Innovating in Africa: Top 10 Things You Shouldn’t be Building

On the 17th of July 1938, Douglas “Wrong Way” Corrigan filed a flight plan for a 4,500 km trip from Brooklyn to Long Beach California in the United States. Twenty Eight hours later, he landed in Ireland Great Britain 8,200 kilometers away from his original destination. How that happened is beyond me, needless to say, the moral of the story is clear, regardless of how fast you’re flying, you will never get to your intended destination if you’re moving in the wrong direction. This is the dilemma I believe a lot of startups are facing.

This article is the first in a two-part series on innovating in Africa, and since I do not consider myself to be a prophet of doom (and no one else would consider me to be one either), the sequel to this would be Top10 things you should be building.

I’ve been privileged to get on calls with startup founders over the past couple of months, and I’ve learned firsthand that while there are a lot of driven and highly technical founders willing to commit themselves to building disruptive businesses within Africa, the vast majority of them have a poor understanding of African innovation (or in other words, what to build to create massive outcomes). I’ve seen everything, from conventional everyday B2C eCommerce (which you shouldn’t really be doing; unless you haven’t seen Jumia’s financials) to modifications on proximity payments via mobile payment applications (I am exceptionally bearish on card-driven contactless payments in Nigeria) to an evolution of agency banking (that sounded more like the founder didn’t want to get a license, but wanted to tell a nice story nonetheless). Everything points to the fact that a good number of people building within Africa have very little understanding of how African innovation works and how to position themselves to create outsized outcomes as both venture-funded and non-venture-funded entities. This article is my attempt to demystify my theory of African innovation that stems from both understanding the environment and playing within it.

Theory of African Innovation

Venture funds are predicated on the notion that 80% of their portfolio will go to zero, 10% may become zombie startups and only one or two startups within their portfolio will create the 10x+ returns all VCs dream about. If you’re a venture capitalist, the one superpower you wish you had is the ability to predict winners ahead of time and just fund them (and keep funding them), however, none of us has that. The best we can do is study market trends, identify recurring behaviors, hedge our bets on those recurring behaviors, and occasionally make provisions for the companies that look like exceptions (which may eventually be winners).

Some of the biggest players in the market today didn’t look like clear winners years back – 5 years ago, OPay was a Chinese fintech sharing free food to Unilag students to drive adoption and trying to be the “O Company” – OFood, ORide, OCar (thankfully it was OPay that eventually stuck), Moniepoint (TeamApt at the time) was building technology solutions for banks and Jumia was trying to prove that it could live up to its Amazon of Africa name after debuting on the NYSE and seeing its stock price plummet by 42%. Five years later OPay is one of the largest mobile payments players in Nigeria with over 40 million users, Moniepoint processes north of US$ 150 billion annually, and Jumia is still Jumia.

Understanding innovation in Africa is understanding that; certain markets aren’t large enough to create venture-sized returns (regardless of how founders try to paint them as growing markets), African markets are winner-take-all markets, and not every incumbent can be completely disrupted regardless of how bad their offering is. A solid understanding of some of these factors is a great way to identify what markets to build in (if you’re a founder), fund (if you’re an investor), and outrightly stay away from (if you value your peace of mind).

This article is my attempt to try and demystify that concept by identifying 10 things you shouldn’t be building in 2024. There are many reasons you shouldn’t be building in some of these verticals, some of these are based on the second theory of African innovation that African markets are winner take all markets (and while there is usually a place for a second and third player in some verticals, everything beyond those two players except in certain verticals like lending is a huge bet you shouldn’t be taking), some are based on the fact that certain markets aren’t large enough to create sustainable returns, while some are predicated on the fact that certain models are largely untested in our markets and based on the way our environment is structured may not necessarily work in my opinion.

My points are also arranged in descending order; from verticals I can swear you shouldn’t be building in, to things I may likely be proven wrong about (but I still have my reservations about nonetheless). To be very clear, these are companies you shouldn’t be STARTING in 2024, I am not in any way trying to denigrate the companies who already play in these spaces. Know this and know peace. Let’s begin.

TL;DR

1.    Mobile Payment Applications

Extremely saturated market, low barrier to entry, high customer acquisition costs, very little opportunity for product differentiation, and high fraud susceptibility. Opportunity to make outsized venture outcomes is next to zero (except a company with a strong recognizable brand is taking this up), not something you should be building if you value your peace of mind.

2.    Payment Gateways

Clearly defined market leaders, highly skewed business model that will make profitability difficult to achieve, very little real problems to solve. Too much stress and regulatory requirements to build for this market without a clear plan to play big.

3.    Agency Banking

Lol

4.    Consumer Savings

Competitive market with existing market leaders, next to zero switching costs, customer acquisition via attractive interest rates may work in the short term but damage your business prospects in the long run. Still, a market you can play in, play small, and be profitable, not the ideal avenue to generate market-defining outcomes.

5.    Card Issuance

Short to medium-term prospects are still valid, possibility of a future where cards becoming irrelevant in comparison with account-to-account transfers. Safer to hedge on a long-term future as a venture builder than chase a present reality that may already be in systemic decline.

6.    B2B eCommerce

Don’t you read Techcrunch?

7.    Open Banking

That kid from high school with so much potential who years after graduating from college hasn’t really done anything with his life because his village people (see regulation) has refused to let him go. Until CBN updates its regulatory stance on Open Banking from just providing API standards to mandating the banks to actually expose those APIs to vetted third parties, Open Banking will continue to be a pipe dream.

8.    Earned Wage Access

Worrisome business model (in my opinion), seems more like employee lending at punitive interest rates than anything else, may just be a strategic trojan horse (see entry point) for a long-term HR platform play,

9.    Payment Orchestration

Very interesting opportunity, market may not have enough players (i.e Online D2C merchants with operations across multiple African markets) to sustain vertical, could be an entry point for a more broader cross-border payment play. Worth looking into.

10.  Crypto Exchanges

Cyclical business model, low barrier to entry, regulatory pressure, may require huge marketing budget to compete. Just one aspect of a crypto play and doesn’t fully define what crypto represents for Africa in its entirety.

Top 10 Things You Shouldn’t Be Building

1.    Mobile Payment Applications

This in my honest opinion should be a no-brainer; the market is exceptionally saturated (Flutterwave reportedly pulled back their Barter mobile payment application), there’s really nothing innovative you can bring to the table (the fact that this is what you want to build is an indicator of that), and regulatory restrictions on who can issue Bank Verification Numbers (BVN) limit the scope of your market (meaning you can’t really target people who genuinely have no bank accounts as a standalone strategy). Regardless, as we speak, three young men are sitting in an apartment in God knows where planning to launch a new app called SugarPay that will “revolutionize the Nigerian payment industry and reportedly bolster financial inclusion”. whatever that means.

