WeBuyCars allows customers to buy and sell used cars, acting as a middleman in the transactions. In 2023, the company sold a total of 142,337 vehicles and bought a total of 141,851. According to its parent company Transaction Capital, also JSE-listed, the unbundling and listing allows WeBuyCars shareholders to have direct access to a market-leading asset. 

The listing of WeBuyCars presents a signal of the renaissance of South Africa’s IPO activity which saw only 13 listings in the last 3 years. When the JSE trade opening bell rings on Thursday, whether the market will agree with or brush off  WeBuyCars’ R18.75 per share ask remains to be seen.

According to Jimmy Moyaha, founder of investment firm Lebowa Capital, WeBuyCars’ R18.75 per share price is reasonable considering the company’s strong business case. “R18,75 may be a little undervalued based on the book-build value they had identified. However, playing it safe only means more upside if you’ve got it right,” Moyaha told TechCabal.

Furthermore, Moyaha stated that the share price has the potential to reach highs of as much as R25 per share in the future. WeBuyCars, on the other hand, stated that it is investing in its proprietary AI, data, and analytics to boost its e-commerce sales. Currently, e-commerce sales represent 22% of total sales, down from the 27% recorded in 2022, showing that a lot of work is yet to be done to attract e-commerce customers to the platform.

However, other analysts are a bit sceptical about the company’s fortunes on the public markets, pointing to the company’s financial performance as a put-off factor. Transaction Capital’s latest financial results show that although the volume of cars bought and sold by WeBuyCars increased by 9% and 13% respectively, its earnings were down by as much as 14% from the previous year. The company’s cost-to-income ratio also increased from 57% in 2022 to 66% in 2023.

Across the country, there are millions of music lovers like Obishai, who download songs from stream ripping sites or use the free tiers of music streaming services due to inability to afford such subscriptions or plain disregard for the value of the art. According to a report, Nigerians spend an average of 31 hours weekly — much more than the global average of 20.7 hours — listening to music, especially Afrobeats. And while there are now more people who are paying for music streaming platforms than five years ago, it’s not nearly enough revenue for the kind of growth the industry is witnessing.

The global music industry is dancing to the rhythm of streaming, with 67.3 percent of all music revenue worldwide generated from digital subscriptions to streaming platforms. In March 2024, The International Federation of the Phonographic Industry (IFPI) released the Global Music Report for 2023, which disclosed that streaming brought in 67 percent of the $28.6 billion realised in 2023, leaving the sales of physical copies and performance rights trailing behind with 17.8 percent and 9.5 percent respectively.

Sub-Saharan Africa had the fastest growth out of all global regions. It was the only one to surpass 20 percent growth as revenues climbed by 24.7 percent , fuelled by the growing popularity of Afrobeats and Amapiano tunes worldwide. Interestingly, while the Nigerian music industry is the largest on the continent, consistently churning out global hits and achieving billboard ranks; South Africa, the second largest music industry, has remained the most profitable music market in the region, bringing in the bigger bucks. According to the report, the rainbow nation contributes 77 percent to music revenue in sub-Saharan Africa — an impressive 19.9 percent growth from the previous year.

Joey Akan, a music journalist, isn’t surprised by this twist, as he shared that the Nigerian music industry has a long way to go before reaching profitability like its well-oiled South African counterpart.

“South Africans have a more structured industry. They have all their collection society rights which is basically a fanbase that values music and a government that punishes piracy. If you put all of these together, you have a better environment for music to generate more money,” he shared with TechCabal.

“It’s taken us about 30 years to build what this industry currently is, while South Africans were able to clock the system and build a functional industry which works for them. We have the artists to brag about, as well as the fanbases and cultural commitment to Afrobeats, but are missing one of the most important elements, which is the [revenue] numbers. This is why we cannot have access to certain deals and attract certain investments.”

While creatives across the world tussle with the illegal distribution of their work, Nigerian artists deal with a much more sophisticated version where bootlegged versions of their music might be even more popular than the original versions on streaming platforms. Nigeria was named the worst place in Africa to be a creative as it has the largest market in Africa for goods which infringe on intellectual property rights. Original physical copies of albums are almost nonexistent in the Nigerian industry, as pirated copies are already the norm.

