Jumia Food exits in seven important markets, Techstars partners with ARM labs and Maka raises $2.65 million in pre-seed funding.
Here are the highlights of tech around Africa for the week:
· Jumia food exit in seven important markets
· Techstars partners with ARM labs
· Maka raises $2.65 million in pre-seed funding
Jumia Food exits in seven important markets
African e-commerce powerhouse Jumia has announced plans to close its Jumia Food food delivery service in seven important markets: Ivory Coast, Algeria, Morocco, Kenya, Nigeria, and Tunisia. Jumia has decided to wind down these operations, with effect from December 20, 2023, as part of a strategic realignment to better match the changing operational landscape and the macroeconomic factors that are now in place in these territories.
Jumia's decision to leave the food delivery industry is a component of a larger cost-cutting plan that was started in Q4 2022 and included the company's closure of operations in Senegal, Ghana, and Egypt. In addition, the business terminated Jumia Prime, reduced first-party grocery in a few countries, and ceased logistics-as-a-service. Although these adjustments accounted for less than 1% of the group's gross merchandise volume (GMV) and 2% of adjusted EBITDA loss in the first nine months of 2022, Jumia Food constituted approximately 11% of the GMV for the nine months ending September 30, 2023.
Jumia Food, the category on the site with the quickest growth, has never turned a profit, consistent with Jumia's main objective of allocating cash and resources as efficiently as possible to ensure long-term profitability. Now, the company is keeping JumiaPay running in all 11 markets while focussing on its core business of selling tangible items.
Jumia's move is consistent with market patterns and follows Bolt Food's recent withdrawal from South Africa and Nigeria. The reasons for both exits seem to be related to macroeconomic difficulties, increased competition, and growing inflation in the continental meal delivery market, where prominent competitors include Uber Eats, Chowdeck, and Glovo.
Jumia's strategy change is an attempt to take advantage of the expansion of the physical goods industry, which is growing in Ghana, Uganda, Senegal, and two other African nations. The company is positive about the growth potential in this category even if the GMV in physical goods decreased by 17% in Q3 2023 compared to the same period last year.
There will be a workforce decrease as part of the restructuring, and some former food delivery workers will move into roles within the remaining physical goods business.
With a focus on promising business categories, Jumia is demonstrating its dedication to overcoming difficult economic conditions and fierce competition through this step.
Techstars partners with ARM labs
In partnership with Lagos-based innovation initiative ARM Labs, Techstars has revealed the second cohort of its pan-African accelerator program. The goal of the ARM Labs Lagos Techstars Accelerator is to assist entrepreneurs who are changing Africa and the world economy.
The 2023 cohort provides tech-enabled solutions across several industries in Sub-Saharan Africa, having been carefully chosen from over a thousand applicants. Oyin Solebo, the accelerator's managing director, oversaw the screening and selection procedure in coordination with a screening committee that included seasoned investors, executive leaders from ARM, and directors from Techstars.
The ARM Labs Lagos Techstars Accelerator, in contrast to its first program, focused on entrepreneurs using technology, data, and intelligence to meet the changing requirements of an expanding population in Africa, going beyond FinTech and PropTech. FinTech, logistics, e-commerce, health tech, renewable energy, and the future of work are among the industries the cohort covers. Notably, four of the cohort's firms have at least one female co-founder. The startups are based in Ghana, Nigeria, and East Africa.
Techstars intends to invest up to USD$120,000 in each firm throughout the 14-week intensive program. In addition, the company will offer benefits surpassing USD$5 million, accounting services, cash equivalent hosting, and legal help. In addition to cash support, the startups will receive customized mentoring, help in establishing their companies, lifelong access to the worldwide Techstars network, and focused meetings with possible investors.
The accelerator program, in partnership with ARM Labs, offers entrepreneurs more than just financial support; it introduces them to ARM's local network, research, insights, and vast financial advice skills. In order to create resilient enterprises, Oyin Solebo, Managing Director of ARM Labs Lagos Techstars Accelerator, emphasized the significance of all-encompassing support that includes financial aid, technical assistance, and network connectivity.
24Seven, Beauty Hut, Eight Medical, GetEquity, JumpnPass, One Plan, PBR Life Sciences, PressOne Africa, Rana, Surge Africa, Swoove, and Veend are among the chosen startups in the cohort. These businesses tackle a variety of issues, including as healthcare, clean energy, financial inclusion, and asset-light marketplaces and mobile self-checkout systems.
Mentorship sessions with prominent figures in the African IT industry, such as Tunde Kehinde, Bode Abifarin, Tingting Peng, Kevin Simmons, Lola Esan, and Yischai Beinisch, are emphasized in the curriculum.
The accelerator program will culminate on February 22, 2024, with an exclusive Demo Day wherein the participating firms will present their achievements, signifying a noteworthy turning point in their professional development.
Maka raises $2.65 million in pre-seed funding
Maka, an innovative African fashion and beauty e-commerce platform, recently secured an impressive $2.65 million in a pre-seed funding round led by Pan-African venture capital firms 4DX Ventures and Janngo Capital. This round of funding, which includes contributions from Wolt executives, Palm Drive Capital, and angel investor Jonathan Shipman, founder of EVP, represents a major advancement for the platform.
Maka, a vibrant social commerce platform, was established in 2021 by Diana Owusu-Kyereko, a former CEO of Jumia Ghana and Chief Commercial Officer of Jumia Kenya. With its interactive features, such as reviews, user-generated material, and live try-on hauls, this innovative platform offers a scalable way for consumers to discover products that complement their individual styles.
Owusu-Kyereko was inspired to start Maka by her pandemic experiences in Ghana, where she struggled to find inspiration for inclusive dress. She used to be able to shop in London, but due to travel limitations caused by the epidemic, she had to look for other options. Many popular websites and influencers that friends suggested lacked the personal touch and frequently raised doubts.
Owusu-Kyereko imagined Maka as a response to these difficulties, a way to simplify the purchasing process for consumers. The platform focuses on two main problems: the lack of trust associated with online buying and the difficulties creators face when trying to make money off of their influence.
Maka uses videos as a strategic tool to close the trust gap that exists between users and content publishers. The platform uses videos because it knows how powerful they are for fostering trust. It uses them to successfully communicate information, encourage user conversions, and create a relationship between users, reviewers, and buyers.
One unique aspect of Maka is its review feature, which enables customers to provide succinct video reviews (30–60 seconds) following a purchase. With the recent switch to a user-generated content model, there are now over 2,000 video reviews on the site, and they are crucial in influencing consumer choices as well as building a feeling of community and trust.
With over 500,000 downloads since its launch and plans to use the recent funding to grow its team, improve technology, and deepen its presence in Ghana and Nigeria, Maka is well-positioned to capitalize on the growing e-commerce market in Africa, particularly among millennials and Gen Zers. This strategic approach is in line with the platform's commitment to meeting the changing needs of consumers.
Maka has also implemented a rewards system to further incentivize user engagement. Users and creators earn points for each video review, and additional points are accrued when others make purchases based on their reviews.