Jack Dorsey, the co-founder of Twitter stepped down as the Twitter CEO only a few days ago, and a few days later announced a huge name change for Square. The company which is highly payment-focused will now be referred to as Block, which underlines Dorsey’s interest in the cryptocurrency scope.
Twitter Chief Technical Officer Parag Agrawal was called upon to take Dorsey’s place on the very popular social network, although Jack will remain on the Twitter board until at least the next shareholders’ meeting. There were speculations at the time of Dorsey’s resignation that he had prioritized Square over Twitter.
Jack Dorsey had been operating as the CEO of both Square and Twitter, and had been encouraged to step down from at least one of the companies.
Dorsey is a public supporter of bitcoin, as well as other cryptocurrencies. He recently announced a new business initiative for Square known as TBD5456697, in which the company will deliver decentralized financial services. After this, Jack’s decision to step down from Twitter makes sense given all the existing buzz around blockchain and cryptocurrency.
Square’s name change to Block is also quite logical, considering that the blockchain is the fundamental technology that will power some of Square – now Block’s – businesses. It’s not only the TBD, but also the crypto initiatives and Square payments.
In a press release, the company stated that the new name has a lot of associated meanings which include building blocks, a blockchain, neighbourhood blocks and their local businesses, communities coming together at block parties with music, a section of code and obstacles to overcome.
This name change is similar to what happened with Facebook and Meta, except this one does not come with any negative press. Facebook’s name change was announced by Mark Zuckerberg and others in the middle of a huge scandal concerning the ‘toxicity’ of the company.
However, just like Meta, Block will be a controlling entity over several other businesses. Block will oversee Square, Cash App, Tidal, and the new TBD54566975. There will be no organizational changes and the businesses will not lose their brands. Square’s payment services will still be offered, just like Facebook still exists as a social network.
African Startups Secured $4.69 Billion Funding In 2021 – African Investment Report
African Investment Report released by Briter Bridges showed that African Startups secured $4.69 billion in estimated funding in 2021, out of which $4.65 billion was disclosed and $300 million undisclosed (not comprehensive, based on data provided by investors to Briter Intelligence).
Dario Giuliani, director of Briter Bridges said, “As the world learns to integrate COVID-19 into daily routine, work is retrieving as usual and interest in harnessing the business potential in Africa proves to be stronger and more intentional than it’s been in the past.
“2021 was a year of recognition, where the newly-available resources and the increasing number of international investors shifting mandates to include Africa met hundreds of promising entrepreneurs to support”.
“Approaching $5 billion in known funding in 2021, especially after nearly twenty-four months since COVID-19 pandemic began is a clear sign that Africa is undergoing tangible changes and the increasing presence of local exits and returns is shaping the continent’s attractiveness”. He added.
The top 4 African countries where the startup funding was focused are, Nigeria, South Africa, Kenya and Egypt.
The report further revealed that financial technology companies captured the largest share of funding on the African continent, gulping 62 percent of the total funding. Breaking down the funding into sectors, Health and Biotech secured 8 percent of the funding, 7 percent to Logistics, 5 percent to Education, 4 percent to Cleantech, 4 percent to Agriculture, 3 percent to E-commerce, 3 percent to Mobility and 2 percent to Data and Analytics.
In 2021, 13 companies raised $100 million in a single round. Some of the companies are Opay, Chipper, Flutterwave, Andela, and others. The report also showed that debt financing companies captured 6 percent of total disclosed funding in 2021.
Africa’s startup Merger and Acquisition market also recorded significant growth in 2021. The African Investment Report showed that 33 acquisition was recorded in 2021 compared to 17 acquisition deals reported in 2020.
The report further revealed that a large sum of the fund disbursed in Africa’s market is from the United States and the United Kingdom. The United States accounts for 62.5 percent of the fund, 7.5 percent from the United Kingdom, 6 percent from South Africa, 4 percent from Canada and 20 percent from others.
The report stated, “the growing investment appetite towards Africa’s entrepreneurs has resulted in the rise of corporate venture funds and corporate innovation initiatives interested in harnessing the skills, networks and technologies developed by local companies in a variety of sectors”.
