The Africa SMME Tech Report
Issue No. 26. Africa-Middle East local and small business tech news for 25 February 2022. This issue features Grubtech, SMBChain, GoDaddy, Orda, MarketForce & more...
This issue of The Africa SMME Tech Report is brought to you by Duda
Is Dining Now a Thing in the Metaverse?
Keywords: food tech, metaverse
One of the highlights of last week’s BigFive Digital MENA Summit in Dubai was a compact 20-minute conversation on the role of food tech in the metaverse.
At first glance, this seems like a silly idea. Kind of like that scene in The Matrix when Cypher eats a virtual steak while plotting to betray his shipmates.
But while the metaverse might be a virtual environment, the conversation in Dubai was about real food.
Mohamed Al Fayed, Co-founder and CEO of Grubtech, a Dubai-based food tech platform, was joined by industry consultant David Singleton to announce plans for a virtual food hall in the metaverse.
The metaverse, still a bit loosely defined, is essentially a virtual reality environment where consumers can interact with one another, via increasingly sophisticated avatars. Gaming is the most obvious current metaverse application. But metaverse enthusiasts insist it will eventually cross over to all aspects of our work and personal lives, from conferences to shopping to dating and, yes, dining.
Grubtech’s coming metaverse food hall is an environment where our avatars (mirroring our real-world appearance, personality, even clothing) can visit stations in the food hall, place orders, and have the (real, not virtual) food delivered to our homes.
“We are working on it as we speak and expect to launch the trial within the end of Q2 2022,” Al Fayed told us after the conference.
During the talk, Al Fayed cited McDonald's recent application for multiple metaverse food and beverage patents as evidence that the metaverse is here today. It’s not a cool idea that may (or may not) come to pass years down the line.
Al Fayed also boldly asserted during the talk last week that he expects the metaverse to account for a third of his company’s business within the next three years. And he urges all brands to start experimenting today.
“If you are not thinking about your brand’s position on the metaverse, it’s like not looking at your social media presence today,” Al Fayed told us.
Will Web3 Change SMMEs’ Lives?
Keywords: small business, Web3, blockchain
If you ask the typical audience at a business conference anywhere in the world if they’ve heard of Web3, you’ll get a decent show of hands. If you ask if they can explain it, most of the hands go down.
At last week's conference in Dubai, the challenge of explaining what Web3 is and why it matters to small businesses fell on Justin Sanger, the CEO of SMBChain, a Web3 martech business based in the United States.
Sanger is a longtime local search entrepreneur, who admits he helped build the local martech infrastructure that he is now trying to replace. He said the contrast between Web2, which is the current Google-Facebook dominated reality, and Web3, which is all about decentralized power (built on blockchain technology) is the difference between night and day.
Web3, as Sanger explains, returns power to individuals, which has implications beyond business, delving into art, politics, and more.
“Web3 is a humanistic drive to overcome personal differences, political rhetoric, and economic inequalities,” Sanger said.
Blockchain is the mechanism for decentralization, which is the source of Web3’s power. Web3, by most accounts, threatens a number of dominant Web2 features, including the dominant presence of advertising and the heavy reliance on intermediaries.
“A blockchain is a digital record of transactions that form a public ledger,” Sanger explains. “In Web3 self-sovereignty is reflected at the individual ‘ID’ level on-chain. You control when, where, and why you assert your ID.”
This gets to how Sanger believes Web3 will transform the local space. Sanger’s new company, SMBChain, uses the blockchain and non-fungible tokens (NFTs) to empower small businesses with control over their own business data.
He describes the business as “A local blockchain-driven data and service network for SMEs.”
The basic principle is that businesses have the right to control their own data — from when they are open, how many locations they have, what services they offer, and what inventory they have on hand, and beyond.
“The network believes that SMEs should direct and own the public data that describes their businesses,” Sanger said. “Currently, SMEs are divorced from simple tasks that reflect the current pulse of their business to the public.”
Covid Accelerated Digitization of MENA’s SMMEs
Keywords: MENA, small business, eCommerce
Selina Bieber, GoDaddy’s GM for MEA + Turkey, came to BigFive’s Dubai event armed with fresh data showing how the pandemic has impacted the technology use of the MENA region’s small and midsize businesses.
And the bottom line is pretty clear. The post-pandemic world is omnichannel, and businesses are clearly benefitting from the shift.