The big question here is why are people still building mobile payment applications? there are two answers to that:

It is relatively easy to build; unlike building a digital bank (which I also don’t think you should be building) that requires you to first of all get a deposit holding license (which in this case is usually an MFB license), and either build your own core banking system (Kuda’s approach with Nerve) or lease one (FairMoney’s approach with Oradian), a mobile payment application requires none of those things. Since a mobile payment application doesn’t require its own ledger update system (because the funds are usually held by a third party), a mobile payment application at its core becomes a fancy user interface with funding and disbursement APIs provided by either Flutterwave or Monnify, bills payment APIs provided by Quickteller, VTU Pass or Remita and some other ancillary services (savings, betting, gift cards etc.) provided by another third party. This largely demystifies what it takes to build a mobile payment application and makes it somewhat easy for any technically competent person to put together.

The second reason people build mobile payment applications is because of the perceived size of the market. The mobile payments market is a huge market, more than 9.6 billion transactions were processed on the NIP rail (Nigeria’s largest real-time payment rail) in full-year 2023 alone, an 88% YoY growth from 2022. There are more than 61million issued BVNs and 107 million issued NINs (key KYC requirements to onboard on a digital platform), there are roughly 40 million smartphones in Nigeria (another key requirement to actually be on a digital platform) and everything points to the fact that all these data points will continue to increase going into the future. My market sizing estimates place the revenue potential of the individual fund’s transfer market as a standalone line item to be roughly N36.7billion (US$26.2million), the bills payment segment is another N118.9bn (US$84.9million) market (putting into consideration commissions earnable by airtime, data, cableTV, and electricity distributors) and other ancillary services like savings, gift cards, and betting (I am unfamiliar with the commercial model) may be another N20bn (US$14.2million) market. Put all these together and you can clearly see a N175.6bn (US$125.4million) market which Is enough reason for someone to (erroneously) position to earn 4% of that market (roughly N7bn (US$5million)) and build to capture that. However, what no one tells you is that most of that market is already cornered.

Most Nigerians are in an abusive relationship with their banks. While Nigerian banks have shown people premium shege at different points in their lives (reason why I have seven bank accounts), most people would rather trust a Zenith or Access Bank than a SugarPay that is promising heaven and earth in transaction processing efficiency even though they are running on the same infrastructure everyone processes transactions on. Why? because the difference between Zenith Bank and Sugar Pay is clear – if Zenith Bank is running mad, there is a physical office you can run into to match their madness too, however, if Sugar Pay is running mad, you will be limited to emails, phone calls (if they pick), aggressive tweets cursing their generations, and eventually pleas of mercy in their DMs because your hard earned money is at stake. Since most customers by default not only trust their banks but are willing to keep large sums of money there and transact from there, as a mobile payments fintech you have a very uphill task of convincing people to move their deposits from their native banking platform to you. This indirectly means that your customer acquisition cost will naturally be on the high side.

However high CAC is just one of the problems, like the Chinese say “Ideas are nothing, execution is everything” In our own parlance (and for anyone who has worked in fintech) this is loosely translated as “downloads are nothing, transactions are everything”. Because (as harsh as this may sound) people don’t really need your product, it’s going to take a lot for your CLTV (Customer Life Time Value) to match up to your customer acquisition cost and make your unit economics make any sense. This means you may be acquiring customers that are of negative value to your business. Because most of these customers already have payment options – they will come, look around, and most likely go back to where they’re coming from. This doesn’t mean there aren’t customers that will stay, but the net retention rate of your startup may be abysmal to say the least.

We also haven’t factored in all the young men sitting in apartments in Lekki looking for how to penetrate people’s fintech startups and cause havoc. At best, you may end up with a business that doesn’t make enough revenue to justify the investment you made in it, at worst you may be owing customers money because one fraudster has compromised your system and made away with customer money. Either way, do you really want to do this to yourself? Ball is in your court.

Note: If you add credit to your product mix, your results may be a little bit different, however, in that case, your startup may be more of a lender than a mobile payments startup which is an entirely different ball game altogether.

Note 2: All mobile payment startups do not necessarily fail, there are founders and teams with exceptional execution ability who can pull this off, but even in those cases, I personally doubt if those businesses will be truly consequential businesses.

Note 3: There are exceptions for companies with a strong and recognizable brand branching into mobile payments, a good brand may be able to save you. E.g Moniepoint Personal is a late entry into mobile payments, but at 1million+ downloads in less than a year, I don’t think it was a bad entry.

2.    Payment Gateways

Quick disclaimer: This will not apply in every African market, there are markets where you should absolutely be building a payment gateway because of the size and nascency of the market opportunity.

My favorite Bible scripture is “as long as the earth remaineth seedtime and harvest shall not cease” I like this scripture primarily because I quote it in church every week, and I think it holds true, my second favorite scripture is a quote from Jesus in Saint John’s Gospel that seems to counter it “I have sent you to reap where other men have sown”

The most painful thing that can happen to a company is for it to sow the seeds of a market evolution and not reap the rewards of the fruit thereof. No company exemplifies this better than Jumia. Jumia went all in into eCommerce and played a large role in creating the cultural shift that you can buy things over the internet and have them delivered to you in your house. That cultural shift is the foundation for the growing social commerce space (where Amaka is now the CEO of Amakwears, and her corporate office is her room in Obalende), spawning logistics companies and evidently payment gateways.

Side note: JumiaFood (which has now been shuttered) developed the foundation for the food delivery vertical (a vertical that both Chowdeck and Foodcourt have now conveniently captured).

Paystack and Flutterwave were not the first payment gateways. Early Fintech 1.0 players (which I have written about in the past) like Interswitch were some of the earliest players and market leaders in this space. For years, various startups had tried to wrest control of the payment gateway space from Interswitch to no avail, there is a graveyard of fintechs who no longer exist (or are completely inconsequential businesses) that had disrupting Interswitch as their life’s mission. Everyone knew Interswitch’s hegemony was going to break at some point, but no one knew when and who was going to break it.

