The post Mapping 30+ Microlending Startups In Africa & Measures Taken To Survive COVID-19 appeared first on WeeTracker.

The post Cross-Border Investing: The Most Active US-Based VCs in Africa appeared first on WeeTracker.

But in any case, Africa’s music streaming space has been growing steadily, and startups have since been fueling consumer interests in music subscription and consumption.

The growth and investment landscape

The concept of music streaming was introduced to Africa in 2013 when Spinlet – a Finnish music streaming platform that started in 2006 was acquired by two Nigerian investors in 2011 and later launched in Nigeria.

Since then, the music streaming industry has grown and is still growing as the last 5 years have witnessed the most activity when it comes to the establishment of music streaming platforms in Africa. More than 50% of these platforms were launched during that five-year period. 

Our team identified 25+ music streaming platforms (web and mobile) that operate in Africa. Of those 25+ music streaming startups, 72% were found to be homegrown while the remaining 28% are international startups that ventured into Africa.

These startups were further divided into 2 depending on their activity status.

1. Active – Startups operating in Africa and engaging on their social media accounts.
2. Shutdown – Platforms assumed inoperative based on their web/social media activity in the one last year or have announced ceasing of operations.

The last two years saw telecommunication companies venturing into this space. In 2018, Safaricom PLC launched Songa App in Kenya and South Africa’s MTN Group launched MusicTime which is currently available in other African countries besides South Africa, including Nigeria, Ghana, and Zambia, among others.

Given the well-documented numbers which suggest that Africans pay more for internet service than any other region even though a huge proportion of the continent’s 1.2 billion inhabitants live below the poverty line, music streaming is yet to be embraced by the mass market.

To get around this and boost user-ship, the telcos mentioned above are known to offer a no-data burn, thus making music accessible. The incentive serves as a way of retaining and acquiring new customers.

Even as bigger corporates in Africa venture into the music streaming industry, they have not been wholly successful in piloting music streaming platforms in Africa.

Based on our analysis, Africa’s music streaming sector hasn’t quite proved attractive to investors. In the last 3 years, music streaming startups have seen a total number of 4 investment deals with 3 disclosed deals amounting to USD 20 Mn.

This raises concern as to whether the lukewarm investor activity could be attributed to the notion that the industry is still quite young.

However, private equity (PE) investors such as Maison Capital and venture capitalists (VCs) like Seas Capital have shown significant interest in the African music streaming industry.

Also, in March this year, MePlaylist – an African music streaming platform founded by a Nigerian raised an undisclosed amount from Mathew Knowles, the father of global music icon, Beyoncé.

How they rake in revenues

By 2024, Africa’s music streaming revenues are expected to have hit a 12% annual growth that will see the market reach a volume of USD 822 Mn. Nigeria, the “home of Afro-beats“, is expected to record music streaming revenues of around USD 65 Mn by end of 2020, according to a report by PwC.

On the other hand, South Africa, the “home to technologies” – as it currently hosts some of the biggest players in music streaming including the likes of Spotify – revenues are expected to be at USD 35 Mn in 2020, as predicted by Statista.

The music streaming industry is known to be capital intensive. For startups to get extensive music catalogues, they are required to pay substantial annual licensing fees. Thus, streaming companies have to recoup their investment from subscription fees and, to some extent, third-party ads.

With global leading music streaming startups offering their services on the basis of subscriptions charged to users, there are legitimate concerns over how many Africans can spare a sum to pay for music, especially as the artists themselves are known to upload their music online for free. This has seen music streaming platforms opt for either the freemium or premium route — or even both. 

According to a survey done by Geopoll in 2019, Nigeria was leading with 46.67 % in terms of the music streaming users being premium subscribers and Kenya followed at 27.2 % while South Africa was at 25%.

Based on our internal research, 50% of Africa’s homegrown music streaming platforms require users to pay a subscription fee. Furthermore, 37.5 % of these platforms have adopted the freemium business model and 12.5% of them have incorporated both the freemium package and the premium package.