Outside of the lack of regard for the value of music, Akan believes that the broader economy also has played a climacteric role in music revenue for the two countries as richer countries are more likely to have higher-yielding industries. The South African rand is stronger than the Nigerian naira, with one rand equaling over 70 naira. 

“It’s not new information that in Nigeria, everything competes with food,” he said. “The money the average Nigerian will pay for Apple Music can be diverted to pay for lunch.”

This means that for music artists in Nigeria, the biggest revenue opportunity lies in their music reaching international audiences across the Atlantic who bring in the juicier revenue; as the majority of their local fans cannot afford to pay for these streaming services.

*Kamal Chude, a popular artiste in Lagos is yet to get the “streaming cake” even after four years of making music, as he doesn’t consider the his earnings significant enough to withdraw yet. *Chude, who is in a two-year contract with a local distribution company he says isn’t transparent at all, has found himself still doing the bulk of the distribution work for his music despite having a 70:30 revenue split agreement. 

“I worked with them on one song, which is my biggest so far, and there isn’t much to show for it on the backends. I didn’t even get access to it until I brought my lawyer into the conversation. We checked the logs and found out that the streaming platforms that were on the list were not up to five. Meanwhile, the song was available on all the Digital Service Providers (DSPs) you can think of,” he shared.

Will partnerships save the music industry?

Distribution and record companies play a vital role in boosting artists and nurturing the industry’s growth, especially in today’s hyper-competitive global market, where social media platforms like TikTok are changing the game with their content-heavy environment.

Tunji Balogun, Chairman & CEO, of Def Jam Recordings, shared that one of the strategies that can be deployed for this growth is forging partnerships. 

“When it comes to music coming out of Sub-Saharan Africa, we’ve partnered with a label from Nigeria called Native. I felt strongly that I wanted to work with people that have a genuine connection to the culture on the continent,” he shared. 

In September 2023, Def Jam signed a Nigerian rapper,  Odumodublvck, who was one of the biggest new artists on the continent with over 252 million Spotify streams. Two of his songs, Declan Rice and Blood on the Dance Floor, were some of the top-streamed Nigerian songs in 2023.

Capital will always move to where it’ll find a profit, and more global labels are partnering with local names. Seventeen months after Def Jam and Native Records signed a partnership deal, Mavin Records, another heavyweight in the music ring, announced that the majority of its stake had been acquired by Universal Music Group (UMG) in a deal that is speculated to be worth about $125 million. The deal, which is expected to close in the fourth quarter of 2024, will give Mavin artists unhindered access to the resources at UMG, furthering their reach. 

This is excellent for the industry, except that it feels like deja vu for industry professionals like Akan. The journalist cuts through the positivity with blunt honesty, and shares that until the structural problems are solved, the challenges in the industry will erode all positive development. 

“We need to increase the numbers we have outside their [the West’s]  influence. We need to know that they can take whatever percentage of our money and numbers or this crop of artists, and we’ll still have the base to successfully nurture new artists and make money independently in the future.”

Are you among the South African citizens who applied for the COVID-19 Social Relief of Distress (SRD) grant of R350 for 2024 and received approval, but haven’t gotten a pay date yet? The South African Social Security Agency (SASSA) has a message for you.

Cash Send/Mobile Money Issues and Alternative Solutions

If you opted for a cash send or mobile money payment method for your approved SRD SASSA R350 (2024) but haven’t received any funds, it might be due to a verification issue. SASSA might not be able to conclusively match your cellphone number with your ID number. This unfortunately prevents them from processing cash send payments.

To ensure you receive your SASSA SRD R350 (2024) grant, SASSA recommends providing alternative banking details. This will allow them to disburse the funds electronically.

Contact SASSA for Further Assistance

If you haven’t chosen cash send/mobile money or haven’t had any issues with verification but are still waiting for your approved SRD SASSA R350 payment, reach out to the SASSA Customer Care call centre at 0800 60 10 11. Their representatives can investigate the matter further and assist you.

You can find more information on their website, https://www.sassa.gov.za/SitePages/HomePage.aspx,  for any further inquiries you may have about the SRD SASSA R350 (2024) program.

