It's already the last month of the year! What a journey it has been.
Happy New Month from all of us in the BD newsroom
We kick off this letter by exploring the November State of VC funding in Africa.
💰 State of Funding in Africa
In November 2023, funding dropped by 68.93% YoY to $90M
Last month, African tech startups collectively secured $89.6 million through 17 deals, reflecting a 68.93% decrease compared to the $288.5 million raised in November 2022 across 19 deals, according to BD Funding Tracker.
This decline continues a funding drought that has overtaken the ecosystem since the highs of 2021, where African startups raised over $4 billion. In 2022, we tracked $3.6 billion in funds raised by African startups. So far in 2023, African startups have only raised $1.9 billion and will need to raise another billion dollars before the end of the month to get remotely close to 2022's funding level.
Except there is a significant mega deal to bridge this gap, we don't see this happening.
Turning attention back to the funding landscape of November, the connectivity sector emerged as the leader in terms of funding during that period. Meanwhile, insurtech, fintech, mobility, and cleantech also stood out as some of the most funded sectors in the same month.
In terms of the primary market, South Africa claimed the top position by securing approximately 40.98% ($36.7 million) of the total funding raised in November, with Uganda, Nigeria, and Kenya following suit.
Regardless of the funding decline, the Big Four have continued to maintain its position in the market. "In uncertain times, investors will seek to de-risk an already risky investment by concentrating capital in markets where the revenue opportunity is exponentially large," says Peter Oriaifo, Principal at Oui Capital.
Now to "The Big Three" stories, we covered:
- the planned mass layoffs in Kenya
- what Nigeria's president said about e-mobility at COP28
- a snapshot of Spotify Wrapped in Nigeria
The big three
#1. About 40% of Kenyan employers consider mass layoffs
The news: The Federation of Kenya Employers (FKE), the national union for employers in the country, has reported that at least 40% of its members are contemplating additional reductions in their workforce.
Know more: High business costs, along with low returns due to taxes, global events, and climate change, have led to a delicate employment situation, FKE executive director and CEO, Jacqueline Mugo notes.
“The country may not be able to have much control on global geopolitical developments and climate change, but we can work on our tax measures to reduce the cost of doing business in the country,” Mugo said, adding that the government needs to enable increase cash flow to drive the purchasing power of residents.
The union claims that the controversial Finance Act 2023 is contributing to some of these difficulties. The key taxes that need to be reviewed, according to FKE, are the VAT on petrol, PAYE and corporate tax.
Zoom out: “If the private sector fails to grow, the economic development shall remain stunted because of the numerous taxes they have to pay,” FKE national president, Habil Olaka said. He went on to state that reverting taxes would pave the way for increased investments in the nation's economy, ultimately leading to a surge in employment.
Grey takes global expansion steps with new look
Grey, a leading cross-border fintech company, unveils a refreshed logo and website design as part of its global rebranding initiative, aligning with the company’s expansion plans.
This refresh follows Grey’s celebration of surpassing 500,000 users.
GREY maintains its commitment to innovation and global connectivity in the dynamic fintech landscape.
This partner content
#2. Nigeria to launch 100 electric buses as carbon reduction initiative
The news: Last week at the ongoing COP28 climate summit in Dubai, Nigerian President Bola Tinubu revealed his administration's intention to introduce 100 electric buses as part of efforts to reduce carbon emissions and modernize the transportation system in the country.
Although he did not provide specific details about the plan, he emphasised, “We recognise the imperative of fostering an environment that not only attracts investment but also upholds standardised and sustainable industrial practices.”
“To drive this visionary plan,” Tinubu disclosed that he has created an inter-governmental committee on carbon markets to be chaired by the executive chairman of the Federal Inland Revenue Service and the director-general of the National Council on Climate Change.
Is Lagos ahead of Nigeria? While the federal government is just starting to navigate the e-mobility lane, Lagos has long been revving up for a ride on the electric expressway. In May, the Lagos state government received the delivery of its first batch of electric buses, which is a partnership between the state, Oando, and EV manufacturer Yutong. The ambitious goal is to roll out 12,000 electric buses on Lagos roads by 2030, aimed at cutting greenhouse emission by 50%.
