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David Buttress, Ex-Just Eat CEO invests in Egypt’s elmenus and joins its Board

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David Buttress, Ex-Just Eat CEO (Source: Thoburns)

Egypt’s fastest-growing online food ordering company has grown revenue by 300%, and plans an ambitious expansion strategy

elmenus, Egypt’s biggest food discovery and ordering platform announces an investment in the company from David Buttress, who has also joined the Board. David is the former CEO of global food-ordering firm, Just Eat.

David’s expertise in customer-centric service development will support elmenus as it formulates its ambitious growth strategy and explores expansion opportunities. In the next 18 months, elmenus plans to:

  • Scale its offering and expand its market share, with 4,000 new drivers to be recruited;
  • Enrich its social and personalized dish discovery experience; and
  • Empower restaurants to be stronger partners to elmenus

David has an extensive entrepreneurial and investment background having joined Just Eat in 2006 to launch its UK business. He led Just Eat in making global acquisitions and investments including the acquisition of MenuLog in Australia for $855 million and taking a majority stake in Brazil’s iFood. David also led Just Eat UK from a start-up to becoming Europe’s largest technology IPO, in just a decade. He is currently a Venture Partner at global venture capital firm, 83 North, and has several successful start-ups in his portfolio.

elmenus began as a comprehensive directory providing users with menus and information about restaurants, while growing a community of followers who shared their love of food via images and reviews. With a critical mass of users and restaurants, elmenus launched its online ordering in late 2018.

Since then, it has experienced rapid success in Egypt’s underserved online ordering market, growing revenue by 300%, achieving significant market share, all with less than $10 million in funding. This included a successful Series B round in 2020 – raising $8 million – led by UAE-based VC firm Global Ventures and Algebra Ventures.

“As we aim to become the go-to food app for all dining decisions, and a partner of choice to restaurants to help them solve their scaling challenges in the MENA region, I believe David’s insights and exceptional record will play a vital role in accelerating our growth and guiding elmenus in acquiring a significant share of the market. We are very excited to be working with an industry veteran like David. His belief in our vision is a grand testament to us.” said Amir Allam, CEO of elmenus.

David Buttress commented: “elmenus’ exponential growth this past year has been quite remarkable. It has been owning the food discovery approach, making it the stronger partner to restaurants as it provides them with more than just online ordering services.

“While elmenus witnessed a 3x growth in 2020 since delivery increased drastically in light of the COVID-19 challenges and more restaurants outsourced their delivering operations, the company is expected to grow 10x in 2021 as it upscales its product and restaurant offerings. It is an exciting time in the company’s evolution.”

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Is Bitcoin A Better Investment Than Gold?

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Over the past few years, gold has proved to be a safe haven commodity for investors. However, the recent pandemic seems to be a positive turning point for its fierce competitor bitcoin. the reputation of the digital asset as a safe commodity waxed stronger during the economic meltdown and the value and adoption have been on the rise since then. The result has been a greater interest in digital assets and more people choosing to buy bitcoin. The rise in the price and market capitalization is a strong indicator.

But does that mean that bitcoin is a better investment than gold? Let’s compare the two tradable assets to help you decide what could make the better investment between the two.

Comparing the two safe-haven assets

Safe-haven investments involve assets that maintain their value, increase in value, or outperform other assets during financial crises. For so long, gold has been perceived as the ultimate safe-haven asset because it has always outperformed other assets when financial markets crumble.

Although gold didn’t seem to meet investors’ expectations during the COVID-19 crisis, it still managed to outperform equities and some commodities.

While bitcoin’s performance at the beginning of the crisis was quite low, dropping from $9,700 to $4,891 in March 2020. It rebounded quite strongly about 6 months later in the last quarter of 2020, trading above $11,000 in October.

Bitcoin yielded a cumulative return of +44.64% between March 24, 2020, to May 6, 2020, surpassing every form of investment during the pandemic. Interestingly, the digital asset continued on a bull run to hit $20k in December and is currently trading at about $56,000.

If you were fortunate to buy bitcoin before the crisis, your portfolio would be up by approximately 447.3% today, making it the most lucrative form of investment to date.

