India’s Narendra Modi makes an Africa play

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By Fatu Ogwuche

Top of Mind: Happy Sunday!

Big news this week – India has its eyes on Africa. Black Ostrich Ventures launched a $20m fund to invest in pre-seed and seed stage startups outside the “Big Four” African markets, and Uganda’s Asaak is expanding into Latin America.

Let’s get to it.

3 big things:

  • India’s UPI is on tour
  • Black Ostrich Ventures has new money
  • Uganda’s taking Africa to the world

India’s Narendra Modi makes an Africa play

The short: India’s Prime Minister Narendra Modi is making a big play for Africa’s fintech space with his plans to expand its payments infrastructure, UPI, to the continent.

UPI?: The Unified Payments Interface (UPI) is an instant real-time payment system predominantly used in India. It instantly transfers funds between two bank accounts on a mobile platform.

In Africa, systems like the Nigeria Interbank Settlement System (NIBSS) is similar to UPI – in terms of payments being settled instantly. NIBSS works by connecting all the banks in Nigeria through a secure network. This network allows banks to exchange information about payments in real time, making it easy for Nigerians to transfer funds to accounts in other banks instantly.

Yuan over Dollars: Modi shared his UPI expansion plans during the recently concluded BRICS summit in South Africa. Over the past few months, the BRICS countries – Brazil, Russia, India, China and South Africa made moves to replace the Dollar with the Chinese Yuan as a primary trade currency – with members settling trade deals in the Yuan and other member currencies.

With the latest addition of Egypt and Ethiopia to BRICS, more countries in leading emerging markets could lose their reliance on America’s financial infrastructure.

India’s dream list: India’s government is already in talks with several African countries, including Namibia, Mozambique, and Kenya. If India rolls out UPI across African countries, instant payments across multiple countries could become a reality.

Final thoughts: The UPI expansion won’t be a walk in the park in sovereign nations with national payment infrastructures. But, if the agreements are finalised, and UPI expansion is successfully executed, cross–border payments will change as we know it.

Uganda’s taking Africa to the world

The short: Ugandan mobility fintech Asaak has acquired FlexClub Mexico for an undisclosed amount as part of its expansion into the Latin American market.

Africa to the world: Founded as Soroti Uganda, Asaak started providing loans to farmers and SMEs. This focus changed to motorcycle financing for operators who often can’t access financing from traditional banks because of security requirements.

What this means: With this acquisition, Asaak will collaborate with the FlexClub Mexico team to create and deliver financial solutions to the Latin American market.

Asaak plans to help their workers access affordable credit to grow their income and advance economically. The strategy is to use cars as an entry point into the Asaak credit ecosystem, and then drivers can eventually access additional credit for other services like fuel and repairs.

Final thoughts: While it’s a standard playbook, it’s great to see African startups solve complex problems on the continent and then export those learnings to other markets around the world. It’s a big move by Asaak, and with the track record of the FlexClub Mexico team, this could be good.

Black Ostrich has new money

The short: Black Ostrich Ventures, a US-based VC firm, invests $20 million in early-stage startups in Africa.

No big fours: Tech’s “Big Four” – Nigeria, Kenya, Egypt and South Africa are not priorities in this new fund. Black Ostrich is betting on countries outside this lucky group because the big four markets have accounted for ~90% of all investments raised in Africa in the first two quarters of 2023 alone – great for startups in these countries, not so great for others.

With this move, Black Ostrich will fund startups in Tanzania, Zambia, Uganda, and Morocco.


Shopping for exits: Black Ostrich’s rationale for this decision is that while the big four countries attract most of the funding on the continent, they don’t deliver most of the exits – where investors get returns on the money invested in your business.

Plus, they’re looking at exits as not just a liquidity event in the usual sense but also a fundraiser. For them, “when a company reaches Series A in Africa, that’s an exit for someone who invested in the pre-seed.”

By the numbers: Black Ostrich will invest between $50k to $200k in pre-seed and seed rounds, with a follow-up investment of ~$1m in Series A rounds.

No fintechs allowed: The $20 million will not fund fintech startups. This fund will go to investments in less popular industries like logistics, agritech, and ed-tech startups.

Final Thoughts: Black Rock’s new strategy is based on historical data. Startups in countries outside the big four get limited attention, and less popular industries than fintech could get just as successful with more investments.

If this strategy works, we could see more VCs prioritise exits in other markets and channel their resources to boost their chances at liquidity.

Thanks for reading! We’d love to hear your thoughts about this week’s issue.

Please respond directly to this email or find me on Twitter @fatuogwuche 🙂

And follow us on Twitter @bigtechthisweek.

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