Following the news that Trump Media & Technology Group (TMTG) has entered into agreements to raise around $1 billion from a group of unidentified investors; Dr Lil Read, an Analyst in the Thematic Research Team at GlobalData, a leading data and analytics company, offers her view:
“Reaching the unicorn club used to be a notable figure of success. However, it must be said: Sorry Mr. Trump, but unicorns aren’t rare anymore. GlobalData figures show that, there were 826 unicorns — privately held companies that are valued at >$1 billion — as of the end of September 2021, and 751 of these were tech unicorns. The term ‘unicorn’ may be born from the rare, mythical creature, but unicorns are everywhere when it comes to business. Maybe we need a new measure of success.
“As for TMTG’s wish to stand up to the ‘tyranny’ of big tech with its TRUTH social media launch, the company has bitten off more than it can chew — as demonstrated by the way Twitter users were able to create ‘@donaldtrump’ and @mikepence’ accounts, exposing simple vulnerabilities. While these accounts were swiftly banned, it should highlight to the TRUTH Social team that building and maintaining a social media platform is not a simple task. Or, perhaps creating an entirely new platform is not the way to deal with misinformation.
“Whether or not TRUTH Social has sophisticated algorithms and teams of content moderators, misinformation and fake news will breed on the platform under the guise of free speech. The risk is that TRUTH Social will become an outpost for lies.”
Angel Investors Plans to List Africa-Focused SPAC Targeting Tech Startup
Angel Investors, Vishal Agarwal an investment banker, and Raj Kulasingam, a corporate lawyer have stated plans to list Africa-focused SPAC targeting only tech startups in the continent.
A report from Bloomberg said the two early-stage investors have been funding African startups since 2017, invested in over 50 startups, and so far made fivefold returns on their investment. They were also part of Acuity Ventures, an early-stage venture capital fund with stakes in Flutterwave Inc. and Paystack before the firms attained unicorn status.
Vishal and Raj saw the successful investment strategy of Swvl Inc. a Dubai-based ridesharing company merging with Queen’s Gambit Growth Capital, a blank-check company. The two investors believed that listing an African-focused SPAC will provide funds for startups needing capital to expand operations in the continent.
Vishal affirmed that investors have developed a keen interest in Africa, he said, “as there is more interest in Africa, we want to give founders a route to market. A SPAC gives acceleration to our founders and is overall a good thing for the ecosystem.”
The growing interest in African startups has been asserted by Briter Bridges in the 2021 African Investment Report, which released data showing that African startups secured $4.69 billion in estimated funding in 2021, where the tech companies dominated the space by gulping $2.9 billion or 62 percent of the total funding.
However, data from SPAC research revealed that less than 1 percent of the 600 New York-listed SPACs are African-focused.
The biggest investment success recorded by Vishal and raj was with Kuda Bank, the African challenger bank, where they invested $600,000 and exited with 14.5 fold gain or $8.7 million in 20 months. Kuda Bank, a unicorn startup is valued at $500 million and has so far raised $91.6 million in funding.
Vishal said, “when we do dealmaking, we are influenced not only by being able to get in at the right price, but being able to come out, We are very conscious about that, and it’s not always straightforward to come out.”
Dario Giuliani, director of Briter Bridges said, “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”.
Vishal and Raj just like every investor identified a growing economy in Africa and the increasing tech-savvy youth population, but also the lack of financial infrastructure. The duo plans to fill this gap by investing in about 20 African startups this year.
Japan, NITDA to Launch Incubation Scheme for Nigerian Startups
The Japanese International Cooperation Agency (JICA) working with Nigeria’s National Information Technology Development Agency (NITDA), is set to launch iHatch.
iHatch is a startup incubation scheme designed to expand the number of innovation-driven enterprises by Nigerian youths.
The scheme will include a 5-month free intensive incubation program where entrepreneurs’ business ideas are shaped and perfected, through a series of coaching, lectures, and boot camps, to generate viable and scalable business models.
The initiative launched through NITDA’s subsidiary, the National Centre for Artificial Intelligence and Robotics (NCAIR) will focus on developing Nigerian youths’ innovation, entrepreneurial skills and technological know-how.
According to the Head, Corporate Affairs and External Relations of NITDA, Mrs Hadiza Umar, iHatch’s incubation program will provide an opportunity “for startups that have innovative business ideas along with a prototype of their products or services”.
The participating startups, Umar said, will receive free offline and online interactive training from experienced coaches and mentors from over the world.
Other benefits would include free co-working space for the duration of the programme and investment opportunities.
In his remarks, the Director-General of NITDA, Malam Kashifu Inuwa Abdullahi said, “iHatch seeks to establish a programme that will accelerate the process of taking ideas to impact, hence providing the much-needed jobs for our teeming youths, and also nurturing that entrepreneurial spirit in them, which will catalyse the Nigerian digital economy to the next level.”
African Tech Scene Rakes in $2.9 Billion, Nigerian Startups Dominate
The technology space is growing to become a very necessary one, with the existence of the pandemic and with the rate at which the world is advancing. This is reflected in the revenue gathered, as tech startups in Africa alone made well over $2.9 billion in 2021.
Of the total income brought in by African tech startups, startups owned and managed by Nigerians brought in the most, with a whopping $1.7 billion (amounting to about 60%) of the total amount coming from Nigerian startups which are creating new products, services and platforms.
Africa is giving a very good account of itself in the tech scene, as a recent report by Maxime Bayen’s – a venture capitalist and business consultant – business database Africa report stated that Africa is currently home to seven different tech heavyweights, referred to as unicorns which boats of valuations surpassing $1 billion.
The United States of America has noticed the blossoming tech scene in Nigeria and is now starting to provide support for the fast-growing, lucrative sector. The United States Ambassador to Nigeria, Mary Berth Leonard at the 2021 Nigeria Tech Summit announced the intention of the US government to provide sufficient support for the tech scene in Nigeria.
The support to be provided from the United States will ensure that the country’s tech scene continues to grow and provide a favourable environment that will boost a sector which will kickstart more global businesses, create more job opportunities and ensure that the citizens live a more prosperous life.
Of the seven African tech “unicorns”, three are owned by Nigerians. These three are Opay, Flutterwave and Interswitch. Mary Berth Leonard lauded the fact that Nigeria owns three of Africa’s seven heavyweights, and went on to say that Nigeria has the potential to do a lot more in the tech scene but only with the proper support.
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