Microtraction: Trusting the entrepreneur, the idea and the market in good faith and helping raise $10m in follow-on

Microtraction, could be called the stepping stone into getting into YCombinator (Silicon Valley-based Startup investor) seed investor base on their track record. Most startups they invested in have been able to get into YC. In this Chat with Dayo Koleowo, the partner, we asked about their thinking when it comes to writing the first checks for entrepreneurs in Nigeria.

Below is the interview;

VentureHunt: What’s the link between YC and Microtraction? Do you hold special classes for your startups to be able to make it through YC?

Dayo Koleowo: Our relationship with YC is pretty informal, we do not have any official relationship. What has really worked for us is that we understand the ethos of YC as well as understand the local market. YC doesn’t have the exposure to the African market because they are not on the ground like us and other micro VCs on the continent. However, because our criteria are similar and we look out for the same things when making investments despite being in different locations, the chances become a little higher for our portfolio companies to get in. 

We do not hold special classes for our startups. What we simply do is go through their applications and help them review it. We also connect them to YC founders who can help them prepare for the video interview if they do get to that stage.

VH:What’s the success rate of the startup’s post-pre-seed in raising additional funds?

DK: 100%. All our companies have raised follow-on funding after our initial investment. They have all raised a sum total of about $10m.

VH: Market dynamics; based on recent investments, MT has invested a lot in Fintech, how much attention is given to other sectors? Do you actively pursue deal flows from other sectors?

DK: It is important to note that we are sector agnostic despite the investments in a couple of fintech startups. One of the most important things for us is the quality of the founders and these founders have generally focused on providing fintech solutions. In general, from an overall economic development perspective, regions like West Africa, and some other parts of Africa are still developing their capital market. Some of the basic and of course important problems such as consumer-level payments, credit, etc. are still being solved for. 

The flow of money is very critical to the economic development of the continent. So what tends to happen is that founders and companies decide to solve a problem but find out that their scalability is linked to the flow of money. When financial problems are solved it then becomes the foundation for other things to be built on top of. Classic example – imagine Nigeria without Paystack & Flutterwave, some companies will never have been started.

In summary, the same attention is given to all sectors. We will support and back founders who are solving the biggest challenges on the continent, regardless of the sector.

VH: Your portfolio has proven true to your mantra of a solid technical co-founder as part of the founding team; how flexible are you these days if the idea is awesome but the founders are not technical, do you invest still and ask them to figure out the technical bit?

DK: It is very difficult to build something without some level of expertise. We are in the business of tech. Any team building a tech business or tech-enabled business has to have some level of technical expertise. It is not just about what our criteria is, it is also about ensuring you don’t outsource your tech development. As a previous founder, I understand how expensive and time consuming it is to outsource your tech development. 

So for us, having 2 – 3 people in the team with a technical founder is always a winning combo. If we come across a great idea with no technical founder, we will only invest if the non-technical founder is willing to have a co-founder down the line. There are exceptions but we like to stick to our mantra.

VH: We have gone through your portfolio, you currently have like 9 startups, are there any others you want to share?

DK: None at the moment.

VH: Logistic is going haywire across the market, what your view and is it something you are looking at?

DK: We are always looking at different sectors. The logistics/transportation industry is a very interesting one and similar to the way fintech is being approached. Moving people or goods around is still difficult and if solved for it will open up interesting ideas that founders can build on top of that. Definitely a space we are keeping an eye on.

VH: There seem to be lower than average activities on the seed side in the country, what’s your view around this?

DK: There will not be enough seed activity if the pre-seed activity is not vibrant. We need more folks to bet on very early-stage startups for the seed activity to pick up. After all, it is the pre-seed startups that stand a chance to become seed startups. That is why we are focused on this very important stage of the venture chain. 

VH: What are your expectations generally about the Nigerian and Africa tech ecosystem?

