Friday, 12 August 2022

Partner(s)

Good morning!

Dennis here,

Of course, it will not have been easy. You don't need to write about tech or be a Twitter finger to know that. Flutterwave is gearing for IPO. But now, it has to answer for all the allegations that have been levied against it all year long.

A new report says that it will not be able to list as soon as it would have expected because of those stormy nights.

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

Summary of the news

With 221 million subscribers, Disney is leading Netflix in the race for subscribers
Kenyan B2B e-commerce platform Marketforce has cut about 9% of its staff
African startups raised $239m in July 2022, a 43.77% decline from June
A new report says Flutterwave will face major set back as it prepares for IPO

Disney leads Netflix in subscription

With 221 million streaming subscribers, Disney+ has overtaken Netflix in the race for subscribers. According to Reuters, the streaming giant announced yesterday that its total subscriptions had reached 152.1 million at the end of Q2, exceeding the 147 million mark predicted by analysts.

The company also announced that it added 14.4 million Disney+ customers, beating the expected 10 million additions in July. Now, the company has a total of 221 million subscribers- combined with Hulu and ESPN+ (Hulu has 46.2 million subscribers and ESPN+, 22.8 million).

Technext reports that with this, Disney has surpassed Netflix which has 220 million subscribers as of the last count. This just demonstrates how volatile the game in the streaming market is.

Consequently, the new streaming giant has also announced a 38% increase in the monthly subscription price for Disney+ users, giving them access to the platform without advertisements. In addition, Hulu’s prices are expected to rise by $1-$2 per month, depending on the plan, beginning in December.

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Kenya's Marketforce cuts 9% of staff

Kenyan retail B2B and end-to-end distribution platform Marketforce laid off a chunk of its workforce in July, according to sources familiar with the matter.

In an email sent from Marketforce CEO Tesh Mbaabu, the layoffs were a part of a reorganization strategy in Kenya, one of its five markets which include Nigeria, Rwanda, Uganda and Tanzania, TechCrunch reports.

Mbaabu confirmed the news on a call with TechCrunch, adding that the company let go of 54 people. Marketforce had more than 600 employees before the event last month, so about 9% of its overall workforce was affected, mainly from field sales, supply chain and customer experience departments.

Mbaabu, in the email, reassured employees that the company still has enough arsenal in its coffers and attributed the company’s decision to “adapting to the global economic uncertainties” and “optimizing the business for different growth metrics.”

“To be clear, it is a path to profitability conversation. I think for a lot of people, even internally, it was hard for them to understand why we’ve raised money and have cash but still conduct layoffs,” Mbaabu said.

African startups raised $239m in July 2022

7,651 deals, making up $108.5 billion in funding, took place last quarter — marking the biggest quarterly percentage drop in deals (and the second-largest drop in funding) in a decade. Q1 2022 was a tough quarter globally, yet investments in African startups grew +150% YoY in Q1 2022.

Technext reports that the only region that was growing faster than Africa YoY in Q2, Q3 and Q4 2021 was Latin America. So, it was the fourth consecutive quarter of 3-digit growth for Africa.

See what else to know below:

Funding dropped across all major regions in Q2 2022, including a 25% QoQ in the US and Asia. While the US drove almost half of all funding ($52.9 billion), Q2 2022 marked its lowest funding amount since 2020. In contrast, Europe-based startups only saw a 13% dip in total funding Q-o-Q.
$100 million+ mega-round funding reached $50.5 billion across 250 deals in Q2’22, marking a 31% fall Q-o-Q. The mega-round activity also experienced a 31% decline, hitting its lowest level since 2020.
Q2’22 saw the birth of 85 new unicorns globally — a 6-quarter low and a sharp decrease from the 148 unicorns born a year ago in Q2’21.
Tiger Global Management was the most active investor for the third straight quarter in Q2’22. It invested in 86 companies. However, that number marked a decline
from 120 in Q1’22. In fact, the top 10 investors in Q2’22 collectively invested in 553 companies — a 22% drop in company count from the previous quarter.
Retail tech funding dropped 43% QoQ to hit $13.2 billion, marking a 7-quarter low for the sector. Other categories also saw a significant slowdown in quarterly funding. Fintech saw a 33% QoQ decline in funding, while digital health funding fell by 32% to $7.1 billion, an 8-quarter low.

Flutterwave face problems gearing for IPO

The Nigerian financial-technology company Fluuterwave recently filled key positions including a chief financial officer as it prepares for an initial public offering potentially next year, people familiar with the matter said, requesting not to be identified because it’s private. But according to Bloomberg, it might, however, take longer as the company deals with a reputation crisis and amid a global market downturn, they said.

“The Flutterwave story was one of an African fintech and it being the leader for Africa as the next frontier for fintech and venture investors. Then the unravelling of that story started and it hasn’t stopped yet,” said Raj Kulasingam, a corporate lawyer, who with investment banker Vishal Agarwal, has made fivefold returns funding African startups since 2017. “With all of this, I don’t believe that the international public markets are ready for a Flutterwave IPO.”

“Given Flutterwave’s market position and strong balance sheet, the company has a significant growth opportunity over the next few years,” Oneal Bhambani, a new hire at the company from American Express who is now the chief financial officer said in an emailed response to questions on a possible listing. “Operationally, we are putting in place all aspects of controls, processes and infrastructure to prepare for an IPO subject to market conditions,” he said.