At the time, Interswitch’s payment gateway APIs were not publicly available for developers to play around with and test in sandboxes, you were charged N150,000 (US$107) as a one-off implementation fee (which was revised downwards to N50,000 (US$35.7) to cater for SMEs), and their user interface was ugly. Everyone knew Interswitch had to be disrupted, but the only question was how. Interswitch at the time had a fledgling card scheme (Verve), dominant card processing rails, and basically owned card processing at the over 16,000 active ATMs that existed across Nigeria at the time via Quickteller, so driving massive innovation on a payment gateway service didn’t seem like a huge priority to them. To be very clear, Interswitch is still one of the largest and most successful fintechs in Africa with over US$42 million in 2023 full-year revenue, but their relative laxity at the time within the payment gateway space gave room for both Paystack and Flutterwave to win that market by completely redesigning the business model for that space, removing implementation costs completely, making APIs publicly available to developers and building non-technical tools like payment links for businesses without developer resources to adopt.

Now to you who wants to build a new payment gateway service, what problem are you really trying to solve? While building a payment gateway is a much more daunting task than building a mobile payment application (so you are definitely not chasing a low-hanging fruit), there are still nuances within the business itself that make it a complex industry to build within.

I’ve written extensively about the payment gateway space in my article on Understanding The Nigerian Payment Gateway Space (Porter 5 Forces Model), so I’m not going to drill too deeply into specifics in this section.

The first thing about the payment gateway space is to understand the business model itself. Payment Gateway players help merchants and other interested entities collect money from their customers over the Internet. For this service, they usually charge a 1.5% service fee capped at N2,000 (US$1.4) which is the cost of service to the merchant and which the merchant can either choose to absorb or pass on to their customers. So, if a merchant receives a purchase of N10,000 (US$7.14) via a payment gateway, he keeps N9,850 (US$7.04) and the payment gateway provider keeps N150 (US$0.10) as a service charge. In this instance, the N150 (US$0.10) is the gross revenue for offering this service (may God forgive founders who report total payment volume as gross revenue in a bid to look bigger), however for the payment gateway to offer this service itself, there are a plethora of third-party providers that provide infrastructure solutions required for this service to function, and each has their own cut. For instance, card transactions will be routed to a card processor who will charge their own service fee that will be deducted from the 1.5% fee charged to the merchant, pay with bank transfer transactions (where the payment gateway provider is fully reliant on a third party as against building it in-house themselves) will also have a charge associated with it. These charges vary based on a lot of factors depending on who is processing the transactions, the volume of transactions being processed, and the payment gateway provider’s negotiation ability. So, let’s assume at the end of the day, the Payment Gateway keeps 1% of the 1.5% charged to the merchant as net revenues (meaning N100 (US$0.07) for a N10,000 (US$7.14) transaction), let’s then look at the numbers.

A payment gateway business targets a specific type of merchant – a D2C merchant, a merchant who sells a product on a digital platform (web or mobile) and has his customers pay for that service directly via that platform. So what will it take for a payment gateway provider to make N1billion (US$714,285) in annual revenue? Let’s do the maths.

·   Let’s assume you’re targeting Amaka’s business (Amakswear). Amakswear makes sales of N40million (US$28,571) a year with 70% of her sales coming from her payment link integration and 30% from some other source I am not particularly concerned about.

·   This means Amaka processes N28 million (US$20,000) through a payment gateway.

·   Let’s assume the average unit cost of an item Amaka sells is N5,000 (US$3.5).

·   If you do the maths, Amaka processes roughly 5,600 transactions a year. At N5,000 (US$3.5) unit cost, the net revenue to the payment gateway provider is N50 (US$0.035) per transaction (1% of processed value capped at N2,000 (US$1.4)).

·   If you multiply net revenues of N50 (US$0.035) by transaction volumes of 5,600 you get N280,000 (US$200).

·   This means Amaka’s net revenue contribution to your business on an annual basis is N280,000 (US$200) (bear in mind that there are not many digital SMEs in Nigeria today making sales of up to N40 million (US$28,571) a year.

·   Therefore to make N1billion (US$714,285) in annual net revenues, you have to find 3,500+ Amaka’s.

Your next target segment is large entities with D2C plays, this is where companies like Chowdeck, Konga, Piggyvest, etc. will likely fall into. Let’s use Chowdeck as a case study:

·   Chowdeck reportedly processes N1 billion monthly in transaction value which if we extrapolate equally over 12 months gives us N12 billion (US$8.4 million) a year in transaction value.

·   Before we begin to analyze, it’s important for us to realize that large merchants tend to get concessions from payment providers due to the volumes they bring.

·   So let’s assume instead of 1.5%, Chowdeck gets to pay 1% in processing fees which means net revenue will be applicable on 0.5% of transaction value.

·   Now based on Chowdeck’s business model, the average transaction value per transaction is probably about N4,000 (US$2.85).

·   If you remove that from the annual processed value, we’re assuming that Chowdeck processes 3 million transactions a year.

·   0.5% of N4,000 (US$2.85) is N20 if you do the math, annual revenues from a merchant like Chowdeck gives you N60,000,000 (US$42,857) a year.

·   Therefore to make N1billion (US$714,285) in annual net revenues, you have to find more than 16 Chowdeck’s to make that possible (good luck with that).

Now that we understand the numbers, the big question is why will all these merchants come to you in the first place? Both Paystack and Flutterwave have invested massively into percolating their brand within developer communities, developers start their engineering careers and are in a hurry to learn how to implement Paystack APIs so they can start building full product suite’s for their clients. Developers by design naturally default to either of these providers (Paystack and Flutterwave) when they need to implement collection for their customers; they have the brand appeal, content libraries, etc. to appeal strongly to developers building solutions across Africa.

A founder hires a CTO who has spent all his career building products on Flutterwave’s APIs guess what he will recommend when they need to embed payment capabilities within their company?

The real question however is what problem do you really want to solve? Any innovation you think you can come up with (if it is in fact consequential) is largely incremental and can be easily copied by any of the big players. Between the leading payment gateway providers in Africa; Paystack, Flutterwave, Remita, Interswitch, Cellulant, etc. every payment channel exists; from Apple Pay to Google Pay to eNaira, there’s very little innovation an upstart can bring to this space and I personally don’t think this market is big enough to accommodate multiple players.

To take this further, most of the leading players in the online acquiring space are licensed switches and are gradually trying to develop solid offline plays i.e As of March of this year, Flutterwave was hiring an associate product manager to work on its offline acquiring play, Paystack has (finally) changed its faded billboard in computer village to reflect its new virtual terminal play and Interswitch has been issuing terminals to offline merchants for a while now.

