The on-demand transport space in Africa has evolved since San Francisco-based ride-hailing firm Uber first set up operations in South Africa in 2013, setting the stage for its foray across the continent while radically transforming the entire taxi industry.
Almost a decade later, Africa’s taxi industry is now dominated by tens of local and international tech-led ride-on-demand platforms, with the latest additions being global giants Didi Chuxing from China and Russia’s inDriver.
Looking to edge out its competitors, Chinese behemoth Didi is currently expanding across the continent, stepping up competition for market leaders Uber and Estonia-based Bolt. Evidence shows it is preparing to enter Nigeria, having begun operations in South Africa in March and Egypt just last month when the company posted a job opening for a driver center manager in Lagos – the same role it first advertised for when entering South Africa and Egypt.
A key indicator of the company’s imminent expansion into Nigeria was hidden within the lines of the driver center manager’s responsibilities – “to collaborate with operations and Didi’s team to support the successful launch.”
Didi did not respond to multiple TechCrunch requests for comment about its expansion plans in Africa.
Didi is one of the biggest ride-hailing services in the world. However, unlike global competitors Uber and Bolt, which years ago saw Africa as a key market in their quest for global dominance, the Chinese firm held off the continent until now.
Founded in 2012, Didi has around 600 million users across 17 countries in Africa, Asia, Latin America and Russia. The company also has over 15 million annual active drivers.
In addition to launching other mobility platforms, Didi now owns minority stakes in other global platforms — the United States’ Lyft and Uber, Indonesia’s Grab, Egypt’s Careem and India’s Ola. It also fully acquired Brazil’s 99.
As Didi starts its incursion into Africa, Russia’s inDriver is firming up its presence across the same markets, where it recently started taking commissions from drivers.
Unlike other taxi-hailing apps that have a unilateral billing structure, inDriver allows riders to negotiate trip charges with drivers, making it popular among taxi users.
Taxi drivers in Kenya’s capital Nairobi using inDriver, which rolled out its services in Africa in 2018, have over the last few days received notifications from the company confirming the introduction of a 9.52% commission for every trip made. The commission is lower than Didi’s 13%, although both are much lower than Uber’s 25% and Bolt’s 20%.
InDriver inferred that it was introducing the charges due to the increased demand of the service, but it was keen to keep the commission lower than those of its competitors. The app was launched about three years ago across multiple markets in Africa including South Africa, Nigeria, Tanzania, Morocco and Botswana with the promise of a commission-free first year. The company is just now introducing commissions in some of these markets, although the deductions are already in effect in Nigeria and South Africa.
In a notification sent to drivers in Kenya, inDriver said that it “became a noticeable event in the passenger rides market in Nairobi. Many people use it daily and their number is increasing. This extensive work requires significant costs. To cover these costs, we introduce payments for each order in the amount of 9.52%. To keep inDriver still profitable for both passengers and drivers, the amount of payments is lower than in other services, where payments can range from 15% to 30% of each order.”
The new update comes as the company plans to grow in different markets, having already diversified into the courier business.
The company launched its delivery business in April last year, at the height of the pandemic, to tap the demand for parcel delivery services. Courier services enlisted on the app include auto, foot and moto, and are available in over 16 countries. The company is now introducing freight services in different markets around the world.
Founded in 2013 by Arsen Tomsky, inDriver is currently available in 34 countries and recently crossed the 100-million download mark.
As it joins Didi to step up competition in Africa, market pioneers Uber and Bolt are expanding their service range in cities across the continent.
Currently, Uber is rolling out Pool Chance, a feature that lets riders headed in the same direction share the cost of the journey, in Kenya, with plans to offer the low-cost service in Ghana and Nigeria. The company says that the rollout of budget services is part of its plan to attract price-sensitive users.
Across the continent, Uber has over the last few months expanded into new regions and introduced new products as part of its strategy to retain existing customers and attract new ones amid growing competition. Earlier this month, the firm entered two additional cities in Nigeria — Ibadan and Port Harcourt — bringing into the regions a service that is already available in three other cities.
In South Africa, Uber is now available in 40 cities, serving 80% of the urban population, with premium services Uber Comfort, UberX and UberBlack and budget service UberGo. It recently expanded into 21 new cities and added a feature last August that allows the booking of trips a month in advance.
The company plans to continue investments into African cities through collaborations with national and local authorities.
“We know that we face significant competition across local transportation modes in Africa. These are vibrant and competitive with many viable alternatives, including ridesharing, personal cars and public transportation—which consumers can and do choose between,” Frans Hiemstra, the general manager for Uber Sub-Saharan Africa, told TechCrunch.
