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El-Rufai Launches $100 Million Afri-Venture Capital Company

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Nasir El-Rufai may no longer be the Kaduna State governor and has missed a controversial ministerial appointment, but he certainly has not lost his zest for taking on big projects. The former governor is going into the private sector with a loud statement.

El-Rufai plans to launch a $100 million venture capital fund for startups in Nigeria, particularly those in the Kaduna tech ecosystem. He plans to match his ambitions with actions. He is willing to stake $2 million of his money for the offtake of the fund. He plans to convince investors to provide the remaining funding. The investors will mostly be those “who believe in us but don’t have the capacity or the time to do the analysis and evaluation. But they trust our judgment and they will come with us.”

He was in Marrakech in November for the Africa Investment Forum where he spoke to BusinessDay.

The former governor who played a significant role in the emergence of the current Nigerian president as the party’s candidate, seems to have put his disappointments behind him.

In Marrakech, there was no trace of the man who became the target of much social media trolling. The El-Rufai that showed up in Marrakech was looking spritely and took part in all the sessions of the Africa Investment Forum, a multi-stakeholder, multi-disciplinary platform with the vision to channel capital towards critical sectors to achieve the Sustainable Development Goals, the African Development Bank’s High 5s, and the African Union’s Agenda 2063.

According to him, he wants to set up a venture capital fund or private equity that will invest in young Nigerians with innovative ideas. It doesn’t matter what segment of the economy the ideas are. It could be in agriculture. ICT or the creative industry, so long as it has the potential to add value to the world, these are the ideas that El-Rufai and his fund will target.

During his tenure as governor of Kaduna, El-Rufai said he met many students in Kaduna who had great ideas and were creating innovations. However, many of them did not have someone to mentor them and help those ideas grow.

“What young people need is essentially mentoring and financing to get things going. They develop the idea and see whether it is viable. And we will open doors for them because they don’t have contact. They don’t know or have access to ministers, presidents, or regulatory agencies. We do. We know the minefields that they have to navigate. We know that they need to give them appointments and we can provide them with the startup funding and in return we take an equity position.

We don’t want to take your business; we want to develop it. But if we take the risk on you, we will take a percentage of the business,” El-Rufai said.
He is working with select private sector partners, including Eyo Ekpo, co-founder of Excredite Consulting Limited, and their primary focus is on Nigeria but the ambition is Africa because he projects from a report that Africa will be supplying the world with a significant portion of the workforce it needs by 2050.

According to a report by the Guardian, by 2050, Africa’s population is expected to reach 2.5 billion, which is about 25 percent of the world’s population.

El-Rufai says such projections call for more investments in the younger demographic. However, his fund will not just be focusing on new startups, there is also a plan to engage established companies with management problems that are still viable. The VC fund will invest in such companies, get them sorted out and take them to exit.

“We don’t intend to remain in any business. We want to catalyse growth in these startups,” he said.

One of the goals of being at the African Investment Conference was to seek continental partnerships, and investors and to explore opportunities with climate-focused investors.

“Nigeria has a lot to offer Africa and the world. Our population, entrepreneurial capability, the innovation of our young people and their boldness and courage to find success. We just felt that we have a duty to encourage,” he said.

The first fund will be investing for three to four years. The fund is expected to launch early next year and the company will be headquartered in Abuja. This is to diversify the funding beyond Lagos because there is already a lot of interest in funding innovation in Lagos. El-Rufai and his partners want to spur startup funding interest in ecosystems in Kaduna, Abuja and other parts of the country.

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Bitmama acquires Payday

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In a significant development in Nigeria’s fintech landscape, blockchain payments platform, Bitmama Inc. has confirmed the acquisition of Payday, a virtual card service provider.

The news comes barely nine months after Payday announced its $3 million seed round and three months after its exploration of sale options was confirmed. Facilitated through Bitmama’s cross-border payments product Changera, the acquisition marks a pivotal shift from earlier speculations, including a potential acquisition by lead investor, Moniepoint. Changera is set to consolidate its blockchain payment platform by acquiring 100% of Payday’s customer base.

A source close to the matter, who declined confirming the financial terms of the deal, revealed to Techpoint Africa that acquisition conversations were initiated just a few weeks ago, and the process is “about 85% complete.”

