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Nigerian Startups Attract $110m Investment

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startup - Investors King
  • Nigerian Startups Attract $110m Investment in First Half

Economic uncertainty and weak investment sentiment were not enough to deter investors from investing $110.9 million in 44 startups in Nigeria in the first half of the year.

A data compiled by Techpoint Africa showed Nigerian start-ups raised the funds in more than 50 rounds denominated in naira and dollar.

Crop2cash, an Agric-tech company raised $100,000 pre-seed round while another startup, Provider, an AI-powered food delivery firm, received $1000 pre-seed funds from Rowland Eno, an Angel investor, in January.

In February, only one startup raised fund. TeamApt, a Nigerian fintech start-up, received $5.5 million Series A fund from a number of investors led by Quantum Capital Partners, a Nigerian venture capital company.

CredPal from Y Combinator and Kudi, a digital payment start-up raised $150,000 and $5 million in March, respectively. Paylater owned by OneFi received $5 million debt facility from Lendable and MiddleTrust, an escrow service provider, also raised $5,000 pre-seed investment in March.

Jumia raised $56 million corporate round investment from MasterCard shortly before it went public in April, while Gokada raised $5.3 million in a Series A funding round. Several other startups received funds in the first half of the year.

Experts however advised that while the funds were good for the country and economy at large, it could disrupt the ownership structure of the businesses.

“Although, some people believe that these funds are Foreign Direct Investment and beneficial to the country, but that would have been a sound argument except for the fact that if you allow too much foreign interest into your economy, then you own nothing at the end of the day,” said Yele Okeremi, the President, Institute of Software Providers of Nigeria.

He explained that “FDI is good and should be encouraged but if we know what we are doing, it should be a fraction of the local investment. Start-ups are better off having the bulk of their capital from local investors than when it is from foreign investors.”

Tomi Davies, the President of the African Angel Business Network, said funding is still a challenge for seed stage startups as investors are focusing more on growth stage start-ups.

“While we are awash with funding for the growth of start-ups that have found product-market fit, there is still a shortage of funding for seed stage start-ups in incubation that are still trying to develop their minimum viable product. As they require smaller ticket size investments in addition to more mentoring and advisory, they are still lacking adequate attention in the commercial world,” he said.

In recent years, Nigerian tech startups have become one of the preferred investment destinations for investors, largely due to the huge internet penetration, 119.5 million internet subscribers, and rising number of financial technology companies amid a growing smartphone population.

The rush to seize a reasonable chunk of the Nigerian tech space is compelling investors, both locally and foreign, to take a risk on Nigeria given her huge potential and opportunities.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Telecommunications

Lagos Residents Frustrated by Rapid Data Drain, Call for NCC Action

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Telecommunications - Investors King

Lagos residents are expressing increasing frustration over what they describe as the rapid depletion of their data bundles.

Many subscribers are now calling on the Nigerian Communications Commission (NCC) to address their concerns as they suspect changes in billing practices by telecommunication providers.

Numerous subscribers have reported that their data does not last as long as it used to. A Lagos-based teacher, Mrs. Nafidah Zaynab, shared her experience, stating that a N2,000 data bundle, which previously lasted almost a month, now depletes within just a few days.

This sentiment is echoed by many, including Idowu Anabili, a trader who has reduced his data usage due to rising costs.

Abdullahi Yunus, who runs a café, noted a significant increase in his data expenses, spending between N70,000 and N100,000 monthly, up from N30,000. He attributes this spike to faster data consumption.

Telecom operators deny any wrongdoing, attributing the faster data consumption to increased usage by subscribers.

An anonymous official from MTN explained that the variety of activities performed on smartphones has increased, leading to faster data usage.

Airtel Nigeria’s spokesperson, Mr. Femi Adeniran, suggested that background apps and high-definition streaming contribute to the issue.

Despite complaints, operators assert they have not officially increased data prices. They emphasize that automatic app updates and other technical factors may be responsible for the perceived quick depletion.

Experts suggest that the challenging economic climate may be pressuring telecom companies to subtly reduce data value.