Precautions for future or new SRD SASSA r350 grant applicants to avoid delayed payments

Mistakes in your details can lead to delays in SRD SASSA  payment processing. Therefore:

• Always double-check information accuracy
• Ensure that the cellphone number and ID number provided during the application process are accurate and match official records.
• If opting for electronic disbursement, verify that the provided banking details are correct because incorrect banking information can cause payment delays or rejections.
• Regularly check your application status through the SASSA online portal or contact the Customer Care call centre for updates on verification progress.

When the draft regulations were published in February, the government invited the public to share feedback and comments that would shape the eventual outcome of the visa. However, the draft regulations and the official ones are the same, meaning that none of the public opinion was taken into consideration.

Although some South Africans favour the digital nomad visa on the premise that it would make the country’s tech ecosystem attractive to foreign talent, others believe an influx would lead to a rise in the cost of living, an increase in inequality, and tax leakage concerns. Others also pointed to several regulations which could impede the effectiveness of the visa.

According to Andreas Krensel, founder of immigration firm IBN Immigration Solutions, the lack of consideration for public opinion on the bill is problematic. “Although the confirmation of [the] digital nomad visa is great news, the same questions asked almost two months ago [when regulations were announced in February] remain unanswered,” said Krensel. Among these questions is whether the minimum salary requirement of R1,000,000 (~$53,000) is gross or net and whether freelancers would be eligible for the visa.

Additionally, South Africa’s current legislature has numerous laws that have to be amended if the digital nomad bill is to become law. For instance, the digital nomad bill proposes an income tax exemption for foreign employees working in South Africa for less than six months, and the income tax act would have to be amended to provide for the exemption to be legal.

The proposed tax administration bill introduced by South Africa’s Revenue Service in 2023 is another potential obstacle. Under the proposed amendments, employers of South Africa-based remote workers must deduct pay-as-you-earn (PAYE) tax. Foreign companies would need to apply for and receive a SARS income tax number and register a branch company within South Africa.

Another legislation that might put off digital nomads is a proposed amendment to the country’s Copyright Bill. For example, universities and other institutions will have the right to reproduce software products without having to pay producers of said products. 

“What the bill proposes [is] to water down copyright owners’ protection, and that [is] deeply concerning,” stated Sadullar Kajiker, professor of intellectual property at the University of Stellenbosch. This could prove to be a disincentive for nomads building proprietary software while in the country. 

With the visa law now official, it will be interesting to see how the government traverses through the unaddressed challenges as applications start flooding in.

The acquisition of Reflector Marketing comes at a time when early-stage investors are under pressure to have portfolio companies with solid business cases beyond just venture capital cheques. In Reflector Marketing, Baobab states that it will help its portfolio companies with specialised in-house marketing, branding, and digital services, amplifying their potential for success and further funding.

Through the acquisition, the Reflector Marketing team will join Baobab to provide portfolio companies with in-house digital marketing support. Klyne Maharaj, founder of Reflector Marketing, will assume the role of director of Baobab Network’s accelerator. Founded in 2016, Baobab Network is a sector and geographically agnostic investor who issues a ticket size of $100,000 to its portfolio companies. The company claims that its portfolio’s cumulative valuation is more than $225 million from 50 companies. 

According to Toby Hanington, co-founder of Baobab, the move is evidence of Baobab’s ambitious plans and long-term commitment to investing across Africa. “We’ve worked with the Reflector team since early 2023, and the move to acquire them is a testament to the work they’ve already done with our portfolio,” he said.

In the past, digital marketing, which comprises elements such as Search Engine Optimisation (SEO), social media marketing, product strategy, pitch deck preparation and branding, has been the go-to marketing medium for startups. This is because of its affordability compared to traditional marketing, relevance to target customers of startups, and its ability to adapt to the changing interests of the target market.

According to Maharaj, the acquisition is in line with its mission to enable the growth of startups via digital marketing. “Our goal has always been to help the world’s best startups nail their positioning, win their markets, and raise capital to fuel their growth.”

Like the SRD, the South African Social Security Agency (SASSA) has unveiled the payment schedule for various grants in April 2024. Beneficiaries can expect their funds to be deposited according to the following breakdown:

Senior Beneficiaries

Older Persons SASSA SRD Grants payment will be starting Wednesday, April 3, 2024. This includes any linked grants associated with these accounts.

