User blogs

In Africa, Y Combinator is known to be a major backer of most of the continent’s well-known startups.

Two of the most talked-about in the last two quarters — Flutterwave and Paystack — are YC-backed. Their successes (Flutterwave’s billion-dollar valuation and Paystack’s rare exit to Stripe) have greatly increased YC’s appeal in the eyes of founders on the continent with local investors clamoring to get their portfolio into the accelerator.

Unlike last year where Y Combinator held its Demo Day, both winter and summer in two days, it’s a single day for this Winter 2021 batch.

This is the accelerator’s third online demo day, its second all-virtual class and remote pitch session following its decision to go fully remote from the previous batch (Summer 2020).

A total of 319 companies pitched today from 41 countries drawing attention from more than 2,400 investors.  However, only ten African startups pitched and similar to other batches; most of them are fintechs.

Other startups offer e-commerce fulfillment, edtech and B2B food marketplace services. Five startups represent Nigeria; three are from Egypt, and one from the Ivory Coast and Kenya. Here they are building.

Dayra (Egypt)

Most of the gig workers in Egypt are unbanked, and it’s difficult for digital platforms to pay them for their services. The traditional method would be to use cash or third-party institutions.

Founded by Omar Ekram, Dayra is trying to solve this via an API. With its platform, Egyptian businesses can offer financial services including loans to unbanked workers and customers in the country.

Djamo (Ivory Coast)

While there has been a huge profusion of financial services that have emerged in recent years in Africa, there’s still a huge underserved gap in Francophone Africa. In fact, less than 25% of the population is banked.

Djamo acts as a challenger bank and offers banking solutions to break into this huge untapped market and help with financial inclusion in the region. Hassan Bourgi and Regis Bamba founded the Ivorian startup. 

Kidato (Kenya)

In African public schools, the student-teacher ratio can be as high as 50:1. This doesn’t aid effective learning. Other options like private schools can be costly.

Kidato, an edtech startup founded by Sam Gichuru, have classes with student-teacher ratios at 5:1. They also offer the same international curriculum as private schools in the country but collect much lower fees.

Flux (Nigeria)

It takes days and sometimes weeks to send money from the U.S. to Nigeria and most African countries. There’s also the problem with expensive fees.

Flux, a Nigerian remittance startup, is using crypto to tackle this. Via an application and from a wallet, people can convert fiat into crypto and send it to the wallets of people in other countries who convert back to fiat if they choose. The startup was founded by Ben Eluan, Osezele Orukpe, and Israel Akintunde.

NowPay (Egypt)

Financial stress plays a major role as a top distraction for employees. NowPay, a startup founded by Sabry Abuelenien and Mostafa Ashour, bridges that gap and provides several benefits for employers that choose to address this area of employee wellness proactively.

The company enables corporates to offer salary advances to employees. It also improves savings, spending, budgeting, and borrowing for employees by building products that tackle every vertical.

Mono (Nigeria)

Due to the proliferation of financial services in Africa, it has become extremely difficult for banks and fintechs to combine users’ data from multiple points and make sense of it.

By streamlining various data in a single API, Mono helps companies and third-party developers retrieve vital information like account statements, real-time balance, historical transactions, income, expense, and account owner identification. Abdul Hassan and Prakhar Singh founded the company.

Prospa (Nigeria)

In the U.S. or the U.K, you can set up a business account in minutes but it can take hours and days in Nigeria. And most of this is still executed offline and on paper.

Prospa is a neobank for microbusinesses in Nigeria founded by Frederik Obasi and Rodney Jackson-Cole. It helps these businesses make international payments to more than 10 countries including China, Kenya, the U.K., and the U.S.

Flextock (Egypt)

When merchants launch their e-commerce businesses, they can easily manage the end-to-end operations in the early stages. But as they begin to grow, managing their own operations can become difficult.

This is a burden for most businesses in Egypt and Flextock, a startup founded by Mohamed Mossaad and Enas Siam, solves it by providing an end to end fulfilment service. They manage a business inventory, pick, pack and ship orders while providing real-time visibility and insights into their products.

