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Thursday, 06 October 2022
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Partners
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Good morning!
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There is sad news. Sendy, the Kenya startup has laid off 20% of its staff. this comes barely months after its laid off 10% of its staff. Tech companies have been struggling to raise money to sustain themselves after years of following a blitzscaling route.
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Now, they need to follow more traditional forms of building a business that pursues profitability as soon as possible.
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Below are the tech stories and news you need to know to start your day, carefully curated by Technext.
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Summary of the news
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- Google said it will host its first African cloud region in South Africa
- Kenya's Sendy has laid off 20% of its remaining staff
- MultiChoice has rolled out new subscription packages in a push to adapt to the streaming age
- Banks financing Musk’s Twitter bid could face hefty losses, experts are warning
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Google's first African cloud region in South Africa
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Yesterday, Google announced its intent to establish a new Google Cloud region in South Africa – it is Google’s first on the continent. The news, which came at the second Google for Africa event, is the latest example of how Google is delivering on the $1bn investment commitment made last year by the company’s CEO, Sundar Pichai.
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The new Cloud Region will help users, developers, businesses and educational institutions across Africa to move more information and tools online, improve access options for customers and in turn, create jobs, Technext reports.
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Google also announced that Equiano now runs through Togo, Nigeria, Namibia and South Africa, which is expected to deliver faster, lower-cost internet to the continent by connecting St. Helena, Togo, Nigeria, Namibia and South Africa with Europe.
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See below other announcements by Google:
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- Google announced the launch of voice typing support for nine more African languages in Gboard, the Google keyboard (isiNdebele, isiXhosa, Kinyarwanda, Northern Sotho, Swati, Sesotho, Tswana, Tshivenda and Xitsonga). 24 new languages are now supported on Google Translate, including Lingala, which is used by more than 45 million people across Central Africa.
- To make Maps more useful, Google has also refreshed Street View in Kenya, South Africa, Senegal and Nigeria with nearly three hundred thousand kilometres of imagery. This helps people virtually explore and navigate neighbourhoods on Google Maps.
- They are also extending the service to Rwanda, meaning that Street View will now be available in 11 African countries.
- Google also announced the launch of Google Warmups, a machine-learning-powered tool that helps job-seeking candidates to maximize their career opportunities by enabling them to undertake mock job interview questions, with a view to improving their interview performance for the real-life application process.
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Sendy's new round of layoffs
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Months after Sendy laid off 10% of its workforce, the Kenyan logistics startup is at it again, sending more staff home while announcing the decision to wind down its Supply service and solely focus on its Fulfillment service to provide a streamlined service for its business clients, TechCrunch reports.
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Sendy confirmed that discontinuing the supply service affected 20% of its remaining 270 staff, about 54 employees — the latest casualties of the funding slowdown fueled by macroeconomic headwinds. Besides, Sendy, which has pivoted to cater to businesses only, is yet to raise the $100 million it had targeted to get this year.
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On a call with employees, Sendy CEO Meshack Alloys, who co-founded the startup in 2015 with Kenyans Evanson Biwott, Don Okoth and American Malaika Judd. mentioned that Sendy was far off from the projections it made the previous quarter and that changes needed to be made to hit the next ones.
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See an excerpt from what Meshack Alloys said below:
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If we look at metrics, we’re headed in the right direction, especially our contribution margins, gross profits, take rates and EBIDTA.
However, the gap between where we are today and where we’re supposed to be is still huge. To put that into context, if you look at the last three months from a GMV perspective, we’re only 65% of where we need to be. And from a revenue perspective about 44%. So the gap is quite huge. And we need to do something about it, given the tough economic conditions we’re seeing,
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MultiChoice's streaming era push
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The deal was made available from the start of October 2022 alongside another bundle that combines the same device and fibre package with a DStv Compact subscription at R699 per month, about 17,000 naira.
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This comes as the company which has dominated cable services in Africa for decades is forced to rethink its business module in a world more inclined to streaming.
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TechCabal reports that between 2015 and 2018, DStv Premium subscriptions declined from 2.35 million to 1.92 million and currently stand at 1.4 million in 2022. MultiChoice’s latest annual financial results also show a 6% decline in Compact and commercial packages.
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A word from our partners!
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For an exclusive 8-week mentorship program for you to take the next step in your Web3 Development Journey, register for the Polygon Bootcamp Africa Class of 2022 slated to hold this September.
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Banks financing Musk’s Twitter deal face hefty losses
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Elon Musk’s U-turn on buying Twitter could not have come at a worse time for the banks funding a large portion of the $44 billion deal and they could be facing significant losses, CNBC reports.
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As in any large acquisition, banks would look to sell the debt to get it off their books. But investors have lost their appetite for riskier debt such as leveraged loans, spooked by rapid interest rate hikes around the world, fears of recession and market volatility driven by Russia’s invasion of Ukraine.
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While Musk will provide much of $44 billion by selling down his stake in electric vehicle maker Tesla and by leaning on equity financing from large investors, major banks have committed to provide $12.5 billion.
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They include Morgan Stanley, Bank of America and Barclays. Mitsubishi UFJ Financial Group, BNP Paribas, Mizuho Financial Group and Societe Generale are also part of the syndicate.
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Noting other recent high-profile losses for banks in leveraged financing, more than 10 bankers and industry analysts told Reuters the outlook was poor for the banks trying to sell the debt.
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Latest in funding
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Other stories we are following
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