Categories
Series V

For the Unbanked.

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There are 2 billion people in the world without access to a bank account, including 41.6% of the adult population of Nigeria adult population. These people are technically termed the “unbanked” and they are a source of untapped market in especially emerging markets.

We cannot examine the unbanked without talking about financial inclusion. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs — transactions, payments, savings, credit and insurance — delivered in a responsible and sustainable way. Financial inclusion is how we bank the unbanked.

The unbanked are financially excluded from being able to have access to certain good and services and this limits this specific part of the population from being true consumers. The path from being unbanked (financial excluded to being banked (financial included) turns citizens into full consumers)

Digital finance has the potential to provide access to financial services for 1.6 billion people in emerging economies. With this in mind, delivering financial services through technological innovations, including via mobile money, can be a catalyst to facilitate the entry of millions of previously unbanked people into the formal financial sector.

Digital finance can boost annual GDP of emerging economies by $3.7trillion by 2025. Likewise, raised productivity of financial and non-financial business as a result of digital payments could be a major source of projected increase by decreasing the unbanked population.

The FinTech sector is experiencing explosive growth in Africa but African banks have been slow to adapt to this change. Thankfully, the outlook for mobile banking remains positive because the rapid spread of mobile phones is the game changer that makes financial inclusion possible.

What is it going to take for the widespread adoption and use of digital finance especially by those at the base of the economic pyramid?

First is the creation of a widespread digital infrastructure; across the board connectivity, powerful digital payments framework and a well-disseminated personal identification system. *looking at you NIMC*

Next is a strong agent network; an established distribution network, such as post offices or retail chains, or be built from independent, small-scale traders and other retailers. Agent networks that have been built, incentivised, and managed effectively. Agents that meet the customers where they are.

Third is an effective financial services market; Policy objectives will play an increasingly important role, as the scope of mobile money regulation broadens. Regulation and policies that promote interoperability and interconnectivity will be critical to the success of digital financial inclusion. Also, there needs to be synergy between banks and Telcos not competition. For instance, M-Shwari through the strategic partnership between Commercial Bank of Africa (CBA) and Safaricom has seen success in Kenya.

Last is digital products that offer true advantage in cost and utility for the people that use them.

It is difficult to say what the game changer will be, because of differences in market and regulations. Also, financial inclusion is comparable to a jigsaw puzzle. The various pieces have to be present to complete the jigsaw.

There is no one set way to approach the challenges or assemble the pieces. What’s certain is that the opportunity is colossal.

Focusing on this market and the impact it is projected to have in the Nigerian economy, we have invested in companies like Paystack and Payconnect and are on the lookout for companies using technology to design and deliver financial services. If you are someone/know someone, talk to us.


Portfolio News

  • Thrive Agric (VP C2) and Kudi.ai (VP portfolio) are a part of the first class of Google Launchpad Accelerator Africa. Details here
  • Paystack just introduced a new feature; merchants can now use Paystack without a corporate bank account or a CAC. More announcements from them here
  • Jalo (VP C1) have just launched their Marketplace. The Marketplace allows users to find and shop from retailers around them and get their orders delivered the same day. Users can shop for anything from, groceries, to food, to consumer electronics and more. Marketplace is currently only available to residents in Abuja. Go to Marketplace + They have also launched Jalo Retail which provides SMB retailers all the tools they need to run their operations — from selling (online and in store), to inventory management, to payments and delivery — on one platform. Platform available here
  • Kudi.ai processed ₦1 billion in the first 19 days of March. See here

Thank you for reading.

Categories
Series V

Agtech for the future

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Photo by Emiel Molenaar on Unsplash

A major turning point for agricultural technology was the Industrial Revolution with the seed drill, the Dutch plough, and the threshing machine. Times have progressed and now we see the deployment of drones, satellite photography, and sensors, IoT- based sensor networks, automated irrigation, etc.

