The State of AI in Africa Report launch was held on the 14th June at the Council for Scientific and Industrial Research (CSIR) Pretoria, South Africa and co-hosted by the World Economic Forum Centre for the 4IR South Africa and City of Tshwane. This 32-page report will appeal to analysts, enterprises, channel managers, governments, VCs or investors, NGOs, Embassies, trade missions and regional promotion agencies who are seeking deeper insights about the dynamics of this rapidly growing frontier tech market.
A key finding was just how cross cutting this technology is, with South Africa, Nigeria, Egypt and Kenya dominating this sector and AI impacting at least 120+ separate market segments across Africa. Privately owned SMMEs or Micro businesses make up 75% of this sector, 40% of which were founded in the last 5 years, showing the importance nation states need to place on supporting their local tech ecosystems.
It’s also attracting serious capital, with Tunisian AI start-up InstaDeep receiving $100m USD Series A funding earlier in 2022. The global AI market is also projected to grow from $387 Bn USD in 2022 to $1,394 Bn by 2029, exhibiting a CAGR of 20%. Bradshaw concluded, “It’s a positive sign that this technology and the growing regional AI start-up ecosystems can win big across Africa if these trends continue.”
A copy of the report can be obtained online here.
The AI Media Group is a South African based industry analysis, publishing & business events consultancy specializing in the 4IR or smart tech sector in Africa. They are curators of AI Expo Africa, the continent’s largest B2B/B2G Artificial Intelligence (AI) and Robotic Process Automation (RPA) trade show and publishers of Synapse, the first quarterly trade magazine charting Africa’s 4IR innovation journey. The group also runs AI TV which hosts discussions on trends in AI and 4IR technologies with local, regional and global thought leaders.
BII and African Guarantee Fund sign $75 million to fund African SMEs
British International Investment (BII), the UK’s development finance institution and impact investor, and African Guarantee Fund (AGF), a leading Pan African guarantee provider, have today announced their partnership of a $75 million re-guarantee agreement for Small and Medium Enterprises (SMEs) across Africa.
Through this facility, AGF and BII will provide credit guarantees to partner financial institutions for up to 75 per cent of the risk on SME loans, thereby increasing access to credit and reducing collateral requirements for these SMEs. As a result, the eight-year partnership is expected to facilitate up to $150 million in loans to 17,300 SMEs through partner financial institutions. This partnership will also encourage lending to SMEs that are women-owned or led as well as SMEs that are climate-focused.
SMEs in Africa continue to face significant challenges in accessing credit. Financial institutions are often constrained by regulatory requirements, limited appetite for a segment that is perceived to be higher risk, a lack of adequate collateral available from SMEs, knowledge gaps by the lenders and skill gaps demonstrated by SME borrowers.
Risk-sharing facilities are a key tool to support knowledge gaps by the lenders and in broadening their SME lending while mitigating risk and allowing them to build capabilities and track record in serving this market segment. As such, at least half of the overall facility will specifically target SMEs in the most fragile African economies to support promising businesses that can contribute to productive economic development over the long term.
UK Foreign Secretary, James Cleverly said: “British International Investment is already a force for good in Kenya, supporting jobs and livelihoods in Africa. This investment shows that when we go together, we can go far.”
Constant N’zi, Deputy Group Chief Executive Officer and Group Chief Risk Officer, African Guarantee Fund said, “Our partnership with British International Investment marks our first engagement with a UK Development Finance Institution and is the beginning of a journey that will positively impact African SMEs. Through this re-guarantee, our capacity to support lending institutions has been increased and we are certain of increased economic growth across the forty African countries wherein our guarantee products are utilized.”
Jo Fry, Investment Director & Head of Intermediated Credit, British International Investment (BII) added: “We are delighted to partner with African Guarantee Fund, a deeply impact-focused African institution, on this critical mission. This investment will increase access to finance for SMEs across the African continent, with a focus on those in the most challenging contexts. The partnership, which will also target funding at climate-focused businesses as well as SMEs owned and led by women, will contribute toward increasing inclusive and sustainable development for Africa. The programme represents BII’s commitment to working with best-in-class local institutions who are deeply embedded in the countries and communities that they serve.”
The joint facility contributes to the United Nations Sustainable Development Goal 8 on promoting inclusive and sustainable economic growth. The investment also qualifies under the 2X Challenge, an initiative by the development finance institutions (DFIs) of the G7 to mobilise capital to support increased economic empowerment for women in emerging economies.
Lipa Later Group Acquires Sky.Garden, One Of East Africa’s Leading E-Commerce Platforms
Lipa Later Group, has acquired Sky.Garden in a move that re-energizes our commitment to bridging the gap between the merchant and a customer with more empowerment between both parties, merchant and customer, stellar service, stellar tech, and revamped strategies that promise to disrupt the industry.
This acquisition of Sky.Garden by Lipa Later marks an important milestone in the group’s goal to offer innovative solutions that meet the needs of businesses and consumers. This move will enable Lipa Later to expand our customer base and solidify our presence in the market.
The e-commerce industry has exploded in recent years, providing businesses with the opportunity to reach customers quickly, cheaply, and more often. This is the driving force behind the decision to invest in Sky.Garden.
Speaking during the onboarding ceremony, Lipa Later CEO Eric Muli reiterated that the acquisition is timely as fintech continues to build an end-to-end avenue that connects merchants to customers and vice versa.
