International Financial Corporation (IFC), a member of the World Bank Group and a lead investor in Africa’s Talking (AT) 2018 $8.4 million series A round has denied suing its portfolio company in 2023 for rejecting an acquisition offer from Infobip. An earlier report from this publication cited a court case referenced by people familiar with the matter.

Certain aspects of their claims have now been determined to have been wrong.

IFC holds a 20% stake in Africa’s Talking and as part of the Series A deal, Wale Ayeni, who led IFC’s venture capital arm in Africa at the time of the investment, joined Africa’s Talking board. Marieme Diop has since replaced him.

“IFC does not discuss the business decisions of its clients,” the corporation told TechCabal via email.

“AT was viciously attacked by the IFC last year, continuing a pattern of abuse that started with their investment in 2018,” Gikandi told TechCabal via email. He added that the “attack” felt like a “cover-up” and claimed he was unaware of IFC’s motivation.

Gikandi did not answer any questions on the legal proceedings.

Orange Digital Ventures, a $350 million fund, and Social Capital, a $600 million fund looking to sell its stake in startups, also participated in Africa’s Talking Series A round.

Africa’s Talking is now caught up in at least two legal cases. On Monday, TechCabal reported that Africa’s Talking and Gikandi were sued by Africa’s Talking other co-founders Eston Maina Kimani and Bilha Ndirangu, and three others who allege that Gikandi pushed out Ndirangu as director after she called for an investigation into “workplace abuse.”

“The 1st Applicant (Ndirangu), who previously served as a CEO and until the irregular ouster held the position of an independent director, possesses a deep understanding of the 1st Respondent and its operations,” a court document read.

She also argued that she was fired despite a court order restraining Africa’s Talking from removing her as a director.

Three others, including Eston Maina, another co-founder and former CEO of Africa’s Talking, are also listed as petitioners. Africa’s Talking, Gikandi, and the shareholders’ trust are listed as defendants in a petition filed in a Nairobi High Court.

Samuel Gikandi, Africa’s Talking current CEO, and other shareholders, including a trust that holds unvested shares for employees, voted to remove Ndirangu as director in June 2023, according to court documents seen by TechCabal. Ndirangu, who owns a 6.33% stake in the company, was immediately replaced. 

Africa’s Talking and Samuel Gikandi did not respond to TechCabal’s request for comments.

After Ndirangu called for an independent investigation into misconduct claims at the company, she was removed to obstruct the investigation process, she told a court.

“The unlawful removal of the 1st Applicant (Bilha Ndirangu) as a director and its intended ratification has caused undue prejudice to the Applicants (Africa’s Talking, the CEO and other shareholders), and urgent intervention by this Honourable Court is necessary to prevent irreparable harm,” one court filing said.

Understanding Ndirangu’s removal

To remove Ndirangu, the company’s board needed a majority vote of the shareholders. Court documents show that a trust (AT Group ESOP Trust)that holds unvested employee shares had to vote to satisfy that requirement. Ndirangu claims that the vote cast by the trust was illegal as the trust is inactive and lacks the right to vote her out. 

Ndirangu and her fellow petitioners own 20.83% of Africa’s Talking, while Gikandi and his team own 25.25% of the company.

“If we exclude the 8th Respondent’s [AT Group ESOP Trust] invalid votes, the combined shareholding of ordinary shareholders in favor of the removal does not meet the necessary majority,” court documents said. 

“The applicants (led by Bilha) seek prompt resolution of this matter in the interest of justice, company stability, and shareholder protection,” reads a submission form to the courts, dated August 2023.

Africa’s Talking was founded in 2010 by Bilha Ndirangu, Eston Kimani and Samuel Gikandi and became profitable between 2012 and 2013, according to one report.

After bootstrapping the company for over seven years, the founders raised an $8.4 million Series A round in 2018, led by the International Finance Corporation (IFC). At the time, Ndirangu was COO and was promoted to CEO the following year. However, she left the company in 2021, in what court documents show was a forced exit. Gikandi then replaced her. 

The terms of the deal were not disclosed.

Angani, developed by Phares Kariuki, Riyaz Bachani, Brian Muita and Ripduman Sohan is a fully automated cloud infrastructure company in East Africa and is focused on SME’s market, financial services and media industries in the region.

Phares Kariuki, CEO of Angani, and the team is looking forward to some interesting tailwind owing to investors’ cash infusion. “This funding proves it is possible to build an internationally attractive infrastructure business in Africa. In the coming year we intend to leverage this capital towards our goal of handling Africa’s data by helping enterprise businesses adopt to the cloud”, Karuiki said.

According to a report released earlier in 2015 from the International Telecommunications Union (ITU), most applications and web content in Kenya, and Africa in fact, are hosted remotely in the USA and Europe, resulting in high access latency, low throughput and increased operational costs.

Miguel Granier, Founder and Managing Director of Invested Development believes this creates a niche for Angani to positively impact the Cloud space in Africa.  “Angani is an attractive proposition because it provides direct benefit to the firm’s existing portfolio. Globally, it’s a competitive space, but the specific local needs for East African remain underserved, creating a significant opportunity for impact”, he said.

Image via: angani.co
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