In Lagos, many mobility and logistics startups are embracing the transition to e-mobility. For instance, Fez Delivery, a logistics startup, rolled out electric bikes just last month.
Zoom out: Since some of the conversations at the summit are around climate financing, President Tinubu's announcement is possibly a move to woo investors.
A few months later, Kenya's President William Ruto signed a $60 million deal with the US foreign aid agency, Millenium Challenge Corporation (MCC) for the acquisition of electric buses to ease traffic congestion in the Nairobi Metro Area.
#3. What the Spotify Wrapped says about the listening habits of Nigerians
The scence: Seems like it is just me and two other who did not drop their Spotify Wrapped on X. Are you one of us?
Last week, Spotify unveiled this year's edition of Wrapped, its annual recap of listeners' musical journeys.
Why it matters: “Nigeria is a hotbed of musical talent, and we are incredibly proud to showcase the diversity and passion of Nigerian music lovers through Wrapped," says Phiona Okumu, Spotify's head of music for Sub-Saharan Africa. “This year's Wrapped is a testament to the power of music to connect people and bring them closer to the culture and traditions of Nigeria.”
Inside the Wrapped: In the year 2023, Nigerian music made an indelible mark on the global stage, achieving unprecedented success and dismantling barriers, Spotify said in a statement shared with Bendada.com.
The image below provides a snapshot of the top performing songs, artists, and podcasts.
Know more: Here’s what the Spotify Wrapped data says about Nigeria’s listening habits in 2023, according to Spotify.
- The demand for local music in Nigeria witnessed an extraordinary surge, with consumption growing by 284%.
- Female artists in Nigeria also experienced a significant boost in popularity, seeing a remarkable 150% year-on-year increase in average streams.
- Fridays emerged as a musical celebration in Nigeria, with 3:00 PM standing out as the preferred time for music lovers to crank up the volume and immerse themselves in their favorite tunes.
- When it comes to searches, Rema claimed the top spot for the most searched queries, while Burna Boy achieved a double victory by ranking as both the most searched artist and the most viral artist.
- Asake's "Lonely At The Top" secured the coveted first position on the list of most viral tracks, highlighting its widespread appeal and dominance among listeners.
Here are other important stories in the media:
- Sky.Garden makes a comeback: Kenyan e-commerce startup, Sky.Garden has relaunched operations, one year after its acquisition by Lipa Later, a Kenyan fintech.
- Kenya's startup bill about to be a law: President Williams Ruto has announced that the Kenyan Startup Bill will be signed into law in April 2024. Johnstone wrote a few things you need to know about the legislation.
- 26 African tech acquisitions in 2023? As of November, we tracked about 26 acquisitions in the African tech ecosystem, with the fintech sector representing the highest number of deals in 2023.
- MPost ditches Kenya: Amidst complaints Kenya is becoming tax-intensive for tech upstarts, Rwanda is cultivating a reputation as Africa's unofficial tech launchpad.
- A Paystack Friendship: Fuad Lawal chronicles the evolution of Paystack, an African payments company, delving into the pivotal role that enduring friendships played in the company's remarkable growth.
- OneWeb looks to rival regulation-hit Starlink: OneWeb, owned by satellite operator Eutelsat, is set to introduce its low-earth orbit (LEO) broadband service in South Africa.
We carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth every week.
Product & Design
- Dervin — UI/UX Designer, Nigeria
- Reliance Health — Product Manager, Nigeria
- Deel — Senior Product Manager, Remote
Data & Engineering
- Moniepoint — Financial Data Analyst, Remote
- Swapcard — QA Engineer, Remote
- Remote — Data Analyst, Remote
Admin & Growth
- Credpal — Marketing & Communications Officer, Lagos
- Early Node — LinkedIn Creator, Remote (Nigeria)
- LemFi — Digital Marketing Associate, Lagos
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