Kenya has continued its crackdown on digital lenders that are abusing customer data. The Office of the Data Protection Commissioner (ODPC) has slammed a total of KES 9.3 million ($63,500) fine on three lenders in the country.
Read a full statement from the ODPC below:
Away from predatory lending in Kenya, we bring you news about:
- Twiga's looming liquidation threat
- Risevest's acquisition of Chaka
We also curated other noteworthy information and opportunities, including a call for applications for Y Combinator 2024 winter batch.
📰 The Weekend Brief
#1. Twiga Food faces liquidation threat
The news: Incentro Africa, a Kenyan Google Premier partner, has taken legal action against Twiga Foods, an agritech startup, for alleged non-payment of KES 39 million ($263,691). The sum in question pertains to fees owed for Google Cloud Services and Partner Service provided by Incentro Africa.
Twiga's relationship with Incentro began in 2021 as a way to improve billing and compliance management. Then, the agritech expanded to engineering support.
Why it matters: Twiga Foods, like many startups, has been impacted by the economic downturn and recently laid off approximately 283 employees. And there have been rumours of plans to shut down the startup's Ugandan operations. Rumours which the CEO, Peter Njonjo has vehemently denied.
In August, Twiga Foods announced strategic operating adjustments to enhance its service delivery capacity in response to the challenging business environment, which saw the startup lay off its entire sales team.
However, these cost-cutting measures have not been sufficient, as the company still owes Incentro Africa. Twiga Foods has described Incentro's demands as "premature" and has questioned the motives behind the insolvency notice. A court ruling on whether Incentro should proceed with liquidation is expected today, with Twiga Foods filing a certificate of urgency to halt any potential liquidation.
The legal dispute between Incentro Africa and Twiga Foods highlights the challenges businesses face in financial dealings, particularly during economic downturns.
Know more: Since its inception, Twiga Foods has secured significant funding, raising at least $157.1 million across 19 funding rounds from approximately 23 investors, according to BD Funding Tracker. Notably, the startup closed a $50 million Series C round in November 2021, with early investors benefiting from a $30 million liquidity event.
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#2. Risevest acquires Chaka
The News: Nigerian fintech startup, Risevest has acquired Chaka in an undisclosed deal. The deal, which was finalised yesterday, follows months of discussions between the two companies.
Risevest and Chaka, both prominent wealth management platforms, enable Nigerians to invest in various assets and securities globally.
Why it matters: The acquisition of Chaka by Risevest carries significance for several reasons. First, it signals a consolidation within the Nigerian fintech space, with two innovative platforms joining forces. While the financial details of the deal remain undisclosed, it's noteworthy that Chaka will continue to operate as a separate entity with its cap table being updated. This suggests that the acquisition aims to harness the strengths of both platforms for mutual growth.
Additionally, this move reflects the dynamism of the Nigerian fintech ecosystem, where collaboration and innovation are driving forces. Risevest and Chaka's decision to continue as separate products while collaborating on product development demonstrates a commitment to providing diverse investment opportunities for Nigerians.
Zoom out: The financial industry in Nigeria has seen its share of regulatory issues as evidenced by the freezing of bank accounts of Risevest, Chaka, and other fintech startups in 2021 by the Central Bank of Nigeria. Nevertheless, these challenges have not deterred their growth and innovation within the sector.
👀 In case you missed out
- Chipper's CEO got a new appointment: US President, Joe Biden has appointed Chipper Cash co-founder and CEO, Ham Serungoji to the US advisory council on African diaspora engagement. He will serve alongside 11 other African Americans.
- P1 Ventures launched a new fund: Pan-African Seed VC fund, P1 Ventures has completed the first close of its $50m fund to invest in African startups with transformational software businesses in fintech, insurtech, health tech, e-commerce, and AI.
- 2Africa's submarine cables reached the DRC: Following successful landings in Egypt, Congo, and Mozambique, the 2Africa submarine cables have landed in the Democratic Republic of Congo. The cable will help connect 3 billion people across Africa, Asia, and Europe.
- The top 10 recipients of remittance: Remittance has become a lifeline for many economies. With $20 billion entering the country in 2022, Nigeria leads the pack of Sub-Saharan countries with remittance inflows, accounting for 38% of the total amount.
- For African startups: Applications are open for the 2023 MEST Africa Challenge. Only early-stage startups in Ghana, Nigeria, Senegal, Kenya, and South Africa, are eligible to apply for the $50,000 in equity prize.
- Become the next YC-backed startup: Y Combinator is accepting applications from startups for the Winter 2024 funding cycle. The deadline for on-time applications is October 13.
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