A step back

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Funding to Ugandan startups surged from US$42 million in 2019 to a record US$70 million in 2022. The country's startups have raised a total of US$181 million in the past five years. How are Ugandan startups seizing funding opportunities?

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Leatherback CEO steps down

On Thursday, Leatherback announced that its cofounder and CEO Ibrahim Ibitade had stepped down. Ibitade led the company for five years.

Toni Campbell, a managing partner at Kinfolk Ventures, has been named interim CEO. Adedayo Amzat, Group Managing Director and CEO of Zedcrest Group, Leatherback’s lead investor, will join the company as a non-executive director.

“With this experienced leadership team, Leatherback is well-positioned to continue its journey as a top player in global financial services, making cross-border payments borderless and more accessible for all,” Leatherback wrote in a statement.

Ibitade’s resignation comes one year after he was declared wanted by Nigeria's Economic and Financial Crimes Commission (EFCC). Ibitade stated that the issue had been resolved following his cooperation.

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When mergers and acquisitions happen between companies with similar offerings, employees in overlapping positions often face job cuts.

On Monday, OmniRetail, a Nigerian-based B2B e-commerce startup recognised as the Financial Times’ fastest-growing African company, acquired Traction Apps, a payment provider and inventory management solution for small businesses in Nigeria .

One week before the acquisition was announced, Traction employees were told of an imminent layoff.

While the acquisition meant that the newly integrated entity could process over ₦1.8 trillion annually and facilitate loans worth ₦200 billion per year, some junior level and senior level traction employees bore the brunt. According to this report, most of the senior team members who played a key role in the growth of Traction will be retained.

Mayowa Alli and Dolapo Adejuyigbe, former co-founders of Traction, will join OmniRetail as Director of Technology for Payments and Director of Operations for Payments, respectively.

Traction will provide severance packages to affected employees in accordance with Nigerian labour laws. Traction will also offer affected employees career counselling and job placement services.

It is Day 1 at Sendstack, a two-year-old logistics startup founded by Nigerians Ifeoma Nwobu and Emeka Mba-Kalu.

The company recently shut down DLVR, its flagship last-mile delivery platform that had reportedly garnered 20,000 users, generated revenue of over $250,000, and was profitable.

The now-discontinued last-mile delivery app has been replaced with an entirely new product, CTRL, a software for corporates to manage their in-house or third-party logistics teams. It enables them to assign, route, track, validate, and process payments of deliveries from one dashboard. Now the company has to start from scratch to acquire customers for a new product.

The co-founders say that running DLVR, the last-mile delivery app, was a way to gain hands-on experience with the challenges of the logistics business that they will use to manage their logistics.

Nonetheless, it was a risky experiment for a startup that has only raised $300,000 since it was founded, Even more daunting is the nature of the target market of its new product—corporates where talks about installing new technology can take as long as six months to be concluded due to bureaucracy.

However, it could turn out to be a more rewarding bet for the startup. The B2B logistics market is pretty competitive. A platform like CTRL can level the playing field, reducing the barrier for entry to new players who do not have to code logistics management software from scratch enabling existing players to streamline their operations and save overhead cost.

If Sendstack moves quickly, it has a chance to gain the first-mover advantage. Although startups like Leta are offering similar services across Africa, this technology is not yet widespread in SendStack’s home country Nigeria. The pure software model is also easier to scale so expansion can be comparatively easier than its now-discontinued last-mile delivery model.

This week, Aya Data, a Ghana-based AI consultancy startup, raised $900,000 in a seed round led by 54Collective. The funding is a mix of debt and equity. (October 18)

Here are the other deals for the week:

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