Playing in Africa's Gaming Market 👾

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Your tour guide on African Tech 🧭

Today is Tech Roundup Tuesday, where we will dive into the biggest stories in the world's most exciting continent.

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Today’s newsletter is about gaming and I couldn’t help myself with the gaming references.

If you're feeling adventurous, have a sip of your drink every time I say play, player, playing, win, level, unlocked and games.

You'll be over-caffeinated or very hydrated by the time we finish. 

A side note before we start - thanks to everyone who voted in last week's poll!

I’ve read your feedback and have a ton of ideas which I'll share soon.

Opportunities to Invest in Africa seemed most popular, so I wanted to share an event coming up tomorrow - Daba’s Fintech Demo Day.

Daba is a friend of the newsletter, and they are building a tool that lets you invest in all kinds of African assets.

Their event will showcase four great African fintech startups. You can learn more here.

Okay - here is the tour plan for today 🧭

• Playing in Africa's Gaming Market 👾

• Tech Roundup

• Tech Twitter

Let's get this tour started  🦍

Playing in Africa's Gaming Market 👾

Last week Carry1st raised one of the biggest fundraising rounds of the year so far - a $27m Pre-Series B.

It was led by BITKRAFT eSports Ventures with participation from Andreessen Horowitz (or, a16z) and Konvoy.

Their previous round, a $20m Series A Extension, was led by a16z. It was their first investment in Africa featuring Google, Riot Games and Avenir Growth Capital

Nope, it’s not a fintech startup. It’s not logistics.

It’s a gaming startup - Carry1st.

When they started, they created and launched mobile games.

One of their first hits was Carry1st Trivia - the number-one downloaded game in Nigeria and Kenya for most of 2020.

Is Andreessen Horowitz playing games in Africa?

Now, you might think Andreessen Horowitz and co are playing games in Africa.

We have bigger opportunities (and problems) to go after - like financial inclusion, supply chain fragmentation and mobility.

So why are global funds giving African gaming attention?

Our answer lies in three trends that have come together to make Africa’s Mobile Gaming opportunity one worth playing in.

1) Smartphones 📱

We know that earning power is lower in Africa.

The latest Playstation 5 has a $500 USD price tag - way out of reach for most people on the continent.

But smartphones are getting increasingly cheaper. New options for smartphone ownership - like financing and refurbished phones - can bring the price down to as low as $1 a week.

And smartphone penetration is picking up, which means that more Africans can get started playing online and on the go.

Game developers see this as a huge opportunity, and are launching their games on mobile phones. Hit games like Call of Duty, Fortnite and Roblox are now on mobile for free.

2) Population growth 📈

Now, you might not have heard of Call of Duty, Fortnite or Roblox - hit games that have dominated the video game industry for the last few years.

But that’s fine - most mobile gamers are between 16 - 35, and Africa’s average age is just 19 years old.

Today, 186 million gamers in Africa (about 16% of the population) are mobile phone game players.

This is expected to reach 310 million gamers by 2027, with 22.6% penetration.

That’s double the number of gamers in North America.

And by 2050, Africa’s population between 0-24 years old is expected to double.

Africa’s pool of gamers will only continue to grow - making it a massive market for gaming startups to tap into and grow with.

3) Pay-to-Earn 💸

Games today aren’t just first-person shooters anymore. The play-to-earn model has unlocked a new level of appeal for users.

Play-to-earn lets players earn tokens or rewards as they reach certain milestones within the game.

These can be used to make purchases within the game or can be sold for real-world dollars.

Put that together and you have a young population with mobile phones and access to games that can earn them money.

It turns mobile gaming into an extremely sticky industry - and one that can grow income.

And it lines up the industry for explosive growth potential.

The Players

Naturally, a few players have entered the game to win big on Africa’s mobile gaming opportunity.

• Carry1st (South Africa 🇿🇦) acquires mobile games which they improve and relaunch, licenses global games in Africa and created Pay1st - a monetisation-as-a-service platform for games that want to embed payments. They have cumulatively raised $57 million from Riot Games, Bitkraft, A16z and Google.

• Metaverse Magna (MVM) (Nigeria 🇳🇬) is a gaming DAO (or community) of over 100,000. They spin out social games and play-to-earn games that give players MVM tokens. In September last year, they completed a token sale of $3.2 million at a $30 million valuation.

• Jambo (Democratic Republic of the Congo 🇨🇩) Jambo aims to be a crypto "super app" starting with play-to-earn games to get players onto other Web 3 Applications. They raised a $30 million Series A funding round led by Paradigm after a $7.5 million Seed round by Coinbase and Alameda Research.

• Skrmiish (South Africa 🇿🇦) is a mobile “play-to-earn” app that lets gamers earn cash every time they play their favourite games. Skrmiish had acquired over 100,000 from around the globe and announced a $2.5 million seed round in August last year.

These companies seem to be following similar trends - using games as acquisition hooks to get users on their products and services. And it begs the question..

Do all roads lead to.. the Super App?

The Super App is a tried and tested playbook.

Chipper Cash started with cross-border transfers.

Now they have a suite of financial products for African consumers - like virtual cards, airtime (phone credit), stocks and crypto - which increases the lifetime value of their users.

Their userbase has shot over 5 million and they hit unicorn status in 2021.

Carry1st’s CEO, Cordel Robbin-Coker, stated their ambition to become Africa’s leading consumer internet company - using gaming as a wedge for online commerce.

And we see this at work with Carry1st Gems - their virtual currency that you can earn in-game, and can be redeemed for rewards in their online store.

Web3 gaming companies see gaming as user acquisition for other crypto services and products. Metaverse Magna - which can use this as acquisition for other products they launch through their Crypto platform and parent company, Nestcoin. [Link]

It seems like all roads in African gaming lead to the Super App - starting with games, then levelling up into other products like airtime and financial services.

Do you think Africa’s next super app could start as a gaming platform? Let me know here

Ps. if you’re an early-stage gaming startup in this space please reach out - I’d love to learn more about what you’re doing :)

Tech Roundup

Djibouti to get a new Spaceport 🚀

Djibouti has signed a $1 billion deal with Hong Kong Aerospace Technology to build a spaceport in the next five years. It will be Africa’s first orbital spaceport and marks a major milestone for Africa's space industry.

Kuda goes to Pakistan? 🇵🇰Kuda Bank - a Nigerian neobank - recently obtained a licence from the State Bank of Pakistan to operate in the country. It seems like Kuda wants to compete in Pakistan’s nascent digital banking space, and comes after a rocky 2022 for Kuda Bank in Nigeria.

200 Kenyan content moderators who worked on OpenAI are firedSama, an African content moderation company has fired 200 Kenyan content moderators after their contract with OpenAI was complete. They earned as little as $1.32 and $2 per hour, less than a third of California’s $7.25 minimum.

Tech Twitter

For more on super apps..

And that's a wrap!

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Catch you soon!

👋🏾 Caleb