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Thursday, 01 September 2022
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Partner(s)
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Good morning!
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As the global tech economy struggles to regain balance from a tough first quarter, the fallout continues to bite the African ecosystem as founders look for funds to stay afloat and continue at times extremely ambitious expansions.
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Startups that were once heralded as shining examples of an ecosystem on the rise have had to cut staff (54gene), slash salaries (Get Equity), restructure some products (Moneymie) or shut down completely (Kune) due to bottlenecks from a tight flow of investors' cash. In May, Y Combinator sent out a PSA advising founders to plan for the worse even as they make huge cuts to their famous incubator program.
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All through this week, the ecosystem has been on overdrive as founders clutch their pearls, slow down hiring in hopes that they can weather the storm. Then the news broke yesterday that Ghana's Viamo is the latest startup reported to have made "a lot" of staff cuts, further underscoring an ecosystem in freefall.
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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
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- A Central African Republic court has made a ruling restricting some benefits of Sango Coin to only citizens
- Snap has cut 20% of its employees
- Ghana's Viamo has laid off “a lot” of its employees
- Crypto.com mistakenly sent a customer $7.2 million instead of a $68 refund
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CAR court move to restrict Sango Coin benefits
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A court in the Central African Republic (CAR) has ruled against non-citizen crypto enthusiasts purchasing citizenship and land in the country using cryptocurrency, as well as the government’s plan to offer citizenship to foreigners through its cryptocurrency purchases, Technext reports.
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The court declared this concept “unconstitutional,” stating that the country’s nationality has no market value and should not be sold or purchased.
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The court also ruled that the concept of “e-residency” violates the country’s constitution because all foreign residents are required by law to stay physically in the country, rendering the concept of e-residency null and void.
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Sango Coin presently allows for purchasing an e-residency for $6,000 and a 250-square plot of land for $10,000 with the equivalent Sango Coins held as collateral for ten years. Other benefits include buying the Sango Coin for foreign nationals and a one-way ticket to CAR citizenship for $60,000, in cryptocurrency with the Sango equivalents held as collateral for five years.
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Snap cuts 20% of employees
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Snap, the maker of the ephemeral messaging app Snapchat, is laying off 20 per cent of its employees, discontinuing at least six products and appointing its first chief operating officer in seven years, the financially struggling social media company said on Wednesday.
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According to the New York Times, the cuts are set to affect close to 1,300 of Snap’s 6,400 employees. Snap is closing down its division that produced exclusive short shows with celebrities and other influencers, as well as its social mapping app, Zenly; its music creation app, Voisey; and hardware including its drone camera, Pixy.
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In an email to employees yesterday, Evan Spiegel, its founder and chief executive blamed challenging macroeconomic conditions for forcing his hand.
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“While we will continue our work to re-accelerate revenue growth, we must ensure Snap’s long-term success in any environment,” he wrote. He added, “I am deeply sorry that these changes are necessary to ensure the long-term success of our business.”
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Viamo lays off “a lot” of employees
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Viamo, a Ghana-based social and technology company that helps NGOs, government agencies, donors and businesses to communicate directly with their audience by using local languages to disperse their messages via mobile phone, has laid off some of its employees.
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The percentage of Viamo’s workforce that was let go has not been confirmed, but one of the laid-off employees said, it’s “a lot”.
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“I don’t have the exact number, but I know the global design team was drastically affected,” the former employee told TechCabal. “In Asia, they laid off the design and implementation team.”
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“The company is currently restructuring internally, and it seems it has figured out there are more people doing what less people could be doing,” the former employee said. Though the ex-employee confirmed that the company has extended them severance packages, they also revealed that the company’s books are in the red, meaning it’s not making enough money to cater for its workforce.
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The employee also confirmed that this is the second wave of lay-offs in the company’s history, “the first one happened about 4 years ago.”
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Crypto.com mistakenly sent a customer $7.2 million instead of a $68 refund
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According to The Verge, the initial transfer occurred in May 2021 after an employee accidentally typed an account number in the payment amount field. Crypto.com only realized the mistake when conducting an audit in December 2021.
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Instead of reporting the incorrect refund to Crypto.com, the customer in question, Thevamanogari Manivel, reportedly transferred the cash to a joint account and spent $1.3 million AUD (~$890,526 USD) on a luxurious, five-bedroom home for her sister. Now the company’s fighting to get its cash back with a lawsuit filed in the Victoria Supreme Court.
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Latest in funding
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Other stories we are following
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