“Guided by our objective to empower African businesses and consumers to do more by enabling e-commerce, financial inclusion and shopping all on one centralized and fully integrated platform, our plan has always been to venture into e-commerce with unique value propositions for our consumers. Sky.Garden has done an incredible job and checks all those boxes. Lipa Later is no stranger to the e-commerce industry, having already established a strong presence in the online payment and finance sectors. This acquisition has greatly accelerated our plans of redefining the shopping experience for consumers,” said Lipa Later CEO Eric Muli.
Sky.Garden, which has raised north of $6,000,000 prior to this acquisition, will now be fully owned by Lipa Later Group and will continue to operate using its name.
With the acquisition of Sky.Garden, Lipa Later is now in a position to provide a comprehensive e-commerce solution to consumers, and with Sky.Garden’s established infrastructure and market presence, consumers will be able to purchase items from Sky Garden using any preferred payment method including Lipa Later’s buy now, pay later model which provides for a payment plan that is flexible and affordable through monthly instalments.
“Last month, we saw no other option than to file for insolvency,” Martin Majlund, founder of Sky.Garden, reiterated. “Today, I’m happy to see that Sky Garden will live on with new owners and new management. We built a great product over time, and I believe Lipa Later has the potential to take Sky Garden to the next level. Through this acquisition, the vision of Sky Garden will continue to live on while retaining jobs and businesses on our platform.”
This acquisition is a key step forward in our goal of becoming a leader in the e-commerce space. The acquisition of Sky.Garden by Lipa Later presents a great opportunity for both companies to benefit from each other’s strengths and further the growth of the e-commerce industry. With the combination of our expertise in financial services and Sky.Garden’s innovative e-commerce platform, the potential for growth is tremendous, and the impact this could have on the industry could be immense. Expansion plans are in place to see Sky.Garden integrated across other Lipa Later countries of operation which include Rwanda, Uganda and Nigeria.
VENCO secures $670,000 pre-seed funding
VENCO, a technology company that provides solutions to enhance living experiences in residential and commercial communities in Africa, has secured $670,000 in an oversubscribed pre-seed funding round to scale its all-in-one technology platform that manages collections, service charge administration, utilities vending, visitor access and other services associated with multi-unit property developments across Africa.
The pre-seed funding round was led by Zrosk Investment Management, with participation from other strategic investors including Voltron Capital, Decimal Point Ventures, Fast Forward Fund, Tayo Oviosu (CEO of Paga), Odun Eweniyi (COO of Piggyvest), Oo Nwoye, Desigan Chinniah, Dakar Network Angels and Viktoria Business Angel Network. Starting with Nigeria and Kenya, the new funding will support VENCO to build out its credit delivery infrastructure for rent and household spend, as well as its expansion into other cities and countries on the continent.
With growing urbanisation across Africa, multi-property developments have emerged as the preferred mode of delivering residential and commercial real estate. Of the 2.5 million households in Nigeria that earn more than $1,000 per month, 80 percent live in multi-property communities. 25 percent of their income is spent on rent and 50 percent is spent on other household needs, including consumables, utilities, internet data, cable TV and other services. This market for household spend represents a $22.5 billion opportunity in Nigeria, and $100 billion across Africa.
However, with the process of managing various aspects of life in these communal developments being largely manual and paper-based, there are many inefficiencies that negatively impact residents’ experience and profitability for property owners. For example, the default-rate on service charge collection for multi-property developments in Africa can be as high as 60 percent, which means that property managers are either out of pocket or forced to operate on insufficient funds. Even when payments are collected, the manual process means reconciliation is error-prone and theft is common.
Co-founded by Chude Osiegbu (CEO), Reagan Mbitiru (CTO) and Uzochukwu Alor (COO), VENCO automates collection and reconciliation of all dues and payments in communities resulting in improved receipts and better margins for property owners. For residents, self-service tools provided by VENCO make processes such as visitor control, issue and emergency management as well as utilities-vending more seamless. With residents able to build an economic profile based on their financial transactions on the VENCO platform, they can now access a range of embedded financial services, including insurance, credit facilitation for rent, service charges and household spend along with many other services.
VENCO has recorded over 200 percent growth over the last 9 months and is currently in 6 cities and more than 12,000 property units across Nigeria and Kenya. Since January 2022, it has processed more than $10 million in transaction value via its platform. The company is also partnering with ecommerce platforms to enable easier access to merchants within and around the community, energy companies to ensure reliable energy metering and collections, and other service providers to improve the overall experience in these communities.
According to Chude Osiegbu, CEO and co-founder of VENCO, “the manual nature of many processes associated with life in residential and commercial communities in Africa presents many issues that we believe technology can fix. Beyond this, we also want to leverage technology to deliver new services and experiences that will transform how people live in Africa’s growing cities and create better value for everyone across the board. Our goal is to deliver technology solutions that will enhance living experiences across the continent, and we are excited to have raised these funds to support that mission”
Samson Esemuede, Managing Director, and Chief Investment Officer at Zrosk Investment Management said “The team at VENCO are building a platform that allows for the validation of the GDP of the African household. Not only does a platform like VENCO allow for significant improvement in the experience of African residents, facility managers and property owners, it could potentially unlock at scale the sort of financial services the African consumer really needs. We view VENCO as both a SAAS and a financial inclusion play with a potential for strong multiplicative impact across the continent. We are excited to support the VENCO team in achieving their vision”.