TechPression

Tag: edtech

  • Fintech and Edtech investments dominate South African venture capital

    Fintech and Edtech investments dominate South African venture capital

    South Africa’s venture capital (VC) industry continues to expand and develop steadily with early-stage fund managers contributing R1.31 billion to 121 organizations through 186 investment rounds. The Southern African Venture Capital Association (SAVCA) has recently published its 2022 Venture Capital Industry Survey. This report examines equity investments in new and developing enterprises for the year 2021.

    A survey respondent Stephan Lamprecht asserts that R5 million or less was invested in the vast majority of agreements. Despite fewer fund managers engaging in active transactions during the survey period, “our data indicated that investment activity in 2021 was quite comparable to those seen in 2020,” he noted.

    According to the report, 57% of all venture capital (VC) acquisitions in South Africa were from the information and communications technology (ICT) sector in 2021, which is in line with trends in major VC markets like the United States and the United Kingdom. One-quarter (25%) of all agreements closed throughout the year were related to financial technology (Fintech) or education and training technology (EdTech), with FinTech retaining its dominance among investors by garnering the most deals during the period.

    The sectors with the largest deals in South Africa in 2021 were Fintech (15.9%), EdTech (9.1%), Consumer Products and Services (7.9%), ICT – other (7.9%), and Software (6.7%). These accounted for a total of 44.7% of 2021’s total investment capital.

    Read more: South African fintech, Ukheshe appoints New COO

    Shelley Lotz, the interim CEO of SAVCA and the organization’s director of policy and regulatory affairs, has identified FinTech and EdTech as two of the country’s most important industries. Even if the local financial system is sophisticated and can compete globally, ensuring that everyone has access to it is still a major problem. She argues that technological progress in the classroom has many positive effects, such as the ability to serve more students and reduce inefficiencies and skill gaps.

    Investment of R298 million in fintech was the second highest, behind the food and beverage industry, which maintained its lead from the previous year.

    Moreover, the Western Cape and Gauteng continue to be favoured regions for venture capital investment, with Johannesburg expected to see more transactions than Cape Town in 2021. Still, the majority of the firms in the active portfolios of VC fund managers have their roots in Cape Town. Also, the survey shows that the majority of trades are mostly done by independent fund managers.

    The industry needs investment to fully develop the venture capital

    Thiru Pather, head of investments at the SA SME Fund, elaborated on what has to be done to attract more fund managers to South Africa, stating that, firstly, it is important to recognize that venture capital (VC) is still a nascent asset class in South Africa, particularly when compared to more industrialized nations.

    Therefore, the sector needs help from all quarters if it is to achieve its full economic development potential. When looking at the asset class as a whole, more work has to be done to attract traditional investors like banks and pension funds.

    She further said that in order to entice these large investors, the asset class in question must be made less hazardous. To achieve this goal, subordinated financing might be used to provide institutional investors with the necessary downside protection they need to make more calculated bets.

    The forefront fintech companies in South Africa

    The financial technology sector in South Africa is thriving, with backing from a wide range of companies and individuals. Fintech entrepreneurs in South Africa are working to make payments and money transfers easier and cheaper for the underbanked, expand access to basic financial services, and increase financial inclusion.

    Here are the top 10 FinTech startups operating in South Africa. JUMO, GetBucks, Yoco, Zoona, Planet42, Inclusivity Solutions, Nomanini, VALR, Pineapple, InvestSure

    The forefront Edtech startups in South Africa 

    A world of aspirations has opened up for ambitious digital entrepreneurs owing to the expanding industry of remote learning, and there are currently more than 290 ed-tech startups in South Africa, and that number is anticipated to increase. FoondaMate, Smartpozi, Go1, and Hyperion Development are some of the cutting-edge South African ed-tech startups that are blazing new trails.

  • FoondaMate Raises $2M in Seed Funding

    FoondaMate Raises $2M in Seed Funding

    In a round led by LocalGlobe, a U.K.-based venture capital firm, FoondaMate, a South African edtech startup, secured $2 million in seed funding to drive global adoption of its WhatsApp and Facebook-based learning chatbot.

     

    What To Know About FoondaMate

    FoondaMate helps students with their revision by providing instant answers to questions and access to revision papers, as well as providing guidance on how to respond to questions.

    Dacod Magagula, who co-founded FoondaMate with Tao Boyle, revealed that the startup is aimed at high-school students in emerging regions where WhatsApp is extensively used, and connectivity is much cheaper or free. He claims that the company’s learning chatbot is easy to use, affordable, and provides an organized alternative to using search engines for studying. Educators can also use FoondaMate’s integrated resources to assign and distribute homework, as well as share other educational content with students.

    Magagula said he began working on FoondaMate in August 2020, when WhatsApp released a beta version of its API to allow businesses to connect with customers.

    “It (WhatsApp) was in beta at the time, and I started playing around with it… I thought it’d be a perfect way to enable access to study materials to students in the same position as myself…because a majority of students do not have access to the wider internet but have access to WhatsApp. Also, many network providers offer WhatsApp for free to attract users to their network,” said Magagula.

    Before teaming up with Boyle, Magagula was trying to fix the supply chain to get textbooks to underserved schools. He had additional experience from his high-school days that made him see the idea’s feasibility.