In 2015, during Goodluck Jonathan’s presidential campaign for a second term in office (or a third term depending on how you look at it), the late Sammie Okposo crafted a song specifically for his rally – there is no vacancy in Aso Rock, Goodluck Jonathan again 2x. My version of that song is slightly different – “there is no vacancy in the payment gateway space, go and do something else”

Note: Payment Gateway providers offer a host of ancillary services beyond just collecting money, these include card tokenization for recurrent payments (strong use case with lenders), disbursement APIs, and in some cases virtual account issuance (in partnership with a bank of course).

Note 2: My emphasis on Paystack and Flutterwave should not be misrepresented, there are other payment gateway providers not mentioned in this piece including Seerbit, Fincra, etc. who are all building great businesses, my take is that the market is not big enough to contain additional players who hope to create venture sized returns for their investors

3.    Agency Banking

There are fintech verticals where you can play around and there are fintech verticals that can really do you damage if you don’t know what you’re doing. This is one of them.

On the 19th of October 2023, Techcabal broke the news that Kippa Africa was shuttering its agency banking business and laying off the entire team responsible for working on it. The CEO of Kippa shared on Twitter his personal reasons for this decision which included his thesis that the market was an untenable one and eventually even the top players would have to make similar decisions sometime down the line. Though his perspective is debatable, there are some core truths about the agency banking business that most outsiders need to understand.

For starters, agency banking is exceptionally low margin; You will make more money selling biscuits to primary school children on a net margin basis than you will make in revenues from a single agency transaction. However, when you add in the scale the largest players In the space can command, you quickly realize it’s more of a scale business than anything else.

Fisayo Durojaiye (former Investment and Portfolio Operations at EchoVC) has a very interesting LinkedIn post that states that to make N1.4Billion (US$1 million) in gross revenues annually (not net revenues) as an agency banking provider, you will need to process at least N280billion (US$200million) annually.

There are three reasons you really shouldn’t be building an agency banking business;

FX Costs: Most of the hardware terminals used to power agency banking operations are provided by Chinese entities who invoice in USD for their products. This means that as the Naira got devalued over the past couple of months, the price of purchasing those terminals in Naira increased significantly. The existing market players have likely secured bulk hardware terminals in warehouses across Nigeria at affordable market prices and that allows them to play more competitively in the game compared to an upstart that will have to acquire at a steep price, lease it to agents, and hope to process enough transactions to cover the initial capital cost of acquiring those terminals. The price you’re paying to acquire those terminals is going to look very bad on your books and there’s very little chance you’ll be able to recover those costs efficiently.

Market Dynamic: The Agency banking market is gradually becoming saturated. Today there are roughly 1.9 Million agents scattered across Nigeria, in other words, there are more agents in Nigeria than there are human beings in Mauritius. This also means that in urban areas like Lagos, the relative distribution of agents within locale’s is becoming extremely dense and since human migration or demand for cash-in/cash-out services (which is the vast majority of what agents offer) isn’t growing at the same rate, revenue per agents is thinning. The simple English explanation of this is that as more people are becoming POS agents, the revenue that these individual POS agents earn is reducing due to market saturation which is also having an impact on the revenues that agency banking providers can take home.

In other words, the obtainable revenue within the market per agent is shrinking linearly as more people become POS agents. A counter to this could be to explore entering markets where there is less saturation (preferably the North) which is what most new entrants are building their go-to-market strategies around. However, those markets have less transaction volumes compared to more urban areas (making your business model somewhat untenable) and will eventually succumb to the same fate of saturation at some point in the future.

Long-term prospects: I think the biggest risks to agency banking are more long-term in nature than situational. The honest truth is that agency banking is supposed to be a stopgap to the realization of a fully digital economy, and therefore should be treated as such – a temporary play. The physical-to-digital evolution tends to follow a certain trajectory: Physical goods sold at a physical store (buying biscuits from a mom-and-pop shop) to physical goods sold at a digital store (e-commerce) to digital goods sold at a digital store (Spotify, Netflix, etc.). Agency banking is largely digital goods sold at a physical store (buying airtime/electricity from a POS agent) which isn’t (in my opinion) how an efficient market should evolve.

Every venture builder should be playing the long game, and thinking about what market opportunities will dominate the market 10 years from now. For you to assume that 10 years from now, someone will not have solved the microtransactions problem and made it possible for people to disrupt cash via small micropayments considering that digital payments’ Year-on-Year growth in Nigeria has averaged almost 70% (specifically 68%) in the past five years is a huge assumption with a very shaky foundation, and most of the market leaders already know this.

The honest truth is that ten years is a lot of time and markets tend to evolve at breathtaking speeds. For context: Ten years ago, USSD didn’t exist in our local market, most banks didn’t have mobile payment applications, POS was a nascent addition to our payment stack, NIP was processing way less than 10% of what it does today, Paystack didn’t exist, OPay didn’t exist, Moniepoint didn’t exist, Flutterwave didn’t exist.

This is probably why a company like Moniepoint for instance is making a strong push into SME banking with new loan products, helping SMEs register their businesses via its partnership with the Corporate Affairs Commission (CAC) and is essentially positioning itself more as an SME enabler than an agency banking provider in its marketing communication.

I believe strongly that the end result of a poorly thought-out agency banking play is a warehouse full of unused POS terminals acquired at an unnecessary premium, active merchants processing volumes that make your break-even look impossible, high customer acquisition costs (because getting those agents to use you exclusively is a daunting task), and a balance sheet in constant red. May your enemies not rejoice over you.

4.    Consumer Savings and Investment

One of my personal principles in life is to not trust women who have the PiggyVest app on their phones (this is a joke by the way, but I honestly couldn’t come up with a better way to start this section, so please deal with it ).

In my 10,000-word article on the 10 commandments of fintech venture investing (which you should definitely read if you haven’t), one of my commandments (the 8th one to be precise) is to “Follow me as I Follow PiggyVest”. PiggyVest in my opinion exemplifies what a successful B2C fintech should look like; profitable, strong brand equity, deep competitive moat, and founders who are grounded in reality and aren’t playing any narrative pandering games (I love the COO’s honesty and plain practicality when she talked about how Piggyvest is looking at international expansion in this interview).

