Afrikoin 2014 Highlights: Reverse Innovation in Financial Services and Proving the Africa Opportunity
The 2nd Afrikoin was a great event just over a week in Cape Town with over 70 attendees, at least half were financial services professionals. The 30 panelists had ventures originating in 6 countries including Kenya, South Africa, Nigeria, Ghana, Zambia and Zimbabwe. Each panel had at least one investor present.
You can catch up on all the keynotes and 6 panel sessions here- www.afrikoin.org/2014
We recently partnered with Apis Partners, a growth stage investor that focuses on financial services in Africa and Asia. I am now a regional investment Partner and together we will focus on investing across early to late stage investment in the financial services space across the continent. As such this year’s Afrikoin was co-sponsored by both Apis Partners and Savannah Fund. Udayan Goyal kicked off with an introduction to Apis Partners and explained the concept of Reverse Innovation – where innovations and business models honed in emerging markets might find their way in time to the developed world. Mobile money being the classic story from Africa- but it should not end there.
Panelists ranged from early stage startups to later stage more established companies. We even had FSS International from India with $100M revenue run rate running ATMs to mobile payments and expanding into Africa, a peak into what a financial services power house in emerging markets looks like that is not a bank or insurance company and the south/south competition that we will see in Africa.
New themes- Lending in Africa?
We added a new panel around lending, savings and investments this year which included companies such as Prodigy Finance and AFB. Both companies are using innovative methods of assessing credit and providing lending where banks are not, KopoKopo and AFB recently partnered to provide merchant advance loans in Kenya. This is in line with global emergence of lending platforms- on the other side of the world we saw the recent IPO of Lending Club validating that space in America. I would argue the need and pent up demand is much larger in Africa and we can local companies thrive in this space beyond payments.
More than Payments and more than Bitcoin
Payments, oh payments. It seems its not enough to offer a payment solution in Africa- 3G Direct Pay focuses heavily on the travel sector with strong local anti fraud prevention. Cellulant has strong B2BC integration between banks and mobile payments. The opening panel on payments was certainly heavy featuring both local, regional and global players.
The Cryptofinance and security panel, moderated by Simon Dingle of BitX was well received and interactive and this year we broadened the conversation beyond a focus on remittance including new use cases around the blockchain. A separate remittance panel had depth of coverage in areas frequently discussed in public including KYC/AML compliance – companies such as Eastsnets focusing exclusively in this domain as the cost of compliance and impact on mobile money continues to dominate.
Commerce in Africa
I moderated the e-commerce panel where we covered the continued investments and validation by global players from Rocket Internet to Tiger Global but also touched on the possible entry of China based ecommerce players such as Alibaba and Alipay (what I called the “the coming of Ali-pesa”). Africa commerce would not be complete without marketing and loyalty schemes around financial services focused on building valuable platform that acquire and engage consumers in Africa – often complimentary to many retailers, ecommerce and payment companies on the continent.
Where were the banks?
One of the consistent feedbacks we got from this year’s Afrikoin was where were the banks? From my perspective, asking this question is like asking why wasn’t Safaricom present at the last Afrikoin in Kenya. Afrikoin is not a mass conference, its a gathering of financial services technology professionals who want to make a dent in the Africa landscape- we should not be surprised if not everyone is able to contribute and participate. 22Seven, recently bought by Old Mutual was the venue sponsor, so in an important way they contributed. I am sure a lot of partnerships and deals resulted from this year’s Afrikoin, I know I learnt a lot and understood the fintech space better on the continent- particularly in South Africa with or without the banks being present at Afrikoin.