Disability Grant Recipients dates for April

Look forward to receiving the SASSA Disability Grants payment on Thursday, April 4, 2024. This disbursement also covers any linked grants in your account.

SASSA Children’s Grant Payment Schedule for April

Children’s Grants will be accessible on Friday, April 5, 2024.

Remember, there’s no need to rush to the bank on the first day of payment. Once the funds are deposited, they’ll remain readily available in your account for your withdrawal convenience.

Plan Wisely, Manage Responsibly

The South African Social Security Agency SASSA encourages beneficiaries to exercise responsible financial management. Remember, these grants are intended to support essential needs.

Why Your SASSA SRD Payment Might Be Delayed

• Verification Delays: Even if approved, Sassa may still be verifying your application. This can take time.
• Bank Issues: Incorrect bank details or an exceeding bank balance can hold up your payment.
• Technical Problems: High application volumes or technical glitches can cause processing delays.
• Missing Information: Incomplete applications with missing details may need correction before payment.

Stay Updated on SASSA SRD Payment April

 The South African Social Security Agency (SASSA) recommends that beneficiaries seeking updates on the SASSA SRD payment should regularly check the official SASSA website (www.sassa.gov.za) or follow their social media channels (@OfficialSASSA) for the latest announcements.

For any inquiries or assistance related to your grants, including the SASSA SRD payment in April, you can contact SASSA’s toll-free number: 0800 60 10 11.

By staying informed and managing your grants responsibly, you can maximize the benefits these programs offer.

According to companies’ regulations in South Africa, a foreign entity cannot have more than 20% of voting rights in a South African broadcasting company. Mpumelelo Ndiweni, CEO of Colmin Group, an African markets advisory and investment company, told TechCabal that the CAF president’s involvement could help Canal+, a French company, to bypass this requirement. “The coming on board of [Motsepe] would ensure Multichoice remains in South Africa and meets the threshold of local ownership required by authorities,” he said.

Sherilyn Kamga, a senior strategic finance analyst, also states that a partnership with local players like Motsepe via a holding company structure would address this regulatory requirement. Motsepe would likely hold a majority stake in the holding company. “This way, it could exert indirect influence over the company’s management without exceeding the 20% voting rights limit,” she said.

Where there’s interest, there’s conflict

CAF, Africa’s football governing body, usually invites bidders for broadcasting rights to some of the continent’s premier football competitions including the African Cup of Nations (AFCON) and other inter-club competitions. Supersport, wholly owned by MultiChoice, bids for these rights. For Motsepe who owns Africa Rainbow Capital (ARC), having an ownership stake in MultiChoice could mean that he would have an impact, directly or indirectly, on which broadcaster gets the lucrative rights.

According to Jimmy Moyaha, founder of investment firm Lebowa Capital, although the conflict of interest is a potential issue, it would largely depend on the ownership structure that Motsepe and Canal+ would agree on. “Motsepe isn’t directly involved in the management of ARC, his investment vehicle, and I doubt he would be involved in the management of Multichoice,“ he told TechCabal. 

Moyaha also noted that ARC’s position as an investment firm could easily be limited to a shareholder with minority voting rights which would address this conflict of interest.

Additionally, Motsepe’s tenure at the helm of African football’s governing body ends next year. He could easily decide to step down from the position should he desire to have a more active role in the entity which would come about as a result of the partnership with Canal+.

For Motsepe’s ARC, an investment company whose portfolio companies include mobile network operator Rain and neobank TymeBank, having MultiChoice on its portfolio could help with diversification. 

The company, which is listed on the Joburg Stock Exchange, has stated that it invests in companies with an established market position, a demonstrable track record, and strong cash flow generation, among other qualities. MultiChoice—with its 22 million subscribers in Africa, its 30-year presence on the continent, and R3 billion (~$156 million) cash flow, per its latest financial results—ticks most of these boxes.

“For ARC, [the investment into] MultiChoice would diversify the business into media, further strengthening its operating model and investment strategy as an [investment vehicle],” Moyaha added.

