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Africa Roundup: TLcom closes $71M fund, Jumo raises $55M, AWS partners with Safaricom

VC firm TLcom Capital closed its Tide Africa Fund at $71 million in February, and announced plans to invest in 12 startup over the next 18 months.

The group —  with offices in London, Lagos, and Nairobi — is looking for tech-enabled, revenue-driven ventures in Africa from seed-stage to Series B, according to TLcom Managing Partner Maurizio Caio.

He told TechCrunch the fund was somewhat agnostic on startup sectors, but was leaning toward infrastructure, logistics ventures vs. consumer finance companies.

On geographic scope, TLcom Capital will focus primarily on startups in Africa’s big-three tech hubs — Nigeria, Kenya,  South Africa — but is also eyeing rising markets, such as Ethiopia.

TLcom’s current Africa portfolio includes Nigerian trucking logistics venture Kobo360, Kenya’s Twiga Foods,  a B2B food supply-chain company and tech-talent accelerator Andela.

Both of these companies have gone on to expand in Africa and receive subsequent investment by U.S. investment bank, Goldman Sachs .

For those startups who wish to pitch to TLcom Capital, Caio encouraged founders to contact one of the fund’s partners and share a value proposition. “If it’s something we find vaguely interesting, we’ll make a decision,” he said.

One $50 million round wasn’t enough for South Africa’s Jumo, so the fintech firm raised another — $55 million — in February, backed by

Goldman Sachs led the Cape Town based company’s $52 million round back in 2018.

“This fresh investment comes from new and existing…investors including Goldman Sachs,  Odey Asset Management and LeapFrog Investments,” Jumo said in a statement —  though Goldman told TechCrunch its participation in this week’s round isn’t confirmed.

After the latest haul, Jumo has raised $146 million in capital, according to Crunchbase.

Founded in 2015, the venture offers a full tech stack for partners to build savings, lending, and insurance products for customers in emerging markets.

Jumo is active in six markets and plans to expand to two new countries in Africa (Nigeria and Ivory Coast) and two in Asia (Bangladesh and India).

The company’s products have disbursed over $1 billion loans and served over 15 million people and small businesses, according to Jumo data.

Jumo joins a growing list of African digital-finance startups raising big money from outside investors and expanding abroad. A $200 million investment by Visa in 2019 catapulted Nigerian payments firm Interswitch  to unicorn status, the same year the company launched its Verge card product on Discover’s global network.

Amazon Web Services  has entered a partnership with Safaricom — Kenya’s largest telco, ISP and mobile payment provider — in a collaboration that could spell competition between American cloud providers in Africa.

In a statement to TechCrunch,  the East African company framed the arrangement as a “strategic agreement” whereby Safaricom  will sell AWS services (primarily cloud) to its East Africa customer network.

Safaricom — whose products include the famed M-Pesa  mobile money product — will also become the first Advanced Consulting Partner for the AWS partner network in East Africa.

Partnering with Safaricom plugs AWS into the network of one East Africa’s most prominent digital companies.

Safaricom, led primarily by its M-Pesa mobile money product, holds remarkable dominance in Kenya, Africa’s 6th largest economy. M-Pesa has 20.5 million customers across a network of 176,000 agents and generates around one-fourth of Safaricom’s ≈ $2.2 billion annual revenues (2018).

safaricomM-Pesa has 80% of Kenya’s mobile money agent network, 82% of the country’s active mobile-money subscribers and transfers 80% of Kenya’s mobile-money transactions, per the latest sector statistics.

A number of Safaricom’s clients (including those it provides payments and internet services to) are companies, SMEs and startups.

The Safaricom-AWS partnership points to an emerging competition between American cloud service providers to scale in Africa by leveraging networks of local partners.

The most obvious rival to the AWS-Safaricom strategic agreement is the Microsoft -Liquid Telecom collaboration. Since 2017, MS has partnered with the Southern African digital infrastructure company to grow Microsoft’s AWS competitor product — Azure — and offer cloud services to the continent’s startups and established businesses.

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AWS partners with Kenya’s Safaricom on cloud and consulting services

Amazon Web Services has entered a partnership with Safaricom — Kenya’s largest telco, ISP and mobile payment provider — in a collaboration that could spell competition between American cloud providers in Africa.