I recently listened to the CEO of Moniepoint share his story on Peace Itimi’s founders’ connect session in London, and the one key takeaway I took from his session was his candid evaluation of the state of the markets he operates in. While he reiterated the general notion that most market segments will be owned by two or three players who will generally control 80% of the market and the rest will be left to wrestle for crumbs to which he gave his honest assessment of the markets he leads (Offline acquiring with Moniepoint) and where he was candid enough to speak clearly about the markets he doesn’t lead (Online acquiring with Monniffy), the 80% rule continues to apply to almost every African technology vertical and consumer savings is not an exemption.

To be clear, most of my postulations apply to people who want to build venture scalable businesses that create multiples in returns and can become consequential businesses. Most verticals I will mention in this article still have room for people to come in and play small games and earn enough revenues to keep a business going (and hopefully buy the founder a Mercedes CLA250) if the team is executing at high capacity. But the large and consequential market leaders do not play those kinds of games and that is what is informing this article, but I digress.

Consumer savings is a very interesting market segment. For one, the market is a seemingly large one; while everyone who earns income doesn’t save, everyone who earns income should, and so there’s a massive opportunity to move people from poor financial habits (living on more than their means) to good financial habits (living on less than their means). Two, savings feels more like a feature than a standalone product itself (I would have never predicted PiggyVest would be a winner, I have always believed savings should be a feature someone distributes via his existing digital platform as against a standalone proposition itself). Thirdly, people save in different ways – some use Kolo Boxes (Hopefully no one reading this does that), the informal sector has agents that collect cash from them, and some just use plain old banks (I have a friend who saves with a Tier 2 bank account where she has no card, USSD or mobile app access and she can only debit that account by physically walking into the banking hall to fill a withdrawal slip).

Today, there are a plethora of fintechs that offer savings as a feature within their digital platforms, from well-known players like Kuda, Fairmoney, OPay, and PalmPay, to relatively unknown upstarts. I like to assume that both PiggyVest and Cowrywise (my savings platform) are the undisputed market leaders, but I really don’t think that’s the case, Kuda and OPay probably have massive deposits sitting within their ecosystems due to the trust they’ve built with their users and the brand they’ve built over the years via consistent investments in marketing and product performance.

However, the reality is that consumer savings is a very fickle market, and while brands like PiggyVest and Cowrywise have the brand loyalty and platform engagement to keep people glued and loyal to their platforms, Nigerians are very fickle people who will quickly jump to a savings platform that can offer higher interest rates than what is obtainable elsewhere (especially when it is a long-term savings plan). In the end, if you can find a way to offer a highly competitive interest rate (and keep offering that) and build some level of trust with users, you will probably be able to acquire new users to your platform. However, offering a highly competitive interest rate is great for your customer acquisition efforts, but is generally bad for your margins, and at some point, you will most likely begin to look at your customers as freeloaders. Everyone knows that the holy grail of product development is switching costs, the more difficult it is for customers to move to a competitor, the more highly valued that enterprise should be. Consumer savings generally has zero switching costs, if that’s the case (which it is), you’re generally at the risk of losing your customers the day you start to adjust your interest rates so your margins can start to make sense. Saving is generally a high-involvement activity (money is very important to people), so your cost of marketing and the process of both acquiring and nurturing users to increase adoption on the platform is going to be one hell of a ride.

I don’t think it is impossible to pull off a consumer savings play if you know what you’re doing, I just think it’s a “Me Too” business that may not create huge outsized outcomes for participants.

Unlike core consumer savings where I generally believe there is a large market segment that can be either directly acquired and/or activated, I think the consumer investing (stock trading space) is a much dicer market segment. For those who may want to build investing plays similar to businesses like Bamboo, RiseVest, Trove, etc, I think the biggest challenge is product complexity. While I am aware that there are index funds you can just invest in and not worry about individual stock picks and analysis, the reality is that most people in Nigeria aren’t sophisticated enough to be concerned about those details. The big bet for the vast majority of companies in consumer investing is that by making these products and services widely available, they will be able to unlock consumption for investment products within our market.

I think the biggest competitor to a conventional stock trading platform is actually the gambling industry, a mature and well-distributed industry with multiple offline (Bet9ja shops, Baba Ijebu Kiosks, etc.) and online touchpoints – there are almost 70 million active weekly sport gamblers in Nigeria according to a report by Edward Howarth. The amount of people who would rather hope on odds they have very little control over than earn a double-digit annual increase on invested assets is beyond me. A colleague of mine once shared with me that she can’t marry a man who gambles – 53% of adults in Nigeria gamble, she’s working with some very interesting odds there.

While I believe consumer savings is largely a “me too” market with some market potential but nothing monumental in my opinion, I think consumer investing from a stock perspective is a small market (possibly niche market) that may not have space for everyone.

5.    Card Issuance

Card issuance (both physical and virtual) has all the signs of being an exciting market play; B2C fintechs are looking for new ways to expand their revenue streams, demand for dollar-denominated products is only set to increase in the coming years, and cards are still a major part of our payment stack today. My main reservations about card issuance plays, however, are mostly long-term.

The two most important skill sets anyone can have is the ability to position yourself for the future and to tell yourself the truth. While cards are still a dominant part of our payment stack today, I expect the dominance of cards to continue to wane in the coming years, and this is largely due to the growth of account-to-account payments via pay with bank transfers.

Average Year-on-Year growth in digital payments value via NIP in the last 5 years was 55%, compared to 35% for POS transactions over the same period (with POS transaction growth rates declining YoY). More consumers are choosing to make purchases via transfers at merchant locations nationwide, pay with bank transfer is gradually becoming the norm across physical payment terminals across the country, and Paystack’s offline acquiring route is strongly hinged on pay with bank transfer overtaking cards (hence their virtual terminals play). While data on the online acquiring space is rather scarce, Paystack reportedly shared that 58% of all transactions on its gateway are now via pay-with-bank transfer.

The idea that the next evolution in in-person payments is contactless payments via cards seems pretty outlandish to me. There are very few (if any) market indicators that this is gradually becoming the consumer channel of choice. The regulatory framework for contactless payments also has a funny clause that places fraud liability on issuers for fraudulent transactions arising from their “negligence” which in my opinion may disincentivize banks from taking this too seriously. While it is possible our market eventually evolves to contactless payments for in-person transactions in the future (ten years is a lot of time), I’m willing to bet that that evolution will be more of a mobile-based scan to pay than a card on terminal play.