DK: My expectation is to see a vibrant and successful Nigerian and African tech ecosystem where problems are being solved and the economic development is rapidly growing. This can only be achieved through the stakeholders – entrepreneurs, founders, investors, service providers, etc. We have to work together, educate each other, and build an ecosystem that will outlast us. 

If you are an entrepreneur building awesome stuff, why not sign up on Microtraction to get your ideas funded? Click here to get started.

Breaking News: Andela is Sacking 400 developers in Africa, declares $50m in revenue

Andela’s is one of Africa’s best place to work, helping global companies hire developers across Africa remotely thereby saving them a lot of overhead and providing opportunities to Africa Developers.

Today, it releases news that it will be letting go of 400 junior developers in Africa as part of its restructuring efforts. The CEO, Jeremy Johnson said they have hired more developers than they can find jobs for, hence the need to cut and focus more on mid-senior developers.

Andela has raised more than $180m in funding since launched in 2014; the CEO mentioned that as a startup, they have generated more than $50m in revenue, showing good sign of demand for its service in the global market.

What happened to these junior devs?

Andela is known to be employee-friendly, with good working condition, good salaries, and perks; one wonders why junior developers failed to live of up expectation given the great opportunities provided by the company.

How will this impact the ecosystem?

It’s good news for everyone but the staffs being let go. For one, more developers will be available for hire for the growing startups. The big question now is, can the startup able to match Andela’s pay and will the developers be willing to take on local opportunities with lesser pay? If I was in their shoes I will take up the job because it becomes an opportunity to improve their skills and be ready for future opportunities.

Is this the end of Coding Bootcamps?

Since the launch of Andela, countless companies have modeled their structure to try to take advantage of the global demand for developers. With young graduates getting picked to join coding boot camps with a promise of a job after training. We will expect this to be a shock to the companies with high hopes of making money from this model.

Fairmoney Nigeria’s Fintech Startup Raised $12.5m in Series A Funding

Fintech just can’t stop raising money. The Firm launched in Nigeria last year with a local team and France-based engineering and product teams. Yesterday announced the raising of $12.5m, Led by Flourish, a venture of The Omidyar Group, the partners of DST Global, and existing seed investors Newfund, Speedinvest, and Le Studio VC.

Fairmoney is a microloan startup with a focus on the emerging market. Started as a mobile phone-based loan company, it has expanded to microloan to small businesses. Its goal with the new funding is to become a digital bank just like Kuda, which raised $1.6m seed last.

Back in May 2018, it raised $1.4m in seed and has gone on to grow to 200,000 customers.

The new funding will be used to scale up the engineering team and expand beyond Nigeria.

Big Question

Given that the engineering team is based in France, will the new funding help hire local devs and product team to help in further tailoring the product to the local markets they will be expanding to?

 

Breaking News: Nigeria’s online-only bank startup raised $1.6m Pre-seed

 Just when you think that Fintech-fever is over in Nigeria, out of nowhere comes Kuda, the fintech startup who prides itself as a bank without a single branch raised $1.6m in pre-seed. Founded just a year ago by Babs Ogundeyi, Kuda has racked up so much growth that investors decided to splash the cash on it.

What makes Kuda different from other Fintech Startups, in his world, Babs Ogundeyi said “Kuda is the first digital-only bank in Nigeria with a standalone license. We’re not a mobile wallet or simply a mobile app piggybacking on an existing bank, We have built our own full-stack banking software from scratch. We can also take deposits and connect directly to the switch,” Ogundeyi added, referring to Nigeria’s Central Switch ”

It’s amazing seeing freshly minted startup raise so much as pre-seed, I can imagine how out-of-the-roof the numbers must be. The funding was led by  Haresh Aswani , along with Ragnar Meitern.

Why does it matter

Many Fintech before it mostly piggybank on existing banks and exist just like wallet service but Kuda has been given a license and its strategy is to operate strictly like a bank. Sign up, verify your identity, get your bank account number and start banking.

