Is the acquisition of Brass a strategic or rescue move?

Kamusta,

This is Victoria from Techpoint,

Here’s what I have for you today:

• Is the acquisition of Brass a strategic or rescue move?
• Glovo will start delivering food in Lagos using electric bikes
• YoLa Fresh for $7 million pre-Series A

Is the acquisition of Brass a strategic or rescue move?

Remember that? Paystack and PiggyVest join forces to acquire Brass

While acquisitions are usually cause for celebration, there is some concern in this case.

Just two months ago, Brass made headlines for failing to provide customers with access to their deposits. Their business banking product, intended to support small businesses, has caused more problems, leaving employers unable to pay wages and businesses struggling to purchase supplies.

Founded in 2020 by Sola Akindolu (CEO) and Emmanuel Okeke, Brass aimed to make banking easier for small businesses in Nigeria. They raised significant funds and hired approximately 5,000 companies. However, already in October 2023, customers began to have problems accessing their deposits.

Akindolu blamed these problems on financing challenges, stating that only a small portion of their customers were affected. He stressed the need for significant capital to successfully disrupt traditional banking.

Despite his explanation, the fact that Brass, a deposit-taking institution, was unable to provide deposits to customers raises serious concerns about its operations.

The acquisition by a group of Paystack investors has been welcomed, but questions remain. Was this move a strategic acquisition or a way to save investors’ funds? Click the link to read more and find out.

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Glovo will start delivering food in Lagos using electric bikes

Glovo is partnering with electric vehicle manufacturer Siltech to start using e-bikes for deliveries in parts of Lagos, Nigeria. The move could help Glovo reduce the gasoline and maintenance costs of its current gasoline-powered motorcycles.

Although Glovo has not yet started using e-bikes, Siltech sees it as a proof of concept. With petrol prices reaching £617 per liter, more and more companies, including Glovo, are seeing electric vehicles as a cheaper alternative.

Siltech CEO Tolu Williams confirmed that Glovo has used their products and services, which include charging stations, battery replacement and technical support. The pilot will begin in areas such as Ikate, Lekki and Victoria Island, where Siltech already has infrastructure.

The cool thing about the Siltech setup is the battery swap stations, which allow riders to replace a dead battery with a fully charged one in a matter of minutes. Glovo riders will use Siltech Ginsu bikes equipped with this feature.

Although Glovo will still have to pay for Siltech’s services, it will be cheaper than sticking to gasoline. Deliveries of electric bikes will begin in a few months.

Williams is optimistic about cost savings for Glovo after launching electric vehicle services thanks to the comprehensive support offered by Siltech. Despite some skepticism about Nigeria’s EV readiness, Siltech already provides services to several EV users and even a Tesla owner.

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YoLa Fresh for $7 million pre-Series A

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

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

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

They deliver over 1,200 tonnes of product to customers per month and boast an impressive customer retention rate of 85%, with retailers making an average of four transactions per week.

YoLa Fresh uses data from both farmers and retailers to provide insight into harvest and financing options. This helps them maintain strong customer loyalty and aims to achieve a positive contribution margin by the end of 2024 or early 2025.

Looking ahead, the startup plans to stick with supplying to traditional retailers, work closely with farmers to increase margins and focus on unit economics.

They expect to reach annual revenues of $40 million to $50 million by 2026 and begin expanding beyond Morocco. With agriculture accounting for 15% of Morocco’s GDP and a traditional trade sector worth between $5 and $6 billion annually, the market looks promising.

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In case you missed it

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Have a nice weekend!

Victoria Fakiya for Techpoint Africa.