Getting to No

Good morning! ☀️

If you need something to reignite your relentless optimism, you should read this article by Kola Aina, a prominent African investor. 

He argues that despite the historic funding downturn, the African tech ecosystem presents the world with an opportunity not to be taken lightly.

A first-time fund manager raising a $50 million growth-stage fund

Getting people to give you money when you have limited experience is hard—just ask any founder raising an early-stage round how many NOs they got because of their lack of experience. If you flip the script, venture capitalists also face this classic chicken-and-egg dilemma: LPs want experience, but you need LPs to trust you before gaining that experience.

Speaking to *James, an entrepreneur and consultant raising a $50 million venture capital fund to address the shortage of growth-stage financing for African startups, I got the sense that solving this dilemma is expensive and difficult. This is mostly because there’s a need to educate high-net-worth individuals and institutional investors about the venture capital and tech landscape in Africa. 

Even before speaking to LPs, he had to identify a gap that his fund would fill. The gap he saw was in the “missing middle” between early-stage funding and growth-stage funding. While early-stage funding is relatively abundant, with numerous pre-seed and seed rounds, many African companies struggle to secure Series B funding and beyond, he said. James aims to fill this gap by leading and co-investing in deals, writing checks ranging from $2 million to $5 million.

Read Muktar’s conversation with James here.

Read Moniepoint’s Case Study on Funding Women

After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges.

One key goal for every business is to become oversubscribed. That is true for Elon Musk-owned satellite internet service provider Starlink in Kenya. Since its launch in the East African nation in July 2023, it has gained popularity among Kenyans seeking more reliable alternatives to local ISPs like Safaricom.

With faster speeds and relatively cheaper subscriptions, Starlink has grown to become Kenya’s tenth-largest ISP with over 8,000 subscribers. This figure is likely to increase.

That growing demand has strained its network capacity and it could no longer support additional customers. Starlink was forced to suspend new subscriptions in Kenya’s capital, Nairobi, and five neighbouring regions. Customers in those areas have been experiencing service disruptions.

“Starlink is working to increase internet capacity in dense urban areas in Africa as fast as possible,” said Elon Musk on X on Monday.

Rising fuel costs in Botswana and competition for rides with Bolt are hitting the pockets of drivers of the ride-hailing platform inDrive. Some drivers say their earnings have reduced by as much as half.

Drivers also pointed out their frustration with the commission inDrive introduced in February as another contributor to reduced earnings. The ride-hailing app introduced the commission after five years of commission-free operation.

On the commission, it says it has yet to receive any formal complaints from drivers although there are channels available to voice such concerns. Additionally, inDrive said like any other business, it had to introduce the commission in order to be sustainable.

inDrive also refutes the claim that the app has seen a decline in rides since the launch of Bolt and it says it has actually seen a surge in ride activity.

Despite having enjoyed a fair amount of popularity since 2019, over the past year, inDrive has been plagued by complaints from drivers, riders, and public transport operators. The introduction of the commission and its subsequent impact on earnings is just the fuel to the fire. 

With Bolt now in the foray, it has set the stage for an interesting competition landscape for ride-hailing in Botswana.

On October 29, Cikü Mugambi, CEO of Kobo360, a Nigerian logistics startup informed employees that she was resigning from her position. 

Her resignation comes one year after assuming the position. Mugambi had joined the seven-year old startup in 2021, from International Finance Corporation (IFC), one of Kobo360 ’s investors. She worked as chief of staff and head of investor relations. In 2023, Obi Ozor, Kobo360 co-founder and ex-CEO exited the startup to pursue a political career and appointed Mugambi his replacement.

On the call announcing her exit, Mugambi hinted that the difficulty of raising fresh funding for the startup, which had previously raised about $78 million in debt and equity by 2021, partly influenced her decision, according to sources close to the company.

Those sources say her exit is bittersweet because Mugambi is leaving the company in a better business position than when she joined. “The revenue from the Nigerian business is now able to pay for operations and break even.”