Mobile Payments in sub-Saharan Africa Are Predicted to Grow by Over 60% in the Next 5 Years
The total value of mobile money transactions in emerging markets is predicted to exceed $870 billion in 2026; this growth tendency can also be seen in sub-Saharan Africa, where mobile payments are expected to grow by over 60% in the next 5 years. Seen as one of prominent payment trends in emerging markets for 2022, the popularity of mobile payments is emphasizing the importance of Local Payment Methods, and could open up the African market to a number of global e-commerce opportunities.
Mobile payments as a Local Payment Method (LPM) appeared in the sub-Saharan region in the early 2000s with Safaricom, a Kenyan mobile network operator, offering one of the first mobile payment solutions. The importance of this LPM only grew with new players and more regional countries entering the space. While mobile payments were not automatically available to each sub-Saharan country, as some still lacked technical solutions, it has become a widely spread trend that continues appearing in more African countries.
Frank Breuss, CEO of Nikulipe, a Fintech company creating and connecting Local Payment Methods to access Emerging and Fast-Growing Markets, notes that this payment trend has grown popular due to the particular circumstances sub-Saharan Africa is in.
“More than half of the African population remains without a traditional bank account even today, so solutions like mobile payments are most convenient for the region,” explains Breuss. “Mobile phones are widely available across the region, making mobile money payments the primary way for Africans to pay for goods and services like groceries, food delivery or taxi rides, or even utility bills.”
Breuss continues, adding that mobile phones in Africa are used in a very different way than they are in the US or Europe; they are often not based on monthly subscription models, but rather balances are topped up by purchasing prepaid airtime credits, that can be purchased at thousands of shops or agent-kiosks even in the most rural areas.
“This allows people, even those without a bank account or a credit card, to buy phone credits not just to make calls, but also to top-up their phone to pay local merchants for goods and services—logistically, it’s the simplest and most convenient LPM to use. Knowing all of this, understanding why mobile payments are popular in this region can, in turn, open up more global e-commerce opportunities for both international merchants and African shoppers, looking to shop more globally.”
Since much of Africa’s population has limited access to financial services, the continent is regarded as one of the world’s most attractive banking opportunities for developing the existing financial industry and introducing new products to improve financial accessibility. After previously disregarding mobile money’s target market in favor of Africans with higher income, Africa’s traditional banks are, too, looking into entering telecommunications territory. This move by local banking institutions indicates that the mobile payments market will continue growing in the upcoming years.
While mobile payment penetration varies from one sub-Saharan African country to another, at the end of 2020, 495 million people were using mobile services, which represents 46% of the region’s population. It is predicted that by 2025 this number will reach 615 million—equivalent to 50% of the region’s population. This shows that Local Payment Methods will remain an important part of not only sub-Saharan Africa’s but also fast-growing and emerging markets e-commerce growth.
Nigerian Startup, Get It Done Now, Expands into Spain
Following the recent report that Nigerian startups are dominating the African tech scene, another Nigerian fintech startup has taken a large business step to expand into Spain.
Get It Done Now, a mobile fintech platform that provides users access to services, loans and insurance, is relatively new as it was founded in 2018 by Bode Bamgboye and Alberto Rodriguez. The startup also allows user to search for, book and pay for handymen.
The decision to expand into Spain did not come ordinarily, as it was a result of the very impressive growth which the company has experienced since it was founded. Rodriguez stated that from inception till date, the company has gathered over 5,000 users and has received loan requests going to the tune of $2 million. The company’s platform provides 120 services and has generated well over 5,000 transactions.
Another reason which backs the company’s decision to expand is the interest which it has received from investors. In the beginning, the startup was self-funded (it received no funding from investors) but has now so far been joined by four investors; three of them Nigerian and one from Europe. The company secured its most recent investment back in February 2021 but is already discussing a new funding round due to recognition of growth potential.
Bamgboye and Rodriguez met when they were both studying for an MBA at the IE Business School based in Madrid, Spain. Since then, their relationship grew and they decided to partner to establish a fintech platform aimed at the African population, helping them to obtain secure services.
Since Rodriguez hails from Spain, it is natural to assume that the selection of Spain was influenced by Rodriguez’s knowledge of his home market, which he could use to the company’s advantage. However, Rodriguez himself gave other reasons for the decision of Get It Done Now – which previously operated solely in Nigeria – to expand into Spain, saying that Spain (alongside France and Italy) is one of the most important European countries for African migrants.
According to him, this has helped the company to establish a base in Spain while also carrying out more fundraising.
Rodriguez praised the high growth potential of the company, stating that they received 500% more loan requests in 2021 than they did in 2020.
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