Projections show that there will be 9 billion people in the world by 2050. The Food and Agriculture Organization (FAO) estimates say we need a 70% increase in food production from 2005 levels to feed all those people, and we have to grow, harvest, distribute, and consume our food more efficiently. For Africa, which is projected to be home to about 2 billion people by then, farm productivity must accelerate at a faster rate than the global average to avoid continued mass hunger.

Our growing population is becoming increasingly urban: the World Health Organization (WHO) estimates that 7 out of 10 people will live in a city by 2050 and we’re not gaining additional resources like land or water, nor are we gaining more farmers. As our growing population becomes increasingly urban, the entry-barrier for agriculture increases and a declining percentage of farmers have to produce for a growing population. What this means is that we need to move past drones and connecting farmers to people quickly.

The possibilities in Agtech are diverse but it seems African Agtech startups have chosen to focus on drones mostly. This is not a bad thing, in fact, it is progress but this progress is not broad in scope.

For example, there’s a family farm in Marcellaz-Albanais, France where their 60 dairy cows are left to their own devices with no one milking them. The owners built an automated milking system two years ago with €140k. The results? Each cow has increased its milk production from 6000 liters/year to 7000 liters.

This system can also detect an infection 24–72 hours before it shows up. The quality of milk has improved as it now sells for €450/ton versus the €300 average.

Not too far from this farm, There’s a winery using a camera to test out AI to monitor their vineyards for signs of disease.

The future of agritech will focus on more sustainable methods of production, moving away from the chemical heavy methods of today. We will see policies that hinder the use of most pesticides.

For instance, from 2022, the EU is going to ban glyphosate — a broad-spectrum systemic herbicide and crop desiccant because it is harmful to animals and human beings (there are concerns that it can cause cancer).

Supply chain efficiency is one more possibility. In Sub-Saharan Africa, the agricultural supply chain is marked by inefficiencies at all levels and is exploitative as well. Food is wasted before it even reaches the consumer. Whatever way you look at it; the supply chain needs to become more efficient.

Also, Irrigation facilities are still falling short of the mark, and there is a significant amount of work to be done here. With the shortage of irrigation facilities in most parts of the continent, Agtech startups should be making strides on how to reduce farmers’ dependence on rainfall.

If the aim of agtech is to improve yield, efficiency, and profitability, we need to quickly utilize other technology areas to create total improvement, large-scale business opportunities and have food available for our projected 2 billion.


We have invested in ThriveAgric, a platform that crowdsources resources to enable farmers to access better inputs and scale their outputs. We are still keeping our eyes open for opportunities in the agtech space.

We’re looking for startups offering technologies that can increase farmer profitability, productivity, and efficiency, improve farmer, animal, and consumer livelihood with better work environments, food safety, and food security, and protect the planet and its finite resources.Talk to us


What we’re reading

  • Where’s all of Amazon’s money going? Benedict Evans breaks down why Amazon has no profits (And why it works) — Link
  • Stripe Atlas has worked with experienced entrepreneurs and industry experts to give you authoritative, actionable guidance on how to run the business side of your company. — Link
  • Each year, Stack Overflow asks the developer community about everything from their favourite technologies to their job preferences.See this year’s 2018 developer survey — Link
  • Bill Gurley on 10 factors to consider when evaluating digital marketplaces. “Great marketplace execution is more nuanced and less systematic than other venture-backed categories, and for every successful marketplace, you will find an amazing entrepreneur that out-executed the many others that had chosen to attack the same market.” — Link
  • “When startups raise big rounds, they’ve convinced investors their company will continue to grow very quickly and very predictably far into the future”. Tomasz Tunguz on the implications of raising a high-priced round. — Link

Please share and have a terrific day,

V.

Categories
Series V

Series V, Episode 3.

Thanks for reading. Have Series V delivered to your inbox every Thursday. Subscribe here.


“Mobile First”

(…because, one dare not write about mobile in Africa without including a photo of a member of one of the Maa tribes smiling and holding a mobile phone. This is known.)

