- Facebook Adds Wifi Hotspots to Sustain African Growth
Facebook Inc. has increased the number of its African users to 170 million and plans to expand further by adding wifi hotspots and laying fiber-optic cables in a bid to spread its reach outside of developed markets.
The figure is 42 percent higher than when the U.S. social network first opened an African office in 2015, Carolyn Everson, vice president of global marketing, said in an interview in Johannesburg on Tuesday. The rollout of wifi in Nigeria and Kenya will be done via partnerships with international wireless carriers such as Emirates Telecommunications Group Co., known as Etisalat, and closely held Surf, she said.
Facebook also announced the construction of 770 kilometers (478 miles) of fiber-optic cables in Uganda alongside Bharti Airtel Ltd. of India earlier this year.
“There is no magic bullet to provide the internet to people on the continent,” Everson said near the site of Facebook’s new, larger office in Johannesburg. “We are using everything available to us, including rolling out express wifi, building fiber, and testing our Aquila project,” she said, referring to unmanned solar-powered planes that beam down internet connectivity.
The plans are part of a long-term investment push by Facebook in Africa, the social network’s least developed market with less than 10 percent of its 1.86 billion users worldwide. The Menlo Park, California-based company is trying to take advantage of a young population, greater connectivity and the increasing availability and affordability of smartphones to access new customers. Other U.S. companies targeting African growth include Google Inc., which said last month it’s laying fiber-optic cable and easing access to cheaper Android phones.
“People are sensitive to data prices on the continent. Infrastructure is expensive and that is why we are looking for partners,” Everson said. “We are partnering with telecommunications infrastructure projects, and, as a result, bring down the price of data.”
The company’s instant-messaging service WhatsApp is proving “very popular” in Africa, she said, more so than Facebook Messenger.
Facebook’s attempt to connect rural Africans last year was scuppered by an exploding SpaceX rocket. While the loss was disappointing, Facebook is using a combination of land-based and satellite technologies to roll out wifi hotspots and is evaluating other options as they become available, the executive said.
Kuda Bank closes Another $55M in Series B Investment Round
Nigerian fintech startup, Kuda Bank, has raised $55 million in a Series B investment round at a valuation of $500 million. This comes after a recent Series A of $25 million announced by the company just a little over four months ago.
The latest round was co-led by existing investors Target Global and Valar Ventures, the firm co-founded and backed by PayPal co-founder, Peter Thiel. SBI Investment and other previous angels also participated.
Kuda plans to use the funds to build on its new services for Nigeria as well as prepare for a continental expansion. According to Co-founder and CEO Babs Ogundeyi, Kuda aims to build a new take on banking services for “every African on the planet.”
“We’ve been doing a lot of resource deployment has been in our operational entity, in Nigeria. But now we are doubling down on the expansion and the idea is to build a strong team for the expansion plans for Kuda,” Ogundeyi explained to TechCrunch in an interview. . “We still see Nigeria as an important market and don’t want to be distracted so don’t want to disrupt those operations too much. It’s a strong market and competitive. It’s one that we feel we need to have a stronghold on. So this funding is to invest in expansion and have more experience in the company with relation to expansion.”
“For Babs and Musty, it was always about building a pan-African bank, not just a Nigerian leader,” said Ricardo Schäfer, the partner at Target Global. “The prospect of banking over 1 billion people from day one really stood out for me at the beginning.”
Ogundeyi co-founded Kuda with the now CTO, Musty Mustapha, in the second half of 2019. The startup launched in Nigeria as a no-fees, digital-only bank with $1.6 million pre-seed funding. It has since witnessed significant growth.
As of November 2020, Kuda had 300,000 customers and was processing an average of $500 million worth of transactions per month.
By March this year, Kuda’s registered users had more than doubled to 650,000, after the startup processed $2.2 billion a month earlier. Presently, Kuda has 1.4 million people in its user base.
Beyond just basic financial services, Kuda now offers credit to its users by way of an overdraft allowance, which the company pre-qualifies the most active users for.
In the second quarter of the year, Kuda disbursed $20 million worth of credit to over 200,000 qualified users, with a 30-day repayment period.
According to Ogundeyi, Kuda has seen “minimal” default because of its approach. “We use all the data we have for a customer and allocate the overdraft proportion based on the customer’s activities, aiming for it not to be a burden to repay,” he said.
“Kuda is our first investment in Africa and our initial confidence in the team has been upheld by its rapid growth in the past four months,” said Andrew McCormack, a general partner at Valar Ventures. “With a youthful population eager to adopt digital financial services in the region, we believe that Kuda’s transformative effect on banking will scale across Africa and we’re proud to continue supporting them.”
Square To Acquire Australian Fintech Afterpay in $29B Deal
Jack Dorsey’s cryptocurrency-friendly digital payments firm Square is expanding competition with global payment giants like PayPal by acquiring a major Australian lending company.
Square announced Sunday that the firm has entered into a scheme implementation deed to acquire all of the issued shares in fintech company Afterpay in a $29 billion deal. The transaction is based on the closing price of the Square common share and is expected to be paid in all stock in the first quarter of 2022.
The acquisition enables Square to further accelerate its strategic plans for payment ecosystems as the company is looking to integrate Afterpay into its Seller and Cash App business units to enable a “buy now, pay later” (BNPL) service.
Also referred to as installment loans, BNPL transactions allow customers to pay a bill in small portions throughout a fixed period of time and are actively pioneered by global financial firms like PayPal, Mastercard, Klarna, Citi, and others.