Sendbox (Nigeria)

For some individuals and merchants, shipping can be a painstaking process. To operate efficiently, they partner with one or more service providers or build their delivery operations themselves.

Sendbox describes itself as a “fulfillment by Amazon for African merchants.” The company provides shipping, escrow payments, among other services, to social commerce merchants in Nigeria. Emotu Balogun and Olusegun Afolahan founded the company.

Vendease (Nigeria)

For small and mid-sized restaurants in Nigeria and most of Africa, food procurement can be a complex process to manage.

Founded by Tunde Kara, Olumide Fayankin, Gatumi Aliyu, and Wale Oyepeju, Vendease solves this problem by building a marketplace that allows restaurants to buy directly from farms and food manufacturers.

Researchers say a botnet targeting Windows devices is rapidly growing in size, thanks to a new infection technique that allows the malware to spread from computer to computer.

The Purple Fox malware was first spotted in 2018 spreading through phishing emails and exploit kits, a way for threat groups to infect machines using existing security flaws.

But researchers Amit Serper and Ophir Harpaz at security firm Guardicore, which discovered and revealed the new infection effort in a new blog post, say the malware now targets internet-facing Windows computers with weak passwords, giving the malware a foothold to spread more rapidly.

The malware does this by trying to guess weak Windows user account passwords by targeting the server message block, or SMB — a component that lets Windows talk with other devices, like printers and file servers. Once the malware gains access to a vulnerable computer, it pulls a malicious payload from a network of close to 2,000 older and compromised Windows web servers and quietly installs a rootkit, keeping the malware persistently anchored to the computer while also making it much harder to be detected or removed.

Once infected, the malware then closes the ports in the firewall it used to infect the computer to begin with, likely to prevent reinfection or other threat groups hijacking the already-hacked computer, the researchers said.

The malware then generates a list of internet addresses and scans the internet for vulnerable devices with weak passwords to infect further, creating a growing network of ensnared devices.

Botnets are formed when hundreds or thousands of hacked devices are enlisted into a network run by criminal operators, which are often then used to launch denial-of-network attacks to pummel organizations with junk traffic with the aim of knocking them offline. But with control of these devices, criminal operators can also use botnets to spread malware and spam, or to deploy file-encrypting ransomware on the infected computers.

But this kind of wormable botnet presents a greater risk as it spreads largely on its own.

Serper, Guardicore’s vice president of security research for North America, said the wormable infection technique is “cheaper” to run than its earlier phishing and exploit kit effort.

“The fact that it’s an opportunistic attack that constantly scans the internet and looks for more vulnerable machines means that the attackers can sort of ‘set it and forget it’,” he said.

It appears to be working. Purple Fox infections have rocketed by 600% since May 2020, according to data from Guardicore’s own network of internet sensors. The actual number of infections is likely to be far higher, amounting to more than 90,000 infections in the past year.

Guardicore published indicators of compromise to help networks identify if they have been infected. The researchers do not know what the botnet will be used for but warned that its growing size presents a risk to organizations.

“We assume that this is laying the groundwork for something in the future,” said Serper.

Soft robotics have long been one of the more exciting categories among emerging technologies. Of course, as with most new tech, the field has some drawbacks over more traditional models. While they improve flexibility and complains over their more rigid counterparts, robots made of soft materials have often had an issue delivering electrical connectivity. In many cases, water and air-filled bladders are used to helped facilitate movement.

New research out of Carnegie Mellon University points to a method that could help increase conductivity in soft materials like hydrogels, without compromising the compliance at the core of the material’s appeal.

Recently highlighted in a science journal, the method essentially adds micrometer-sized silver flakes into the mix through a method similar to screen printing. When the material is partially dehydrated, the flakes begin forming connections that can be used to deliver a charge. The team describes the flakes as akin to, “a second layer of nervous tissue over your skin.”

“With its high electrical conductivity and high compliance or ‘squishiness,’ this new composite can have many applications in bioelectronics and beyond,” mechanical engineer professor Carmel Majidi said in a release tied to the news. “Examples include a sticker for the brain that has sensors for signal processing, a wearable energy generation device to power electronics, and stretchable displays.”