For instance, Ghaneely, a music streaming platform in Egypt, has adopted both the freemium and premium business model. Its freemium package has limited features and is supported by third-party advertising placements. But users can pay for the premium subscription that contains no ads and offers unlimited music downloads. 

The average premium subscription fee in Africa typically costs between USD 1.00 to USD 10.00 per month.

Majority of the music streaming platforms in Africa will prefer not to disclose their total paying users, although little is known about their users. Our team found the following;

The less-melodious side of music streaming

The music streaming industry has also experienced a fair share of shutdowns in the last 5 years.

For instance, Iroking, a music streaming platform based in Nigeria was officially shut down in 2018 after losing USD 2 Mn in 5 years. A statement made by Jason Njoku, founder of iROKOtv under which Iroking was created, revealed that negotiations around earnings and payments to Nigerian artists were the greatest challenge.

While Spotify, one of the biggest players in the music streaming game, took 13 years to gain 96 million paying users by 2018, Africa may take longer to grow its music streaming industry as not much is known about the number of paying users at the moment. Music streaming startups in Africa typically disclose only their total number of users.

Across Africa, the biggest challenge for music streaming startups seems to be piracy. While these platforms provide consumers access to a rich catalogue of good music, they also inadvertently become the prime targets of piracy and currently, Africa lacks a concrete framework to combat the menace.

That notwithstanding, with an estimated population of 420 million youths, as well as music streaming penetration that is expected to grow to up to 14.9% by 2024, Africa might yet become a promising market for music streaming startups.

Startup	Logo	Country	Year Established	Status
Boomplay Music		Nigeria	2015	Active
Ghaneely		Egypt	2016	Active
LasGidi Tunes		Nigeria	2011	Shutdown
Mdundo		Kenya	2012	Active
Meplaylist		Nigeria	2017	Active
Mkito		Tanzania	2014	Active
MusicTime		South Africa	2018	Active
My Muze		South Africa	2019	Active
Mziiki		South Africa	2014	Active
Nichestreem		South Africa	2014	Shutdown
Orin		Nigeria	2015	Active
Playfre		Nigeria	2019	Active
Simfy Africa		South Africa	2010	Active
Smubu		Kenya	2017	Active
Songa		Kenya	2018	Active
Spinlet		Nigeria	2011	Active
UduX		Nigeria	2018	Active
iRoking		Nigeria	2010	Shutdown
MTN Tidal		Uganda	2018	Active
Tigo Music		Tanzania	2015	Active

The data in this research piece comes from THE BASE, Africa’s leading market intelligence platform focused on private companies, VC, and PE space. Sign up for FREE today.

The post Successes & Shortcomings Of Music Streaming In Africa – Mapping 25+ Platforms. appeared first on WeeTracker.

The post eCommerce In Africa – An Analysis Of The Startup Investment Landscape appeared first on WeeTracker.

Accessing justice in Africa is still an issue that African countries are struggling with, the main questions being, is it the failure of the judicial systems put into place or is it the lack of knowledge among Africans on legal information?

In the last 5 years, 35+ innovative legal tech startups have come up, bringing about disruption in the legal sector and changing how things were previously done. These legal tech startups have brought about efficiency, affordable legal services and have also sped up the legal process. This might be the tipping point to Africa’s law practice as we’ve known it.

Below is a breakdown of legal tech startups divided into 5 categories. They include;

1. E-discovery – Startups that have made it possible for individuals to access justice or legal information through the use of text messages.
2. Online Legal Services – Digital platforms that provide legal services including legal advice, consultation, and Q&A forums.
3. Lawyers Marketplace – Digital platforms that connect clients with lawyers.
4. Legal Documentation – Startups that generate legal documents for their users online.
5. Legal Practice Management – Providers of Data Analytics and Systems used in the legal sector.

Based on our sample of 35 legal startups, as sourced from The Base, close to 40% of the legal startups were founded with the aim of providing Online Legal Services, 5% provide services in Legal Documentation, 26% focus on Legal Practice Management, 10% constitutes Lawyers’ Marketplace platforms, and 15% focus on E-discovery.