It also has a relationship with 3 (GTbank, Access, and Zenith)of the top ten banks in Nigeria where you are able to walk, make deposit or withdrawal without charges. This essentially turns it into Nigeria’s bank with the widest reach. According to the story, the banks are not investors but partners. This is unlike other partnership we have seen banks in recent times where they own equity in startups where they have deep integration.

The startup plans to use the fund to scale up its team and execute more on it’s the strategy. With offices in Lagos, South Africa and London!

Jumia is looking to deal with fraud and loses, jumps into the ring with Paylater, RenMoney to start giving out loans

It’s no secret that Jumia is struggling to turn a profit; this was apparent during its last earnings call. Since its launch, it has burnt through more than a Billion dollars in a bid to dominate e-commerce in Africa.

JumiaPay, the payment arm of the company, which has been growing over the years, looks like a good candidate and channel for growth. During the earnings call, the CEO mentioned that it will be spun-off as an independent firm to enable it to take advantage of the growing Fintech sector across Africa. They recently posted on their website looking for a loan officer to join the payment team. This product will help give loan to the merchant in its marketplace to enable them to increase inventory and improve sales. The consequence of this is that they will have improved revenue in the coming quarters.

According to the job post;

“Our loan officer will assist in the development of Jumia Lending in Kenya by presenting our solution to our sellers. He/she will be helping our sellers to apply for a loan, and with the help of the loan officer will review the data collected and the applications. The loan officer will be part of the JumiaPay team in Kenya and work side by side with the loan officer,”

The candidate will work from Kenya, which has a more evolved Fintech than other areas in Africa. It will be a testbed for other Fintech products the company will launch in the nearest future.

What does this mean for the space?

Fintech is growing aggressively across Africa, Nigeria and Kenya are the hottest spots for the sector. From Paylater, to RenMoney, Branch and other loan platforms, the fight just got bigger. This product should be an easier sell than others, given that the company has live data about the customers’ sales numbers from the platform this should help them accurately predict revenue and the merchant’s ability to pay back.

Wallets Africa wants you to ditch your business bank account

 

Ever put together the cost of making payments from your corporate bank account?

Founded in 2016, Wallets Africa is a Nigerian fintech startup that is working to make banking in this digital age as seamless as possible.

It allows people to send money, receive money, and make payments using phone numbers around Africa. The company’s goal is to give its customers a unique and improved transaction experience.

Two days ago, on 2nd September, the company, the Co-Founder and CEO of the company, John Oke, took to his Twitter page to announce the launch of a new product that will further help the company achieve its goal. He said,

Over the past few months, we’ve been working hard to allow businesses enjoy modern internet banking just like our customers. I’m excited to announce the launch of Business Wallet Accounts on @walletsafrica. businesses.wallet.africa.”

“It’s the easiest way to manage bulk payouts, make expense payments and perform transfers via API. Startups that you love … already use their business @walletsafrica account to manage day to day business internet banking operations. Request access businesses.wallet.africa.”

In an interview with Venturehunt, the company disclosed that the name of the product is Wallets for Businesses.

What is the process of opening Wallets for Business?

To open a Wallets for Business account, you have to request access to the Wallets for Business website. Your business has to be registered by the Corporate Affairs Commission and have an RC number.

How is this different from normal banks?

Wallets For Business is really easy to set up and devoid of the typical bank charges that corporate customers are used to. This is mainly because Wallets Africa is not a bank, but a built relationship with banks to offer better experiences to our customers.

How are your charges different from the current bank charges?

All bank transfers on Wallets go for as low as N25 and if you’re sending to a Wallets account, the transaction is done for free.

How long will it take before this product is open to the public?

We will be open to the public soon but we’re currently running a closed beta where people can request for access to start using it.

Do you have a banking license, and will the businesses receive a bank account number?

We’re currently using Providus Bank and all businesses will receive a bank account number.

Can Wallets For Business be used to handle employee payments?

