Much ado about food delivery

TGIF! ☀️

Moonshot, the widely acclaimed African tech event of the year, has come and gone, but the memories, the conversations, and the pictures will forever be cherished as mementos of the journey the African tech ecosystem is on.

Pulling a crowd of 4,000, featuring aces in the African tech ecosystem, from across the globe in the middle of a week? Yes, we take our flowers! We take every compliment to heart. A special shout-out to the incredible team that made it happen—including you! 

We discussed everything from climate and cleantech, creator economy, AI, venture capital dynamics in Africa, entering tech, and building companies that compete globally. These conversations will remain key reference points we’ll hold onto as we continue to build innovative solutions that consistently put Africa on the global map.

Thank you for making this event memorable. 

See you next year?

Much ado about food delivery

If you ask me, the most interesting panel at TechCabal's Moonshot was the panel on food delivery.

During the panel discussion, Kennedy Offor (head of business development at Chowdeck), Yinka Adewuyi (founder of GoLemon, an increasingly popular grocery delivery startup), and Guy Futi (founder of Orda, a food ordering software provider) spoke about the market opportunity in food delivery. They also spoke about sustainable business models that maximise revenue in this market.

Futi, who previously worked for Jumia Food Nigeria when the platform was processing a mere 300 orders daily, gained valuable insights while scaling it to 10,000. Hardened by those lessons, Futi now believes that software is the key to profitability. This conviction led him to found Orda, a software provider for restaurants, and a business unburdened by the decreasing purchasing power of consumers and the unpredictability and high cost of logistics necessary to deliver food door to door.

Offor, who has co-led Chowdeck to partner with thousands of restaurants across eight markets and to serve one million users, believes the key to profitability lies in speed and a symbiotic relationship with restaurants. Chowdeck has built a reputation for delivering food and groceries within 40 minutes, half the time it took predecessors like Jumia Food, Bolt Food, and OFood. The startup has also rapidly onboarded popular restaurants and claims to collaborate with them to increase their production capacity, expand to other locations and consequently, the number of orders on the platform. 

On the other hand, Yinka, the founder of GoLemon, established over a year ago, believes it's about prioritising the right elements. According to him, in the food delivery sector, there's a triangle from which businesses must choose only two of three factors to centre their business models around: speed, price, or quality. For his grocery business, he has chosen to de-emphasise speed and has found that focusing on price and quality offers a valuable proposition.

The company promises to deliver high-quality groceries at below-market prices, but customers must wait two days for their orders. This makes sense for its customers who typically order in bulk but don't need to use it instantly and can afford to wait a day or two for delivery. 

Only time will tell which models find profitability first.

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Open banking is ready for Nigeria, but the Central Bank of Nigeria (CBN) is taking its time to give the green light.

“All we need is CBN to blow the whistle to open banking,” Adedeji Olowe, the founder and CEO of Lendsqr, a lending platform said during a fireside chat with Uzoma Dozie, CEO of fintech startup Sparkle at Moonshot.

The regulator has been slow to adopt open banking in the financial ecosystem, three years after it first released the guidelines for open banking. 

Open banking lets banks securely share customer financial data with fintechs and other third-party providers (TPPs) through APIs allowing fintechs to build more personalised financial services. It can unlock growth in Nigeria's lending market, which has long been held back by insufficient data for credit assessment.

With open banking, customers win as they get personalised and cheaper financial services.

“Lenders want to know if they will get their money back. Open banking will ensure that they know who they are giving their money to,” Olowe said, arguing that pricing risk in credit due to little access to information about borrowers makes lending expensive.

Experts, during the panel discussion, said they expect the regulator to approve open banking by 2025.

African startups can build solutions that are scalable across the global market, investors who spoke at Moonshot by TechCabal on Thursday said. They need support in terms of funding, access to networks and market knowledge to achieve global ambitions.

In Africa, the idea of expansion is mostly centred around launching in one of the “Big 4” markets and scaling from there. In recent years, startups like TymeBank, Flutterwave, and Moove have set up shop in markets like Southeast Asia and North America. 

Penetrating foreign markets requires startups to have a clear idea of what it takes to succeed in different countries. This clear picture of the market comes from having investors who can back the founders' ambitions. 

As the African market becomes highly competitive and somehow saturated, foreign markets are becoming increasingly attractive. To reach their potential of penetrating these markets, it will take a combination of “patient capital,” deep knowledge of the markets and partnerships with significant synergies.