Currently, legal tech startups are disrupting the legal sector because of the low prices they offer their users and the use of digital format support systems which speed up the legal process. In the ecosystem, legal stakeholders can work together to enhance efficiency in facilitating access to justice and other forms of legal needs.

Even as technology is growing, issues on cybersecurity are still a concern in times where companies are struggling with data protection and privacy. Custos, which a technology company based in South Africa provides a solution to this by providing measures to avoid data leakages. Players looking to venture into the field will need to prioritize data protection and privacy given the sensitive nature of law practice.

The potential for legal tech in Africa is enabled by its ability to serve the needs of the larger masses better than traditional law practice. While larger African law firms have tended to be conservative in technology adoption, it may be time to rethink this approach as current service delivery standards grow. To attain a client-centric service delivery, technology will play a role in attaining this objective.

Below, we feature 35+ legal tech startups in Sub-Saharan Africa.

Country	Logos	Company	Vertical
Nigeria		Law Padi	Online Legal Services
Kenya		Uwakili	Online Legal Services
Benin		He Lawyer	Online Legal Services
South Africa		Creative Contracts	Online Legal Services
Nigeria		Gavel	Online Legal Services
Nigeria		Mylaw	Online Legal Services
South Africa		Lenoma Legal	Online Legal Services
Cameroon		Novatis Consulting	Online Legal Services
Burkina Faso		Faso Legal	Online Legal Services
Nigeria		LawStrive	Online Legal Services
South Africa		Legal Legends	Online Legal Services
Tunisia		Startup Factory	Online Legal Services
Tanzania		Sheria Kiganjani	Online Legal Services
Kenya		Haki App	Online Legal Services
Uganda		mSME Garage	Online Legal Services
Senegal		Sunulex	Online Legal Services
South Africa		JusDraft	Legal Practice Management
Sierra Leone		Crimesync	Legal Practice Management
Algeria		Legal Doctrine	Legal Practice Management
South Africa		Libryo	Legal Practice Management
South Africa		Custos	Legal Practice Management
Kenya		Sheria Soft	Legal Practice Management
South Africa		Baobab Connect	Legal Practice Management
Kenya		Btrack Global	Legal Practice Management
Uganda		JusticeBot	Legal Practice Management
Nigeria		DIY Law	Legal Documentation
Kenya		Lawyer Wangu	Legal Documentation
Morocco		Juris	Lawyers Marketplace
Zimbabwe		Lawbasket	Lawyers Marketplace
Kenya		Loyasoft	Lawyers Marketplace
Kenya		Wakili Mkononi	Lawyers Marketplace
South Africa		Citizen Justice Network	E-discovery
Malawi		Ufulu Wanga	E-discovery
Uganda		Nkola App	E-discovery
Uganda		Lawyers 4 Farmers	E-discovery
Uganda		Justice 2 People	E-discovery
Kenya		Mulika	E-discovery
South Africa		Updraft	Legal Practice Management

The data in this research piece comes from THE BASE, Africa’s leading market intelligence platform focused on private companies, VC and PE space. Sign up for FREE today

The post An Overview of LegalTech in Sub Saharan Africa- 35+ Startups Defining the Space appeared first on WeeTracker.

As of March 24th, 43 African countries have reported more than 800 cases of active infections. Sadly, in-country infections continue to increase even as governments enhance measures to control the spread. For instance, South Africa recently shut down 66% of its land borders, but infection rates are now six-folds, with Northern Cape being the last province out of the country’s nine, to report more cases of COVID-19. 

SOUTH AFRICA: CURRENT STATE & POLICY RESPONSE:

In a recent press release, the government notes that it anticipates 60 – 70 % of the population to be infected, and of those, 20% to be seriously ill, should all measures not be sufficient.

The country has been at the forefront of the fight against Covid-19, view South Africa’s first policy response, state of the Nation address – March 15, 2020.

With the newly imposed 21-day lockdown in the country, effective March 26, 2020, South Africa will have to deploy technology not only in its delivery of health services but also in facilitating the supply of basic commodities to its wider population. As is, retailers have had to impose rationed selling across their stores after a reported upsurge in the purchase of hygiene and food products.  

