👨🏿‍🚀TechCabal Daily – Another Kenyan startup faces closure

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SKY.GARDEN FACES CLOSURE

Amidst news of global funding winter, Kenyan B2C marketplace Sky.Garden is facing a brittle future.

According to TechCrunch, the Amazon-like startup may be facing closure after its CEO, Martin Majlund, sent termination notices to employees earlier this month and revealed that the company was running out of money and would close down on October 16.

This news is coming three months after foodtech Kune shut down due to similar reasons.

There’s still hope

This is what CEO Martin Majlund believes.

In his response to the tech publication, the CEO admitted that the startup is facing a funding crisis and noted that the startup is looking for a solution.

“Sky.Garden Limited is still solvent and operations are still ongoing. We are in dialogue with potential investors and acquirers but as we have to be diligent about doing things the right way, we chose on September 16th to give our staff 30 days’ notice while working on our opportunities,” said Maljund to TechCrunch. 

Since its kickoff in 2017, the startup has received about $6.1 million in funding, per Crunchbase. Its last raise was a $4 million Series A round led by SANAD Fund in June 2021.

“Rising prices, inflation, war in Ukraine and increased interest rates have made the venture capital space very challenging, especially being a B2C e-commerce business,” the CEO said. “We have therefore for a while been in deep M&A conversations. But we are not the only ones being hurt by the macro-economic contractions which have had a negative implication on the timeline of these conversations leaving us in the above-mentioned situation.”

Big picture: Several African startups have been affected by the global funding winter that has seen startups like Edukoya, Swvl, Vezeeta, and Sendy lay off some of their staff in order to preserve whatever funding they already have. 

SAFARICOM MAKES OVERDRAFTS CHEAPER

Cheaper loan charges are coming to Kenya.

On Wednesday, Kenya’s leading telco Safaricom, and its partner banks—NCBA and Kenya Commercial Bank (KCB)—announced cuts on daily charges for loans below Ksh 1,000 ($8.29) from Fuliza, Kenya’s leading short-term digital loan product.

Starting October 1, Fuliza customers who borrow between Ksh 500 and Ksh 1,000 ($4 to $8) will pay a daily interest charge of Ksh 6 (5 cents), down from Ksh 10 (8 cents). Users who borrow between Ksh 1,001 and Ksh 5,000 will pay Ksh 18 in daily charges, down 10% from Ksh 20, while borrowers of Ksh 2,500 ($21) to Ksh 70,000 ($580) will pay a daily charge of Ksh 25 (20 cents) down from Ksh 30 (25 cents).

The new rates will only apply to Fuliza users who are not currently indebted. All customers who already hold a Fuliza loan by the start of the new charges will continue paying their loan using the old tariffs.

 But why’s this happening?

For one, it establishes Fuliza as the most affordable loan service in Kenya. 

Already, about 18% of Kenyans use Fuliza, and the loans make up 85.54% of digital loans given out by NCBA, Kenya’s third-biggest bank by assets. Peter Ndegwa, Safaricom CEO, believes that the slashes will help make the service even more affordable.

It’s also possible that Safaricom is preempting the promised review of Kenya’s credit bureau which is set to start next week.

As part of his manifesto, newly-elected president William Ruto promised to review Kenya’s Credit Reference Bureau (CRB) which has blacklisted several Kenyans who defaulted on loans. At his swearing-in ceremony earlier this month, Ruto declared the current way CRBs assess credit applications “arbitrary” and “punitive” saying, “Our starting point is to shift the CRB framework from its current practice of arbitrary, punitive, all or nothing blacklisting of borrowers that denies borrowers credit.”

Ruto may be weeks old on the throne, but his plan may already be producing results.

On Wednesday, a meeting with officials from Treasury, Central Bank, Safaricom, Kenya Commercial Bank (KCB) and NCBA led to the announcement that four million Kenyan defaulters would be removed from the CRB defaulters’ list. 