Yes, it can. It comes with the bulk transfers option that allows the user to transfer money in bulk by integrating with Google sheets. All you have to do is input the account details into a google sheet and you’re good to go.

Will there be a corporate expense ATM card?

Yes, there will. We’ve started testing.

Basically, it will allow businesses to manage bulk payouts, make expense payments, and make transfers.

Even more, it includes a feature that will allow companies to link their business account with Google Sheets and perform bulk transfers to bank accounts.

Mines.io Raised $13M to expand big-data for lending in emerging market

Mines.io uses big-data to help lending companies to identify the risk profile of their customers in Nigeria and other emerging markets. Starting a lending startup in Nigeria is almost as quick as launching a WordPress site, this is made largely possible by Mines.io and other payment infrastructure in the country.

Mines.io has raised 2 seed funds and a debt financing before now and has been able to expand it’s customer base across payment service provider, telco company and lending startups.

With offices in Lagos and San Fransisco, the company is founded by high-flying computer scientists; Ekechi Nwoka and Kunle Olukotun. The funding will help them expand to other emerging market is South East Asia and South America.

Nigerian TaxiTV raised $50k in seed funding

Ever been in an Uber or Taxify and while you are on our ride, you watch TV skits with ads at intervals? Yes, it’s powered by TaxiTV, it’s a digital advertising company helping clients reach upwardly mobile professionals using Ride hailing services.

Raising $50,000 from Beta.Ventures, Collins Onuegbu of Sasware, Sam Senbanjo of Neon Ventures and group of angels it will help the company ramp up its product, expand the fleets it deploys to and also grow its client base.

Currently, with over 200 cars, 10 brands and 20 SMEs, we hope to see them accelerate this in coming months. The sector seems really exciting, executing this will help them take control of the market and probably take on other outdoor digital advertising startups.

 

Devjobs.ng launches to provide one stop site for all developer jobs in Nigeria.

We received a press release today, from DevJobs.ng. We have been following the growth of tech and developers in the country and thought this is a welcome development.

We estimate that close to 50 thousand new developers will join the labour market by mid-2019 and a job discovery platform is just a way to go!

Full Press Release Below

Introducing DevJobs.ng; One stop location for all tech jobs

Today, 12th July 2018, Devjob.ng a Lagos, Nigeria based startup as launched! The goal of the site is to aggregate and disseminate developer jobs in Nigeria.

Why DevJobs

Since last year, we have witnessed a massive increase in young people learning how to code, attending tech meetups and also sharing their success stories. However, countless companies still find it hard hiring developers. Comes Devjobs, our goal is to help companies find developers out there and also help developers find interesting jobs in the country.

How it works

For companies, all you have to do is to sign up on the site, and post jobs easily. The site is launch with job posting for free but plans to charge a token for every job posted. The verified jobs will be sent daily to developers email and they can click to apply. The company has the freedom to review, shortlist and invite qualified candidates for an interview.

For developers, after sign up, they are required to set up their profile which contains their skill-set, work experience and upload their CV. Once they find an open that matches their skills, they are free to apply for the job. When a developer is accepted by a company, he gets an email for a follow-up interview to complete the hiring process.

To get started, log on to devjobs.ng and enjoy the benefit this brings.

LifeBank gets $200k in Seed funding

The Nigerian startups just raised $200k in seed funding to expand its service across Nigeria. Founded 2 years ago, LifeBank has been saving lives by making blood available on demand.

The health sector is the least disrupted in Nigeria and seeing the startup take this sector and thriving is a welcome development.

According to QZ

Since its launch, while servicing a sliver of the market which founder Temie Giwa-Tubosun believes exists, LifeBank has moved products valued at $360,000 and has earned revenues of nearly $100,000 from charging a fee for delivery. In total, using WHO-approved equipment, it has moved 9,000 pints of blood. The startup now plans to expand and start off operations in Abuja, Nigeria’s capital, and also in Kaduna, a state in Nigeria’s north.

We hope to see the startup do amazing things in the next 18 months.