The Africa SMME Tech Report
Issue No. 20. Africa-Middle East local and small business tech news for 26 November 2021. This issue features Kippa, OZÉ, Asilimia, Ozow, and more...

Funds Flowing in to Help MSMEs Manage Africa’s Informal Economy
Keywords: Nigeria, Kenya, Ghana, fintech, SaaS, MSME lending, seed funding
Very small businesses in Africa tend to do business in an analog fashion. Pen and paper to log transactions. Mostly dealing in cash. And in the process, missing out on opportunities to be more efficient. And probably leaking revenue as well.
A group of companies is emerging to help Africa’s MSMEs appify their businesses. By using sophisticated yet easy-to-use SaaS tools, MSMEs can track their income and expenses, pay bills and collect money, and in some cases access credit.
The real power with these business management solutions comes in how the data flowing through the business can drive recommendations that can help businesses reduce expenses or maximize income. This data is also useful in assessing the individual MSMEs credit risk in order to approve loans and lines of credit for inventory, payroll, etc.
One such company, Nigeria’s Kippa, has just raised a $3.2 million seed round to build out its SaaS business management product, and eventually add a lending component.
Berlin-based Target Global led the seed round. Also joining were Entrée Capital, Alter Global and Rally Cap Ventures. A number of angels also chipped in, including Kuda CEO Babs Ogundeyi.
Kippa, which launched this year, is the latest entrant to the space. But it isn’t the first.
Ghana-based OZÉ, for example, launched in 2017 as a SaaS solution (business app) that bills itself as a “business coach in your pocket.” OZÉ already offers small loans to MSMEs, someting it has been doing since early 2020.
In January, OZÉ raised a $700,000 seed round. Since then the company has expanded to Nigeria. Co-founder Meghan McCormick told us this week that “an announcement on OZÉ funding is coming.”
Meghan is a past guest on the BIG5D Podcast.
And this week we learned that Kenyan fintech startup Asilimia, also founded in 2017, has raised a $2 million pre-seed round. Asilimia is also built to help small and informal businesses handle transactions inexpensively, access capital and manage their financial operations.
Asilimia has spent the last three years building its value with small traders by enabling mobile money transacitons free of transfer charges using its Leja app.
Now, Asilimia will use its new funds (half equity, half debt) to begin offering loans to its community of traders. It also plans to improve its tech, add staff, and look at expanding into neighboring East African countries. The data flowing through Leja will help Asimilia make accurate lending decisions.
How Will $48M Transform Ozow?
Keywords: fintech, South Africa, payments, Series B funding
South Africa payments company Ozow has raised an eye-opening $48 million to pour petrol on an already accelerating growth profile.
According to a blog post announcing the Series B round, Ozow has been growing at a 100% year-on-year pace since its Series A round in 2019. Including two seed rounds (in 2016 and 2017) and the Series B round, Ozow has raised $49.4 million. However, this doesn’t include the Series A round, the size of which was not disclosed.
Today, the company (founded in 2014) processes more than $100 million in monthly transaction volume across its merchant network, which the company says numbers in the thousands. Ozow also reports adding 120,000 users to the platform each month.
Ozow says it plans to invest in product and expansion into other African markets.
Back in August, Ozow revealed plans to expand into the Southern African Development Community (SADS) countries. At the time, the company revealed it had already received regulatory approval in Namibia. At the time Ozow also expressed designs on Nigeria, Ghana, and Kenya.
Ozow didn’t offer any new details in the blog post on its market expansion plans. It did make it clear that M&A activity may be in the near-term offing.
“To help us achieve all of this [new products and market expansion], we’re also placing a strong focus on strategic investments that include mergers and acquisitions,” Ozow wrote in the post.
Given how crowded the payments space has become in Africa, it’s worth asking what sets Ozow apart.
Ozow, like any other digital payments provider, is focused on innovations that give more consumers and businesses access to cashless and contactless payments options.
For example, the company has been a big supporter of South Africa’s Rapid Payments Programme (RPP).
On its website, Ozow touts simplicity as a key differentiator.
In an interview with Ventureburn, Ozow CEO Thomas Pays said the following.
“We’re continuing to innovate by creating new payment solutions to meet the changing needs of both businesses and consumers alike. With every new product or service that we develop, we’re committed to ensuring that they simplify people’s lives by making payments even easier, quicker, and more secure.”
Tencent, Naspers Fates Intertwined
Beyond the deal’s size, the investors themselves are notable. Leading the round is the Chinese Internet company Tencent (of WeChat fame).
Also joining the B round are the Endeavor Catalyst Fund and Endeavor Harvest Fund. Endeavor alumni include some familiar names in Africa and Middle East tech. These include Flutterwave, SweepSouth, Kitopi, MFS Africa, Pargo, and many others.
Tencent already has strong ties to South Africa. Its largest shareholder is Naspers, which has earned a massive return on its investment in Tencent. Naspers acquired a 46.5% share it acquired in 2001 for $32 million. It has reduced its stake over the years to 29%, which is now worth about $170 billion.
As China has begun to crack down on its own technology industry, for example limiting screen time for children, Chinese Internet stocks like Tencent and Alibaba have taken a beating. Tencent is currently trading at around 60.00, well down from its 52-week high of 99.40. Similarly, Alibaba is trading at around 136.50, well off its 52-week peak of 278.92.
A recent article in the National outlines how exposed Naspers, and by extension the JSE, is to the fortunes of Tencent.
This may provide a clue into why Tencent made this investment. Perhaps as its position weakens in China, it will look to Africa as a new source of growth. Since we do not know Ozow’s current valuation, the size of Tencent’s stake in the company is unclear.
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