In this letter, we explore the following:
- Flutterwave's five-year deal with Microsoft
- The controversial KYC requirement by the CBN
- the decline of Google Black Founders Fund investment in Africa
And other noteworthy information like:
- the latest African Tech Startup Deals
- opportunities, interesting reads and more
The Big Three
1. Flutterwave's five-year deal with Microsoft
The news: African fintech unicorn, Flutterwave has entered a five-year "strategic technology agreement" with Microsoft. The partnership will enable the fintech company to build its next-generation platform on Microsoft Azure, powering payments infrastructure across Africa and the rest of the world.
"As we manage high-volume payment processing, particularly during peak periods, the robustness, reliability, and scalability of Microsoft Azure become critical. As such, deepening our collaboration with Microsoft is the most logical step forward for us," Olugbenga Agboola, Founder and CEO of Flutterwave, said.
What now? With this engagement, Flutterwave says it will accelerate transactions processed via its platform for its global clients, including Uber, Netflix and Microsoft. According to a statement seen by Bendada.com, vital Flutterwave products, such as Flutterwave for Business, Send by Flutterwave, Flutterwave Store, and Flutterwave for Fintech Platform, will be transitioned onto the robust Azure cloud platform.
Currently, Flutterwave uses Azure OpenAI Service capabilities, enabling the scaling of its product offerings to millions of merchants across the world.
"Our development on Microsoft Azure has set a strong foundation for Flutterwave," says Gurbhej Dhillon, Flutterwave CTO. "Their platform provides us with significant developer leverage, which we harness in service of our clients. Looking to the future, we’re excited about the possibilities of scaling with Azure OpenAI Service, which will enable us to serve even more merchants worldwide."
2. CBN adds social media handle(s) as a KYC requirement
The news: The Central Bank of Nigeria (CBN) has disclosed that social media handles are now a mandatory know-your-customer (KYC) requirement. This is according to the CBN Customers Due Diligence Regulations released last week.
Know more: This requirement applies to both individuals and legal entities. According to the CBN, including social media handles in KYC requirements aims to enhance the accuracy and depth of customer identification.
Thereby enabling the nation's financial sector to tackle money laundering, terrorism financing, and proliferation financing. "These Regulations seek to ensure that Financial Institutions comply with customer due diligence measures as required by the Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing of Weapons of Mass Destruction legislation and regulations," says the CBN.
Protests: Amidst its merits, civil rights activists argue that it will violate citizens' freedom of privacy and expression.
Shortly after the regulations were made public, the Socio-Economic Rights and Accountability Project (SERAP) urged Folashodun Shonubi, Acting Governor, Central Bank of Nigeria (CBN), to "immediately delete the patently unlawful provisions in [regulation] directing banks to obtain information on customers' social media handles for the purpose of identification".
"The mandatory requirement of social media handles or addresses of customers does not serve any legitimate aim. Such information may be used to unjustifiably or arbitrarily restrict the rights to freedom of expression and privacy," SERAP deputy director Kolawole Oluwadare said in a letter to the CBN. "There are other means of identification [...] which banks and other financial institutions already require their customers to provide."
Zoom in: As of January 2023, only 14% of the Nigerian population was active on social media. If not amended, the CBN regulation will unbank several Nigerians, especially those in rural areas who cannot afford internet.
However, it is unclear when and how this policy will be implemented.
3. Google BFF investment declines in Africa
Last week, Google announced that 25 African startups were selected for the third cohort of Google for Startups' Black Founders Fund.
Each selected startup will receive up to $150,000 in non-dilutive cash awards, $200,000 in Google Cloud credits, Google Ads support, and one-on-one mentoring from Googlers and industry experts.
Since the first cohort was announced in 2021, Google has invested in 125 African startups via the fund.
However, data from the BD Funding Tracker shows a 58% decline in the number of startups the Fund invested in. In 2021, Google's BFF in Africa invested in 50 startups; in 2022, it went up to 60, but only 25 African startups were selected this year.
Despite the decline, Nigeria—Africa's most populous nation—remained the biggest beneficiary, followed by Kenya and South Africa.
In the coming days, we will provide you with a more detailed data story on the growth of the fund in Africa since its launch.
💰 State of funding in Africa
The decline of Google's BFF in Africa investment is symptomatic of a broader squeeze that the continent's tech ecosystem has felt this year.
In the first quarter of 2023, VC investment in Nigeria declined by 92%. Similarly, YC's selection of African startups into its accelerator dropped massively from 24 in Winter 2022 to only three this year, an 87.5% decline.
As we continue to observe the trend, we will share our analysis of this quarter's performance this weekend.
For now, here are the three African startups that announced their funding rounds last week.
Here are other important stories in the media:
- Eyowo is not shutting down yet: Digital bank Eyowo has denied the reports claiming that it is shutting down on June 27. The CEO and founder confirmed that instead, the firm is decommissioning a product and letting go of about 11% of its employees, TechCabal reports.
- Glade denies $214,000 internal hack: Nigerian fintech startup Glade has strongly debunked the news making the rounds online that it suffered an internal hack of about $214,000.
- Spotify launches a dedicated site to house all things Afrobeats: Afrobeats is one of Africa’s biggest musical exports and is currently taking the world by storm. The site will act as a repository for this cultural phenomenon, housing text, infographics and visual elements, including Spotify streaming data and results from the Spotify-commissioned April 2023 Afrobeats survey.
- Nigerian lawyers face uncharted waters as AI disrupts global music: This article by The Cable explores the nascent world of generative AI, the global scramble to regulate its application in music production, and how these interact with IP rights management as they affect Nigerian creatives.
- New data centers are supercharging cloud computing in smaller African countries: A new generation of data centers are being built in Africa’s smaller economies, fueling a $5 billion market opportunity on the world’s fastest-growing continent, Semafor Africa reports.
We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.
Product & Design
- WHO — Graphic Designer, Abuja
- Reliance Health — Product Manager, Lagos
- Vendease — Head of Product, Lagos
Data & Engineering
- Visa — Senior Manager - Solution Architect, Nigeria
- RenMoney — Engineering Manager, Lagos
- Flutterwave — Integration Engineer, Lagos
Admin & Growth
- QuickCheck — Performance Marketing Lead, Remote
- Bolt — Regional Manager for North & West Africa, Lagos or Accra
- Glovo — Partner Business Lead, Lagos
- Raenest — Quality Assurance Specialist, Remote
- Climate Change program in the Middle East and Africa: Application is open for Google's 10-week program, Google for Startups Accelerator for Climate Change, it aids Seed to Series A startups in the Middle East and Africa with tech-based climate solutions through mentoring, workshops, and Google Cloud support. (Deadline: July 7, 2023)
Have a great week!
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