BD Insider 159: Internet shuts down in Sudan as crises escalates

BD Insider 159 examines the internet shutdown in Sudan, Gluwa's $35 million investment in African crypto exchanges and the ongoing restructuring at Kuda Bank.

BD Insider 159: Internet shuts down in Sudan as crises escalates
A Sudanese man holds his phone with restricted internet access social media platforms, in Khartoum, Sudan. Credit: Quartz Africa 

Letter 159 covers:

  • the ongoing restructuring at Kuda Bank
  • the internet shutdown in Sudan
  • Gluwa's $35 million investment in African crypto exchanges

and other noteworthy information like:

  • the latest African Tech Startup Deals
  • opportunities, interesting reads and more

The big three!

Kuda Bank dismisses new Chief Strategy Officer

Correction: The email version of this newsletter stated that Kuda reportedly lost $6 billion. We have edited it here to represent the correct figure—₦6 billion.

The news: Last week, Kuda Bank dismissed its chief strategy officer (CSO), Elena Lavezzi, according to Semafor Africa. The report says that Elena's dismissal is part of an ongoing restructuring of the digital bank's executive team.

We have reached out to Kuda but have not received a response.  

Why it matters: Eight months ago, Kuda hired Elena and Pavel Khristolubov—the company's Global COO—to drive its international expansion. Shortly after these appointments, the Nigerian digital bank expanded its operations into the UK (through its UK-based subsidiary, Kuda EMI Limited), Ghana and Uganda.

In January, Kuda acquired a digital banking licence from the State Bank of Pakistan, marking its expansion into the South Asian country. The licence was issued to "KT Bank", a joint venture between Kuda and two leading Pakistani companies—Fatima Fertilizer Company and City Schools Group.

Zoom in: Before joining Kuda, Elena led operations in Italy and Southern Europe for a British digital bank, Revolut. She also pioneered Uber's expansion into Italy.

Although it's unclear why Elena was dismissed [we will inform you immediately after we get Kuda's comment], the company conducted layoffs last year; about 5% of its 450 employees were affected, mostly redundant roles and nonperforming staff, per TechCrunch.

"Kuda is currently making some strategic changes to serve its customers better and continue to make financial services more accessible, affordable and rewarding to every African," the bank disclosed at the time.

Since its launch in 2019, Kuda has raised at least $90 million from various investors, including Valar Ventures and Target Global. Two years ago, the bank raised a $55 million Series B at a $500 million valuation. However, in 2021, Kuda reportedly incurred ₦6 billion in losses, a 602% rise from its 2020 losses.

Sudan partially shuts down the internet as war persists

The news: Sudan is experiencing an internet outage as the war between its armed forces and the Rapid Support Forces, a Sudanese army-general-led paramilitary continues in the streets of the capital, Khartoum and around the country.

"Real-time network data show a near-total collapse of internet connectivity in Sudan with national connectivity now at 2% of ordinary levels," global internet outage monitor, NetBlocks tweeted yesterday.

Last week, MTN blocked its internet service in the country following the orders of the local regulators, according to Reuters; another local provider, Canar Telecom also went off. However, NetBlock says that power outages and inability to access gasoline for backup generators and the destruction of population centres are also factors.

Dig in: "Internet connectivity has saved lives since the start of the conflict, and its absence will make it more difficult for residents to avoid danger and stay safe," Isik Mater, Director of Research at NetBlocks said.

Since the crises erupted a week ago, some citizens have been using social media to crowdsource for aid and information with hashtags activated to meet the needs of various regions.

"Anyone who wants to go outside Khartoum [can ask] about safe roads and travel stations that [are operating], and he can find someone on Twitter going to the same area," Jia El Hassan, a Sudanese activist said.

The outage also has a ripple effect on Chad, the country derives much of its connectivity from Cameroon and from Sudan, which fell largely offline. Reports say that the satellite network has been activated to quell the outage.

One in four Africans was affected by internet shutdowns in 2022, and Sudan residents were the most affected on the continent.

Gluwa to invest $35 million in African crypto exchanges

The news: A global blockchain company, Gluwa says it is committing $35 million to the growth of African crypto exchanges. "We believe cryptocurrencies have the potential to transform the financial landscape in Nigeria, and the African continent," Tae Oh, Gluwa founder and CEO, said.

Gluwa also disclosed that it is working with the Nigerian government to create an environment that will drive Web3 adoption in the country. "Our proposals have been sent to the Securities and Exchange Commission (SEC), the Ministry of Finance, and the Central Bank of Nigeria,"  Oh says. "By working closely with the Nigerian government, we hope to create a policy framework that encourages the responsible and regulated use of cryptocurrencies while prioritising the protection of consumers and preventing illicit activities."

In May 2022, the Securities and Exchange Commission (SEC) of Nigeria issued new guidelines for the issuance, offering, and custody of digital assets in the country, despite the ban on crypto transactions by the Central Bank of Nigeria. The SEC described “Digital Asset” as a digital token that represents assets such as a debt or equity claim on the issuer.

Driving the news: Recently, a Bitcoin exchange with large Nigerian and Kenyan users, Paxful discontinued its operations due to US-related regulatory challenges. A local exchange, Lazerpay also shut down its operations after failed fundraising attempts.

Generally, investments in the Nigerian [and African] Web3 and crypto industry have slowed down due to the global economic downturn. Last year, the winter in the industry became evident with plunging Bitcoin, Ethereum and other major asset prices, as well as the collapse of companies like FTX.

Gluwa's investment will possibly enable access to funding in the sector.

Outside this news: Last year, the Lekki Free Zone Development Company listed Gluwa as its potential partner for the creation of a virtual zone within the Lekki Free Zone. Although there is no mention of the use of cryptocurrency in the proposed virtual free zone, on Monday (August 5, 2022) Bashir Ahmad, the Special Assistant on Digital Communications to Nigeria's President in a teaser-like manner tweeted "a crypto-friendly economic zone in Nigeria".

The proposed partnership includes other companies like Binance and Iyin Aboyeji's Talent City.

💰 State of funding in Africa

Nigerian mobility startup, Autochek made its seventh acquisition last week since it launched operations in 2020. The company acquired a majority stake in Egypt’s AutoTager; this is Autochek's second North African acquisition since its expansion last year.  

Within one year, the company has made three [disclosed acquisitions]. Mayokun Fadeyibi, SVP at Autochek told that acquisitions are "a strong part of [its] growth strategy".

Autochek has raised at least $16.5 million in venture funding since it commenced operations, according to BD Funding Tracker.

Before you go, here's an overview of African tech VC funding from last week.

BD Funding Tracker

📚 Noteworthy

Here are other important stories in the media:

More on the conflict in Sudan:

💼 Opportunities


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