Gold is stored in a vault and managed by a custodian. As a physical asset you can also store it in the bank or even in your home. However, storing gold in a vault offers flexibility and it’s much safer than storing the precious metal in your home. Bitcoin on the other hand requires a wallet to store the asset. You have to possess a bitcoin wallet before you buy BTC. You cannot keep bitcoin in a wallet the way you put your cash in a wallet because it is a digital asset. A bitcoin wallet is a software program that has a unique key. Once you purchase BTC and store it in the wallet, the private key guarantees your ownership of the asset and must be kept safe. Unlike in a vault where gold is managed by a custodian, you are fully in charge of your asset with your private keys in the case of bitcoin, and you can also make transactions at any point in time, peer-to-peer.

Which asset has shown value increase over time?

Gold has survived the test of time and is no doubt a good investment option. Its value has grown consistently over centuries and it is a trusted store of value. Bitcoin shares some similarities with gold and has even been dubbed gold 2.0 by many. Although it will always have unstable prices because of its volatile nature, it has, however, proved to be a good investment option with a consistent increase in value even during economic downturns when even gold has not quite performed to expectations.

Which has served longer?

Unlike bitcoin, gold has been around for centuries. It is an attractive, durable and multi-purpose resource that has stood the test of time. Aside from its good return on investment, it has other unique features. It is a scarce resource and thus has a limited supply. Bitcoin was developed in 2008. It is still a  relatively new technology, nonetheless, it has shown great potential since being created. Long term its prospects look bright as even countries like China are now looking to introduce their own versions of digital currencies.

Which can be used for other investments?

You can decide to use bitcoin to buy other cryptocurrencies. If you have bitcoin and you don’t wish to hold the asset anymore, you can buy other crypto assets directly with bitcoin. However, gold is not as flexible in that same regard and it’s an asset that is not easily liquid especially for the retail investor or trader.

Which is more safe and transparent?

The method of trading gold is old and trading the asset is quite cumbersome. Before buying gold, you need to weigh it, track, and test to confirm if the gold is pure. It is easy to deceive those who do not have machines that can detect whether the metal is really gold or counterfeit metal.

Bitcoin on the other hand is tough to alter or corrupt. It is cryptographically secure, easily trackable and cannot be double spent. Despite being powered by a decentralised and trustless network, bitcoin traders and investors ought to exercise extra caution since the world of cyber can be infested with cybercriminals and hackers.

Which of the two is more scarce?

Both bitcoin and gold are rare assets. However, unlike gold, bitcoin has a limited issuance with only 21 million to be mined into existence. All this was predetermined in the initial bitcoin code and cannot be altered. There is no accurate way to evaluate the amount of gold that can be mined. Even if we exhaust the gold on earth, gold can be mined in asteroids. Some companies are already looking into the mining of gold in space and on other planets. In future this could significantly affect the supply and demand mechanics in the gold markets.

Which of the two is more volatile?

For any investment option, you need to consider the history of the price. Bitcoin is a very volatile asset, its price was at its peak in 2017 before the fall to $3000 in the following year. Recently, the bullish run took bitcoin past the $41000 mark in January 2021 and it continues to be on the rise as the bull market rally continues almost unabated.

Gold is also volatile because the price of gold can be influenced by other market forces. Gold however, is the more stable of the two and the average and conservative investor would likely choose gold as the safer trade. But even with its high volatility, bitcoin has always shown a consistent and more rewarding price increase over time.

Which of the two can be converted to cash easily?

Gold and bitcoin are both liquid investment options and they can be converted to money anytime. Gold however is not as easily convertible to local currency compared to say bitcoin which can be exchanged peer-to-peer. Converting gold to local currency is time consuming and the process is riddled with regulatory constraints. To convert your digital currency to local currency, all you need is to use exchanges like Remitano where you can buy or sell bitcoin.

Conclusion

Any asset that is considered a good investment must also be a good store of value or be a hedge against the volatility of other assets. Bitcoin is stored digitally and thus eliminates the risks associated with physical stores of wealth such as gold. All you need to store your bitcoin is a cryptocurrency wallet. Bitcoin is portable, divisible and easily exchangeable and transferrable. It’s the ideal medium of exchange for cross-border transactions and it gives users complete privacy and at the same time full transparency since all transaction records are publicly available on an immutable blockchain or distributed ledger.

All things considered, it appears that bitcoin is inherently superior to gold in many ways even though like any other innovation, it comes with its own specific shortcomings which cannot be ignored if you want to consider investing in the digital asset. At the current rate, it is not beyond feasible that if the cryptocurrency market continues to increase in market cap, it may some day in the future rival gold in demand and adoption.