The industry has reported a 43% rise in operational costs, although no formal tariff hikes have been announced.

The NCC has clarified that it has not authorized any increase in data tariffs. The commission highlights technical factors like automatic video play and app updates as potential causes for quick data depletion.

In a bid to assist consumers, the NCC has advised turning on data saver modes and managing app updates to conserve data.

To combat the issue, Mobile Network Operators (MNOs) have initiated a campaign to educate consumers on optimizing their data usage.

They recommend practices such as disabling automatic updates and closing unused apps.

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Social Media

Meta Shuts Down 63,000 Nigerian Accounts in Sextortion Crackdown

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Facebook Meta

In a significant move to combat online crime, Meta Platforms Inc., the parent company of Facebook, Instagram, and WhatsApp, has removed 63,000 accounts in Nigeria linked to sextortion scams.

This sweeping action is part of Meta’s ongoing effort to address the growing threat of digital extortion on its platforms.

Unmasking the Scammers

The crackdown, which took place at the end of May, targeted accounts engaged in blackmail schemes.

These scammers posed as young women to coerce individuals into sharing intimate photos, which were then used to extort money from the victims.

The removal follows a Bloomberg Businessweek exposé highlighting the rise of such crimes, particularly affecting teenagers in the United States.

The Global Impact

The U.S. Federal Bureau of Investigation (FBI) has identified sextortion as one of the fastest-growing crimes targeting minors.

The schemes often lead to severe consequences, including the tragic suicides of more than two dozen teens.

In one high-profile case, the death of 17-year-old Jordan DeMay in Michigan led to the arrest of suspects traced back to Lagos, Nigeria.

The Role of the Yahoo Boys

Many of the dismantled accounts were linked to the “Yahoo Boys,” a notorious group known for orchestrating various online scams.

These individuals have been using social media to recruit and train new scammers, sharing blackmail scripts and fake account guides.

Meta’s Response

Meta’s spokesperson emphasized the company’s commitment to user safety, stating, “Financial sextortion is a horrific crime that can have devastating consequences.”

The company is continually improving its defenses and has reported offenders targeting minors to the National Center for Missing & Exploited Children.

To enhance protection, Meta has implemented stricter messaging settings for teen accounts and safety notices regarding sextortion.

They are also employing technology to blur potentially harmful images shared with minors.

Ongoing Efforts

Meta’s actions highlight the complex and evolving nature of online crime. The company has pledged to remain vigilant, adapting its strategies to counter new threats as they emerge.

“This is an adversarial space where criminals evolve to evade our defenses,” Meta noted.

Looking Forward

As digital platforms continue to grapple with issues of privacy and security, Meta’s recent actions demonstrate a proactive stance in safeguarding users.

By dismantling these networks, the company aims to reduce the prevalence of sextortion and foster a safer online environment for all.

The crackdown serves as a reminder of the need for continued vigilance and collaboration between tech companies and law enforcement to protect individuals from the harmful effects of digital exploitation.

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Fintech

Flutterwave Celebrates Inclusion in CNBC’s Top 250 Global Fintechs

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Flutterwave has been recognized as one of the Top 250 Fintech companies globally by CNBC and Statista.

Joining the ranks of industry giants like Ali Pay, Klarna, Piggyvest, and Mastercard, this accolade underscores Flutterwave’s impact on the financial technology sector.

This honor follows Flutterwave’s recent inclusion in Fast Company’s Most Innovative Companies list, highlighting the company’s pivotal role in transforming Africa’s payment landscape.

The recognition is a testament to Flutterwave’s dedication to innovation and excellence in providing seamless payment solutions across the continent.

Expressing gratitude, Flutterwave acknowledged its talented team, supportive board, reliable partners, and loyal customers for contributing to this success.

The company continues to drive progress in the fintech industry, reinforcing its commitment to enhancing financial accessibility and inclusion in Africa and beyond.

Flutterwave’s recognition on these prestigious lists marks a proud moment and a significant milestone in its journey, reflecting the company’s growing influence and leadership in the global fintech arena.

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