There are many use cases for card payments that will need to be gradually disrupted by account-to-account payments over a period of time before A2A becomes truly dominant. One of those is card tokenization; the ability to profile your card on a payment platform and automatically process debits with that card without reinputting your card PAN. I have a debit card profiled on my Chowdeck app, and I won’t even lie, just clicking pay with card and seeing the screen switch to order in process is such a delightful experience; compared to pay with bank transfer where you may have to log on to your bank app to fund the virtual account provided for that transaction (a process that gives you the opportunity to look at your bank account balance and really ask yourself if you really need that N5,000 (US$3.57) plate of jollof rice and chicken from The Place. An opportunity that neither Chowdeck, The Place, or Paystack (their payment provider) wants you to have).

While account tokenization (the same process except directly with bank accounts) already exists in some form today, a future where instead of profiling cards (which are highly fraud-prone) users can profile direct accounts is one of the first steps to complete A2A domination. These conversations are already ongoing today, fintechs like Paystack, Mono and Lendsqr are already beta-testing new fully digital direct debit mandate setups on bank accounts working with APIs provided by NIBSS. While the first use case will most likely be for lenders and subscription payments, you can bet that new use cases will eventually begin to emerge that create new value propositions for existing players to leverage on.

However, the big opportunity in card issuance is the virtual USD card business and while this is a business opportunity that will probably continue to grow in the near term, I strongly believe there are innovators looking for ways to circumvent this and create new market opportunities by making this an account-to-account payment.

I personally find it hard to believe that in the next ten years, someone wouldn’t have found a way to seamlessly move funds from Nigeria to foreign merchants via a direct account-to-account rail, completely independent of cards, via stable coin settlement layers, or some other means. This will create new opportunities for cross-border trade and drive new foreign services into the country. While they are still pretty nascent, Zone’s blockchain payment infrastructure is a great contender for that market, and betting on that market overtaking cards and creating a new paradigm for competition and international trade is not one I will personally struggle to make.

Card issuance is a good business in the short and medium term, but in the long term, I believe direct account-to-account payments will probably overtake that market.

6.    B2B eCommerce

The one thing I’ve learned in the past couple of years is how to decouple businesses into what they actually do as against what they say they do (the fancy buzzword narratives aimed at selling an oversized picture of what they actually are). On the surface B2B eCommerce seemed like the holy grail of retail market innovation; it allowed technology companies to provide a service to the millions of small mom-and-pop shops that exist across Africa, it created a platform for digitization and a unique opportunity to cross-sell other services to these SMEs, and it was basically supposed to be the next evolution of e-commerce since B2C eCommerce hadn’t shown much promise. In reality, B2B eCommerce was simply a case of slapping technology into an existing value chain and finding possible avenues of efficiency capture within that segment.

Prior to the founding of most B2B eCommerce startups, there were already existing distributors who helped FMCG companies distribute their products to wholesalers and retailers within their distribution networks. These were basically “boring companies”; they did not apply tech, they did not have fancy ads, they did not make fundraising announcements on Techcrunch, they were simply Mike has a relationship with P&G or Unilever, gets a loan from a bank to hire warehouses and transportation equipment, and just brute forces his way to revenues and profitability. Nothing fancy, no branded t-shirts, just pure brute forcing. B2B e-commerce companies figured they could add more efficiency to this system by adding a technology layer that allowed retailers order what they wanted and get it delivered to them in record time, and that made a lot of sense if they could morph the retailer distributor relationship from “I only get goods when you come or I have to go to the market to get goods” to “a goods are available on demand one” (similar to how food ordering companies like Chowdeck and Glovo have increased profits for companies like Chicken Republic and The Place by removing the friction of physically going to the actual restaurants), they could capture market share within that ecosystem and then start the process of layering (adding additional products to the foundational product stack).

To be very clear, the B2B eCommerce play made so much sense and would have actually been a game changer, there were however three problems with the B2B eCommerce play;

One, technology is costly; the two highest-paid people on Mike’s payroll are his business manager and accountant. Every other person is paid anywhere between N20,000 – N100,000 a month, partly because most of the work they did was mainly manual labor, and because the unemployment rate in some African countries by design has driven wages down for low-skilled work. Compare that to your B2B eCommerce player that is posturing as a technology company and has therefore gone to hire a team of software engineers, product managers, and product designers, let’s not forget support teams also and you see how operational costs begin to balloon when compared to Mike’s business.

Two, Inflation – realizing that my monthly shopping bill has now gone up 43% month on month was one of the most hysterical things I witnessed this month, however, for the vast majority of consumers, shopping bills don’t go up 43%, they go up 43% on paper, and some things have to leave the list to put the bill at an acceptable level, in other words, as prices go up, people buy less, and if people buy less, retailers have lesser order volumes, which inevitably affect your margins. While inflation cycles are not new, Mr Mike can manage that because his operational cost is not as high as a VC-funded startup, The tech startup however is pressured into either weathering the storm and hoping the markets thaw after a while (partly because they still have a huge war-chest) or start to cut costs immediately to preserve runway and avoid dying of asphyxiation (where money is oxygen in this context).

The third and most salient reason B2B eCommerce startups didn’t work out was because of one market insight you wouldn’t have been able to guess unless you were in the market; there was no customer loyalty, and customers were fickle. Customers could use your platform today and use another player tomorrow, or worse – use the normal non-tech distributors they had been patronizing, it didn’t really matter to them that much, products were products. This meant that the long-term value play of allowing customers to use your platform for eCommerce (first layer) and then use that as an entry point to distribute other services to these customers (i.e payments, lending, insurance, etc.) was going to be difficult to execute on and that is where I think the cards probably began to fall apart.

In retrospect, no one would have been able to predict that problem three would exist, and I honestly thought B2B eCommerce would be a game changer, more than US$526 million was raised between the leading players in that space in the last 8 years. Some players have had to furlough staff, shut down entire product lines to focus on more profitable ones or even outrightly merge with other players just to stay afloat.

Popular Nigerian Afro Beats Artiste Asake once said in a song “Some of us are wise, every other person overwise” If after reading this, you still think that B2B eCommerce is the next best thing after sliced bread, you’re probably among the people Asake was referring to as “Overwise”.

7.    Open Banking

Open Banking is the Skales (Nigerian Afro Beats artiste) of the Nigerian fintech industry; has all the signs of a promising vertical, has some good names supporting it, and has good funding from prominent investors behind it, but has just refused to blow (Nigerian slang for become widely acknowledgeable or successful).