Here are some highlights from GoDaddy’s 2021 Observatory Survey, which asked MENA entrepreneurs how the pandemic impacted their businesses’ expansion and growth trajectories.
In the UAE, 33% of businesses launched online stores or expanded their online presence.
37% of Saudi entrepreneurs added a new business line and 28% launched an e-store.
In Egypt, 33% of businesses added a new line to their existing business, while 25% started another business or added a side hustle.
Businesses that already had online sales channels saw accelerated growth during the pandemic, with UAE and KSA entrepreneurs seeing 77% growth on average, while in Egypt, the figure was 66%.
“Ecommerce isn’t the cherry on the cake, it’s the new cake,” Bieber said, quoting Jean L’Oreal CEO Paul Ago.
Big Moves in Africa’s FMCG Startups
Some big news has come out this week from two companies we’ve covered previously that have built marketplace and fintech solutions (or dare we suggest, super apps) for Africa’s small shops selling fast-moving consumer goods.
The business of creating platforms to make life easier for Africa’s informal shops is gaining traction, with leading players raising serious money, which will help them consolidate competitive markets, add products, and scale growth. These services help shops keep their shelves stocked while moving off cash and onto mobile payments.
First, Nairobi-based MarketForce just raised a $40 million Series A equity and debt round, led by V8 Capital Partners, a London-Lagos investment firm focused on Africa.
The company raised a $2 million pre-Series A round back in July 2021.
MarketForce was co-founded in 2018 by CEO Tesh Mbaabu and CTO Mesongo Sibuti. RejaReja is the company’s flagship project. It’s a marketplace allowing informal shops to source, order, and pay for inventory at any time via interactive SMS and mobile app. RejaReja then delivers the goods within hours.
MarketForce plans to use the new funds to “scale merchant inventory financing”, which will include launching a buy now, pay later solution that will allow merchants to stretch out their cash flow while keeping their shelves stocked.
Last June, we reported that MarketForce acquired a rival platform, Digiduka, which is a platform that enables small merchants to accept digital payments, pay bills online, access credit, and earn money through reselling arrangements for services like airtime, electricity tokens, and bill payments.
“Our goal is to be the ultimate partner for informal merchants, empowering them to maximize their profits and grow in a digital age by getting better service, assortment, and access to new revenue opportunities. [And] outfitting them with the technology and support they need to transform themselves from simple FMCG outlets to comprehensive financial service hubs for the continent’s last-mile communities,” said Cofounder and CEO Tesh Mbaabu.
“We are targeting to serve over 1 million active merchants on our platform in Sub-Saharan Africa by 2025.”
TradeDepot was founded in 2016. Last year it raised a $10 million pre-Series B round, bringing its cumulative fundraising total to $13 million.
TradeDepot provides distribution for consumer goods manufacturers like Unilever and Nestle through a string of depots in Nigeria. It also provides micro-loans to retailers, through partnerships with financial institutions.
Green Lion has so far made 29,854 transactions with 4,404 customers. This puts it among the largest B2B e-commerce platforms in Ghana.
Found on LinkedIn…
Courtesy of Africa the Big Deal. This chart shows that African startups have already raised $1 billion year to date this year. Last year it took five months to hit $1 billion.
The BIG5D Podcast Returns from Hiatus
In 2020, Futi left Jumia, where he ran Jumia Food in Nigeria, to co-launch Orda, a Lagos-based software company that aspires to be the operating system for small (and also large) restaurants across Africa.
Orda was founded as StarKitchens. The initial name reflected an early intention to launch a cloud kitchen business in Nigeria. However, Futi and his team quickly realized there was a much bigger opportunity. Africa’s very small restaurants need help making the transition from managing their sales and financial operations with pen and paper.
“We do focus a lot on a small vendor,” Futi says on the podcast. “Typically, the clients we love are the ones that are using cash and pen and paper. They were writing everything by hand…Those are the ones that we like because we can come in, and within a day of them running Orda, they see a huge shift.”
Orda recently raised a $1.1 million pre-seed round, in a process that Futi candidly described as “brutal.”
The ad-supported version of the BIG5D Podcast features an abridged interview and is free to all.
An ad-free version, including an edited transcript and the full audio interview, is available to paid subscribers, as well as BigFive Digital members and sponsors. The free version is also syndicated wherever you get your podcast (Apple, Spotify, Soundcloud, etc.) And finally, it’s also available on YouTube.
BigFive Digital 2022 In-Person Events
This Issue of the SMME Tech Report is sponsored by…
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