Is Brass’ acquisition a strategic or rescue move?

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May 31, 2024
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5 min read
Brass co-founders
L-R: Emmanuel Okeke and Sola Akindolu, Co-founders of Brass

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Victoria from Techpoint here,

Here's what I've got for you today:

  • Is Brass’ acquisition a strategic or rescue move?
  • Glovo to start food delivery in Lagos with EV bikes
  • YoLa Fresh’s $7m pre-Series A 

Is Brass’ acquisition a strategic or rescue move?

Brass co-founders
L-R: Emmanuel Okeke and Sola Akindolu, Co-founders of Brass

Remember this? Paystack and PiggyVest join forces in Brass acquisition

While acquisitions are usually cause for celebration, there's some unease here.

Just two months ago, Brass made headlines for failing to provide customers with access to their deposits. Their business banking product, meant to support small businesses, ended up causing more problems, leaving employers unable to pay salaries and businesses struggling to buy supplies.

Founded in 2020 by Sola Akindolu (CEO) and Emmanuel Okeke, Brass aimed to make banking easier for small businesses in Nigeria. They raised significant funds and onboarded around 5,000 businesses. However, by October 2023, customers started facing issues accessing their deposits.

Akindolu blamed these issues on funding challenges, stating that only a small fraction of their customers were affected. He highlighted the need for substantial capital to disrupt traditional banking effectively.

Despite his explanation, the fact that Brass, a deposit-taking institution, couldn't provide customer deposits raises serious concerns about its operations.

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The acquisition by Paystack's group of investors has been received positively, but questions remain. Was this move a strategic acquisition or a way to salvage investor funds? Click the link to read more and find out.


Glovo to start food delivery in Lagos with EV bikes

Glovo delivery EV-bikes at Siltech EV charging station
Glovo delivery EV-bikes at Siltech EV charging station

Glovo is teaming up with EV manufacturer Siltech to start using electric bikes for deliveries in parts of Lagos, Nigeria. This move could help Glovo cut down on petrol and maintenance costs for their current petrol-powered motorcycles.

Though Glovo hasn't begun using the EV bikes yet, Siltech sees this as a proof of concept. With petrol prices hitting ₦617 per litre, more businesses, including Glovo, are looking at EVs as a cheaper alternative.

Siltech’s CEO, Tolu Williams, confirmed that Glovo has signed up for their products and services, which include charging stations, battery swaps, and technical support. The pilot will start in areas like Ikate, Lekki, and Victoria Island, where Siltech already has infrastructure.

The cool thing about Siltech’s setup is the battery swap stations, which let riders swap out a drained battery for a fully charged one in minutes. Glovo's riders will be using Siltech Ginsu bikes equipped with this feature.

Even though Glovo will still have to pay for Siltech’s services, it’s at a discounted rate, making it cheaper than sticking with petrol. Deliveries with the EV bikes are set to start in a few months.

Williams is optimistic about the cost savings for Glovo once the EV services are up and running, thanks to the comprehensive support Siltech offers. Despite some scepticism about Nigeria's readiness for EVs, Siltech is already providing services to several EV users and even a Tesla owner.


YoLa Fresh’s $7m pre-Series A

YoLa Fresh co-founders
Moroccan agritech startup YoLa Fresh secures $7 million pre-Series A

YoLa Fresh, a Moroccan agritech startup, just raised $7 million in pre-Series A funding. Al Mada Ventures led the round, joined by Algebra Ventures, E3 Capital, Janngo Capital, and the Dutch Entrepreneurial Development Bank (FMO).

While YoLa Fresh plans to expand into other markets eventually, Morocco is their main focus. It also aims to connect farmers directly with retailers and food service providers, cutting out the middlemen to streamline the supply chain.

YoLa Fresh, founded in 2023 by Youssef Mamou and Larbi Alaoui Belrhiti, has already made a mark by working with over 1,000 retailers across North Africa, reaching a gross merchandise volume (GMV) of $1 million. 

They deliver over 1,200 tonnes of produce to customers every month and boast an impressive 85% customer retention rate with retailers averaging four transactions weekly.

YoLa Fresh uses data from both farmers and retailers to offer insights into harvests and financing options. This helps them maintain strong customer loyalty and aims for a positive contribution margin by late 2024 or early 2025.

Looking ahead, the startup plans to stick with cash on delivery for traditional retailers, work closely with farmers to boost margins and focus on unit economics. 

They expect to hit an annual revenue of $40 million to $50 million by 2026 and start expanding beyond Morocco. With agriculture making up 15% of Morocco’s GDP and a traditional trade sector worth $5 billion to $6 billion annually, the market looks promising.


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Have a fun weekend!

Victoria Fakiya for Techpoint Africa.

She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.
She's autistic and interested in mental health and how technology can help Africans with mental disorders. Find her on Twitter @latoria_ria.

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