 African startups got off to a sluggish start in 2024, raising just $83 million across 31 disclosed deals in January, but that's according to data from Africa, the big deal. But these marks has tipped the client from the $545.1 million raised in 20 deals during the same month in 2023, representing an 84.8% year-on-year drop. The January 2023 fundraising activity was, however, heavily influenced by a single large deal. That is the $403 million acquisition of AI company, instituted by Beontek. Excluding this out here, African startups in January 2023 raised roughly $99.1 million, bringing the year-on-year decline to a more moderate 16.2%. This suggests that the underlying growth of the African tech ecosystem remains relatively stable despite the headline, Grab & Fund & Slowdown. Now, my guest, Darlentino Nyagor has a diverse work experience in various companies and roles. He is currently the co-founder and CEO of Aladdin Digital, and after that supports Africa's economy by providing an ecosystem of solutions for gig workers and SMAs. Prior to that, they founded and advised Blacklistin, an alternative database for chronic debtors and fraudulent individuals reported by verified online lending firms in Nigeria. Darlentino also served as the MD of Okash, Nigeria, under Opera Software AS, where they handled business development, product development, strategy formulation and execution and people management. Many thanks for joining me on Business Insight. Darlentino. I'm excited to be here. Once again, happy new year. Yeah, happy new year to you. All right. Now, Darlentino, how's the African startups looking this year from reports that we have so far? Is there really anything to go by from what you have seen and heard? Yeah, in every year, it's every year comes with its own challenges and excitement. What matters to us is that projections should be showed that we all, the investment that we have experienced in 2023 might still continue in 2024. If there's anything to go by, the funding in January, about $23 million actually in January into Africa, showed that the majority of the bigger needs were going to other sectors like architect, architect and health tech, which means that the future space is seeing a really decline in funding. All right. I mean, we might experience further in Africa, because investors are becoming smarter, they're really away from having a start-up to actually be proper valuations, and they're for starting businesses that actually need profit or that turn out to be not just creating a start-up for start-ups. All right. Let's move on now according to Tech Cabal. The three sectors with the highest funding that is the AgriTech, which I'm $26.3 million in raises. ClinTech was about $18.1 million, and HealthTech, which are more than $13.5 million. Their sectors, most notably FinTech within the ecosystem, have observed a decline in funding compared to the sums raised in previous year. What are we expecting to see, really, and why is this so, really? What are the first three sectors that actually gaining momentum? Thank you. Somebody mentioned that there are over 20,000 start-ups in Africa. I'm sure after that 20,000, if you take it very closely, you realize that probably 60, 70% of them are actually FinTechs. So FinTechs have had their base, and there are so many FinTechs everywhere. In Nigeria, there are so many FinTechs. So many digital brands, so many mobile money start-ups, so many start-ups in Nigeria, which we know are trying to solve SME issues. So FinTech space is already, as I said, saturated. There are so many guys doing the same thing, the same similar after this, the same thing with the two generations of innovations around the start-up area across Africa is the same story. So the truth about the matter is that FinTech is hard. FinTech is not easy. For you to turn the profit in FinTech, that means why did you go out? You begin to hear very, very few FinTechs that are profitable around the world. Very few. For example, you see the story of Time Bank, who turned the profit of 2.1 billion dollars recently after the 20 losses for some time. All right. So then you see the level of new bank, and you know, in that time, a couple of banks just sparingly, just seeing a couple of users, and they're about to be FinTechs that eventually become profitable. So it takes years of hard work, innovation, creativity, and a lot of funding to turn that corner where you go from either making losses to becoming profitable. So investors are beginning to see that FinTechs are using more of a valuation game than a profit game. And they're not putting their funds where people are selling more critical issues. For example, agriculture will always be very important. People must think. Whether you are good looking, you're hungry, you have to be on there or you're on there. Everybody must think. So, I mean, why would I invest into an agri-tech startup that is solving real issues that has to do with agriculture, you know, food production? Health is very important. I mean, people are sick. I mean, lots of people are going to sickness, so you see, I think about a constant idea to stop the particular sickness disease or to improve the particular process for health care, I believe. And I'm happy with that. But I see people are looking at real-life issues right now, not just the hike, you know, of the FinTech things and all the harassment as a consequence of FinTech at the moment. Okay. Let's leave the African stage right now and narrow it down as we come closer home. How is Nigeria playing really in the sector, FinTech, agri-tech, health