When you put a computer in the hands of everyone on the planet, often fitted with a camera, a gyroscope, GPS, multi-touch display, and so on, what becomes possible?

In a sense, the entire African startup ecosystem is organised around providing answers to this question. Each founder pushes forward their opinion about what the future looks like, now that “everybody is coming online”, hoping that others buy into it and it becomes reality.

It has become common knowledge — that is to say, everybody knows, but also expects that everybody else does — that one must “build for the next billion”, and make their web apps and experiences translate well from desktop to mobile. Pfft. Obvious.

But there is some tension here. First, as Ben Basche argues in his 2016 essay, “Ghost in the Machine”, it is not enough to be “mobile first”. That is to say, it is not enough to take functions that already exist on desktop and present them as if they will be consumed on mobile — vertical orientation, light data consumption, et al.

The services of the future will likely be *authentically mobile*, meaning they do old things in new ways that would not be possible without mobile phone, or even better, meaning they do entirely new things, in entirely new ways. One example of the former is Mobile Forms (VP C1), who are enabling consumer data collection at scale. (It would be … challenging to have 100,000 agents haul around huge HP Pavilion laptops to conduct surveys or collect data for a FMCG company.)

In the same way, Uber, which requires a “location-enabled computing device always on our person”, could not exist without mobile. This, in turn, has effects far beyond transportation, into delivery, nutrition, and even healthcare. One would be wildly wrong to estimate Uber’s potential market size using the taxi industry.

There is another side to this coin, though. Nanjira Sambuli, a researcher at the Web Foundation and VP mentor, has argued that bar social media, “mobile-first” services are designed primarily for consumption not creation. We risk creating a new digital divide, where the “haves” all have powerful computers and shape experiences for everyone else, meanwhile, the “have-nots” must consume those experiences without participating in their creation, and more importantly, any of the economic value that comes from it.


What we’re reading

  • Transsion Holdings, the Chinese firm that produces TECNO, Infinix, and iTel phones, is plotting an IPO-but-not-really. Link
  • Andrew Chen on forecasting growth for new products the right way. Link
  • What did they do before you came along? — designing your marketing and sales pitch. Link
  • Lessons from Spotify. Link
  • The Veni, Vidi, Vici of Voice. Link
  • This Apple HomePod ad by Spike Jonze is the best thing you’ll see today. Link
  • Everything you ever wanted to know about artificial intelligence. Link
  • Justin Irabor, on user acquisition tactics for startups. Link
  • “If everyone loves your idea, I might be worried that it’s not forward thinking enough.” — 12 things I learned from Chris Dixon about startups. Link
  • Four steps to forecast total market demand. Link

“Photospeak”

The VP team on a rare night out. (SABOR makes a mean cocktail)
Osarumen, delivering a talk to entrepreneurs in Benin for the Accelerate Labs program by The Future Project, Microsoft, and Sabihub.

Portfolio

Accounteer has partnered with invoizPAID to provide invoice financing to Accounteer users. Their users can now forward their invoices to invoizPAID and get money in their bank account within 48 hours. + check out the new version of their mobile app.

Sayonara. Till next time,

V.

Categories
Series V

Series V, Episode 2

This is Series V, a new weekly newsletter from the Ventures Platform editorial team.
Every Thursday, at 7 am (WAT), we will tell you something you didn’t know before, and ask you to do the same. Sometimes, it will be what we’re thinking about; other times, it will be what we’re reading about; other times, it will be both and some propaganda from our portfolio. We make only one promise; that it will be worth your time.

So, subscribe, share, and tell someone about it. Onto today’s edition. ??


#SMWLagos
Kola is going to be on the “Get Paid! — Hustler to Pan-African Mogul” panel session today at 1.30pm, Experience stage Landmark Centre.
Get more information and see other speakers here.