“We believe competition makes us better, which improves the service for our riders and earners alike,” he said.
Uber is still king in terms of combined market share in Africa; it claims to have about 150,000 drivers in its eight markets across the continent, while Bolt comes in second.
Bolt has been aggressively expanding its services in Africa. The firm is planning to roll out electric taxi options in South Africa four months after introducing e-bike food delivery services in Johannesburg and Cape Town. Bolt also launched its food delivery service in Nigeria last month.
Like Uber, Bolt sees myriad opportunities in the continent.
“We see that there is room for several players across the continent. The infrastructure and experience we have built up with our ride-hailing business give us a good platform to expand and diversify our services,” said Bolt’s regional director for Africa and Middle East, Paddy Partridge.
For new players like Didi, it will be an entry to a market that dealt with drivers and partners demanding better working terms.
In Nigeria and Kenya, both Uber and Bolt faced a series of protests earlier this year as their drivers expressed displeasure with the ride-hailing companies’ decision to increase their commissions, despite burdening users with price surges. However, no notable changes have been made from either of the two companies in line with the demands of drivers.
Didi’s operations elsewhere have not been without drama. Before it went public on the NYSE this year – nine years after operating as a privately held startup and raising $25 billion from investors – the Alibaba, SoftBank and Apple-backed company faced scrutiny from the Chinese government and regulators. It was accused of employing anti-competitive practices and pricing and misusing users’ personal information.
Didi’s fallout with China is just one of the many struggles it dealt with this year. Trying to compensate for the troubles at home, the firm looked to enter the U.K. market, but the move was met with concerns from the British Parliament that China could harvest data from Brits using Didi’s service. However, it seems its entry into African markets has been smooth — and could explain why it wants to keep its operations quiet: to avoid scrutiny.
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Galaxy Digital calls off $1.2 billion acquisition of BitGo – TechCrunch
Crypto sector’s first $1 billion deal, announced at the height of record surge in token prices, is disbanding as the market reverses much of the gains.
Galaxy Digital said Monday it has terminated the $1.2 billion proposed acquisition of crypto custodian BitGo, a high-profile deal they announced in May last year, after the San Francisco-based startup failed to provide its audited financial statements for the year 2021.
BitGo’s alleged failure to provide the financial statements by July 31 violated the terms the two firms had agreed upon last year, Galaxy Digital said in a public statement, adding that the termination of the deal won’t incur the company any fee. Shares of Galaxy Digital, which trades in Toronto, jumped on the news.
The proposed acquisition — which was proposed to include Galaxy Digital issuing 33.8 million new shares, and a $265 million cash component — was supposed to be crypto sector’s first $1 billion deal. The BitGo purchase was positioned to help Galaxy Digital broaden its offerings for institutional investors by adding services such as investment banking, prime lending and tax services. BitGo counts Galaxy Digital, Goldman Sachs, Valor Equity Partners, Craft Ventures, DRW and Redpoint Ventures among its backers.
“The power of the technology, solutions, and people we will have as a result of this acquisition will unlock unique value for our clients and drive long-term growth for our combined business. We are excited to welcome Mike Belshe and the talented BitGo team to Galaxy Digital,” Mike Novogratz, chief executive officer and founder of Galaxy Digital, said at the time.
Novogratz (pictured above) said Monday: “Galaxy remains positioned for success and to take advantage of strategic opportunities to grow in a sustainable manner. We are committed to continuing our process to list in the U.S. and providing our clients with a prime solution that truly makes Galaxy a one-stop shop for institutions.”
The announcement follows Galaxy Digital reporting a second-quarter loss of $554.7 million, up from a loss of $183 million a year ago, earlier this month. In the company’s earnings call, Novogratz said Galaxy Digital had about $1 billion in cash on hand.
Galaxy Digital said today it is waiting for the SEC’s review and stock exchange approval for a Nasdaq listing.
Uber to sunset free loyalty program in favor of subscription membership – TechCrunch
Ride-hailing giant Uber is shutting down its free loyalty program, Uber Rewards, so it can focus on its subscription-based Uber One membership.
Uber first launched the rewards program in 2018 as a sort of frequent flyer scheme that allowed riders to earn points for every dollar spent on rides or Uber Eats deliveries. Those points could then be used to get discounts on future rides or deliveries. In November 2021, Uber began introducing Uber One, which, for $9.99 per month or $99.99 annually, allows members perks like 5% off certain rides or delivery orders and unlimited $0 delivery fees on food orders of over $15 and grocery orders of over $30.
