Much of the talk around the African tech scene over the last few years has been around consistent growth and success, with mobile money service M-Pesa at the heart of it all.
But last month both – the scene and the service – received a blow, as mobile operator Vodacom announced it was discontinuing M-Pesa in South Africa, where the service has failed to take off as in other markets.
Though M-Pesa was a major success in Kenya, and has subsequently successfully expanded to the likes of Tanzania, Lesotho, Mozambique and the DRC, it had not gained sufficient uptake in South Africa to make it viable, leading to its closure.
Uber Scaling on Up
May was bad month, then, for M-Pesa, but another productive one in Africa for Uber, which announced it will be expanding to Tanzania, Uganda and Ghana by the end of June after previous launches in South Africa, Nigeria and Kenya.
In spite of controversy, Uber has been doubling its passenger numbers in Africa around every six months, and in May also partnered Sidian Bank to launch a Vehicle Solutions Programme that provides driver-partners and business investors with the access to quality vehicles required to begin or develop Uber-based businesses.
The initiative, which is valued at approximately US$100 million, includes a vehicle finance component delivered through Sidian Bank and a vehicle leasing solution made available through Zohari Leasing.
Also on the expansionist path during May was Netflix competitor ShowMax, which expanded from South Africa to 36 other countries across the continent, and Fortumo, which launched its direct carrier billing services in three West African countries.
The month also saw media companies Ringier Africa and One Africa Media (OAM) merge their pan-African classifieds assets to create Africa’s largest classifieds group. The new Ringier One Africa Media (ROAM) comprises brands such as OAM’s Jobberman, Brighter Monday, Cheki, BuyRent Kenya, PrivateProperty Nigeria and Ringier Africa’s Expat-Dakar, ZoomTanzania and PigiaMe.
Providing the Connection
All of this activity could not take place without the growing amount – and quality – of internet connectivity on the continent. Development continues apace, with Microsoft awarding grants to a number of African initiatives aimed at accelerating the delivery of affordable internet access.
Meanwhile, Ericsson and MTN announced a partnership to develop a LTE network in Ghana, while a number of telecoms firms – including MTN Group, PCCW Global, Saudi Telecom Company, Telecom Egypt and Telkom South Africa are to construct the “Africa-1” submarine cable system, connecting Africa with the Middle East and South Central Asia and providing onward connectivity to Europe.
The initial companies are expected to be joined in the consortium by other carriers, with Africa-1 to have at least a three-fiber pair core extending more than 12,000 kilometres along Africa’s East Coast towards Saudi Arabia, Egypt and Pakistan.
And Africans are certainly finding interesting ways of using this growing connectivity, with Cameroonian medical innovation Cardio-Pad rewarded with a cash prize from the UK Royal Academy of Engineering for its heart monitoring device. Innovative ideas have also caught the eye of the BBC, which has selected two Nigeria-based innovations for pilots in its bid to make World Service content more accessible to Africans.
Growing the Ecosystem
As ever, African tech startups received the support of investors during May, most notably with South African startup ThisIsMe, an online verification tool, raising US$2.5 million to help it expand. There were also rounds for South African marketing tech company Delvv.io, Tunisian expense reporting platform Expensya and diaspora-founded mobile advertising startup Sliide Airtime, which received backing from Singularity Investments.
Further cash is in the offing, too, as South African VC firm Capital Eye is halfway to raising a US$100 million fund for African tech investments. Continued backing is also going to be forthcoming from a South African fund specifically for mobile startups, new VC fund Niveus Ventures, and Nigeria’s FastForward, which is specifically looking to invest in student-founded early-stage startups.