TechCabal Daily – A $10 million farm
Written by Tim Hartwell on May 17, 2022
TOPSHIP RAISES $2.5 MILLION
The round was led by Y Combinator, Flexport (the world’s leading digital freight forwarding company), Soma Capital, Starling Ventures, Olive Tree Capital, True Capital, Capital X, and many angel investors, including Mercury’s founder and CEO Immad Akhund and Dropbox’s co-founder Arash Ferdowsi.
This new investment brings Topship’s total funding raised till date to $2.8 million, having raised $300, 000 pre-seed in March last year
Founded in 2020 by Moses Enenwali, Topship started out as an Instagram service helping people ship to and from Africa. By March 2021, Enenwali had gained enough traction to build Topship into a software that handles the end-to-end process. The platform now has a web app that allows merchants and individuals to book a door-to-door shipment. It has also extended its shipping offerings from only parcels to include cargos and freight to and from anywhere in the world.
Since launching, the company has reportedly onboarded over 1,800 users, and 700 of them are active businesses that have been vetted and verified. In the past quarter, it has also served 1,000+ merchants, primarily made up of small and medium businesses (SMBs) and recorded 50% month-on-month revenue growth.
With this seed capital, the company intends to grow fast and “remain asset-light.”
“Our mission to make the shipping experience in Africa as easy and stress-free as booking an Uber ride has brought us significant growth and valuable first-hand lessons that we could have never learned by being on the sidelines,” the company said.
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TWIGA’S $10 MILLION FARM
Twiga Fresh will be initially financed with $10 million through debt backed by Development Financial Institutions.
A little backstory
In 2020, agriculture reportedly added 22 billion dollars to the Kenyan economy. Agriculture accounts for 65 per cent of the export earnings and provides the livelihood for more than 80 per cent of the Kenyan population.
However, farmers face a variety of problems which affect their productivity and consequently, the quality of food produce and their pricing. Some of those problems include lack of access to infrastructure like good roads, and lack of adequate financing for domestic farmers, disconnection of farmers from the market (that is people who need fresh produce).
Twiga Food is offering solutions to some of those problems through its B2B supply chain which links farmers to new and larger markets. This formalizes the domestic food market using technology and consequently increases productivity and reduces the cost of food.
Why Twiga Food wants its own farm
Twiga reportedly had to deal with traceability challenges, stock-outs and price volatility, which affected the affordability and security of its offerings. Twiga Fresh was introduced so it can grow some of its own produce and consequently solve those problems.
What about its partner farmers?
Asserting that it is one of the largest commercial fresh produce firms targeting the home markets in East Africa, Twiga Food affirmed that Twiga Fresh will affect only a few farmers. It will continue sourcing some produce from more established and efficient value chains like bananas, from partner farmers, to serve the 45,000 traders it supplies every month.
Twiga plans to start operations in Uganda and Tanzania and is also considering the Central and West African market. In addition to its widening range of private label products, this new subsidiary might drive Twiga Food’s customer growth and broaden its basket size.
SAFARICOM TO LAUNCH COMMERCIAL OPERATIONS IN ETHIOPIA
Safaricom, the largest telecommunications provider in Kenya, is set to launch commercial operations in Ethiopia later this year. This announcement was made by Safaricom CEO Peter Ndegwa while sharing the telco’s financial statement for the year ended March 31, 2022, last week.
“We have made our first test call, sent [the] first test SMS and completed [the] first test data session,” Ndegwa said on Twitter. “We have a strong team of 300 employees with half of them being Ethiopians.”
Safaricom increased its service revenue by 12.3% to KES 281.11 billion ($2.42 billion) and profit by 13.5% to KES 109.13 billion ($940 million), according to its latest financial report. Voice service revenue grew by 0.8% to KES 83.21 billion ($720 million); mobile data revenue grew by 8.1% to KES 48.44 billion ($420 million), while M-PESA revenue grew by 30.3% to KES 107.69 billion ($930,000).
Safaricom Ethiopia plans to bring mobile financial services to Ethiopia. However, this is subject to the licensing and regulatory process by the Government of Ethiopia.
Last year, Safaricom joined efforts with Vodafone, Vodacom, Japan’s Sumitomo Corp, and UK’s CDC Group to secure the licence to operate in Ethiopia at a cost of $850 million, a landmark win as the second most populous African country opened up its telecom sector to competition.
This led Safaricom to set up shop in Ethiopia earlier this year, but while the licence allowed the company to compete against state monopoly Ethio Telecom, it couldn’t offer M-PESA services (its mobile financial service) due to legal limitations.
In April, Ethiopia started changing its national payments law to enable Safaricom to introduce M-PESA in the country.
According to Business Daily Africa, the National Bank of Ethiopia (NBE) drafted a new bill which included a clause that “Foreign nationals may be allowed to invest in a payment instrument issuer or a payment system operator business, or establish a subsidiary which shall be licensed as a payment instrument issuer or payment system operator.”
Zoom out: When the new bill is signed into law, Safaricom will be able to compete with Telebirr, a mobile service which state-owned telecoms Ethio Telecom launched last year. Telebirr already has a head start, attracting 4 million users within its first month but this isn’t surprising as Ethio Telecom has over 58 million subscribers, the highest number of subscribers by an African operator in a country.
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