Written by Heath Muchena 

 

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Baker McKenzie outlines shifting patterns of infrastructure funding in Africa

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Baker McKenzie latest report – New Dynamics: Shifting Patterns in Africa’s Infrastructure Funding – shows the state of the African infrastructure market, and how the major global players’ approach infrastructure lending on the continent is changing. While the IJ Global data shows a decline in the value of infrastructure lending, it is expected that as economies recover, new types of financing will be unlocked.

The data

The report’s data shows that multilateral and bilateral lending into Africa has declined – with investment levels falling successively in 2019 and 2020 compared to peak levels seen after the financial crisis. In 2019, bilateral and multilateral lending into Africa amounted to USD 55 billion, which drops to USD 31 billion in 2020. Over the last six years, the decline is significant – deal values dropped from USD 100 billion in 2014 to USD 31 billion in 2020.

This slowdown in infrastructure investment was attributable to a number of factors, including the pandemic. Economic contraction has affected Nigeria and South Africa, meaning that the region’s largest economies have not been feeding in growth as in previous years. However, market fundamentals signal a region with underlying resilience and, as the global economy recovers, finance will be unlocked. There are already positive indicators of forthcoming investment. Commodity prices are rising and landmark deals are returning. For example, mining multinational Sibanye-Stillwater recently committed ZAR 6.3 billion to South African infrastructure projects.

The data also shows that deal tenor is contracting – from a high of 17 years in 2019 to 13 years in 2020. However, the long-term nature of infrastructure projects means that international partners have made lasting commitments to the region, which are unlikely to be abandoned despite immediate pressure on national finances.

China

Surprisingly, given the pandemic, the data shows that lending by Chinese banks into energy and infrastructure projects in Sub-Saharan Africa saw a small uplift in 2020, although deal values are well below their 2017 peak. In 2017, Chinese banks lent USD 11 billion to African infrastructure projects, which decreased to USD 4.5 billion in 2018, USD 2.8 billion in 2019 and USD 3.3 billion in 2020.

Simon Leung, Partner, Baker McKenzie Hong Kong, explains, “There has been a slowdown in the number of infrastructure deals from China. In the short-term, we expect to see more targeted lending – fewer projects of a higher quality using sophisticated structures – and new finance options, such as factoring, used to deploy Chinese capital into the region.”

International players

It is also clear that other international players have the region in their sights, with key political changes in the United States (US) and United Kingdom (UK) likely to see capital flow into Africa.

Michael Foundethakis, Partner and Global Head of Projects and Trade & Export Finance, Baker McKenzie Paris, notes, “The US hasn’t kept pace with Chinese lending into Africa. The recent change in administration is likely to renew focus on impact-building and financing strategic long-term projects in the region, but bankability and risk-sharing remain a priority for US lenders.”

Lodewyk Meyer, Partner, Baker McKenzie Johannesburg, notes further that, “The infrastructure funding gap is so large and of such strategic importance, it remains necessary to encourage international investment to fill it. African DFIs are very good at collaborating and I am encouraged by the actions of the new US administration, UK government and New Development Bank, in particular in their willingness to work with regional institutions in this regard. The UK is making a strong play for influence, investment and trade with Africa post-Brexit. Further to key summits held in 2020 and 2021, there are signs that finance will be redirected into Africa.”

Commercial banks

The report points to infrastructure gaps in energy provision, internet access and transportation that have resulted in an urgent imperative to identify and enable new sources of finance outside traditional lenders and international partners. Further to the expected return of multilateral and bilateral lending, there is room for evolution to bridge the funding-opportunity gap.

The report shows, however, that this vacuum is unlikely to be filled by commercial banks, noting that in 2020, just 84 projects were supported by commercial bank finance and their involvement in Development Finance Institution (DFI) and Export Credit Agency (ECA) deals continues on a downward trend.

Luka Lightfoot, Partner, Baker McKenzie London, explains, “Banks are likely to be focusing on managing liquidity, with lenders deploying capital selectively.”

DFIs and new financing solutions

Instead, local and regional banks, specialist infrastructure funds and private equity and debt are stepping in to collaborate with DFIs and access returns. This outlines the deepening DFI involvement in the infrastructure ecosystem at large, with DFIs increasingly anchoring the infrastructure ecosystem in Africa – serving a critical function for project finance as investment facilitator and a check on capital. This is because they can shoulder political risk and access government protections in a way that others can’t, enter markets others can’t and are uniquely capable of facilitating long-term lending.