The local Open Banking rave started circa 2021, and the product proposition was clear; people needed to extend access to their banking data to third parties to enable said third parties to create highly tailored financial products that could improve their individual lives. These products included better loan products that would allow third parties access to customer bank statements for effective credit underwriting, personal financial management products that allowed you properly budget across all bank accounts, and even novel direct debit products tailored towards simplifying the wallet funding process for corporates. The international market for Open Banking at the time with VISA’s US$5.7bn offer for US-based Plaid, and the subsequent US$825 million purchase of Finicity and purchase of Denmark-based Open Banking provider Aiia for an undisclosed amount by Mastercard made it very clear to investors that there was something about this Open Banking concept that was worth looking into, coupled with new regulation in the United Kingdom that not only encouraged Open Banking adoption, but basically mainstreamed it, it seemed like Open Banking was going to represent the next nexus for fintech evolution in emerging markets, and investors voted with their pockets regarding this. More than US$73 million in disclosed capital was poured into open banking startups between 2017 and 2023 and it looked like we were on the cusp of a market shift.

To be fair, I wasn’t particularly excited about the data bit of Open Banking, I think what drew my attention was the Payment Initiation Service (PIS) bit that would allow fintechs bypass conventional rails and offer direct account-to-account payments to merchants and customers alike, I wrote about that in a 2021 article on why I think Open banking may be a threat to the card networks, and similar to how I have always believed that account-to-account payments are the future of payments, I figured Open Banking players would clinch that market and own that business vertical. That did not come to pass.

Since there was no regulatory framework governing Open Banking at the time, most Open Banking players leveraged screen scraping as a means to access customer data and initiate PIS services. The challenge, however, was that without proper APIs from banks, the product flow felt pretty burdensome; asking me to provide my mobile payments login seemed pretty arduous to me (considering I log in to everything I use for banking with biometrics and I probably can’t remember half my passwords), and while screen scraping isn’t necessarily illegal, a lot of banks were not comfortable with the process, so that created some level of tension.

However, I think the biggest issue with Open Banking was that when the Central Bank of Nigeria (CBN) finally released its regulatory guidelines on Open Banking, it released API standards for Open Banking integrations, but the document was missing one thing; there was nowhere in the document that mandated the banks to open up their APIs to third party fintechs to consume, and since the banks were not mandated to open up their APIs, and they couldn’t even find enough incentives to allow third parties utilize their customer data, they just let the whole Open Banking thing lay shallow in the mud, juxtaposing that with the FCA in the UK that not only provided regulatory guidelines, but mandated the top consumer banks to open up their APIs to third parties to consume, and you understand why Open Banking has thrived in those markets as against ours.

Almost every core Open Banking provider that raised money during the open banking heydays has now morphed into some kind of PSSP or the other in a bid to find product market fit and extend the business into other verticals.

Can the CBN do something about this? Yes, but this is probably way below the priority list of the Central Bank at this time, the CBN leadership is focused on propping up the Naira against the Dollar, strengthening the financial system via the bank recapitalization exercise, and finding a way to fix inflation, I think Open Banking is the least of their priorities.

Until the regulatory framework for Open Banking evolves to mandate banks to open up their APIs to third parties, Open Banking is a fintech vertical you shouldn’t be building dedicated products for.

8.    Earned Wage Access

On the surface, Earned Wage Access makes a lot of sense; employees are paid for work done, but the value they bring to the table only becomes liquid once a month on a specific date. Is it plausible to make it possible for employees to access a certain percentage of liquidity at differing times during the month to help shore up emergencies or anything that comes up mid-month? Earned Wage Access (EWA) seems like the answer to that; EWA makes it possible for employees to access a percentage of their salaries before the month is over for a withdrawal fee and no interest rates attached. As someone in full-time employment, I fully understand the importance of what EWA represents and why it is important to employees. EWA however is a great product innovation sitting on what I personally think is a faulty business model.

If you break down EWA into its underlying components and try to look at it from first principles, you’ll realize that EWA is basically a payday loan service with very bad commercials. With EWA you can access 50% of the wages you’ve worked for before your salary is paid and repay directly from your salary afterward for a fixed fee, in a payday loan, you are given a short-term credit facility you are expected to pay off on your next salary due date for a fixed interest rate. If you ask me EWA is a fancy way to describe a payday loan service where you find unique ways to underpay yourself.

The second issue I have with EWA is the lack of inherent defensibility within the business model; even if I am completely wrong about EWA and there is some ingenious way to make substantial revenue by offering this service, the distribution model for EWA means that EWA providers have to walk up to organizations to pitch EWA to them, get their employees to download their mobile application, and onboard them to the service. However, every company has one thing in common – an existing HR platform, and if the HRM solutions begin to see promise in offering EWA to their customers, what stops them from just building out their own EWA solution (which I really don’t think is a hard thing to do), bundling it into their existing offerings and extending to their existing customer base (similar to what Microsoft did with Teams). The players more likely to capture real value if EWA were to eventually become a big thing are not the startups trying to propagate the gospel of EWA, it’s the HR providers like Seamless HR, Bento, etc. who can bundle this within their existing offerings and just cross-sell to their existing customer base easily.

It is however possible that EWA is a path to a much larger HR business play of which EWA just acts as an entry point to distribute other unique services to corporate entities. If this is the case, then this is clearly an interesting market expansion approach, and one worth watching. Earnipay, one of the pioneers of EWA within Nigeria recently began moving to a more robust HR product suite as against sitting solely as an EWA provider, which in my opinion is an indicator of what the core EWA market looks like considering Earnipay was founded less than 3 years ago.

While there are foreign markets that have adopted the EWA play and have seen some level of success think India, The United Kingdom, etc. the underlying business model for a dedicated EWA play is really challenging to operate profitably within the African market, and may not be a very wise segment to build within.

9.    Payment Orchestration

Payment orchestration is a very interesting business segment. For the uninitiated, payment orchestration is a fintech vertical that allows merchants receive payments from multiple countries via multiple payment options (regardless of whether a payment channel is native to a single country or not) all via a single API integration. Today if you run a business that has customers across say 12 African countries, knowing how payment types and configurations vary across multiple African markets (some African markets are card-driven, some are account-to-account driven and some are mobile money-driven), you may need to integrate to the payment gateways most suitable to operate within those markets to receive payments. This inadvertently means that your technical teams will be burdened with managing multiple integrations, service provider relationships, and support teams for issue resolutions. Payment Orchestration is aimed at abstracting all those layers by integrating with these multiple service providers themselves and allowing you to access that service via a single integration that allows you toggle between multiple payment channels/providers of your choice all via a single button within your dashboard.