In a statement to TechCrunch, the East African company framed the arrangement as a “strategic agreement” whereby Safaricom will sell AWS services (primarily cloud) to its East Africa customer network.

Safaricom — whose products include the famed M-Pesa mobile money product — will also become the first Advanced Consulting Partner for the AWS partner network in East Africa.

“The APN is…the program for technology…businesses who leverage AWS to build solutions and services for customers…and sell their AWS offerings by providing valuable business, technical, and marketing support,” Safaricom said.

“We chose to partner with AWS because it offers customers the broadest and deepest cloud platform…This agreement will allow us to accelerate our efforts to enable digital transformation in Kenya,” said Safaricom CEO Michael Joseph.

“Safaricom will be able to offer AWS services to East-African customers, allowing businesses of all sizes to quickly get started on AWS cloud,” the company statement continued.

For now, the information provided by Safaricom is a bit sparse on the why and how of the partnership between the American company and East African mobile, financial and ISP provider.

TechCrunch has an inquiry into Amazon and some additional questions posed to Safaricom, toward additional coverage.

An initial what-this-all-means take on the partnership points to an emerging competition between American cloud service providers to scale in Africa by leveraging networks of local partners.

The most obvious rival to the AWS-Safaricom strategic agreement is the Microsoft -Liquid Telecom collaboration. Since 2017, MS has partnered with the Southern African digital infrastructure company to grow Microsoft’s AWS competitor product — Azure — and offer cloud services to the continent’s startups and established businesses.

MS and Liquid Telecom have focused heavily on the continent’s young tech companies. “We believe startups will be key employers in Africa’s future economy. They’re also our future customers,” Liquid Telecom’s  Head of Innovation Partnerships Oswald Jumira told TechCrunch in 2018.

Amazon hasn’t gone fully live yet with e-commerce services in Africa, but it has aggressively positioned AWS and built a regional client list that includes startups — such as fintech venture Jumo — and large organizations, such Absa and Standard Bank.

Partnering with Safaricom plugs AWS into the network of one East Africa’s most prominent digital companies.

Safaricom, led primarily by its M-Pesa mobile money product, holds remarkable dominance in Kenya, Africa’s 6th largest economy. M-Pesa has 20.5 million customers across a network of 176,000 agents and generates around one-fourth ($531 million) of Safaricom’s ≈ $2.2 billion annual revenues (2018).

Compared to other players — such as Airtel  Money and Equitel Money — M-Pesa has 80% of Kenya’s mobile money agent network, 82% of the country’s active mobile-money subscribers and transfers 80% of Kenya’s mobile-money transactions, per the latest sector statistics.

A number of Safaricom’s clients (including those it provides payments and internet services to) are companies, SMEs and startups.

Extending AWS services to them will play out next to the building of Microsoft’s $100 million Africa Development Center, with an office in Nairobi, announced last year.

VC firm Oxx says SaaS startups should avoid high-risk growth models

Oxx, a European venture capital firm co-founded by Richard Anton and Mikael Johnsson, this month announced the closing of its debut fund of $133 million to back “Europe’s most promising SaaS companies” at Series A and beyond.

Launched in 2017 and headquartered in London and Stockholm, Oxx pitches itself as one of only a few European funds focused solely on SaaS, and says it will invest broadly across software applications and infrastructure, highlighting five key themes: “data convergence & refinery,” “future of work,” “financial services infrastructure,” “user empowerment” and “sustainable business.”

However, its standout USP is that the firm says it wants to be a more patient form of capital than investors who have a rigid Silicon Valley SaaS mindset, which, it says, often places growth ahead of building long-lasting businesses.

I caught up with Oxx’s co-founders to dig deeper into their thinking, both with regards to the firm’s remit and investment thesis, and to learn more about the pair’s criticism of the prevailing venture capital model they say often pushes SaaS companies to prioritize “grow at all costs.”

TechCrunch: Oxx is described as a B2B software investor investing in SaaS companies across Europe from Series A and beyond. Can you be more specific regarding the size of check you write and the types of companies, geographies, technologies and business models you are focusing on?

Richard Anton: We will lead funding rounds anywhere in the range $5-20 million in SaaS companies. Some themes we’re especially excited about include data convergence and the refining and usage of data (think applications of machine learning, for example), the future of work, financial services infrastructure, end-user empowerment and sustainable business.