Africa’s Top Tech Business Headlines For 2021

The year 2021 is coming to an end! This year has been filled with a lot of happenings in the African technology-business space; new milestones were set and Africa as a continent saw a lot of investment from foreign investors. Startups had rounds that pushed their expansion plans and goals – some broke new records, the government also had one or two things to do or say about the tech space. The world is moving towards digital currencies and Africa wasn’t left out in attempts to launch a digital currency.

Africa as a continent has seen major advancement in tech and business. While the continent was in the news for a number of reasons regarding tech, the following are some of the notable happenings this year as they either shook the continent, broke one or two milestones, or could not just be overlooked.

South Africa’s Tyme Bank Raises $109 Million From Investors, The Largest Raised By An African Digital Bank

Digital banks, also known as neo or challenger banks, took 2021 by storm. These banks leverage the shortcomings of the traditional banking system and technology to provide financial services to people. They target either the unbanked, underbanked or people who do not have access to financial services. In 2021, digital banks contributed a huge quota in narrowing the financial gap in the continent. Digital banks like Kuda were always in the news for one milestone set or the other.

South Africa’s Tyme Bank was in the news this year for raising over a hundred million from investors. The digital bank, owned by African Rainbow Capital (ARC) raised $109 million from investors. As of February this year, the digital bank boasted 2.8 million customers and forecasted to reach 3 million by March. The digital bank offers free transfers as well as zero costs for specific transactions. It was also adjudged to be Africa’s fastest-growing digital bank.

Cryptocurrencies Became Banned In Nigeria

In February this year, the federal government of Nigeria banned the use of cryptocurrencies in the country. A circular stating that it had banned cryptocurrency in the country and that all banks and financial institutions within the country should close all accounts of crypto exchangers and individuals operating in cryptocurrency was released on the 5^th of February. Social media was hot as Nigerians took to microblogging platform Twitter to express their displeasure about the news. Many cryptocurrency trading platforms had put a hold on all their operations in Nigeria.

To date, cryptocurrencies remain banned in Nigeria.

Nigerians Traded Over $500 Million In Crypto Before The Ban

The crypto ban took Nigerians by a huge surprise. Many Nigerians, especially unemployed and underemployed youths found solace in cryptocurrency, carved out a niche for themselves and provided themselves with a source of income. One factor that drove the popularity of cryptocurrency is CBN’s stringent rules around foreign exchange in what has been a failing effort to stabilise the Naira. In December 2020, Nigeria became the second Bitcoin peer-to-peer market after the United States with over $560 million worth of Bitcoin traded between 2015 and 2020.  That same month, the Central Bank instructed switches and processors to stop all domestic currency transfers in respect of foreign remittances through International Money Transfer Operators (IMTOs).

Nigeria still has reverence today when cryptocurrency is mentioned in Africa as the country continues to hold some important records irrespective of the looming ban.

Savannah Fund Announced Africa-focused Investment Fund of $25 Million

In March, Savannah Fund launched a new Africa-targeted fund worth $25 million for startups in the continent. Savannah Fund is a Sub-Saharan tech venture capital firm focused on Africa, it launched in 2012 and was founded by Mbwana Alliy and Paul Bragiel. As of March, records showed that the venture capital firm had already invested in 31 companies across seven different countries across the continent of Africa. The plan was to provide funding to Series A investments in core markets in Africa that are located in Nigeria, South Africa and Kenya and also to look into the emerging markets in Ghana, East Africa, Rwanda, Ethiopia and the Ivory Coast.

Jiji Acquires Cars45

Jiji’s acquisition of Cars45 made it the first time the business ventured out of its classified business model. According to CEO Anton Volyanskyd, the acquisition was both a step and the foundation for building the company’s future. The details of the deal were not given and the amount in which Cars45 was acquired remains a mystery. The acquisition, however, still remains one of the unexpected in this year.

Nigerians Traded almost N100 million Worth Of Bitcoin Using “Peer-to-peer” Months After Ban

The following months after the ban was not as tough as one would have expected. Although crypto and related activities remained banned in the country, Nigerians found a loophole in peer-to-peer transactions. Crypto platforms took advantage of this and created features that ensured safety for people using this loophole. According to crypto exchange platform Paxful, Nigerians traded Bitcoin volumes of over N92.25m ($225K) on Paxful between March and June 2021. The platform also mentioned that trading volumes from Nigeria from November 2020 to February 2021 were worth N73.8m. Prior to this revelation, the platform had revealed that Nigeria was its largest crypto market with volumes of $1.5 billion and a user base of 1.5 million, adding that it believed that the figures could still grow irrespective of the Federal Government ban.

Opay Became Valued At $2 Billion, Got Listed On CB Insight’s Top 250 Fintech Companies And Was The Only African Fintech To Make The List

Nigerian mobile payments platform OPay raised $400 million in a funding round led by SoftBank Vision Fund, valuing the fintech at $2 billion and marking the first investment in an Africa-based startup by SoftBank Vision Fund. OPay became the fourth Unicorn in Nigeria, and the fifth in Africa, joining the likes of Interswitch, Jumia, and Flutterwave. The fundraising was the largest that happened for a fintech this year in terms of size and value.