Payment orchestration has seen relative success in markets like Europe and SouthEast Asia where multi-variate payment channels are the norm and certain payment channels are only applicable in certain markets. Because it is common for European companies to offer products and services across other European countries regardless of language barrier due to a single trade currency (the Euro), a single regulatory oversight body (The European Central Bank), and the relative synergy that exists between eurozone countries, having a payment provider that removes the burden of integrating multiple APIs by abstracting all of that into a single API that has all those capabilities embedded is exceptionally useful.

However, while these benefits are applicable in Europe and other markets, the applicability of said benefits for African-based direct-to-consumer (D2C) merchants may be largely questionable. For starters, while there are many African businesses that have an expression of their business in one way or another in more than one African country with multiple payment channels, the number of direct-to-consumer merchants that fall into that category is not humongous to me. Excluding some more popular names like MTN, Multichoice, or Betting companies like Bet9ja and the like, a good number of African merchants do not offer services across multiple countries and this places the model of payment orchestration in a limbo.

A payment orchestration provider operating in Africa will in most cases be an unlicensed entity, what they will have is a relationship with gateways that operate across multiple African countries i.e Paystack, Flutterwave, Cellulant, etc. that allows them to extend access to their collection capabilities to these merchants at a markup while providing a unified dashboard that makes cross-country reconciliation much easier. This inadvertently means they may find themselves directly competing with some of their service providers for certain merchants.

When it comes to payment orchestration, I think the biggest risk is the possibility of some of these large merchants building out their own payment capabilities to reduce their reliance on third parties and improve their cost structure (by reducing their cost of doing business due to the volume of transactions they process).

MTN and Airtel are licensed in multiple African countries to provide payment capabilities of some sort, Multichoice announced a partnership with UK banking as a service fintech Rapyd to launch Moment its very own payment provider. While I don’t think most large-scale online D2C merchants across Africa will take a similar route (considering the fact that building out a payment stack is more than just having resources to plow into license acquisition and product development), I personally believe that the number of large merchants in Africa who will find a value proposition with payment orchestration is finite and may impact the growth of that market going forward.

Note: there is a case for the availability of payment orchestration infrastructure expanding the market by making it possible for companies to offer D2C services across multiple African countries.

Within Africa, there aren’t many standalone payment orchestration players; Revio and MoneyHash are the two that come to mind, with each serving distinct market regions. Revio, founded in South Africa, while MoneyHash, founded in Egypt, primarily targets the broader MENA (Middle East and North Africa) region.

It is also important to not rule out that payment orchestration within Africa may just be a means to an end – by giving payment companies access to large multi-country corporates within Africa, there may be novel opportunities to help these companies optimize their payment flows, strengthen their fraud resilience via specific products or enrich their product proposition stack from a payment perspective. The opportunities for payment orchestration are wide (primarily why this is low on the list), and I am not completely ruling out the possibility of this having outsized outcomes, however, as a standalone business proposition, I am a little unclear on where it will end up.

10. Crypto Exchanges

I’m not even going to lie, crypto is funny, as of late 2023, I was already bragging about how my late 2022 prediction that 2023 would be the year for crypto came to pass in the last month of the year when I saw the CBN circular on Virtual Asset Service Providers, and then 2024 ushered the hammer of the CBN on crypto exchange platforms, particularly Binance.

I like to start this section with a quick disclaimer that I am not a crypto expert (neither do I intend to be), and similar to how I do not know how to use either TikTok or SnapChat (downloaded the app once and deleted it in less than 48hours), I am probably not an expert on how crypto exchanges work, so everything in this section should be taken with a pinch of salt. There are however a couple of no-brainers on the crypto market that seem pretty conspicuous to me;

Crypto is volatile; as of the time of writing this, Bitcoin is at US$70,000 and the meme coins have been aroused from their months of slumber. The launch of the Bitcoin ETF in the United States and the Bitcoin halving event are key causants for the latest market resurgence. The volatility of crypto means that this business (crypto exchanges) is cyclical. While there are die-hard crypto fanatics ready to HODL (Hold on for dear life), the vast majority of crypto investors are (supposed to be) everyday individuals looking for ways to earn an extra 20% on their savings, this means that when the markets go down (as they inadvertently do) every now and then, some of these everyday individuals will either get burnt or carry their money elsewhere.

Crypto is concerning; while many individuals use crypto exchanges for legitimate purposes, it is naïve to assume that there are no bad actors lurking within the system and using it to execute their nefarious deeds. The easiest way to move illicit gains from a foreign country down to Africa is still via crypto, and while more money is laundered via cash than cryptocurrencies annually, it is still noteworthy that the system allows certain unscrupulous entities to thrive (not necessarily the fault of the exchanges themselves).

Crypto is basic; I don’t necessarily think building a crypto exchange is a hard thing to do, similar to how building a lending business is not rocket science – the fact that more than 355 companies applied to get a South African Crypto license (yes I know all of them aren’t necessarily exchanges) says a lot about how uncomplicated it is to build one. This also means that moat building (a very important component of business design) is primarily based on both brand and trust which makes it somewhat difficult for new entrants who intend to enter the market to thrive unless they have deep pockets to spend on brand marketing for an extended period of time.

In reality, investors want something that goes up and right for an extended period of time and not a cyclical business that thrives for 18 to 24 months and then goes bland for another 12 months and continues again, and while the regulatory atmosphere for crypto is gradually cooling down with more African markets creating regulatory frameworks for how to deal with these digital currencies, Nigeria, Africa’s largest crypto market still has a long way to go. Recently released guidelines by the CBN on VASPs articulating how banks should deal with crypto exchanges is a great first step in the right direction, but if it doesn’t evolve from there, it is a complete disincentive for most large banks to get involved with crypto players due to the huge liability shift leveled on the banks in cases of misconduct.

There are existing crypto exchange players in Africa today, and I believe most will thrive as the market continues its upward trajectory, however, while I believe new players may be able to capture some share of this market, I am not of the opinion that there is space for outsized venture outcomes for new players who decide to enter this market, especially if they choose to operate solely as exchanges.

Note: This section is focused on crypto exchanges, not crypto in general, I am exceptionally bullish on the opportunities in cross-border payments using stablecoins as a liquidity layer and even though that is a crypto play, that may not be under the purview of most crypto exchanges.

Conclusion

Building a successful business in Africa takes a lot of grit and perseverance, beyond that however is the ability to find the right opportunities, markets, and strategic entry approaches to channel efforts towards to avoid wasting time and resources on market segments and verticals that cannot produce outsized outcomes for builders.

 

Inspired By The Holy Spirit