In an email sent to customers that was picked up by The Verge, Uber said users can still earn points via the legacy rewards program until the end of August, and that they can redeem those points until October 31. Uber Rewards will officially shut down on November 1, 2022, according to an update posted by the company.
The Uber Rewards program allowed users to earn 1x point for every Uber Pool dollar spent, 2x for every UberX dollar spent and 3x for every $1 spent on Premium. The number of points accumulated would put members into different castes of loyalty, from Blue to Gold to Platinum to Diamond, the latter of which comes with benefits like access to highly rated drivers, free delivery on three Uber Eats orders, access to better customer service and free upgrades.
While phone support will continue for Diamond users, now the only way to get additional perks with Uber will be to shell out for a subscription. Existing Rewards members will get a free one-month subscription to Uber One, but then will be charged for access. If you’re someone who orders Uber Eats more than twice a month, you can easily break even with the Uber One subscription, but plenty of users might not see the money saving benefits in the switch.
Uber did not respond immediately for clarity as to why it is shutting down the Rewards program in favor of the Uber One membership. Perhaps the company did not see the returns and user loyalty that it would have expected from the program and thinks a subscription offering will provide better returns.
As companies fight to retain talent, employee benefits startups might escape cost cuts – TechCrunch
How will employee benefits startups fare when their corporate customers start slashing costs as the market goes downhill? We’re going to find out if current trends continue.
There was a spike in the number of startups offering employee benefits services through a B2B2C model last year, as nearly every company focused on employee benefits amid the Great Resignation in an effort to retain and attract talent. These startups sell everything from paid care leave coordination and fertility services to discounted gym memberships to consumers through their employers.
But the freewheeling spending of 2021 is now over, and some of these startups could find their offered services on the chopping block if market conditions continue to worsen.
If there is indeed a recession on the horizon, many of these startups would be right to fear for their future growth, but Brian Kropp, chief of HR research at Gartner, doesn’t think this downturn will mirror the last. Kropp told TechCrunch that even if the market enters a recession, it won’t be similar to what we saw in 2008 because of the ongoing labor shortage.
You’re not that special (I swear, there’s a startup angle here) – TechCrunch
Welcome to Startups Weekly, a fresh human-first take on this week’s startup news and trends. To get this in your inbox, subscribe here.
For longtime Startups Weekly readers, you’ll remember that edtech used to be my primary beat. Like, day one beat. Most of my coverage was focused on edtech’s rise in the early innings of the pandemic, the unicorn mad rush and even some IPOs. Duolingo continues to be the company that I know the most about, mostly because I wrote thousands of words about its savvy owl and wild founding story.
While I’m more focused on fintech these days, I was curious if edtech is still a big deal or if the sector — like most during the downturn — is facing a reset. This week, I interviewed seven leading venture capitalists who have a focus on education technology to better understand how the sector is faring during the downturn.
The big takeaway? Edtech is facing a reality check in the form of discipline. Investors explained that the whole startup ecosystem is slower this year; edtech is no different. If anything, as USV’s Rebecca Kaden put it, “The boom in the category in the last couple years means most of our education-focused portfolio is funded quite well [ … ] rounds would be opportunistic rather than out of need, and most are focused on building their businesses for the next couple years.”
As Kaden describes, it’s time to focus and edtech, luckily, has the capital to do it. It makes me think a bit about advice that my friend often gives our friend group: We’re not that special, and that’s a good thing. He means in the kindest way, and the lesson there is that feelings of change, stress or anxiety are not as deep as we may think when we first feel them. What we’re experiencing is shared by other people in their mid-20s, or, well, other sectors in startup land right now. All that matters is if you’ve invested in yourself long enough before the spotlight turns on that when the lights go down, you’re still there. Just quieter and maybe focused a bit more on backstage.
Anyway, for the full survey, read my TechCrunch+ piece: “7 investors discuss why edtech startups must go back to basics to survive.” You can also check out my accompanying analysis, “Edtech isn’t special anymore, and that’s a good thing.”
In the rest of this newsletter, we’ll get into one Haus’ closed doors, SoftBank execution fund and a pitch deck teardown you don’t want to miss. As always, you can support me by forwarding this newsletter to a friend or following me on Twitter
Bring the Haus down
I wrote about Haus, a buzzy VC-backed aperitif company going up for sale in light of a collapsed Series A. CEO and co-founder Helena Price Hambrecht spoke to TechCrunch about what went down between the company and its potential lead investor, the reasoning they got behind the fallen deal and what’s next.
Here’s what’s important: I’ve never seen an entrepreneur so transparent about the challenges, and unfortunate outcomes, that happen within startups. Here’s an excerpt from my interview with her.