There are a ton of potential uses for soft robotics, but medical remains one of the most compelling. Treatment of motor disabilities and muscular disorders are among those highlighted by the team, including assistance for stroke patients and people suffering from Parkinson’s-related tremor.

After a few twists and turns and then ultimately cancelling its F8 developer conference last year over Covid-19 concerns, Facebook today announced a return of the event in a virtual-only format it is calling F8 Refresh. The company today said that it will be holding it as a one-day event on June 2. You can sign up for F8 Refresh here.

It’s a mark of the times to be right-sizing everything to the place we are in right now. So although F8 has grown in size and scope over the years — it typically attracts around 5,000 people and many more to its in-person event — it looks like the social network is taking 2021 to be a little more modest in its approach.

Mark is maybe the operative word here: there will be no Mark Zuckerberg keynote this year, Facebook has confirmed to me. Instead of words from its founder and CEO, Facebook will have Konstantinos Papamiltiadis, VP of Platform Partnerships, delivering the opening presentation at the event, which will as usual provide some updates on new launches for the platform.

It’s another sign of the times that making plans so far in advance, and in person, just won’t cut it right now: there have been too many unexpected developments around the spread, then wane, then resurgence of the pandemic, and even one year later, in multiple parts of the world authorities are still trying to get activity under control to keep the virus in check.

In the past, Facebook has given much more lead time to people for F8, to let developers, partners and other attendees to clear their calendars and organize travel from further afield. Its 2020 two-day event, which had originally been scheduled for May 2020, was announced in November 2019 for example. Of course, in the months following, as Covid-19 took its grip, F8 2020 became one of a wave of events to be cancelled, with Facebook first looking to replace it with a series of local events, but then cancelling everything altogether.

“F8 has always brought together an incredible community of people who are building, innovating, and looking for what’s next. And over the last year, our community of developers enabled growth for businesses of all sizes to adapt to a changed world and accelerate their digital transformation,” noted Papamiltiadis in a blog post. “In recognition of this, we want to bring F8 back to its roots: a place to celebrate, inspire and help developers grow.”

The big question will be what topics Facebook will see fit to tackle in June. Some of the bigger themes hanging over it right now are how it plans to continue growing in developing markets, whether/what it will launch in response to newly rising apps like Clubhouse, how it might diversify its business model beyond advertising, whether we will ever see a launch of Novi and Diem, and how Facebook continues to tackle misuse on its platform.

For a company so huge and influential, there is indeed a lot to potentially cover. But at least for now the focus seems to be more modest as well. Rather than big launches and major announcements, it looks like Facebook will keep the F8 focus more on its ecosystem and the developers in it. Among the areas that Papamiltiadis highlighted will be addressed, he mentioned product tools for building in Facebook, Instagram, Messenger, WhatsApp and Oculus; technical deep-dive sessions; demos, and panels.

Messaging platform Telegram, which recently passed 500 million monthly active users but still isn’t monetizing all the digital chatter it hosts — has taken in a little more funding to keep its engines ticking over.

Mubadala Investment Company, the Abu Dhabi-based sovereign investor, is throwing in $75M in exchange for 5-year pre-IPO convertible bonds of Telegram — with Abu Dhabi Catalyst Partners investing a further $75M, the pair said today in a press release.

The investment is touted as a strategic partnership, with Mubadala anticipating benefits for Abu Dhabi’s startup ecosystem by having a local Telegram presence drawing in skills and talent to the capital.

Per Reuters Telegram will be opening an office in Abu Dhabi following the investment — building out its regional presence from a Dubai, UAE base.

Commenting in a statement, Pavel Durov, Telegram founder and CEO, said: “We are honoured by the $150M investment into Telegram from Mubadala and Abu Dubai Catalyst Partners. We look forward to developing this strategic partnership to continue our growth in the MENA region and globally.”