     

    Read Also : Betastore’s $2.5 Million to Ease Financing Challenges for African Retailers

     

    “During the final year of high school in South Africa, I used the computer my brother and I had bought using our savings for studies and downloading all revision materials I could get my hands on. I had a huge database of past papers, but no way of sharing it with my friends, and printing them was expensive,” he added.

    Furthermore, he explained that “the materials played a big role in my success in school as I graduated top of my class and my performance was the best in the school’s history (at that time). And so FoondaMate was created to make these resources easily accessible to students,” said Magagula, who studied Computer Science at the University of Capetown. After teaming up with Boyle, they added more functionalities and integrated it with additional services.

     

    FoondaMate Rapid Growth

    FoondaMate has been used by more than 400,000 students in more than 30 countries since its launch, including Colombia, Mexico, Brazil, and Indonesia, where the startup recently launched and has witnessed a spike in usage.

    Magagula stated that the company is now focusing on localizing its learning materials in order to accommodate learners from more nations and accelerate the platform’s growth to more than 50 million users. This recent funding round has provided the resources required for its rapid growth.

    “Initially, I thought FoondaMate would be used by students who do not have Wi-Fi and those with limited access to the internet. But the reality is, it is being used by those with good internet connectivity too…because it’s an easy and intuitive way to access study material,” he remarked.

    To keep the children safe on the platform, the startup has a team that vets where the bot gets its information and monitors the results.

    Emerge Education, Odunayo Eweniyi via FirstCheckAfrica, Iyin Aboyeji via Future Africa, LoftyInc, and angels from Luno (Marcus Swanepoel) and Justworks took part in the round (Isaac Oates). They joined the XX accelerator, which was the startup’s first backer.

    LocalGlobe Partner Ziv Reichert commented that – “FoondaMate’s viral growth strongly reflects how well the product resonates with learners and speaks volumes to Dacod and Tao’s deep understanding of their users’ needs.”

    “Having initially launched with a mission to transform how students across Africa study, FoondaMate has evolved into a tool that is now used and loved by learners from a range of backgrounds, with varying needs and learning styles, from all across the world. We believe that it takes immense empathy for a problem and a realistic long-term view to build a product of this kind,” he emphasized.

  • EDTECH STARTUP MANARA RAISES $3M TO GROW TECH TALENT POOL IN MENA

    EDTECH STARTUP MANARA RAISES $3M TO GROW TECH TALENT POOL IN MENA

    The Middle East and North Africa (MENA) focused EdTech startup Manara announced raising $3 million in a pre-seed funding round led by payment giant Stripe to grow the tech talent pool in the MENA region.

    More on Manara

    Manara was founded in 2021 by Iliana Montauk and Laila Abudahi to unlock the human potential of the Middle East and North Africa. It uses a digital platform to provide a cohort-based training program for computer science students and software engineers, connecting them to big tech companies like Google, Facebook, and Amazon. The platform connects MENA engineers with a community of world-class tech professionals who provide mentorship and network to help them secure top tech jobs.

    Manara poises itself as a social impact EdTech startup offering training to anyone that qualifies for the program. While its students do not pay any tuition fee for the program, they are required to commit 10% of their salary in their first two years of employment to the company.

    Relating the need for a platform like Manara with her experience, Laila Abudahi, Co-founder & CTO of Manara, said, “I grew up in Palestine and realized quickly that to become a world-class engineer, I needed to work on highly scaled products with experienced teams. After I reached my dream through lots of trial and error, I wanted to make it easier for people back home to do the same. Ultimately, these engineers will become the CTOs and senior developers that the region needs in order to accelerate the growing success of its tech ecosystem.”

     

    Read Also : Coinbase Ventures And FXT Lead A $23M Seed Round For MARA To Develop Africa’s Portal To The Crypto Economy 

     

    The startup claims 86% of its trained engineers receive job offers within five months of graduating, and those who already have a job get up to a 300% pay hike after the training.

    With the new funding, Manara plans to scale its existing cohort-based solution from 60 engineers to 6,000 engineers per year. The startup also plans to launch a self-service product for interview practice, networking, and mentorship, targeting software engineers from across the globe.

    Participant of the pre-seed round includes LinkedIn founder Reid Hoffman; Paul Graham, founder of Y Combinator; Eric Ries, founder of Lean Startup; and Mudassir Sheikha, founder and CEO of Careem.

     

    Read Also : Draper Startup House Launches in Zambia in Partnership with BongoHize

     

    Iliana Montauk, Co-founder and CEO of Manara, talked about the funding and the excellent caliber of investors it has attracted, “We received more appetite from investors than we could accommodate, signaling an increasing interest from Silicon Valley in platforms that facilitate online and offline communities, and solutions to access highly skilled talent from emerging markets.”

    What They Are Saying

    Carlos Espinal, the Managing Partner at Seedcamp, said,

    “Europe’s tech sector is growing quickly. There’s a massive need for new solutions to access talent, whether remote or onsite. The Middle East and North Africa is an obvious fit because of their proximity and time zones. We’re very excited to back the first startup bridging these two markets — and are particularly enthusiastic about the founders’ commitment to women engineers.