Back in 2011, Cell C sold off its 3,200 towers to American Tower Corporation for $430 million.  In June 2022, MTN sold its 5,701 towers to Nigeria’s IHS Towers for R6.4 billion (~$337 million), with the company stating that it will use the proceeds of the sale to fund the purchase of spectrum to high-demand spectrum frequencies and provide it with additional balance sheet flexibility. The following month, in July 2022, Vodacom announced that it would unbundle its over 9,000 tower assets into a separate subsidiary in which it would hold a 100% shareholding. The telco said the move was to enhance asset returns and lower communication costs. Last year, Cell C announced that it would switch off tower access and have its subscribers roam on towers owned or leased by MTN.

As these SA telcos continue to sell off their tower assets, with reasons ranging from raising funds for other investments to supposedly lowering communication costs and shifting business strategies, experts who spoke to TechCabal say there may be other reasons at play.

According to Jimmy Moyaha, founder of investment firm Lebowa Capital, telcos may be pursuing strategic goals which do not necessitate having the towers on their balance sheets. “We’re seeing telcos rather deploy their capex into more strategic things like buying spectrum and improving network capabilities,” he said. Cell C and MTN took this route as they immediately leased back the towers from their respective buyers.

Additionally, according to Moyaha, loadshedding might also be a factor in pushing telcos to move the towers off of their balance sheets. With the loadshedding situation having gotten worse over the last few years, telcos have constantly reiterated in their financial results the investment that they have had to make in backup power during blackouts.

MTN has stated in the past that loadshedding led to an increase in thefts at its towers; Vodacom has said it had to invest R1 billion (~$200 million) on backup power for its towers; and Telkom has said it had to spend over R500 million (~$100 million) on diesel for the backup generators needed to run its towers. 

“When loadshedding is severe, backup power doesn’t have enough time to recharge and replenish itself,” added Moyaha. “This then necessitates the need for additional power solutions to be deployed and that becomes a very capex-intensive undertaking.”

Yet another (possible) reason…

According to Tshepo Magagane, an investment analyst, shareholder pressure might also be a significant factor behind the selloffs. Over the last two years, when most of the sell-offs have taken place, Vodacom, MTN and Telkom have all seen their share prices tumble by 38%, 53% and 39% respectively. “Share price underperformance [has led] to pressure from shareholders which results in the companies convincing themselves that the tower assets are ‘non-core’.”

He adds that the fact that private equity firms, which emphasise cashflow generation, are buying up the assets indicates their cashflow importance. “Infrastructure assets [like towers] allow revenue prediction, stable margins, efficient working capital deployment, manageable and incremental maintenance capex to investors,” said Magagane. 

Following its acquisition of Cell C’s towers, American Tower Corporation reported significant returns from the purchase. At the time, the company stated that it was generating a return on invested capital of approximately 20%. Each tower had approximately two tenants at a lease rate of $2,500 per tenant.

According to Magagane, the prominence of such deals is likely to attract even more private equity investors to seek similar opportunities on the continent. “A consummation of deals this large should act as a catalyst for other investors to wake up to the fact that there are opportunities in South Africa and Africa,” he concluded.

Motsepe, worth $2.4 billion according to Forbes, is the founder and chairman of Ubuntu-Botho Investments and African Rainbow Capital (ARC). Some of the companies’ investments include mobile network operator Rain and neobank TymeBank. Motsepe also has mining interests through Africa Rainbow Minerals (ARM).

Earlier this month, Canal+ made an offer of R125 per share for the pan-African broadcaster, a 20% increase from the initial offer of R105 per share submitted in early February. 

The offer valued MultiChoice at about $2.9 billion. Since 2020, the French company has increased its stake in MultiChoice from 20.1% to 35.01% when the first offer was made in February 2023.

Since Canal+’s flirtations, experts have pointed out the regulatory complexities that the deal to acquire MultiChoice might incur. 

Motsepe’s involvement in the deal may be able to address some of these complexities, which include the fact that foreign companies are not allowed to have more than 20% voting rights in South African broadcasting companies. 

“With its roots in South Africa, the coming onboard by [Motsepe] would ensure Multichoice remains in South Africa and meets the threshold of local ownership required by authorities,” said Mpumelelo Ndiweni, CEO of Colmin Group, an African markets advisory and investment company.