According to the Kenyan lenders and government, they’re working to create a new credit-according system that does not include blacklisting defaulters.

WHAT IS GOOGLE SEARCHING FOR?

The short answer: a way to keep more young people on its search engine.

The long answer, as always, is a bit more complicated. On Wednesday, Google held the Google Search On 22 Event and announced some changes that will affect how people use its search engine. 

ICYMI: Last month, Google revealed that about 40% of young people—GenZ’s specifically—use social media sites like TikTok to search for stuff. Why? Because they offer a more visual appeal. Instead of text-based results like Google’s SERP gives, social media sites give them pictures and visual stimulation of what they’re looking for.

This is one of the data Google is using to bring new changes to its search engine.

So what changes should we expect?

There were about 10 major changes announced at the hour-long event.

Most are basic updates of already existing features. For example, Google Lens will present translated text in a cleaner and more blended approach. Google Multisearch—a feature that allows you to make an image-and-text search in one go—is expanding to 70 more languages.

There’ll also be more shortcuts added to the Chrome iOS app so iPhone users can use screenshots to search for products, use voice search and image search.

Starting next year, Google Search will also translate headlines from news sites that appear in its SERP.

One of the most important updates though is the addition of visual results. Google is redesigning search results in a way that produces more visual results related to users’ search queries. Google will use queries to highlight visual stories, short videos, and tips. It’ll also highlight relevant information in a different way. 

Zoom out: Finally, Google will let users turn off personalisation features. Already, search results are personalised to fit users, depending on their location and web history. The results you get for searching “pizza” in Lagos, Nigeria, are different from those you’ll get in Nairobi, Kenya. Soon, users will be able to see which results are personalised and toggle the feature just in case they’re looking for something fresh.

TC INSIGHTS: FUNDING TRACKER

This week, Yellow Card, a crypto exchange platform, closed a $40 million series B round. Polychain Capital led the round with participation from Valar Ventures, Third Prime, Sozo Ventures, Castle Island Ventures, Fabric Ventures, DG Daiwa Ventures, The Raba Partnership, Jon Weiner, Alex Wilson, Pat Duffy, and others.

• Vendease, a Nigerian digital procurement platform, secured $30 million in series A funding. The round was led by Partech Africa and TLcom. Other participating investors include VentureSouq, Hustle Fund, Hack VC, GFR Fund, Kube VC, Magic Fund, and Kairos Angels. 

• South African identity startup, iDENTIFii, received $15 million in growth capital. The round was led by African investment company Arise; other participating investors include growth-stage private equity firm Sanari Capital and veteran US tech entrepreneur Bill Spruill.

• Uganda-based fintech, Numida, raised $12.3 million in a pre-Series A equity-debt funding round led by Serena Ventures with participation from Breega, 4Di Capital, Launch Africa, Soma Capital and Y Combinator.

• South African home services startup, SweepSouth, secured $11 million in a round led by Alitheia IDF, a gender-lens private equity fund. Other participating investors include current investors, Naspers Foundry, The Michael and Susan Dell Foundation, and Futuregrowth Asset Management. New investors Endeavor Catalyst, Endeavor’s Harvest Fund II, Caruso Ventures, and E4E.

• Farmerline, a Ghanaian-based agritech company raised a $1.5 million extension to its previous $12.9 million pre-Series A announced in April. The round was led by Dutch investor Oikocredit. Other investors include Acumen Resilient Agriculture Fund (ARAF), FMO, the Dutch entrepreneurial development bank and Greater Impact Foundation.

That’s it for this week!

Follow us on Twitter, Instagram, and LinkedIn for more funding announcements.

GAME: UNSCRAMBLE “EMBEZZLE”

About a dozen words can be created from the letters in “embezzle”. How many can you find?

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Why West African solar company Daystar Power is selling to oil major Shell.

JOB OPPORTUNITIES

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