The report explains how the amount of capital needed to fill the infrastructure gap is significant and DFIs can’t bridge it alone. Private equity, debt finance and specialist infrastructure funds are primed to enter the market, and multi-finance and blended solutions are expected to grow in popularity as a way to de-risk deals and support a broader ecosystem of lenders.

Lightfoot comments, “We expect to see an increase in non-bank activity in Africa in future as a result of new credit mitigation products come to market. We have seen an increase in appetite from established market participants, such as development banks, to create products that are not tied to existing arrangements that may have limited the type of finance available.”

A new era

Lamyaa GadelhakPartner and Co-head of Banking, Finance and Projects at Helmy, Hamza & Partners, Baker McKenzie Cairo,adds, “The pandemic represents the end of an era and the start of a new one. There will be a re-prioritization of funds and strategy through this lens. I expect to see more investments in the healthcare industry and connected infrastructure, as well as water related projects, to be top priority. We should also consider the impact of other factors aside from the pandemic. For instance, the African Continental Free Trade Agreement and what it needs to translate into increased cross-regional trends. I would expect development of transportation and logistics infrastructure focused projects to enable the acceleration of on-ground execution of intra-African trade.”

Emeka Chinwuba, Partner, Baker McKenzie New York, and Banking, Finance & Major Projects Group member, concludes, “Last year was a relatively difficult year across jurisdictions and for investors – with considerable uncertainty and change in the ways in which we do business. Shutdowns had a depressant effect on the infrastructure market, as deals in the pipeline were delayed and projects halted as a result of COVID-19. Full vaccination in Africa is still quite a long way off comparatively, so we can’t expect a full and fast return to normal activity. But we’ve reached the bottom, and the only way is up.”

Article by Baker McKenzie

 

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Cairo-Based Grocery Delivery Startup, Appetito Raises $450k Seed Investment

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Appetito truck and press release (Source: Shehab Mohamed) 

Appetito, a Cairo-based grocery startup, has announced a raise of $450k seed round of financing. The Startup operates through dark stores model, where products are sourced from manufacturers, stored in mini fulfilment centres then delivered to household customers. Established in March 2020, the company started with a wide range of private label products serving all areas of Cairo, Giza, and Alexandria with next day & pre-scheduled deliveries.

Recently, the company expanded its product portfolio to include more than 1000 SKUs from well-known consumer brands and entered the hyper convenience race by offering its customers less than 60-minute delivery in selected areas.

The round was raised by a group of Saudi Angel investors led by Ahmed Al Alola, an early-stage investor who was one of the early backers of Nana and Sary, alongside with Afropreneurs Fund, an African early-stage technology fund that has previously backed top startups such as Andela, Flutterwave and Trella, in addition to the participation of Jedar Capital an emerging VC focusing on early stage start-ups in the Middle East, Africa & Emerging Asia.

Speaking on the raise, Appetito Founder and CEO Shehab Mokhtar says: “We’re proud of what we have achieved in just a few months from our launch. We’re privileged to have such prominent investors backing us. With their support and the team, we’re building, I’m confident we will be in a leading position in the global race of grocery delivery.”.

Ahmed Al Alola commented on the round “Observing the radical change in consumer’s behaviour post-COVID-19, the grocery delivery market is expanding rapidly in the region. I believe Appetito – with its stellar team – is well positioned to lead that segment and capture the market by delivering superior experience compared to what is currently available in most of the African space.

On his part, Idris Bello, Managing Partner, Afropreneurs Fund said ” Our investment into Appetito’s seed round follows on our proven thesis of investing in strong founders with unique local insights and a bias towards execution. We are excited by what Shehab and his team have achieved so far, and we are very bullish on the Egyptian early-stage ecosystem.”

Sherif Nessim, Founder and Managing Director of Jedar Capital said “We are excited to be part of Appetito’s journey in Egypt and MENA region. We have been watching Appetito’s execution and the team’s growth focused approach with very limited resources early on, this was a clear message to us on how resilient and focused they are. Appetito is best suited for growth with the digital transformation happening in Egypt where online commerce growth is skyrocketing and saw a huge leap with covid, more and more customers now are adopting online grocery shopping as their standard now. We believe that Appetito’s model focusing on dark stores rather than aggregating from grocery retail stores will add value and differentiation in the market and play a pivotal role in terms of operational efficiency and gross margin contribution. We look forward to supporting them with their expansion and growth plans in Egypt and beyond.”.

 

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