Africa-focused and early-stage venture capital firm GOODsoil VC announces it is investing nine hundred and forty thousand US dollars as seed capital in Ghanaian fintech company Zeepay.
This part of the company’s mission to drive financial inclusion across the African continent.
Firstly, by leading the global surge of investments into Africa’s fintech market. Secondly, by being an example and offering investors a case study of real ROI through their investments.
GOODsoil VC also intents on becoming a catalyst of economic growth for minority founders across Africa. Noting there is a level of disparity in global funding for African startups.
“There are clear barriers to entry for tech startups to scale” shares Charmaine Hayden, Managing Partner and Co-founder. “Our vision is to level the playing field” she continues.
Charmaine explains the deal not only highlights the levelling of disparity in global funding for African startups. But also the challenges inherent in various levels of funding.
“Whilst the growth of seed investment in Africa is incontestable, it does not reflect the same volume of exits that is able to attract mass investors to the market. In order to sustain real growth, we believe there needs to be an increase in trade sales (exits); real tangible successes that can have a light cast on them to increase investors appetite into the continent.”
Charmaine Hayden
Zeepay, used in more than 20 African markets focuses on digital rails to connect digital assets.
Through this investment, Zeepay will continue to scale and roll out its services across the continent. It will also help in Zeepay’s plans to extend its global reach with plans to launch in the UK in 2021.
“We are delighted to have GOODsoil on board,” says Zeepay co-founder and managing director Andrew Takyi-Appiah.
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Check out other stories making the news in the ecosystem.
Smallholder farmers in South Africa are set to benefit from a 2.3 million dollar Microsoft investment aimed at driving sustainability in South Africa’s agricultural sector.
Through the investment, Microsoft will use technology to solve some of the challenges these farmers face. That prevents them from becoming commercially viable, efficient and sustainable.
Microsoft notes that smallholder farmers form an important part of the agricultural workforce in South Africa.
Lillian Barnard, Managing Director at Microsoft South Africa notes the investment is aimed at making a real difference in one of South Africa’s most vital sectors.
“There is no doubt that South Africa’s smallholder farmers have significant potential to drive growth and employment opportunities. As well as enable other sectors within the country to ultimately drive food security.
This makes it critical to invest in the sector to address the challenges they face. Key challenges are a lack of infrastructure, access to competitive formal markets, production and business skills, funding and financial support to re-invest in their farming activities, and compliance with foodsafety regulations and legislation.”
“Our investment is aimed at making a real difference in one of South Africa’s most vital sectors by harnessing the power of technology. High-impact technological solutions will improve efficiencies in smallholder farming, lower the cost of production, improve access to local and international markets, improve compliance with legislation, and drive access to information, among others.
By investing in the agriculture sector and unlocking the potential of technology to act as an enabler for growth and skills development, we are showing our commitment to driving sustainability and creating opportunities in one of South Africa’s most critical, job-creating industries.”
Lillian Barnard, Managing Director, Microsoft South Africa.
Investments in AgriTech
Last year, Microsoft South Africa announced a new evolved Microsoft Equity Equivalent Investment Programme to focus on investments in technology solutions in agriculture and digital transformation in the manufacturing sectors.
With cryptos not looking appealing with recent trends, investors are seeking alternatives. Is forex trading an answer? Let’s take a look.
Cryptocurrency
Cryptocurrency has become a trendy investment topic over the course of the last five years or so, and it’s never been hard to see why. It offers an entirely new opportunity, decentralized and set apart from ordinary investment markets. For many in Africa, it can also be somewhat more accessible than those traditional investment markets. And, of course, there have always been arguments suggesting likely profits. That bitcoin and its closest counterparts will one day skyrocket to high values. Or that cryptos will serve as “hedges” in times of economic downturn. There is definitely some logic to all of this. But all of a sudden cryptos aren’t looking quite as appealing, which could lead some investors to seek alternatives.
Crypto mining in Africa
For starters, there’s the fact that crypto mining in Africa has begun to feel somewhat problematic. Last year, we wrote about the ‘Top Five Countries Mostly Impacted By Ransomware And Cryptocurrency Mining’. Several African nations (Ethiopia, Cameroon, Tanzania, and Zambia) were included. While not nearly as many people mine cryptocurrency as actually use it or invest in it, this does pose a larger problem. Concerns over malware could reduce the flow of new cryptocurrency into Africa, stunting the market and potentially dissuading would-be investors.
There’s also the “hedge” argument to consider. For many years now, crypto advocates have tended to suggest that digital currencies would resist economic downturns and serve as financial safeguards in much the same way gold has occasionally done in the past. Now, however, faced with its first big test on this front, cryptocurrency is coming up short. As world markets plunge in reaction to the coronavirus pandemic, NewsBTC writes that bitcoin is at risk of a massive drop-off (and it has already plunged sharply). This is not to say that the hedge argument has been conclusively disproven. But right now cryptos don’t look any safer or more reliable than ordinary market investments.
Fresh alternatives for investors
This brings us to our main point, which is that we may begin to see African investors seeking fresh alternatives. Options that are not tied to traditional stock markets, but which also don’t involve cryptocurrency. And one logical option is going to be the forex trade.
If you aren’t well versed in the forex trade, it’s actually fairly simple to grasp. At least on a fundamental level. Basically, it is the worldwide market comprised of the exchange of different currencies for one another. It is by nature a decentralized investment market, and one that operates 24 hours a day during the week. FXCM adds that it is the most liquid market in the world as well. Meaning its trade volume exceeds that of any other market (and vastly so, in fact).
In a sense, that description closely matches how many investors view cryptocurrency. The characterizations that the market is decentralized, enjoys high liquidity, and functions via the exchange of different currencies could certainly apply equally to forex and cryptocurrency. This is one reason that the former could become such an attractive alternative to African investors if indeed they start to back away from cryptocurrency. Fundamentally it’s a similar way to invest. Except that it does away with some of the uncertainty that surrounds crypto markets.
Similar?
It may also be that the similarities don’t end there, either. Another thing investors tend to like about the crypto market is that transactions occur via blockchain technology. Which ensures a certain degree of security, fairness, and in many cases efficiency. This method of trading transaction initially only found in crypto markets. However, the last year or so has brought about continual stories concerning the adoption of blockchain tech by other trading entities. For instance, Reuters covered HSBC’s blockchain venture just last year. Revealing that the company had “reduced the cost of settling foreign exchange rates by a quarter” through a blockchain-based system. This could indicate that before long a significant portion of worldwide forex trading will use this technology.
None of this means that forex trading is identical to crypto investment. There are significant differences between the two. However, if crypto does start to look like a shakier prospect, we could begin to see investors in Africa and elsewhere turn to forex as a fairly logical alternative.
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