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Thursday, 16 June 2022

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Good morning!

Dennis here!

There is no stopping the progress of the African startup space. In Nigeria's Flutterwave, there is a major change, as the company goes overseas for its new CFO. In East Africa, Silicon Valley just can't get enough of Kenyan startups.

Below are the tech stories and news you need to know to start your day, carefully curated by Technext.
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Summary of the news

  • Flutterwave appoints Oneal Bhambani of American Express as its new CFO
  • Amazon is making major moves into Nigeria
  • Kenya played a key role in Eastern Africa's $2.3bn startup raise in 3 years
  • Jumia made 44% revenue growth and 9.3m orders in Q1 2022
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Flutterwave shops for news CFO across the Atlantic

Technext Round1
Flutterwave has a new chief financial officer in Oneal Bhambani, a move that immediately raises concerns about whether the company, which is now valued at $3 billion, might be in the market for raising funds again.

Oneal Bhambani was most recently the Vice President; CFO and Head of Capital Markets at Kabbage, an online financial technology company, owned by American Express.

Flutterwave has been recked in reports after reports with stories of gross workplace impropriety perpetrated by top executives at the company.

Bhambani face in the company will no doubt allay the fears of Silicon Valley-type investors who have become warier of pumping money into Africa for a mirage of reasons.

How founders manage their companies is on top of the list. But also is whether or not the figures that make up the African market presented to investors by founders are actually accurate.

"Venture firms never challenged the fuzzy data behind top valuations, but with an imminent cool-off in funding, some are asking tough questions," Rest of World's Yinka Adegoke says in an essay from earlier this month.

The reality is a bit more complicated. The addressable market — the actual number of customers that can be reached — is much less than 1.2 billion. Looking at the potential of an app-based idea, for example, an investor might see 500 million phone subscribers, but that doesn’t mean all the phones are smartphones, and it doesn’t mean that all those phone subscribers can afford enough internet data to power an app built for a seamless, “always connected” lifestyle. In other words, investors still have to figure out the real size of the opportunity — the “serviceable addressable market” — and, within that, how much they can capture.

Reports say that Bhambami will "design and oversee the company’s expansion objective with best-in-class discipline, operational controls, and financial rigor."

Key word there; "best-in-class discipline," underscoring that the company is looking to take its internal practices a bit more seriously.

Of the hiring, Olugbenga ‘GB’ Agboola, Founder and CEO of Flutterwave said:

I am excited to welcome Oneal to Flutterwave. His track record of operating finance to enable scale and innovation with listed company standard financial controls will help us accelerate our growth as we continue to meet the needs of our expanding global customer base.

Oneal Bhambani said:

I am looking forward to partnering with Flutterwave’s team to enable solutions for our customers in Africa and across the globe. I fully expect to apply best-in-class strategies learned from my tenures at American Express and Kabbage.
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Amazon is wetting the ground to open shop in Lagos

Amazon
Amazon is now serious about enlisting Nigerians to create original content for its international audience.

Weeks ago, Technext reported that Amazon had put out a call looking for top production executives to fill in roles that will include them employing Nigerian content creators. Now the company has gone on a hiring spree of Nigerians, a report from Rest of World reveals.

Amazon has been quietly recruiting salespeople and engineers in Lagos, hinting at an expansion of its streaming and cloud computing businesses in Africa’s largest economy.

The company has also hired a major advertising agency to work on its first push for Prime Video subscribers in Nigeria, while also investing in production and licensing deals with local film and television studios.

These are still the early days of Amazon making this bet on Nigeria. But it's not the first time it will be testing the waters with original Nigerian content. Amazon has bought exclusive rights to content from heavyweights production companies like Anthill Studios and Inkblot Studios (The Wedding Party).

Nonetheless, an Amazon speaker person told Rest of World that:

"We have no changes to share with regards to the location of our teams or on expansion plans for other Amazon businesses.”

The company hasn't hidden its interest in the Nigerian market before now.

Amazon’s International Head of Local Originals, James Farrell, and Chief Marketing Officer for Prime Video and Amazon Studios Ukonwa Kuzi-Orizu Ojo disclosed as far back as last year that Amazon is looking to create Nigerian content for its global audience of streamers.

But Amazon will have to make very strategic decisions about who its audience will be, as it will battle Netflix and Showmax for subscription naira. Both companies are also poised to invest heavily in local African content.

Amazon might also be looking for a physical shop in Nigeria, at least for its Amazon Web Services division, which has advertised at least 10 roles based in Lagos over the last two weeks, including entry-level engineers and senior sales managers for Nigerian clients.
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Kenya dominates as Eastern African startups raise $2.3bn in 3 years

BitCoin
It will be a major disservice to any of the regions that underestimate another region as Africa looks for a tech hub.

A new report sets its eye on East Africa with Kenya leading the pack.

Kenyan startups, Technext reports, raised $1.935 billion in funding between 2019 and May 2022, making the ‘Pride of Africa’ the dominant destination for tech investors in Eastern Africa.

This is just as the region raised $2.3 billion in the same period under review, based on a new report by Africa: The Big Deal, a newsletter that tracks startups.

According to the report, 84% share of the funding realised by the region went to Kenya during the period. Five other countries shared the remaining 16%: Sudan ($6m), Ethiopia ($46m), Uganda ($125m), Rwanda ($23m), and Tanzania ($152m).

This also puts East Africa ahead of South Africa, which between January 2015 and May 2022, raised US$993,684,600. South Africa is topping the recent list of countries poised to become the tech hub of Africa, after which is Kenya, then Nigeria in the third place.
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Jumia posts 44% revenue growth, 9.3m orders in Q1 2022

Netflix
Pan-African e-commerce company Jumia has released its first-quarter (Q1) 2022 financial performance.

In the report, the company highlighted consistent growth but had lapses in some areas compared with Jumia’s previous quarter. Like with every other report by the business, the first page of the Q1 2022 report highlights its year-over-year wins.

Compared to the first quarter of 2021, the business recorded double-digit growth in orders, GMV and revenue. Orders grew by 40% year-over-year from 6.6 million to 9.3 million. GMV itself jumped by 27% year-over-year from $198.9 million to $252.7 million. And Jumia’s revenue reached $47.6 million, a 44% rise from Q1 2021’s revenue of $33 million.

Food delivery, a core part of the company’s offerings, improved 86% year-over-year, while phones and electronics grew 19% year-over-year despite “continued global supply chain volatility for these categories.”

The business also recorded growth with its fintech arm, JumiaPay. The total payment value (TPV) of JumiaPay, grew by 36.7% to $70.7 million in the first quarter, primarily supported by solid growth in GMV. Total transactions on JumiaPay reached 3.2 million in Q1 2022, indicating a 32% year-over-year increase.
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