Changera, launched in 2021, is set to absorb a number of Payday’s key personnel across various departments, including marketing, customer service, and engineering. This integration is already underway, with some Payday employees already transitioning to Changera. As a founder with a strong technical background, Payday CEO Favour Ori’s integration into Bitmama’s team is not yet confirmed. However, given Bitmama’s already established leadership and robust technical team, it appears more likely that he may step away.

For the over 300,000 customers previously reported by Payday, who will now be under Changera’s care, there will be hopefully no noticeable changes.

According to a senior member of Bitama’s management, Payday’s brand will continue to operate but it will now fall under the broader umbrella of Changera, supported by its stablecoin infrastructure. This integration is expected to overcome the liabilities and challenges Payday faced due to its dependence on third-party integrations, thereby potentially improving both customer experience and service reliability. The self-proclaimed neobank of the gig economy had previously grappled with operational challenges, including industry-wide charge-back fraud issues, a notable disruption in Mastercard services, and the exit of senior team members in July 2023.

For Changera customers, the acquisition promises to expand the range of available services, providing access to Payday’s digital payment solutions.

In the short term, there are no planned changes to the fee structures or terms of service for Payday customers. However, as the integration progresses, customers can anticipate an expanded suite of services and potentially new features that leverage the combined strengths of Bitmama and Payday.

Post-acquisition, Bitmama is poised to embark on an ambitious roadmap. Central to this roadmap is the development of a new solution aimed at enhancing FX transactions for African businesses. Slated for launch in Q1 2024, this solution is expected to address a critical need in the market, facilitating smoother and more efficient B2B cross-border financial interactions.

The acquisition of Payday by Bitmama mirrors a broader trend of strategic consolidations within the fintech industry. It comes in the wake of similar acquisitions, such as that of Chaka by Risevest in September 2023. This consolidation trend suggests an emerging pattern where fintech companies are increasingly seeking strategic partnerships and acquisitions to overcome market challenges and scale operations.

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Sam Altman To Return As OpenAI CEO

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Sam Altman is returning to OpenAI as its chief executive, the high-profile AI startup said Wednesday, capping an intense five days of discussions, debates and convincing following the sudden dismissal of Altman last week from the startup he co-founded.

OpenAI, which is the most valuable U.S. startup, said it has reached an “agreement in principle” for Altman’s return. The startup is also reforming its board, eliminating several members who faced intense scrutiny for their decision last week.

Former Salesforce chief executive Bret Taylor, former US Secretary of the Treasury Larry Summers, and Quora founder Adam D’Angelo will be part of the new board at the AI startup, it said. Taylor will serve as the chair of the board, the startup said.

Microsoft, which owns about 49% of OpenAI, was taken aback by OpenAI’s decision last week and rushed to hire Altman to lead a new AI group at the software conglomerate. Greg Brockman, former President of OpenAI, and countless other members of the startup resigned in protest of the earlier OpenAI board’s decision.

“I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together. when I decided to join Microsoft on Sunday evening, it was clear that was the best path for me and the team. With the new board and with Satya’s support, I’m looking forward to returning to OpenAI, and building on our strong partnership with Microsoft,” Altman said in a statement posted on X.

Microsoft chief Satya Nadella, who also expressed disappointment in OpenAI board’s decision last week and pledged to ensure that Microsoft is never “surprised” again, said Wednesday that he was encouraged by today’s changes to the OpenAI board.

“We believe this is a first essential step on a path to more stable, well-informed, and effective governance. Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”

OpenAI’s earlier board — which included its chief scientist Ilya Sutskever, independent directors D’Angelo, technology entrepreneur Tasha McCauley, and Georgetown Center for Security and Emerging Technology’s Helen Toner — faced intense public scrutiny for their abrupt decision, for which they never offered a comprehensive explanation. Growing frustrated with the earlier OpenAI board, several OpenAI investors began exploring options to sue the board members, Reuters reported Tuesday.

Emmett Shear, the former Twitch chief executive who was appointed as interim leader of OpenAI on Sunday, said he was pleased with OpenAI’s new decision. “Coming into OpenAI, I wasn’t sure what the right path would be. This was the pathway that maximized safety alongside doing right by all stakeholders involved. I’m glad to have been a part of the solution,” he posted on X.

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