👨🏿‍🚀 TechCabal Daily – Sky.Garden gets a second chance

15 NOVEMBER, 2022

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CRYPTO MARKET

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Ether	$1,218	+ 0.85
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FTX CRASH CAUSES LAYOFF IN NESTCOIN

Yesterday, one-year-old Web3 startup, Nestcoin, announced that it would be laying off some of its employees as its operational expenses—used for salaries and day-to-day operations—are stuck on FTX.

In February of this year, the company raised $6.5 million in a pre-seed round that included investors like Alameda Research, a sister company to FTX. Now, most of that money—about $4 million of it—is reportedly tied down at FTX.

According to the Financial Times, the startup will lay off almost half of its 100-person workforce to compensate for the loss. While some of the staff will be let go instantaneously, others will remain on 8–10-week contracts. Remaining staff members will receive pay cuts of up to 40% while the CEO, Yele Badamosi, will have no salary for the foreseeable future.

The company, however, announced that clients’ assets were unaffected by the debacle.

Other affected startups

FTX has affiliates and subsidiaries in Africa, and they have voluntarily declared bankruptcy along with FTX. 

Its affiliates in Nigeria include cryptocurrency exchange platforms BT Pesa Nigeria Ltd and B Payment Services, which convinced several Nigerian villagers to invest their savings in FTX. Other African affiliates of FTX include BTLS Limited Tanzania, B for Transfer Egypt, BT Payment Services Ghana, BT Payment Services South Africa, BT Payments Uganda, BT Pesa Nigeria Ltd, BTC Africa S.A., and others.

Zoom out: Nestcoin is the only African startup that has announced a financial loss. FTX and its sister company Alameda Research, however, have invested in other companies, including Kenyan startups Mara and Chipper Cash.

SKY.GARDEN GETS A SECOND CHANCE

Two months ago, Kenya-based marketplace Sky.Garden announced it would shut down in October, but now the tides have turned. The startup will keep its doors open for much longer.

ICYMI: Preparing for closure, the managing director, Martin Majlund Sky.Garden, sent termination notices to employees and announced that the company would close on October 16 unless it got a cash injection. He had been receiving slow nos from VCs who have become more frugal due to the economic downturn. The e-commerce startup was running on the last leg of the $4 million it raised last year. 

Breaking a spell

Despite the dry spell in the funding scene, the four-year-old startup secured an investment by selling its intellectual property (IP), per Techweez. 

This acquisition means that Sky.Garden will continue to run but under new owners and management. The company has not disclosed who its buyer is, but it has announced that the workers who were notified of their termination will no longer have to leave the company. Considering the layoffs that are happening across Africa as startups restructure to operate more leanly and tighten their spending, this is a lucky stroke.

Several African startups, like Kune Foods and Notify Logistics, have had to shut down because they ran out of money and were unable to secure funding for more runway. 

KENYA MOVES TO REDEEM DIGITAL BORROWERS

The Central Bank of Kenya (CBK) has released a new framework that is set to help mobile lenders improve their credit scores.

With the Credit Repair Framework, Kenyans who are yet to repay 30-day loans acquired through mobile phones will have until May 2023 to repay these loans. 

The defaulters will also have at least 50% of their outstanding debts, as at October 2022, forgiven. They will then have six months to repay the balance, and acquire improved credit standing.

This way, over 4.2 million lenders with adverse credit scores will be able to redeem their standings with commercial banks and credit reference bureaus (CRBs).

The bigger picture: Since newly-elected president William Ruto’s signing in, Kenya has held fast to his mandate of helping more Kenyans access loans. In September, for example, the Treasury, Central Bank, Safaricom, Kenya Commercial Bank (KCB) and NCBA announced that four million Kenyan defaulters would be removed from defaulters’ list. Today’s update comes a few days after the CBK released a statement restricting credit reference bureaus (CRBs) and other commercial facilities from using negative credit history to deny Kenyan loans.

SELL MORE WITH PAYSTACK

EVENT: FIDELITY INTERNATIONAL TRADE AND CREATIVE CONNECT

Today at 2 PM, join us at the Fidelity International Trade and Creative Connect (FITCC).

TechCabal’s managing editor, Koromone Koroye, will moderate a panel on technology and fintech, and she’ll be speaking with:

• Sukhi Srivastan – Head of sales and business development, AZA Finance
• Edidiong Uwemakpan – Group head, marketing and communications, TeamApt
• Ovie Esiekpe – VP of growth, VertoFX
• Adedoyin Odunfa – MD/CEO, Digital Jewels Africa
• Ben Champion – CEO, Nanumo

This session will speak to the expansive strides of players in the fintech ecosystem and how to utilise the opportunities as well as tackle the challenges of expanding to Europe.

For more information on how to join the event, click here.

IN OTHER NEWS FROM TECHCABAL

The Next Wave: The social questions around Africa’s digital economy.

Orange Botswana becomes the first Orange subsidiary to launch 5G in Africa.

OPPORTUNITIES

• TechPR is open for applications to its Be Seen with TechPR programme.Two startups will get media coverage on two relevant media platforms, introductions to key journalists covering their sectors, media relations training, and media assessment worth $5,000. Apply by November 18.

• Applications are open for the UK Research and Innovation African Research Leaders’ Programme. Talented researchers in sub-Saharan Africa leading quality health research in the region can apply to get up to £750,000 in funding. Apply by December 1.

• The Fondation Maison des sciences de l’homme and the Institut Français de Recherche en Afrique of Nairobi are offering a three-month-long fellowship in France for postdoc researchers from Kenya, Tanzania, Uganda, Burundi, Rwanda, and Eastern Congo (Kivu) who have presented their thesis from 2017. Laureates will receive a monthly stipend of €1,600 at the start of each month. Apply by December 9.

• If your startup or innovation is focused on climate-smart agriculture practices, apply to the THRIVE|Shell Climate-Smart Agriculture Challenge for a chance to win $100,000, a spot in a prestigious accelerator, publicity and more. Apply by December 11.

• Applications are now open for Apple’s Entrepreneur Camp. The immersive virtual camp will give founders and developers from underrepresented communities mentorship, technical support and access to the alumni network. Apply by December 5.

• If you have a business in the agricultural sector, apply to the  African Development Bank’s AgriPitch competition—a 2-week virtual program—-to get business mentorship and win access to a grant pool of $140,000. Apply by November 4th.

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