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May Roundup, Crypto x Africa & Africa's Biggest Pre-Seed Deal
Your front row seat to Africa’s booming startup scene
Proximity Fortnightly is your front row seat to Africa’s booming startup scene.
You’re either here for edition #1 because you’re curious (or bullish? 🚀) about Africa’s tech scene.. or I’ve forced you to sign up to this.
Either way, welcome! I’m glad you’re here.
So, what’s the deal?
This is my first newsletter and I’m still tweaking things - but here’s the plan:
Expect an email from me fortnightly.
At the start of the month, I’ll dig into funding, trends and the biggest rounds across Africa.
Mid-month, I’ll feature great African founders working in exciting new industries.
Why Africa?
Africa is the tech frontier of the future. This newsletter will show you why with data, trends and stories from the region.
Africa’s population is expected to grow from 1.2 billion today to 3.1 billion in 2050 - making up almost a third of the worlds population.
With a rapidly growing mobile penetration at only 44%, technology still has plenty room to fill gaps in finance, healthcare and education.
But anyone can tell you that. Instead, let me tell you about Samrawit and Henok.
I lived in East Africa in 2020 when the startup scene was just starting to boom.
Ride (Ethiopia’s Uber) was the most popular way to get around. Founded by female engineer, Samrawit Fikru, Ride has employed 10,000 drivers to date.
I was taking the same route across Addis Ababa, Ethiopia, every day. Henok, a 25 year old living in my neighbourhood, became my regular driver through Ride.
Henok was borrowing a car from his uncle and was driving on Ride as much as he could, determined to save money.
I asked him what he was saving for and learned Henok wanted to start an e-commerce business with his wife. His dream - to become an entrepreneur.
Tech has made it magnitudes easier for Africa’s young, ambitious, hard-working population to create value on the continent.
And now, they have role models - like Samrawit Fikru from Ride.
Then, when you mix in the fastest growing class of consumers, you start to see a continent set to grow in leaps and bounds.
We’re only at the beginning of Africa’s growth story, and Proximity Fortnightly is your front row seat at the show 🍿
Before we kick off, I have a few asks.
I would seriously love feedback on how you found this. This is my first newsletter and I want to build it around you :)
Please refer any friends or colleagues who may find this interesting. Lets kick off that network effect ⭕️
Let’s dive in!
Contents
i) May Funding Roundup 💰
ii) Inside the Megarounds 🔍
iii) Crypto x Africa - Meant to Be? 🤝
iv) Africa’s Biggest Pre-Seed Deal 🚙
May Funding Roundup 💰
All Gas No Breaks - Venture funding in Africa is speeding up, not slowing down
Instead of a slowdown, funding is speeding up on the continent.
In May, $437.2m funding dollars were invested into African startups. This is almost double the $230.2m amount invested in May 2021.
On a quarter to quarter basis, Africa: The Big Deal, shows that funding has grown 150% in the last year. 🚀
Comparatively, the United States and Asia are have seen funding decline in Q1 year on year growth.
Inside the Megarounds 🔍
The top three capital raises made up 47% of venture funding this month. Lets dive in.
🥇 Interswitch 🦄
Funding: Interswitch, Nigerian digital payments platform, raised $110m from LeapFrog Investments and Tana Africa Capital.
Background: Interswitch (now a 20 year old company) is one of Nigeria’s earliest digital payment platforms, powering much of the rails of Nigeria’s online banking system. Leapfrog and Tana Capital will work with Interswitch to build more products to support financial inclusion.
🥈 Paymob 💵
Funding: Paymob, Egyptian fintech, raised a $50m Series B from Paypal Ventures and Kora Capital. This marks PayPal Ventures’ first investment in MENA (Middle East Northern Africa).
Background: Paymob creates payment infrastructure that allows merchants to accept digital payments online and offline. In 2021, Paymob serviced 35,000 merchants with its platform. In May, that had grown to 100,000 merchants.
🥉 Instabug 🐞
Funding: Instabug, Egyptian bug monitoring and reporting platform, raised $46m from Insight Partners.
Background: A tool for mobile developers to monitor bugs and report crashes, Instabug’s software sits within 2.7 billion mobile devices. Their customers include DoorDash, Verizon, Porsche and Gojek.
Crypto x Africa - meant to be? 🤝
Crypto funding grows in Africa 💎
The 4th and 5th largest funding rounds in May were Jambo and Mara - two crypto startups that raised $30m and $23m respectively.
Jambo is building a Web 3 user acquisition platform that combines education, play-to-earn and de-fi apps for users. Their $30m round was led by Paradigm, the second largest crypto fund. This is Paradigm’s first investment on the continent.
MARA, an African crypto exchange platform, raised $23m from Coinbase Ventures and Alameda Research.
In 2021, Africa saw crypto usage grow 1,200%, making it the third-fastest growing cryptocurrency economy.
And the funding followed. This quarter blockchain startup funding in Africa has grown 1668% compared to Q1 of 2021. This is an 17x Increase 🚀
Meant to be? 🫂
While announcing their funding round, MARA casually dropped that it will become the official crypto partner of the Central African Republic, and an advisor to the President on crypto strategy and planning.
This follows the Central African Republic passing a bill legalising bitcoin as legal tender (only the second country to do this).
Africa’s economic structure creates the ideal conditions for crypto adoption to accelerate:
💎 Crypto solution: Peer-to-peer payments
Problem: Double digit (and even triple digit) inflation
💎 Crypto solution: Stable coins
💎 Crypto solution: On-chain digital identification
We will be keeping tabs on this relationship as more countries respond to and regulate crypto on the continent.
Inside Africa’s Biggest Pre-Seed Round 🚙 💨
Sylndr - an Egyptian online used-car marketplace - raised a $12.6m pre-seed round, led by RAED Ventures. This is Africa’s biggest Pre-Seed round to date 💰 Let’s dig into Egypt’s $14 billion used car market to understand the round.
Egypt has one of Africa’s largest fleets of vehicles, with over 6 million cars on its roads.
Annually, 750,000 used cars and 250,000 new cars are sold. Egypt’s used car market alone is estimated to be worth $14 billion.
With over 18,000 car dealers, used car supply is fragmented. No one dealer has captured over 1% of market share.
Demand is high, but customers experience lack of transparency and pricing instability.
Sylndr’s marketplace model lets customers reliably and transparently buy and sell used cars online.
Sylndr is using the same marketplace model used in other emerging markets, like India, Mexico and Malaysia.
🇮🇳 India’s Cars24, now valued at 3.3B
🇲🇽 Mexico's Kavak, valued at 8.7B
🇲🇾 Malaysia's Carsome, valued at 1.3B
In Egypt, a car is the second biggest investment in someones life. Sylndr shows how startups can create great customer experiences in distrusted industries, and provide safer, cheaper options for users who need it most.
That’s a wrap! I hope you enjoyed this edition.
Holler if you have any feedback or if you learned something new! And if you just want to say hi, you can:
Reply to this email 💌
And if you enjoyed this and know someone else who might please share it over 🙏🏾
Until next time,
👋🏾 Caleb