tech, generally, specifically, what are we supposed to watch out for in this year, 2024, from the key players? Okay. So, in 2024, we are going to be seeing a couple of things in the Nigeria space. First of all, the reality is not done in the people. Nigeria's are very smart. What anything that we do, we do to the uttermost as in we are, when the FinTech is, sorry, when the start-up is started, you see a lot of young smart people, they see start-up as a ticket out of poverty, you know, the ticket and the ticket out of hunger, you know, and to put those in the pockets of start-ups, you know, my office is in a place where we have so many start-ups in that really is a co-working space. That's the same thing as when you have all mighty flutter where they stay there downstairs. You have a lot of start-up, the different ideas, you know, every room is a start-up. Every room in that particular building is a start-up. So, because of the kind of funding, start-ups we are getting in 2021 and 2022, yeah, you know, we are raising hundreds of thousands of dollars, millions of thousand dollars. I saw young people, 27 years old, 26 years old, raising $60 million, $70 million. It's a very young person, not yet married, not even understanding what they want. But we are raising a lot of money. So, it was a ticket out of poverty. But now, the bubble has bursted and, you know, investors are becoming smarter and some of these investments are never going to come back. All right. So, the truth about it, we're going to receive a lot of measures and acquisitions. A lot of smaller start-ups will be brought in by bigger start-ups. A lot of smart start-ups that are struggling with cash now are putting bigger players, commercial brands to see how they can be acquired or how they can, you know, be powered by those people that have the financial measure, especially if your product makes sense. All right. We're going to receive a lot of people resigning from start-ups. In the last few years, people were resigning from commercial brands and they are moving into start-ups. I know that I was in banking, so I know a lot of my friends left banking to go out and start job in start-ups. But now, most of those start-ups are running out of cash. So, we're going to receive people going back to tear codes, going back to banks, going back to other sectors that are most sustainable because they want to keep their jobs and put their head over their head and then on their table. So, we're going to receive a lot of that happening. We're going to receive a lot of start-ups also. We're shutting down because, I mean, we're all struggling. Everybody's struggling. The mantra right now in the start-up series, do not die. You don't do everything possible to survive. And that's what everybody's doing. A lot of start-ups are all scratching. We're all, you know, biting our fingers to see how we can survive and see how we can keep the business going. So, that's just more in the scene. So, people that are going to be innovating are going to make it and also, founders with experience are going to be sought-after. So, if you're a founder with experience, you're going to be sought-after. Yeah. Are you happy? Yeah, I can hear you. I was just going to talk about bringing innovation and those with experience who are going to stay and some people, some start-ups that are going to go on there. But specifically, last year, you and I were talking about some things. You talked about some innovation that you were going to bring into the system, the FinTech system. So, specifically, what is Aladdin doing differently in the year 2024? You talked about innovation that would actually drive those who will remain in business this year. OK, so, I mean, Aladdin is three years old. January 9th made us three years. I mean, the last three years had the top six, top eight, had the top eight, and it was not easy. We are not among the fortunate ones. There are millions of dollars. So, we have to be strapped with the little funding we've got in the last three years. It has not been easy. So, what we realize is that we've been in the Nigerian space for a while, although we're a U.S. company, also the same in the U.K. But our major market has been in Nigeria. And with the most type of the Naira, the Naira not going to $1,000 for $1,500, Naira per dollar, we realize that anything that we need in Naira is no other sustainability. For example, the investment gives you half a million dollars as investment, and it's especially a return, right? And then, you are earning half a Naira for transfers or 10 Naira for transfers. In some cases, because you want to compete with the big boys, you make your own transfers on your app free. You know, the loans are not being paid, but there's so much hunger in the land. Give out loans, Nigerians take your loans, and they don't pay back the seats as God's blessing and God's reward for prayers and all that. So, I mean, it's really tough. So, that's why we say we're going to be moving away from not just depending on the Nigerian economy, but diversifying into entire Africa. And that's why this year, we're launching an African app, the Aladdin Global app, that allows you to actually onboard anybody from anywhere in the world. So, whether you're in Africa in diaspora or Africa within Africa, we're trying to connect Africans everywhere. So, our mantra now is that we're connecting Africans or Africa through payment. So, wherever you are, you're in Germany, you're in America, you're in Botswana, you're in Egypt, Aladdin is the app where you can download and get