🛋️ Africa's investment slowdown – correction or crisis?

Opening up this week's edition, we're diving into how African startups are adapting to investors' changing priorities. These shifts could ultimately breed more resilient, formidable businesses on the continent.

I'll also be unpacking trends signaling that this is more a short-term course correction than an existential crisis. Staying optimistic, there are bright spots amidst the challenges.

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🛋️ Africa's investment slowdown – correction or crisis?

After years of slow and steady progress, the African tech scene really took off in 2021-2022, with over $18 billion in announced funding.

But now, things have cooled off a bit. Deal volumes in 2023 are down 21% compared to last year, though they're still up 11% from the pre-pandemic days.

This slowdown isn't necessarily a crisis, though. It's more of a necessary correction. Investors are getting a little more cautious and focusing on fundamentals and long-term sustainability rather than just pouring money into whatever's shiny and new.

That means African founders will need to work a bit harder to attract and retain capital. So we can expect more healthy competition and diversification among Africa's startups.

Background

• African ecosystems showed a sudden increase in funding after COVID (2021-2022), raising $18 billion in deals after years of steady growth.
• But growth slowed in 2023 due to less global venture investment, worries about high valuations, and more scrutiny from investors.
• Deal volume in 2023 fell by 21% from 2022 but stayed 11% higher than pre-COVID levels in 2019.
• Despite the overall slowdown, early-stage investment activity remained high, showing that investors are still interested in emerging opportunities.

Today

• Fintech remains the top funded sector, but diversification is growing into areas like mobility, health, biotech, and cleantech, suggesting a maturing ecosystem.
• This diversification creates new opportunities for innovation and makes the African market more appealing to investors.
• Most investments are concentrated in a few main markets: Kenya, Egypt, Nigeria, and South Africa.
• This shows the need for more balanced growth across Africa to fully develop its entrepreneurial potential.
• Regional integration, supportive government policies, and developing secondary hubs could help achieve this balance.

What's Next

• The 2023 slowdown will put pressure on startups to focus on profitability and scalable business models.
• African startups can benefit greatly from partnerships with global companies, development finance institutions, and international investors. 
• Such partnerships can share knowledge, transfer technology, and open new markets. This will help African startups become more competitive and grow globally at a faster pace.
• Investors are getting more careful and focusing on basics, but they still believe in the long-term potential of African innovation.

How will African startups cope with the shift in investors' priorities towards profitability and sustainable business models?

🟠 Dubai's Fuse fintech secures DIFC licence to expand digital remittances in the UAE.

🟠 Qatar's digital currency pilot phase will run until October 2024, focusing on issuing and settling securities with participating banks.

🟠 du Pay partners with Visa to introduce prepaid cards in the UAE through its app, and expand digital payment options.

🟠 Doha Bank and Mastercard partner to boost the bank’s customer service and improving payment solutions in Qatar.

🟠 Dash Solutions partners with Visa to offer real-time payments to cards, bank accounts and digital wallets,through Visa Direct.

🟠 iOS 18 will allow Apple Pay on non-Safari desktop browsers like Chrome and Firefox by scanning a code, expanding Apple Pay’s reach beyond Safari.

🟠 Google Ads will phase out card payments for high-spending advertisers by July 31, requiring bank-based payment options to avoid account suspension.

🟠Paytiko, the payment management solutions provider, expanded to Dubai, to improve service for UAE merchants and strengthen GCC presence.

🟠 Ozone API and Tuum partner to help Tuum’s customers meet open banking regulations and advance open finance worldwide.

🟠 The global open banking market is expected to reach USD 135.17 billion by 2030, growing at a CAGR of 27.4% from 2024 to 2030.

🟠 Circle expands web3 services to support Solana blockchain by improving tools for developers with programmable wallets and gas station features.

🟠 TON blockchain's rise in popularity pushed by Telegram's user base and web 3 clicker games like Hamster Kombat and Notcoin.

🟠 Apple and Meta are expected to face charges for violating the EU’s Digital law regarding their market dominance.

🟠 Ripple and Archax partner to allow financial institutions to tokenize real-world assets on the XRP Ledger, aiming to bring millions of dollars of assets onto the blockchain over the next year.

🟠 Solana Pay plugin expands on Shopify, now accepting 100+ cryptocurrencies.

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🟠 HSBC Egypt plans to launch a $31.5 million fund to invest in fintech SMEs in Egypt.

🟠 UAE fintech NOW Money raises $4 million to scale operations and improve its P2P remittance technology.

🟠 UAE hospitality platform Qstay raises $4.6 million to speed up growth and upgrade its virtual hotel brand.

🟠 UAE’s Polynome Group announces a $100 million fund to invest in AI and robotics startups.

🟠 Orisdi, an Iraq-based e-commerce platform, secures a six-figure bridge round from investors including Al Sharqiya TV Group. This funding will help strengthen its business development efforts.

Generative AI in payments: What are the potential benefits and challenges for financial institutions using generative AI in payments operations? This report suggests that AI helps in developing successful products and services by identifying unmet or under-served customer needs. Also, It will speed up the process of manual tasks and make it more accurate. However, we must carefully consider transparency, fairness, security, and reliability when implementing generative AI. Click here to read the full report.

Now, a quick break for your wellness. Chief Wellness Officer at FAB Diego Carrete is on a mission to help executives get fit, increase their energy, and live longer.

Today, he explains how busy executives can keep their diet while dealing with a tough work life.

Hello there, 

Many people think they can eat whatever they want after a diet and keep the results. But that's not true. 

When you've lost weight by dieting, your body wants to store fat again. Your fat cells are starving. The key is to slowly go back to eating more calories after a diet. Here's how:

Reverse dieting is a personalized approach. It does not have a specific length since it depends on the time you spent dieting.

You gradually increase your daily calorie intake by 50–150 calories per week until you've reached your pre-diet calorie intake. 

Start by deciding whether to adopt a conservative or more aggressive strategy: 

• A conservative approach involves slower calorie increases (around 5% weekly), aiding in weight maintenance and digestive comfort. 

• A more aggressive approach involves an immediate increase (around 15%) followed by weekly increments of 5%. 

Remember, your reverse diet's specifics depend on your starting point, approach, and goal intake. Rapid calorie increases (e.g. 15–20%) may be preferred by some, while careful monitoring of portion sizes can help prevent excessive weight gain.

Helpful? See you next week, where we'll talk about how to stay in shape even if you spend your day glued to a desk. 

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