Seventy-one percent of technology investors in Africa would be reluctant to invest further in a startup that does not furnish regular reporting updates, a new report says.

The report, titled ‘Start-Up Performance Reporting in Africa: What Do Investors Want to Know?,’ highlights the vital importance of founders within the African tech ecosystem prioritizing communication with their current investor base as a means to secure long-term funding.

As per the study shared with BitKE and conducted by Wimbart, a leading PR agency specializing in tech start-ups across Africa and other emerging markets, 29% of startup investors revealed that they did not receive regular reports from the companies in their portfolio, coming as the Africa tech ecosystem continued to grow in terms of VC funding.

The study had participation from over 90% of the respondents, which included venture capitalists, angel investors, accelerators, and incubators from various regions across the continent.

“In recent years, we’ve become increasingly familiar with anecdotal intelligence on the lack of consistent investor communications, and with our growing network of VCs, DFIs, and early-stage investors, we strongly believed it was the ideal time to accurately capture the problem and contextualise the narrative,” said Jessica Hope, founder and CEO at Wimbart.

Some of the key issues identified about founder communication in Africa include:

• Lack of clarity and focus
• Vague performance metrics
• Absence of actionable insights
• Selective reporting
• Inconsistent reporting timelines

Hope continued,

“The resounding conclusion from our research is that, in light of the current funding climate, founders simply cannot afford to neglect consistent engagement with current and potential investors.

Now more than ever, there is a huge need for clear, regular, and standardised updates to investors so they can not only accurately assess the health of their portfolio companies during this critical period, but sustain the upward trend in funding we’ve experienced over the last 5 to 10 years.”

Wimbart, established in 2015, has offered assistance to more than 120 African-focused startups, scaleups, and investors. It proudly counts prestigious names among its clients, including:

• Andela
• TLcom
• Wasoko
• Piggyvest
• Sparkle
• Moove

Despite the growing entrepreneurial drive in Africa, maintaining effective communication with investors continues to be a significant challenge. The report underscores the crucial importance of founders being deliberate in their accountability to existing investors by offering regular and valuable updates.

Read / Download the full Wimbart report here.

Follow us on Twitter for latest posts and updates

__________________________________________

__________________________________________

Canza Finance has launched Baki, a new stablecoin platform based on African fiat currencies, in what is described as an initial move to bring forex trading to emerging markets.

Baki, built on Avalanche, a popular L2 network, is an infinite-liquidity forex protocol allowing for slippage-free swaps between African currencies. The protocol allows users to deposit stablecoins and mint overcollateralized, synthetic assets, called zTokens, that are pegged to African currencies, creating the first on-chain implementation of African stablecoins.

With Baki, any zToken can be burnt to mint the equivalent value of zTokens in another currency.

Currently, Baki supports the minting of:

• US Dollars (zUSD)
• Nigerian Naira (zNGN)
• West African CFA (zCFA)
• South African Rand (zZAR)

All FX conversions between currencies are provided at the central bank rates, offering users access to dollar markets at the best possible rates.

“Baki aims to reshape the fundamentals of FX transactions on the continent by creating a robust and accessible market that offers all participants the best, fairest price available,” said Victor Teixeira, Chief Crypto Economist at Canza Finance.

“By creating a synthetic marketplace for African currencies, we are able to overcome the key challenge on the continent, FX scarcity. Avalanche C-Chain provides the most efficient and fastest growing blockchain to facilitate this protocol with numerous on ramps and off ramps that will enable adoption.”

According to a post on Avalanche website, in its initial version, Baki will facilitate on-chain trading of tokenized Nigerian Naira, South African Rand, and West African CFA. However, these stablecoins are different from most; instead of being backed directly by the underlying currency, they’ll be backed by USDC.

“zTokens, supported by USDC, are programmed to follow the values of specific fiat currencies, categorizing them as synthetic stablecoins. The backing from USDC, with a market cap surpassing $25 billion, maintains significant liquidity, reduced fees, and a straightforward UX for many DeFi users.”

– Avalanche

Canza, which secured $3.27 miilion in seed funding in March 2022, is looking to break new ground with Baki, which becomes the first synthetic DeFi market for African stablecoins, the participants said.

The protocol is poised to capitalize on the unique dynamics of the Sub-Saharan FX market, generally characterized by high inflation, illiquid and fragmented currencies, and a bias towards OTC and P2P markets over CEXs, to usher in the next wave of DeFi power users.

Follow us on Twitter for the latest posts and updates

__________________________________________

__________________________________________