To date, Telegram has been bankrolled over a seven+ year lifespan by Durov, who made ~$300M from selling his stake in the vk social network he also founded — aka Russia’s ‘Facebook’ — back in 2015.

But sustaining a messaging platform with half a billion users can’t be done through billionaire bootstrapping alone.

Some additional investment did come in via Telegram’s recent attempt to launch a blockchain platform. However the effort was derailed by US regulators last year — forcing it to refund most (but not all) of the money it had booked for the failed TON platform — so speculation over how Telegram will monetize its platform goes on.

In recent weeks Durov has responded to this chatter via his public Telegram channel to confirm he’s considering introducing ads for “large one-to-many channels” — but pledging he won’t do so in chats.

He has also rejected the notion of using user data to target ads — a move that would undermine the loud privacy promises Telegram repeatedly makes to users to put clear blue water between its platform and the (Facebook-owned) data-mining competition.

“Users will be able to opt out of ads, but I do think that privacy-conscious ads are a good way for channel owners to monetize their efforts — as an alternative to donations or subscriptions, which we are also working to offer them,” Durov wrote last month.

Telegram’s usage has, meanwhile, continued to swell this year — boosted by users switching from Facebook-owned WhatsApp over privacy concerns. So there’s limited room for copycat monetization, unless Durov is willing to trash his personal ‘pro-privacy, pro-user’ brand. To say that’s highly unlikely is an understatement.

Nonetheless, he has further limited his options by rejecting a series of investment offers in recent months.

A report in Russian press earlier this year said he’d rejected an investment offer for a 5%-10% stake in the company that had valued it at $30BN. We’ve also been told he rejected a higher offer that had valued Telegram at $35BN — and another of $4BN at a $40BN pre-money valuation.

“Durov is afraid of investors of any kind,” one source told us on why he refused to give up any equity.

Debt financing seems to be Telegram’s preferred route at this stage. Back in January The Information reported that it was discussing raising up to $1BN in debt financing from with banks and investors — which would convert to shares in an eventual public offering.

That debt route — via pre-IPO convertible bonds — is now taking shape with today’s investment news out of Abu Dhabi. Although $150M is a lot less than the rumoured $1BN so this may be just an initial tranche. (And may in fact be needed to pay back TON investors’ whose refunds are falling due.)

But with a couple of debt backers sticking their necks out to take a punt on Durov’s anti-establishment alternative — and on the chance of an Telegram IPO by 2026 — the company is in a better position to get buy in from other debt funders, including in the region as it deepens its geographical commitment to the Middle East.

One key attraction for Telegram backers is likely to be its agile product dev. There Durov has repeatedly shown he can deliver — growing usage of his platform with the help of a steady pipeline of user-focused features.

Efforts on the product side at this stage look geared towards pivoting into a Patreon-style platform for content creators to build communities of followers willing to pay for their content (which would thereby enable Telegram to monetize by taking a cut as commission).

“Our end goal is to establish a new class of content creators — one that is financially sustainable and free to choose the strategy that is best for their subscribers,” wrote Durov last month. “Traditional social networks have exploited users and publishers for far too long with excessive data collection and manipulative algorithms. It’s time to change this.”

Just over a month later his channel lit up again with more product news — this time capitalizing on the buzz around social audio with the announcement of the launch of a Clubhouse-clone on Telegram channels dubbed “voice chats 2.0”.

He also announced feature that lets admins of channels and public groups host voice chats for millions of live listeners — taking the cap off the earlier feature. “No matter how popular your talk gets, new people will be able to tune in. It’s like public radio reinvented fo the 21st century,” Telegram’s blog post enthused.

Durov had more developments to tease: One-to-many video broadcasts that will see the platform let users host their own ‘TV stations’ which he said will be coming this “spring”. So Telegram continues to evolve as the social app landscape shifts.

Commenting on the debt financing in a statement, James Munce, CFO and COO of Abu Dhabi Catalyst Partners (ADCP), lauded Telegram’s management team’s “unshakeable dedication to building a platform centred around privacy and user experience”.

“We believe this creates a strong value proposition and will be a focal point for social media platforms and a new era of messaging,” he added.