“It’s always dangerous to be low on cash. We got there, and it’s unfortunate, but I know there are many companies in this position right now,” Hambrecht says. “I have been sharing my work online for over 20 years now. It’s definitely something in my DNA. If me sharing this process is helpful for another founder in a tough spot and considering their options, then it makes all of this a little more worth it.”
As for what’s next for the entrepreneur, a Silicon Valley branding veteran, there’s no immediate plans to jump into a new startup.
“My goal, right now, is to be as helpful as I can to make this ABC process have the best outcome possible. After that, I’m going to take some time to process the last four years; it’s been so extraordinary, as well as brutal and traumatic; I’m going to rest and process that.”
So, when is the SoftBank Execution Fund III dropping?
This week on Equity, your favorite trio dug into the numbers and nuance behind the headlines. It meant SoftBank, Coinbase and deals from ByteDance, Haus and Axios.
Here’s why it’s important: Part of the conversation hovered around SoftBank’s losses on losses, which was really the highlight of the show. Do we see a redemption arc forming for one of the biggest, buzziest investors of the past few years? And what does Tiger Global think? So many questions, and it’s always fun to get Mary Ann and Alex’s take.
Pitch Deck Teardown: Five Flute’s $1.2M pre-seed deck
TC’s Haje Jan Kamps is back with another pitch deck teardown, this time looking at the deck that helped Five Flute raise a $1.2 million pre-seed round.
Here’s why it’s important: If you haven’t been following along with this series, you’re — and I mean this in the kindest way — missing out. Haje goes slide by slide, and in this case, taught me a lot about why more can be more in terms of length of deck and why a “chockablock of words” is a top mistake founders make. Read the story here and pitch Haje for the series if you so dare.
If you missed last week’s newsletter
Read it here: “Venture investors to founders: Turn down for what?” We also have a companion podcast out, which you can listen to here: “Founders, whales and the sea change in the entrepreneurial energy.”
Seen on TechCrunch
Seen on TechCrunch+
Same time, same place, next week? Talk soon,
Twilio gets hacked, teens ditch Facebook, and SpaceX takes South Korea to the moon – TechCrunch
Is Facebook for old people? If you’ve got a teenager around the house, you’ve probably heard them say as much. The most read story this week is on a Pew study that suggests this generation of teens has largely abandoned the platform in favor of Instagram/YouTube/TikTok/etc.; whereas in 2014 around 71% of teens used Facebook, the study says in 2022 that number has dropped down to 32%.
Mark Cuban sued over crypto platform promotion: “A group of Voyager Digital customers filed a class-action suit in Florida federal court against Cuban, as well as the basketball team he owns, the Dallas Mavericks,” writes Anita, “alleging their promotion of the crypto platform resulted in more than 3.5 million investors losing $5 billion collectively.”
A troubling layoff trend: While tech layoffs might, maybe, hopefully be showing signs of slowing, Natasha M points out a troubling trend: some companies are announcing layoffs only to announce another round of layoffs just weeks or months later.
SpaceX launches South Korea’s first moon mission: South Korea has launched its first-ever lunar mission — a lunar orbiter “launched atop a SpaceX Falcon 9 rocket” ahead of plans to land on the surface some time in 2030.
Twilio gets hacked: While it’s unclear exactly what data was taken, Twilio says the data of at least 125 customers was accessed after some of its employees were tricked “into handing over their corporate login credentials” by an intense SMS phishing attack.
Amazon’s bizarre new show: Think “America’s Funniest Home Videos,” but made up of user-submitted footage from Ring security cameras. By now most people probably realize their every step is recorded on a security camera or three — but doesn’t embracing it as Entertainment™ like this feel kind of…icky?
Haus hits hard times: Haus, a company that ships specialized low-alcohol drinks direct to consumers, is looking for a buyer after a major investor backed out of its Series A. The challenge? Investor diligence for an alcohol company can take months, and Haus just doesn’t “have the cash to support continued operations at this time.”
How clean is the air you breathe every day? Aclima co-founder Davida Herzl wants everyone to be able to answer that question, and sat down with Jordan and Darrell on this week’s Found podcast to explain her mission. Meanwhile on Chain Reaction, Jacquelyn and Anita explain the U.S. gov’s crackdown of the cryptocurrency mixer Tornado Cash, and the Equity crew spent Wednesday’s show discussing whether the turbulent market conditions of late will mean we see fewer early-stage endeavors in the months ahead.
What lies behind the paywall? A lot of really good stuff! Here’s what TechCrunch+ subscribers were reading most this week…
Building an MVP when you can’t code: Got a great idea but can’t code? You can still get the ball rolling. Magnus Grimeland, founder of the early-stage VC firm Antler, lays out some of the key principles to keep in mind.