Ventures Deals
“When we meet people who say they are “trying to raise money,” “testing the waters,” or “exploring different options,” this not only is a turnoff but also often shows they’ve not had much success. Start with an attitude of presuming success. If you don’t, investors will smell this uncertainty on you; it’ll permeate your words and actions.”
Brad Feld, Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist
We’ve kicked off with our reading list with Venture Deals by Brad Feld. As we dive deeper into the book, we’ll share our thoughts and lessons here.

#Wakanda
This evening, the Team is going to the hottest place in the world right now. Place so hot, Osarumen has been three times! Yes, we are going to see Black Panther.

Kola and Dotun with a fan.

Links from the Internets

– Nigeria does not have 180 million people *chuckle* [Link]

– New Things In New Ways, or Same Old Things In Old Ways? [Link]

– Lessons and warnings for African returnees [Link]

– Stop wasting your life — know when to sell your company [Link]

  • Market Size Doesn’t Equal Market Demand [Link]

Opportunities
– We’re on the lookout for a Computer Vision Engineer with 2+ years experience with OpenCV, preferably with Machine Learning experience. Bonus points if you’re African or based in Africa. Email: [email protected] with your resume + links to your work.Thank you for reading and have a good month!

Please share. Till next time,

V.

Categories
Series V

Series V, Episode 1

Voila!
“In view humble vaudevillian veteran, cast vicariously as both victim and villain by the vicissitudes of fate. This visage, no mere veneer of vanity, is a vestige of the “vox populi” now vacant, vanished. However, this valorous visitation of a bygone vexation stands vivified, and has vowed to vanquish these venal and virulent vermin, vanguarding vice and vouchsafing the violently vicious and voracious violation of volition. The only verdict is vengeance; a vendetta, held as a votive not in vain, for the value and veracity of such shall one day vindicate the vigilant and the virtuous.Verily this vichyssoise of verbiage veers most verbose, so let me simply add that it’s my very good honor to meet you and you may call me V.”

This is Series V, a new weekly newsletter from the Ventures Platform editorial team.
Every Thursday, at 7 am (WAT), we will tell you something you didn’t know before, and ask you to do the same. Sometimes, it will be what we’re thinking about; other times, it will be what we’re reading about; other times, it will be both and some propaganda from our portfolio. We make only one promise; that it will be worth your time.

So, subscribe, share, and tell someone about it. Onto today’s edition. ??


2017

Last year was pretty great. We graduated our second cohort, made some major announcements, expanded the team, and moved to Lagos.
We’re recruiting all year round, and are excited to get our boots on the ground (??) to hunt down bold founders using technology to solve important problems across Africa.

Portfolio Propaganda

  • Mobile Forms (VP C1) is a part of the 22X Fund, the first-ever token offering backed by real equity from a group of 500 Startups alumni. [Link]
  • Paystack now processes over ₦2.7bn every month, up from ₦200m, a year ago. [Link]
  • Read how Thrive Agric (VP C2) is crowdfunding farmers. [Link]
  • Accounteer (VP C2) has launched in South Africa! They have teamed up with AddPay, a payments platform with a strong network of corporate partners and SMEs. + they came first place at the Nigerian Fintech Conference and were proud winners of the utility category at the Techpoint Build Conference.

What we’re reading

Kayode and Osarumen made a bet to see who could finish the most books by the end of Q1. The list is much too long, but here are five to get you started:

Links from the Internets

– Why willpower is overrated [Link]

– Oh no, oh no, oh no [Link]

– Infinite learner with Barry Diller [Link]

– Inside GE’s transformation [Link]

– Oh yes, oh yes, oh yes [Link]

– Founder control [Link]

– How to build 10x products [Link]

Opportunities
– We’re on the lookout for a Computer Vision Engineer with 2+ years experience with OpenCV, preferably with Machine Learning experience. Bonus points if you’re African or based in Africa. Email: [email protected] with your resume + links to your work.Thank you for reading!

Please share. Till next time,

V.