your, you know, sort of, you know, sort of, you know, sort of, you know, sort of, you know, you're a business or individual. We're trying to create one ecosystem. The Africans can transact. They can do trades. They can do, you know, payments within the same ecosystem. They are reducing the cost of payment within Africa. The other cost of payment within Africa is about 15%. Sometimes, within some corridors, it's almost at 60%. So, we're trying to crash that particular cost down to probably 5% or less, or within some places, 0%. We're going to do a login to a login payment within the same login ecosystem. So, that's the innovation we are bringing. But, like I said, for this to happen, we also need investors. We also need people to come on board, to partner with us. M&As are open to M&As. We're open to web shares. We're open to all kinds of financing models to ensure that we carry out this engagement for Africa. Yaka, you can... Yeah, I can hear you so far. I can, yes. Okay, so, fine. Even last year, we also talked about Afro-global expansion in the midst of a struggling economy. I want us to talk about that again, because right now, Niger is really, he burned all the pinches in terms of the freefall of the Naira. And you talked about loans not really being paid back. And of course, the interest, when you actually deal in Naira and all of that, you have to transact in dollars. Let's talk about how we can actually expand Africa to be global in the midst of all of these challenges. We have one Niger on the one side and, of course, Africa on the other hand. Okay, like I mentioned last year, the same thing, it's becoming more and more important, but I mean, African businesses, SM is going to think about how they earn money as a Naira, how they earn money in dollars, how they earn money in pounds, if possible. How they diversify their revenue streams. It's very important. And one of the ways is that, I mean, the Nigerian market is one of the biggest markets in Africa, over 250, 60 million. But there are other African countries, so who do you need your services? About African countries, there are other African countries around the world that may need a particular product that you have or that service that you have. So it's time for us to do to take aside the books. I mean, need to research what can I export outside Nigeria? Now what services can I export? What tangible or intangible goods can I export out of Nigeria? You forgot to have to be kind. Somebody else in Ghana buy that product. Somebody there in the public is there for that particular product somewhere else across Africa. So we need to start thinking about just matters in Nigeria. But even in the Nigerian market, if you're already in the North, I mean, because I'm thinking about how can I do well in the South? If you're in the South, how can I do well in the North and in the middle belt? So apart from the Afro-Global expansion, they can also do the expansion within Nigeria. For example, I realize that most of the startups are concentrated in Lagos. Everybody's in Lagos. Everybody wants to do their free tech. They are stuck in legal statement. But when I went for a conference in Abuja, people were telling me why not build my company and allow me to add those things. For example, so if I look at if we come up and build across Africa, right here in Nigeria, there are some states that don't have some of these free tech services. So you can actually go there and become a dominant player in those states. But at the same time, if you have the capability, you can also spread your business across Africa and aim in a different way. Sorry, currency is a part of the matter. Just before we go, despite the report that we got for late last year and January specifically as per the growth of startups, how do you see the startup industry before the end of this quarter and maybe subsequently in the second quarter of this year? Okay, so in this quarter, everybody's trying to find their seats. I mean, I believe that before the end of the quarter, we're going to be getting a mass base of different M and A's. So a lot of medias and acquisitions are those that come to fruition when we announce because there can be a lot of startups that don't have cash. Most of us have run out of cash, thousands of it, and everybody's struggling. So they're all in prayer mode. I'm telling that if you can get somebody from abroad, there's going to acquire somebody in the ecosystem that has more to acquire your technology or acquire your customer base or something. So we're going to be seeing a couple of M and A's, a couple of acquisitions that are going to be happening and you'll be spending one or two fundings with no risk of it happening. So the tickets are becoming smaller. For example, out of $3 million, the premium in general, I mean, more than 70, 80% of them are just three views. The rest of these are just very small ticket size. So we hope that these improve in this first quarter. That's our hope. And let's see how it goes. All right, thank you so much, Abdaleddin, for all the useful insight that you have provided on the show for today. I would do appreciate them. And let's just hope that we'll see the desired growth in the way expect in the startups and FinTech and all of them generally in Nigeria. Well, many thanks once again for your time. Thank you so much, James. Thank you so much for having me. All right. Good luck to you. And that's the size of the show for today. Many thanks for being there. I am Justin Akadunian, business insights will return to your screen same time. Bye for now.