Are SaaS valuations staging a recovery?: “…the good news for software startup founders,” writes Alex, “is that the period when the deck was being increasingly stacked against them may now be behind us.”
VCs and AI-powered investment tools: Do VCs want AI-powered tools to help them figure out where to put their money? Kyle Wiggers takes a look at the concept, and why not all VCs are on board with it.
Digital pensions platform Penfold raises $8.5M Series A led by Bridford Group – TechCrunch
Penfold, a digital pensions platform, has closed a £7m ($8.49m) Series A funding round led by Bridford Group, an investment group.
Also participating in the round was Jeremy Coller, Chief Investment Officer and Chairman of Coller Capital. Penfold also raised additional funding via a crowdfund amongst its customer base. The cash will be used to expand Penfold’s workplace pension division.
Chris Eastwood, Co-Founder at Penfold, commented (in a statement): “It’s been a big year for Penfold – from launching our workplace pension offering, to reaching £100m AUA.”
Bridford Group, lead investor, commented: “The pensions industry represents a huge market – with £8trn in savings in the UK alone. Despite this, many people remain uninterested and unengaged in their pensions. With so many people not saving enough, there’s a real opportunity for a new provider to step in.”
After the FBI raid at Mar-a-Lago, online threats quickly turn into real-world violence – TechCrunch
Threats of violence reached a fever pitch — reminiscent of the days leading up to the Capitol attack — following the news that the FBI raided Trump’s Florida beach club to retrieve classified documents the former president may have unlawfully taken there.
After Trump himself confirmed Monday’s raid at Mar-a-Lago, pro-Trump pundits and politicians rallied around declarations of “war,” and Trump’s ever-fervent supporters called for everything from dismantling the federal law enforcement agency to committing acts of violence against its agents. The situation escalated from there in record time, with online rhetoric boiling over quickly into real-world violence.
By Thursday, an armed man identified as Ricky Shiffer attempted to force his way into an FBI office in Cincinnati, Ohio, brandishing a rifle before fleeing. Law enforcement pursued Shiffer and he was fatally shot during the ensuing standoff with police.
Analysts with the Institute for Strategic Dialogue (ISD), a nonprofit that researches extremism and disinformation, found evidence that Shiffer was driven to commit violence by “conspiratorial beliefs related to former President Trump and the 2020 election…interest in killing federal law enforcement, and the recent search warrant executed at Mar-a-Lago earlier this week.” He was also reportedly present at the January 6 attack — another echo between this week’s escalating online threats and the tensions that culminated in political violence at the Capitol that day.
Shiffer appears to have been active on both Twitter and Truth Social, the platform from Trump’s media company that hosts the former president and his supporters. As Thursday’s attack unfolded, Shiffer appeared to post to Truth Social about how his plan to infiltrate the FBI office by breaking through a ballistic glass barrier with a nail gun had gone awry. “Well, I thought I had a way through bullet proof glass, and I didn’t,” the account posted Thursday morning. “If you don’t hear from me, it is true I tried attacking the F.B.I., and it’ll mean either I was taken off the internet, the F.B.I. got me, or they sent the regular cops…”
In posts on Truth Social, the account implored others to “be ready to kill the enemy” and “kill the FBI on sight” in light of Monday’s raid at Mar-a-Lago. It also urged followers to heed a “call to arms” to arm themselves and prepare for combat. “If you know of any protests or attacks, please post here,” the account declared earlier this week.
By Friday, that account was removed from the platform and a search of Shiffer’s name mostly surfaced content denouncing his actions. “Why did you censor #rickyshiffer‘s profile? So much for #truth and #transparency,” one Truth Social user posted on Friday. Still, online conspiracies around the week’s events remain in wide circulation on Truth Social and elsewhere, blaming antifa for the attack on the Ohio FBI office, accusing the agency of planting documents at Mar-a-Lago and sowing unfounded fears that well-armed IRS agents will descend on Americans in light of Friday’s House passage of the Inflation Reduction Act.
“‘Violence against law enforcement is not the answer no matter what anybody is upset about or who they’re upset with,’ FBI director Christopher Wray said in light of emerging threats of violence this week. Trump appointed Wray to the role in 2017 after infamously ousting former FBI director James Comey.”
Friday is also the five-year anniversary of the Unite the Right rally, which saw white nationalists clad in Nazi imagery marching openly through the streets of Charlottesville, Virginia. The ensuing events left 32-year-old protester Heather Heyer dead and sent political shockwaves through a nation that had largely grown complacent about the simmering threat of white supremacist violence.
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