BD Insider 224: Africa's Talking faces lawsuits from ex-director

Last Friday was International Women's Day, themed "Invest in Women, Accelerate Progress," we spoke with leading African women in tech Bolaji Sofoluwe (ETK Group founder/MD) and Chioma Okotcha (PayHippo co-founder).

Sofoluwe discussed the economic impact of backing women-led businesses, while Okotcha shared her inspiring journey and resilience tips.

In this letter, we cover:

• LemFi's expansion into China
• what's going on at Africa's Talking
• the shutdown of Flutterwave's Barter platform

We also have updates on the state of funding in Africa, other noteworthy information, and several opportunities.

The big three!

#1. Pan-African bank for immigrants eyes Chinese market 

The news: LemFi, a Pan-African payments startup, has hired Allen Qu, the former COO of OPay, to lead their expansion into the Chinese market. Qu will serve as LemFi's new Vice President of Growth.

"We are excited to have Allen lead our expansion into China. Following his previous successes, we are confident in his contribution," says Ridwan Olalere, co-founder and CEO of LemFi. "His addition to the LemFi team is a significant step toward fulfilling our promise of international payments for everyone."

Why it matters: Last August when LemFi raised a $33 million Series A, the fintech expressed its intention to expand to Europe, the Middle East, and Asia, as well as innovate new product offerings according to the needs of its users.

In a Bendada.com interview last August, LemFi co-founder Cochran emphasised the company's dual focus: securing more licenses to drive expansion and building up their product offerings. "The choice of our current markets—Canada, the UK, and the US and the ones we will be expanding into is informed by data showing immigrant communities that will find our solutions relevant," he said.

"Over 60 million Chinese diaspora worldwide, and those traditional financial companies underserve many. As a fintech company with a deep understanding of immigrants, LemFi is uniquely positioned to combine its know-how and state-of-the-art technology to bring a real change into the market." Allen Qu said. There are an estimated 500,000 Africans in China.

Read More: Inside LemFi’s journey of providing financial services for immigrants

#2. Legal battles for Africa's Talking: Former director and investor file lawsuits

Start here: Earlier this month, Bilha Ndirangu, formerly a director at Africa's Talking, a Kenyan-based communication API startup, initiated legal action against the company she co-founded.

Ndirangu alleged that her appointment was unlawfully terminated seven months after she raised accusations of misconduct against senior company officials. "The unlawful removal of the 1st Applicant (Bilha Ndirangu) as a director and its intended ratification has caused undue prejudice to the Applicants (Samuel Gikandi, Africa’s Talking current CEO and other shareholders), and urgent intervention by this Honourable Court is necessary to prevent irreparable harm," reads a court filing.

Owning 20.83% of Africa's Talking, Ndirangu and her fellow petitioners (including Eston Maina, another co-founder and former CEO of Africa’s Talking) hold a smaller share compared to Gikandi and his team who own 25.25%.

While Africa's Talking's June 2021 statement painted Ndirangu's departure as a resignation, recent court filings suggest a forced exit. She also challenges the legality of her removal as director, arguing that votes from the inactive AT Group ESOP Trust (a trust that holds unvested employee shares) were invalid, potentially jeopardising the claimed majority.

The lawsuit is before a Nairobi High Court for judgment.

Zoom in: IFC, which owns 20% of Africa's Talking, has reportedly sued the company in 2023 for rejecting a takeover offer from Infobip. The Corporation has denied the report. An initial report suggested that IFC pushed for the Infobip acquisition but failed to sway the entire board. Notably, co-founders Maina and Ndirangu reportedly supported the deal.

Samuel Gikandi, who reportedly holds significant influence on the board at Africa's Talking, claims the company "was viciously attacked by the IFC last year, continuing a pattern of abuse that started with their investment in 2018", according to TechCabal. The IFC has not yet responded to these allegations.

#3. Flutterwave shuts down Barter

The news: Pan-African fintech startup Flutterwave has shut down Barter, its consumer payment product to facilitate personal and small merchant payments within Africa and across its borders. Barter also provided a virtual card service.

In an email, the fintech informed users that after the date, their Barter accounts will become inactive tomorrow March 12, and accessing their funds will be impossible.

Rewind: Barter's virtual card service faced challenges in the past. In July 2022, a temporary halt occurred due to an update with its card provider. Recall that Flutterwave initially launched the product alongside Visa, but it later switched to Mastercard. Startups who had previously issued virtual Visa dollar cards provided by Barter told Bendada.com that it was not reliable enough. 

Looking ahead: "While retail remains important to us, our immediate focus is optimising services for businesses and remittance solutions," the fintech said.

We've seen this focus with the rebranding and global expansion of its remittance product Send into markets like Canada, the US, and India. In the United States, Flutterwave has acquired money transmission licences enabling it to provide remittance in 29 states in the United States.

💰 State of Funding in Africa

Last week, Global payroll platform Deel announced the acquisition of Johannesburg-based HRTech startup PaySpace, expanding its presence in Africa.

Founded in 2007 by three brothers Bruce, Clyde and Warren Clark, alongside George Karageorgiades, PaySpace has been growing by over 30% annually, according to managing director Sandra Crous. It has served over 14,000 businesses–including Heineken, Coca-Cola Beverages, and Puma Sports—across four continents: Africa, the Middle East, Europe, and Latin America.

Other deals that took place last week include:

• MDaaS Global, a Nigerian health-tech startup, secured $3 million in pre-Series A funding. Aruwa Capital Management and Newton Partners co-led the round, 
• Moroccan fintech start-up Tookeez raised $1.5 million from the Azur Innovation Fund. 
• RecoMed, a South African healthcare e-commerce startup, secured an undisclosed amount of funding from Eisai.

📚 Noteworthy

Here are other important stories in the media:

• Chipper Cash halts US service: Pan African fintech startup, Chipper Cash's US remittance service, halted in January, remains unavailable.
• EU anti-trust case: The European Union (EU) earlier fined Apple Inc. €1.84 billion (about $2 billion) after an investigation found it guilty of silencing music-streaming rivals, including Spotify, on its platforms.
• Embattled Binance halts Nigerian Naira transactions: Amidst heightened regulatory scrutiny, Binance is permanently stopping Nigerian Naira deposits and withdrawals. This move came into effect last week.
• Lagos to sanction Uber: The Lagos state government says it will sanction Uber for “failure to comply with essential data sharing agreements”.
• How the Skilled Students Award is promoting the next generation of techies in Nigeria: In Nigeria, the National Skilled Awards stands as a beacon of recognition and celebration for students across various universities, embodying leadership, entrepreneurship, creativity, technology, and innovation.

Also Read: How to link your NIN and BVN to your GTB, Zenith, UBA, Access and Stanbic bank accounts

💼 Opportunities

Jobs

We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.

Product & Design

• Paystack — Design Manager, Remote
• SunKing — Product Ops Associate, Lagos & Nairobi
• Flutterwave — VP, Product Engineering, Remote

Data & Engineering

• LemFi — Senior Backend Engineer, Remote
• Nomba — Senior Backend Engineer, Lagos
• Fairmoney — Data Engineer, Remote

Admin & Growth

• LemFi — Kenyan Community Manager, Dallas/Minnesota
• Stears — Senior Sales Associate, Lagos
• Turaco — Business Intelligence Lead, Kenya

Other opportunities

• Become a VC investor: Applications are open for the Dream VC 2024 Venture Capital Fellowship. The deadline is on April 14.
• For Egyptian startups: DMZ Cairo is receiving applications for its third incubation programme until tomorrow March 12, 2024.

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