Monday, 12 September 2022

Partner(s)

Good morning!

Dennis here,

The day of reckoning has arrived for the African tech ecosystem.

Investors are now paying closer attention to how founders are spending their cash. The founders of Capiter, an Egypt-based startup are already on the receiving end of the reckoning.

What did they do? They raised money and then they laid off staff. Then investors paid more attention and now the founders have been fired over claims that they mismanaged funds.

Is this the next phase in the crackdown of the ecosystem by investors?

Below are the tech stories and news you need to know to start your day, carefully curated by Technext.

Summary of the news

Founders of Egypt's Capiter have been fired following fraud allegations
Instagram is working on a native "reposts" feature
Elon Musk sent another notice trying to terminate the Twitter deal
Kippa has acquired a Super Agent Licence from CBN

Troubles for Capiter founders

Last September, Egyptian startup Capiter raised $33 million in Series A funding to compete in the country’s growing B2B e-commerce and retail space. Fast-forward a year later, the startup has laid off multiple employees. Now, its CEO, Mahmoud Nouh, and COO Ahmed Nouh have been relieved from their duties after allegedly mismanaging funds, TechCrunch reports.

Between June to July, several ex-employees of Egyptian startups, including Capiter, wrote posts about layoffs at their respective companies even though the employers never addressed them publicly. Other companies include OPay Egypt, elmenus, ExpandCart and Brimore.

Some said that Capiter had laid off at least 100 staff in those two months. Others described a workplace with poor management and no structure and a company finding it hard to onboard merchants to its platform while running out of money simultaneously. The company had only a month runway as of August, they said. TechCrunch reached out to Capiter at the time but received no response.

As a result, Capiter investors have been searching for potential buyers to absorb the struggling company in the form of an acquisition or merger. This information was further corroborated in a local news report where Capiter’s Board allegedly said that the founders had not been reporting to the board, its representatives and shareholders during on-site in-person due diligence for a potential merger. Another publication stated the executives had refrained from appearing before the board of directors after internal disturbances and disagreements over their management method.

CEO Mahmoud Nouh, in response to the allegations, said, “I deny the false allegations and that I haven’t received any official notice of what’s above [referencing the statement about his and Ahmed’s dismissal].”

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Instagram testing repost feature

Instagram is gearing up to give users the ability to repost other users’ posts and reels, TechCrunch reports. Although the Meta-owned company hasn’t released the repost feature publicly yet, it plans to begin testing it with select users soon.

“We’re exploring the ability to reshare posts in Feed — similar to how you can reshare in Stories — so people can share what resonates with them, and so original creators are credited for their work,” a spokesperson from Meta told TechCrunch in an email. “We plan to test this soon with a small number of people.”

The new feature was first spotted by social media consultant Matt Navarra, who posted a screenshot that showcases a Reposts tab. The tab will likely be home to all the posts and reels that users have reshared on their accounts. According to the screenshot, the Repost tab will appear on users’ profiles alongside the posts, reels and tagged photos tabs.

Elon Musk tries again to terminate Twitter deal

Elon Musk has sent a third letter to Twitter attempting to terminate his $44 billion acquisition of the company. Musk’s legal team cited Twitter’s multimillion dollar severance payment to former security chief and whistleblower Peiter Zatko as a violation of the merger agreement and a reason to end the deal. The letter, dated September 9th, was sent to Twitter’s chief legal officer Vijaya Gadde, and was included in a filing Twitter made with the SEC last week, The Verge reports.

Last month, Zatko made headlines by accusing Twitter of misleading investors about the number of bots on the service, failing to delete users’ data, and having poor security practices, among other things. Musk jumped on the accusations, citing them in his second termination letter and subpoenaing Zatko to testify in the lawsuit. Zatko was set to be deposed last week.

Elon Musk sent his first letter of termination in July, saying that Twitter mislead him about the number of bots on its platform, and that the company wouldn’t give him access to the information he need to make his own determinations. This is despite the fact that he was given access to the “firehose” API that contains every tweet.

Kippa gets Super Agent Licence

The Central Bank of Nigeria (CBN) has issued Kippa, a financial management and payments platform, a Payment Solutions Services Licence to operate as a Super-Agent in the country, Benjamin Dada reports.

Super Agents are companies licensed by the CBN to recruit agents for the purpose of agency banking; provision of financial services within communities on behalf of banks—these agents are contracted by mobile money operators (MMO) or other financial institutions. The operating license of Super Agents is renewable every two years.

This licence will enable Kippa to provide MSMEs with the infrastructure and tools to offer financial products and services to their customers. Kippa merchants can now accept offline payments from customers and, more importantly, increase customer footfall, customer retention and business revenue by offering financial products and services on Kippa's infrastructure.

"What this license does is that it allows us to truly empower all our customers with tools, and infrastructure to not just accept payments, but to start to offer financial services to their end customers," Kennedy Ekezie-Joseph, CEO of Kippa said, "It affords us the opportunity to implement integration with the national switches and allows us to provide business-to-business and platform and services to other fintechs."