AI & African Enterprise: March 2023 Newsletter
Newsletter Originally Published March 27, 2023
💥 Tick, tick, boom! An African Perspective on SVB
How We Got Here
Silicon Valley Bank initiated an asset sale and a capital raise intended to shore up investor and ratings agency confidence in a financial institution at the core of Silicon Valley's VC/startup ecosystem. The move had the opposite effect, triggering a "run" on the bank leading to insolvency and, on March 10th, a takeover by the FDIC. As of March 27th, North Carolina-based First Citizens bank announced it was acquiring SVB from the FDIC.
Where We're Headed
Historically, AI has received a fraction of investor interest in Africa. With African startups in dominant tech markets (Nigeria, Kenya and South Africa) facing challenging local market dynamics, and largely dependent on US VC for funding, a slowdown in US VC inflows will likely shift the focus from selling narratives to shoring up fundamentals and a potential increase in M&A activity.
Chipper Cash, Africa's most valuable startup following a $100M Series C round led by SVB, reportedly initiated a search for a buyer or new investors, while the CEO released a statement suggesting minimal impact from SVB's collapse.
Takeaway: Considering the capital and resource-intensive nature of building and scaling AI companies, African AI startups may face greater headwinds in the coming months.
In other news, watch ajala's founder, Abake Adenle, discuss AI, Africa, ChatGPT and all things Language Technology on Arte TV's Square Idée (French).
We look forward to keeping you informed of the products, deals and partnerships shaping the future of AI in Africa on the last Monday of every month.
Questions, comments, feedback? Get in touch hello@ajalaco.com!
—Team ajala