Good day,
Titilola here
Today we are discussing
- Is internet affordable in Nigeria?
- Cameroonian fintech startup Diool raises $3.5 million
- What Spotify’s move to Africa means for podcast creators
Is Internet affordable in Nigeria?
According to a new report, Nigeria has the least affordable Internet in the world. The Digital Quality of Life report 2020 put together by SurfShark ranks Nigeria 85th out of 85 countries indexed.
This report is in conflict with the Economist’s Intelligence Unit (EIU)’s Inclusive Internet Index which ranks Nigeria 25th out of 100 countries and top in Africa. While Surfshark’s methodology uses a country’s average hourly wage, EIU’s uses the average monthly income. Emmanuel has more on this on Techpoint Africa.
While we may doubt the accuracy of these reports, we don’t need any reports to tell us that Internet is still not affordable in Nigeria. But if we need data evidence, MTN Nigeria’s 2018 Listing Memorandum paints a more realistic picture.
Of the telco's 44 million data users at the time, 25 million were accidental users who use between 0MB and 5MB. There’s no doubt that other telcos have similar numbers.
Nigeria’s addressable market is smaller than you think. Even though Internet penetration has increased between 2018 and now, Nigeria’s failing economy makes it even more difficult for its citizens to have disposable income.
Startups building Internet-based products and services targeted at Nigerians face challenges with lower adoption rates than those targeted at other markets.
Read: There are probably less than 50,000 Netlfix subscribers in Nigeria.
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Cameroonian fintech startup Diool raises $3.5 million
Fintech Startup Diool has raised funding of $3.5 million from the Lundin Group and its existing investors to expand its operations across Cameroon. Prior to this raise, the startup had reportedly raised over $2 million across four rounds.
From prepaid recharges to fintech: Founded by brothers Serge and Phillipe Boupda, Diool is one of the fastest-growing startups in Cameroon.
It started out in 2015 as an app that sold prepaid recharges to customers. But pivoted in 2018 to become a payments platform that helps small businesses to manage digital payments.
The startup won the Cameroonian leg of the 2018 Seedstars competition. It was also one of the 20 Francophone African countries chosen to participate in the World Bank’s Group Tech Acceleration Program.
Since 2018, the startup has reportedly has signed up over 2,000 merchants who have transacted over $120 million on the platform.
Fintech in Africa: Despite being the global leader in mobile money, many Africans still do not have access to financial services. The potential for solving this challenge has attracted a lot of investments into the African fintech space over the past five years. A notable example in recent times is Stripe’s acquisition of Paystack for over $200 million.
In addition to startups like Paystack and Diool helping merchants to access payment, a new crop of African fintech startups are getting attention - fintech infrastructure startups.
Just yesterday, South African API startup Stitch announced its $4 million seed round. Earlier this month, Pngme, a US-based but African-focused API startup also announced a seed round of $3 million. In 2020, three Nigerian-based fintech API startups Mono, Okra and OnePipe also attracted investment. Read more for context here.
Question: Will open banking render API startups obsolete?
While there’s an influx of investment into the African startup space, some countries benefit more than others. According to Disrupt Africa’s Startups Finding Report 2020, the big four countries -- Nigeria, Kenya, South Africa and Egypt -- accounted for 77.3% of funded startups and 89.2% of the total funds invested across the continent in 2020. Even more disadvantaged than others in this regard are Francophone countries.
The Francophone disadvantage. While more Francophone startups like Diool are getting attention from investors, the region is still not getting enough recognition. The region’s tech ecosystem suffers from its small size and population, as well as a language barrier. Read more about it here.
African podcasters on Spotify
Earlier this week, global music streaming pioneer, Spotify announced its plans to expand into 41 new African countries and 39 others across Asia, the Caribbean, Latin America and Europe. With its expansion into these new markets, Spotify now has a footprint in a total of 180 countries.
In this past Tuesday’s edition of the newsletter, Oluwanifemi and Emmanuel discussed how the streaming platform will have to play catchup with already existing streaming platforms in Africa. If you missed it, find it here.
However, Spotify could be off to a promising start. Thanks to its reputation, many Africans may be ditching other streaming platforms for Spotify, if we’re going by reactions on social media anyway.
But the biggest winners could be podcast creators. While African musicians already put their songs on Spotify and have access to a global audience on the platform, podcast creators didn’t have that opportunity, until now.
Podcasts are growing in Africa with many individuals and businesses sharing their stories and journeys through podcasting.
Spotify’s entrance into the African market gives podcast creators an opportunity to reach a wider global audience and helps the rest of the world to discover our stories through this medium. This could also mean more opportunities for ad placements.
Podcasting on Spotify: In October 2018, Spotify rolled out podcasting for all its users and by the end of the year, podcast listening on the platform reportedly grew by 175%. Ever since then, Spotify has become the most widely used podcasting platform in a number of markets including the US, Canada, Australia and Sweden.
And Spotify is not just helping podcast creators to reach a wider audience, it’s also betting big on exclusive content. In 2020, popular American Podcaster Joe Rogan signed a $100 million 3-year exclusive deal with Spotify.
Like Joe Rogan, former American First Lady Michelle Obama, Media personality Kim Kardashian and TikTok star Addison Rae also signed exclusive deals. Not to mention the multiple million-dollar acquisitions of podcast startups.
Spotify is also finding interesting ways to merge music and podcasts on its platform. Read all about it here.
It remains to be seen how African podcast creators will leverage Spotify going forward.
What else is happening
- The definition of cryptocurrency according to Godwin Emefiele, Governor of the Central Bank of Nigeria. Watch.
- Twitter has announced the rollout of new features including Super Follow, a feature that allows users to monetize exclusive content. Find out more.
- Joe Biden revokes Donald Trump’s visa ban on immigrants. But with a twist. Family members of US citizens and green card holders can now immigrate to the US but foreign workers still cannot get visas. Read more about it.
- The Australian government has passed a new law that requires Facebook and Google to pay news publications for their content. Read.
Have a great day!
Titilola for Techpoint Africa.