USING TECHNOLOGY IN KEY AREAS:

Alongside the outbreak of the disease is the deployment of a myriad of AI-powered technology that is being used. Technologies being tested and in use include Covid Symptom Tracker, a trial app that tracks symptoms, and TerraDrone & MicroMultiCopter, to track the spread and enforce control measures through drones. Other technologies are also taking center stage in bridging human interactions in the wake of the pandemic. Such include, health apps with chatbots, streamlined medical supply chains, self-delivery solutions such as JD.com among others. 

AN ECOSYSTEM OF TECHNOLOGY-DRIVEN SOLUTIONS:

To identify how technology could be used to combat the spread of CoronaVirus in South Africa,  WT Research compiled an ecosystem of applications and services that the masses and businesses in South Africa can use while they isolate. The ecosystem is focused on providing services on eight key segments.

These include Food & Delivery, Home Healthcare, Healthcare products, eCommerce, Logistics, Internet Service Provision, Fintech, Media & Entertainment, and On-demand services. 

These services and applications will complement the social distancing directive imposed by the government as well as the Work from Home initiative which has been made mandatory by most corporates across the country and globe. 

It helps that technological infrastructure is available in all provinces and their major cities.

Our analysis indicates that 75% of these applications and services are available nationwide with the exception of food delivery and on-demand home care services which account for the remaining 25%, and are predominantly available in Gauteng and Western Cape. The distribution of critical services, however, is proportionate as services such as fintech, eCommerce, logistics, and healthcare are available across the country. It is well-matched with 66% of internet penetration and usage in South Africa. These play a critical role in combating the spread of Covid-19.

We also identified a number of B2B providers targeting small to large businesses. A majority of the players are end-to-end eCommerce enablers and Fintech SaaS solution providers. Such include SMEasy in Fintech, eComplete in eCommerce, and Vula Mobile in Health tech. The current shock introduces a unique complexity to economic forecasting. However, in the near term, we see a trend where businesses integrate with cloud computing solutions to reach the market. In the middle and long term, businesses will prioritize the automation of lead processes and customer safeguarding measures.

Below, we map the South African provinces by service provision. WT Research mapped representative cities and towns to demonstrate the distribution.

Below, we feature 30+ technology-powered solutions that will aid combat the spread of COVID-19 in South Africa. 

Important links on South Africa’s Latest COVID19 Status

South Africa Situation Report

The National South African COVID-19 hotline

The data of this research piece comes from THE BASE, Africa’s leading market intelligence platform focused on private companies, VC and PE space. Sign up for FREE today

The post COVID-19 in South Africa – An Ecosystem of Tech-Driven Solutions to combat the spread appeared first on WeeTracker.

Summary of Formation

Founded in 2016, SA SME is an initiative between 50 JSE Listed firms, and the South African government, through the Public Investment Corporation (PIC). With a fund size of R 1.4 Billion (USD 88 Million), the fund’s mandate is to invest in innovation and technology, through Venture Capital and Private Equity funds, to support SME growth in Southern Africa. To date, the fund has announced capital deployment of more than R 900 Million, approximately (USD 70 Million) to fund managers. The remaining amount is expected to meet the Fund’s operating expenses over the next 10 years.

Management and Limited Partners

Out of its 55 shareholding companies, inclusive of corporates and government agencies, 45% are players in the financial services sector, 9% in food & agriculture, 7% in mining, real estate & infrastructure, with the remaining participants being players in the hospitality, manufacturing, and apparel industries. Government entities form 6% of the LPs and include the Compensation and the Unemployment Insurance Funds both of which stem from the department of labor. To fulfill its mandate, the fund has two teams reporting to the Board of Directors. These are the Investment Committee, overseen by Micheal Jordaan, and the Executive Management team, overseen by CEO, Ketso Gordhan. The management forms a 16 member team.

