in terms of scale, exits or even being around as sustainable profitable businesses,” said VKAV Ory Okolloh.
VKAV has already established a strong portfolio by investing in 12 promising African companies. These include Moove Africa, KOKO Networks, Ceviant, Chari, Shuttlers, Nawy, Julaya, NowPay, Chefaa, Cloudline, Zone, and mTek-Services.
Google AI and Jacaranda Health Team Up: AI Fellowship to Empower African Mothers
Tech giant Google and maternal health nonprofit Jacaranda Health announced a fellowship aimed at transforming the potential of Large Language Models (LLMs) for low-resourced communities across Sub Saharan Africa. The fellowship program builds on a recent $1.4 million grant from Google.
Six Google technical experts have been chosen for the opportunity. It is a six-month program focused on tackling real-world AI challenges by applying their skills in research, machine learning, and software engineering.
“Having this support from Google is critical for our innovation journey at Jacaranda. The work we have planned with support from these Fellows will give us the springboard to significantly improve maternal and newborn health outcomes through the power of AI,” said Jay Patel, Director of Technology, Jacaranda Health.
From April to October, the six fellows will collaborate with Jacaranda’s teams to enhance Jacaranda’s technology to better serve mothers across Kenya and pave the way for expansion into new African countries.
Kenyan Startup Pula raises $20m Series B funding round
Pula, a Kenyan Insurtech company dedicated to mitigating climate risks for smallholder farmers, has successfully closed a $20 million Series B funding round. This investment aims at growing Pula in emerging markets like Africa and Asia.
The latest funding round was led by BlueOrchard, a global impact investment manager and member of the Schroders Group, via its InsuResilience strategy. The round also included investments from IFC and the Private Sector Window of the Global Agriculture and Food Security Program (GAFSP).
“What sets Pula apart is their innovative business model, leveraging artificial intelligence, on the ground data collection mechanisms, mobile-based registration systems, remote sensing, and end-to-end automation tools,” said Richard Hardy, private equity investment director for Africa at BlueOrchard. “Their digital platform has enabled them to expand into new geographies with ease and efficiency, all while keeping setup costs low,” he added.
So far, Pula has partnered with about 70 insurance and 20 reinsurance companies. In addition, it has over 100 distribution partners across the globe. This has helped develop the capacity of local insurance and reinsurance players to understand and underwrite agricultural insurance for smallholder farmers.
The startup operates in Kenya, Nigeria, Zambia, Malawi, and Mozambique. Further, it is eyeing expansion into Asia and Latin America. Currently, Pula has its headquarters in Switzerland and a service center in Nairobi, Kenya.
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BasiGo Secures $3M Investment to Expand EV Production in Kenya
Kenyan electric vehicle (EV) startup BasiGo has raised $3 million (approximately KES400 million) in equity investment from CFAO Group. The new round of investment is meant to give a huge boost to the company as it looks to expand EV production in Kenya and Rwanda.
Akira Wada, the managing director of CFAO Kenya, expressed his enthusiasm for the future, stating, “This investment marks the beginning of a new era. We are not only committed to advancing the electric vehicle industry but also to fostering a sustainable green energy value chain that will positively impact communities across Africa.”
BasiGo is certainly looking to bolster its operations at a time when it has been unveiling its new line of electric buses at the Kenya Vehicle Manufacturers plant in Thika. This marked Kenya’s first specialized assembly line for modern electric buses.
The company has set a target to produce 1000 electric buses in the next three years in a bid to transform the country’s public transport system which is still heavily reliant on fuel-powered vehicles. BasiGo states that they already have 500 orders from bus operators in Nairobi and 100 reservations from bus operators in Kigali, Rwanda.
Solar Irrigation Startup SunCulture Secures $27.5 Million Funding Boost
Kenya’s SunCulture, an Agri-tech startup, has raised a US$27.5 million Series B funding. The company has more than 50 per cent market share for smallholder farmer solar irrigation systems in Sub-Saharan Africa. Its solar-powered water pumps and irrigation systems enable access to water, reducing labour costs, and increasing crop yields.
The $27.5 million Series B funding round saw participation from global investors. This included Reed Hastings and the Acumen Resilience Agriculture Fund (ARAF). In addition, there was continued support from EDF Group and Equator.
“This investment is a testament to the hard work and dedication of our team, and it reinforces our mission to make farming more profitable, sustainable, and environmentally friendly. With this new funding, we are set to accelerate our impact, bringing our life-changing technology to even more farmers around the world,” said Samir Ibrahim, CEO and co-founder of SunCulture.
Bolt E-Mobility Partnership
Ride-hailing platform Bolt announced partnership involving Roam Electric, Ampersand, and M-Kopa. This collaboration paves the way for the introduction of electric motorcycles to Bolt’s platform. Riders will have an eco-friendly alternative to traditional boda bodas. The company says it plans to have 1000 electric bikes on its platform by the end of the year. In two years, the aim is to get to over 5000. Ampersand and Roam Electric are the manufacturers of electric motorcycles while M-Kopa will provide buyers with options to buy and finance the motorcycles.
Glovo is the Most Preferred Delivery App
A recent report by the Competition Authority of Kenya (CAK) sheds light on consumer preferences in the online food and grocery delivery market. While Jumia Food, which ceased operations in December 2023, still appears in the data with 23% user preference, Glovo has emerged as the dominant player, capturing 33% of the market share.
Further, Glovo is the most preferred platform for grocery delivery at 46%. 35% of online platform consumers preferred Jumia while the other platforms were preferred by 20% of the consumers.
Uber Eats has now arrived at the lakeside city of Kisumu, its sixth city in the county.
The launch of the food delivery platform in Kisumu signals multi-level value addition across the value chain, including restaurants, retailers and delivery people, who will be able to access flexible and independent earning opportunities for the city’s residents. Uber Eats currently operates in five other cities including Naivasha, Eldoret, Mombasa, Nakuru and Nairobi.
UberEat’s, the food delivery platform, arrived in Kisumu. The move is intended to bring city residents a variety of selection options for food, grocery and retail- all at the tap of a button. Having launched its Kenyan operations in 2018, the platform currently operates in five other cities including Naivasha, Eldoret, Mombasa, Nakuru and Nairobi.
Startups Feted at The Connected Africa Summit 2024
The Connected Africa Summit 2024, held in Nairobi, recognized 16 African startups across various sectors like education, agriculture, and healthcare. Ebikes Africa (sustainable mobility), Mzizi (EdTech), Terralima (Agritech), Tusenti (Fintech), Apexloads (Trade & Logistics), Ecomobilus (Green Tech), Zuri Health (Health Tech), and Uamuzi (Creatives) were among the category winners.
Ebikes Africa received the top prize (Ksh.500,000) in the startup pitching competition, followed by Vunapay (Ksh.300,000) and Signvrs (Ksh.200,000).
The summit highlighted Africa’s growing tech scene and its potential to drive growth through innovation. It also facilitated networking and collaboration among key players in Africa’s digital economy.
Zipline One-Millionth Delivery
In April, Zipline, a drone delivery company known for its autonomous technology, reached a major milestone: its one-millionth delivery. This achievement involved delivering medical supplies in Ghana. Zipline uses drones and operates across four continents, having flown over 70 million miles. It has been funded by the likes of Sequoia Capital. The logistics startup aims to be a leader in delivery and envisions a future with daily deliveries exceeding a million.