According to the announcement, the integration will enable small businesses to offer BNPL at checkout, allowing Afterpay consumers to manage their installment payments directly in Cash App and discover BNPL offers directly within the app. The integration marks a new milestone for Square in meeting the growing consumer demand for shifting away from traditional credit.
Square co-founder and CEO Dorsey said that the acquisition will help the companies to deliver on their shared mission to make the financial system more accessible, fair and inclusive. “Together, we can better connect our Cash App and Seller ecosystems to deliver even more compelling products and services for merchants and consumers, putting the power back in their hands,” he noted.
As part of the transaction, Afterpay’s co-founders and senior executives will join Square and help lead Afterpay’s related merchant and consumer businesses within Square’s Seller and Cash App ecosystems. Square has also agreed to establish a secondary listing on the Australian Securities Exchange (ASX) to allow Afterpay shareholders to trade Square shares via CHESS depositary interests on the ASX.
The news comes amid Square announcing notable second-quarter earnings, reporting 200 percent growth in Bitcoin (BTC) revenue. Square’s Bitcoin services generated $55 million in gross profit, increasing 223 percent year-on-year, while Cash App generated a gross profit of $546 million, surging 94 percent.
MTN Nigeria Loses 7.6 Million Subscribers Amid Regulatory Restrictions
MTN Nigeria Communications Plc, Africa’s leading telecommunications giant, reported a 7.6 million decline in subscribers to 68.9 million in the first half of the year.
MTN Nigeria reported in its unaudited financial statement released on Friday and obtained by Investors King.
MTN Nigeria Key Highlights
• Mobile subscribers declined by 7.6 million to 68.9 million, impacted by the regulatory restrictions on new SIM sales and activations
• Active data users declined by approximately 52,000 to 32.5 million
• Service revenue was up by 24.1% to N790.3 billion
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 27.6% to N417.2 billion
• EBITDA margin improved by 1.4 percentage points (pp) to 52.7%
• Capital expenditure was up by 39.1% to N186.4 billion (up 50.6% to N114.5 billion excluding right of use [RoU] assets)
• Dividend per share of N4.55 kobo, up 30%.
Speaking on the results, MTN Nigeria CEO, Karl Toriola, said “In the first half of 2021, we made good progress strengthening the resilience of the business, managing the impact of the COVID-19 pandemic and enhancing support to our people, customers and other stakeholders. We extended our commitment to the Coalition Against Covid-19 (CACOVID) with an additional N3 billion contribution over a two-year period, half of which has already been paid.
This is in support of efforts to promote the health and security of Nigerians, as we navigate our way through the pandemic; and in line with our Y’ello Hope initiatives through which we provided support to our broad base of stakeholders to the value of approximately N25 billion in 2020.
Our progress towards achieving greater business resilience is reflected in the upgrade by Global Credit Ratings (GCR) of our national scale long-term issuer rating to AAA and affirmation of our national scale short-term rating of A1+ with a stable outlook. This puts MTN Nigeria on the highest possible GCR scale for short-term and long-term ratings, providing a solid platform for growth.
2021 marks the 20th anniversary of MTN’s presence in Nigeria. As we celebrate this milestone, we are pleased to announce that our Board of Directors has approved our participation in the Road Infrastructure Tax Credit (RITC) Scheme. This is in response to Government’s drive towards public-private partnerships in the rehabilitation of critical road infrastructure in Nigeria. We intend to participate in the restoration and refurbishment of the Enugu-Onitsha Expressway. Conversations in this regard have already commenced, and further announcements will be made in due course.
In line with our desire to plant deeper and more permanent roots in Nigeria, we have also initiated plans to commission a purpose-built, state of the art MTN Head Office, designed to act as a central hub for our network, a catalyst for creativity and innovation, and a showcase for the flexible working structures that are driving
efficiency gains in this new normal working environment. Aligned with our wider commitment to environmental sustainability, it will meet the highest global environmental standards, demonstrating the role of green technology in our future.
Following MTN Group’s stated intention to sell down up to 14% of its investment in MTN Nigeria, subject to market conditions over the medium-term, MTN Nigeria’s shareholders approved an equity shelf programme at the last Annual General Meeting.
This will facilitate a process to increase ownership of the Company by more Nigerian retail and institutional investors. Alongside this, we further localised our predominantly Nigerian management team with the appointment of Nigerians to two key senior positions (Chief Marketing Officer and Chief Information Officer) previously held by expatriates.
MTN Nigeria continues to invest in improved world class services and its network, accelerating the expansion of our 4G coverage and providing home broadband. As part of our rural connectivity programme, we plan to connect approximately 1,000 rural communities to our network this year with additional 2,000 communities in
We are delighted that these are translating into strong operational performance in line with the objectives of Ambition 2025. In the next 3 years, we will invest over N600 billion to expand broadband access across the country in support of Government’s Broadband Plan.
Operationally, our mobile subscribers closed H1 at 68.9 million, down 9.9% from December 2020. This was due to the regulatory restrictions on new SIM sales and activations, which was lifted on 19 April 2021. Although the initial run-rate of additions has been slower than usual due to new process requirements, we anticipate
growth to normalise in the short-term as more of our acquisition centres are certified for SIM registration.
Finally, our Board of Directors has approved an interim dividend of N4.55 kobo per share to be paid out of distributable net income. This represents a growth of 30% over N3.50 kobo per share paid in H1 2020.”
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