Strategy Teardown

SA SME Fund commits capital in three priority areas; VC/ Incubation, Growth Investments, and impact & support initiatives. With black-owned businesses still highly marginalized, the fund’s deployment strategy requires that fund managers invest 50% of capital received to black African SA owned businesses, 25% into other businesses owned by SA Indians and other people of color, and the remaining 25% into other businesses. Failure to adhere to this strategy may result in a 20% penalization of profits as a percentage of invested capital. This carried interest mechanism establishes best practices in structuring the LP/GP partnership as it improves transparency and governance, which help to align the interests of all parties involved.

Operationally, SA SME presents itself as an unfettered fund of funds. While 86% of its investable capital has been allocated to growth equity fund managers, SA SME has invested in debt capital. Its debt fund portfolios include A2Pay and Spartan SME Finance which provide short-term debt capital to SMEs. A2Pay is a trade financing company focussing on spaza shops and stokvels at the grass-root level. The firm, which also manufactures Point-of-Sale (PoS) hardware, provides up to USD 3300 in debt capital to these shops, in a bid to enhance their capacity. This initiative is in line with SA SME fund’s mandate to spur innovation in activities that directly contribute to sustainable job creation and growth of SMEs. Through this partnership, the fund hopes to finance 10,000 spaza shops over the next 10 years. 

In its industry building efforts, SA SME has partnered with a number of industry players whose activities it supports through funding and advisory services. These include SAVCA and Akro networks. In partnership with SAVCA and the First National Bank (FNB), the fund has developed a training program dubbed the Fund Managers Development Program (FMDP). The 12-month curriculum aims to support and increase the number of female and black-owned fund managers in investment management. In its partnership with Akro, the fund has developed a 20 -week accelerator program that utilizes a hands-on venture building approach. The cohorts constitute up to 8 startups to maximize face time and to get the scalable businesses, investment-ready and funded within 5 months.

Known Plans

With most of the funds having been formed in the year 2019, SA SME fund’s main play centers around monitoring the investment funds. One of the funds to keep an eye out for is the newly formed University Technology Fund (UTF), the first of its kind in Africa, which aims to commercialize technologies and business ideas that arise from universities.

Funds

In our analysis, we identified 10 fund managers through which the SA SME has invested. However, in a recent interaction with a member of the Executive management, SA SME discloses that there are plans to deploy further capital into 3 new funds that have been approved by the Investment Committee but awaiting legal sign off. Below, we summarize these fund managers’ industry focus and disclosed funding.

SA SME is a Rand denominated fund. The USD amounts are backdated to reflect historical rates at the time of fund formation.

Logo	Name	Fund Name	Industry Focus	Amount (USD)	Amount (ZAR)
	Knife Capital	KNF Ventures Fund	Technology & Innovation commercialization	1.4 Million	40 Million
	4Di Capital	4Di Capital Fund III	FinTech, InsureTech, HealthTech, EduTech, AgriTech	9 Million	125 Million
	SummerPlace	Summer Place Equity Fund I	Priority sector revenue generating SMEs	8.4 Million	125 Million
	Pape Fund Managers	PAPE Fund III	Agnostic SME	6.8 Million	100 Million
	Savant	Savant Ventures Fund	Technology & Innovation commercialization	8 Million	110 Million
	One Bio	One Bio Seed Investment Fund	Biotech	5.7 Million	75 Million
	Stocks & Strauss	University Technology Fund	University technologies	10.4 Million	150 Million
	Spartan SME Finance	Spartan Debt Fund	Agnostic SME Debt financing	7.2 Million	100 Million
	Masisizane Fund	Masisizane Francise Fund	Agnostic SME fInancng	3.4 Million	50 Million
	A2Pay	Spaza Shops & Stokvels	Agnostic	1.7 Million	25 Million

The data of this research piece comes from THEBASE, Africa’s leading market intelligence platform focussed on private companies, VC and PE space. Sign up for FREE today

The post Strategy TearDown: Decoding SA SME Fund and its Investments in the Southern Africa VC/PE Space appeared first on WeeTracker.

InsurTech StartUps in Africa

The post InsurTech Market Map – 40+ InsurTech Startups Disrupting the Insurance Scene in Africa appeared first on WeeTracker.