Although other African fintech companies including Wave, Flutterwave, TymeBank, and Chippercash gained traction and raised impressive amounts this year, OPay was the only one dominant enough to make this year’s CB Insights’ ranking of the Top 250 fintechs in the world. Last year, OPay, PalmPay and South Africa’s Yoco were the only African fintechs to feature in CB Insights’ 2020 Fintech Top 250 list.

TAT Ordered MultiChoice To Pay N900 Billion Over Tax Evasion Allegation

In August, the Tax Appeal Tribunal (TAT) slapped Multichoice, the parent company of DSTV and GOTV with a fine of N900 billion. The company was accused of gross tax evasion that totalled the sum of N1.8 trillion naira and was demanded to pay 50 percent (N900 billion) or $2.1b of the total sum it owed. The company was also given an ultimatum of September 23^rd to pay 50 percent of the tax it owed. The headline makes the list because it is the biggest tax fine out of Africa for a company like Multichoice.

Nigeria Launched Its Central Bank Digital Currency, The First Out Of Africa

Months after the cryptocurrency ban, the Central Bank of Nigeria revealed that it had been working on launching its digital currency for about two years. The central bank digital currency, known as the e-naira, was launched on the 25^th of October after an initial launch date of the 1^st of October. The launch of the e-naira was postponed as a result of activities lined up to commemorate this year’s Independence Day. The apex bank has since instructed that the e-naira be accepted everywhere nationwide. Although the e-naira is still struggling to gain acceptance and major adoption, it poses huge benefits to both Nigerians and the economy as a whole. The e-naira could go a long way in narrowing the existing financial gap in the country by promoting financial inclusion.

The launch of Africa’s first central bank digital currency is of great significance because it shows that Africa is on track with the financial changes happening around the world. Africa is always at the tail end of many global changes and developments but the naira’s launch shows that Africa is putting in the effort to be on speed with the rest of the world.

Uganda’s Safeboda Receives The First Investment From Google’s Africa Investment Fund

Internet and search engine giant Google made its first investment from its Africa Investment Fund in Ugandan startup Safeboda. The investment followed after an October announcement that Google would be committing $1 billion over the next five years in “tech-led initiatives”, which covers a $50 million Africa Investment Fund focused on African startups in their early or growth stages. This headline is super significant because Safeboda, a mobility startup focused on revamping the transportation sector in Africa, was the first to benefit from the Africa-focused fund.

MTN Nigeria Announced A Digital Public Offer Of Shares

Telecommunications company MTN, announced a digital public offer of it shares this year. MTN Nigeria announced that retail investors can purchase up to 575 million available shares at ₦169 per share starting from the 1^st of December, 2021. The sale ended on the 14^th of December. The public offer came out of the company’s commitment to cut down its shareholding in the country from 78.8 percent to 65 percent over time.

The digital public offer was a huge opportunity for people to own a part of the company and many people jumped on this offer which was done in an extremely easy and convenient way. MTN Nigeria offered 575 million shares at N169 per share.

Africa Sees Its Largest Pre-seed Round Ever With Nigeria’s Edukoya

Lagos and London-based edtech startup Edukoya raised $3.5 million in a pre-seed round from European venture capital firm Target Global, the largest to ever be recorded in the continent of Africa.

The edtech startup set a new milestone for startups in Africa by raising the biggest pre-seed round ever in Africa’s startup history. Edukoya is taking services provided by offline test preparation centres in the country online and is providing after-school guidance and tutoring for students planning to take specific examinations. Edukoya boasts of a range of features and the platform is popular for its exam preparation and homework assistance which is always available and its question bank that comes with step-by-step solutions to these questions. 

The platform, which is only available in beta mode at the moment, plans to go live by next year as well as expand to other African territories.

Jack Dorsey Appoints Three Nigerians And One South Africa On His Bitcoin Trust Fund Focused on Africa

Twitter’s founder known for his fervour for Bitcoin appointed three Nigerians and one South African on his Bitcoin Trust (BTrust) Fund focused on India and countries in Africa. Jack Dorsey first announced the Bitcoin Trust (BTrust) fund in February this year in collaboration with music magnate and founder of music platform Tidal Jay Z. Jack Dorsey’s Bitcoin Trust fund is a fund with 500 Bitcoin (currently worth almost $50,000) and is targeted for development in Africa and India. The fund will be managed by these four found-to-be worthy Africans without any interruption from either Jack Dorsey or music magnate Jay Z.

Abubakar Nur Khalil, Obi Nwosu, Ojoma Ochai and South African, Carla Kirk-Cohen were selected from about 7,000 people who applied to be on the board. The board was originally only to have three directors but Jack Dorsey decided to make it four in the end.

        2021 has been quite the year. The African tech space has undergone major changes and development this year. Looking on to the next year, we can expect a lot of things to happen in the tech space in the continent. 2021 is enough evidence to show that the next year holds a lot for startups, technology and development in the continent. The next year is expected to have newer milestones set by these startups who are putting Africa in a good spotlight.

Happy Holidays from us at Techbooky Business!