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Pan-African contrarian investor P1 Ventures reaches $25M first close for its second fund

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Pan-African venture capital firm P1 Ventures has reached the first close of its second fund at $25 million. The venture capital firm secured this capital from some of Africa’s largest industrial conglomerates and private companies, several fund of funds and general partners of global funds based in the U.S. and Europe.

P1 Ventures expects to reach a final close by early next year, founder and general partner Mikael Hajjar told TechCrunch in an interview.

Hajjar launched P1 Ventures in 2020 with Hisham Halbouny, who also serves as a general partner. Its first fund (a proof of concept fund, as Hajjar calls it) allocated $11 million to 24 ventures, primarily concentrating on e-commerce, fintech, insurtech, health tech, and SaaS industries.

While this second fund (its first institutional fund) will still focus on these sectors, the firm is adding AI to the mix. Its first investment in this category is Zambian startup Nkoloso.ai, which gathers data and keeps track of vast tracts of agricultural land using satellite imagery and AI. It’s also one of two AI startups and five portfolio companies the Dubai–based venture capital firm has backed from its second fund.

Hajjar argues that the use of AI by the firm in the agriculture and fast-moving consumer goods (FMCG) sectors exemplifies Africa’s potential to leverage this emerging technology to bypass traditional infrastructure, similar to the way mobile money in Africa surpassed the need for debit and credit card infra. Additionally, AI demonstrates how African companies may develop products with global reach.

“We believe that AI will be Africa’s next big leapfrog opportunity. So when you think how fintech transformed the continent and allowed it to disrupt the banking sector, we believe AI will do the same with sectors like retail, healthcare, and the creative economy,” said the general partner.

“What we see beautiful in AI is the ability to export. As you know, single market and currency risk are the main risks in investing in Africa. The beauty of AI is that you have export-first businesses.” Hajjar cited Egypt-born Instabug and BioNTech-subsidiary InstaDeep as examples of such African-founded software and AI businesses with customers in the U.S., Europe and globally.

P1 Ventures, which has offices in Lagos and Cairo, recently began an Entrepreneur In Residence program, under which Nkoloso.ai received funding. Both partners utilize their skills and expertise as past operators to manage this venture studio, which plans to incubate four more startups in the next four years headed by founders capable of achieving product-market fit and scaling the product.

During the interview, Hajjar proudly highlights his firm’s “contrarian” approach to VC investment in Africa. “We go off the beaten path and back the underdogs; we invest where no one else does,” he says, underscoring super early investments made from P1 Ventures’ first fund in startups operating within Francophone Africa markets, including Yassir, a mobility startup-turned-super app in Algeria; Chari, a B2B e-commerce platform in Morocco; and Djamo, a payments startup in the Ivory Coast. These upstarts have emerged as the most well-funded startups in their respective countries. Notably, Yassir, the firm’s first investment, stands out as one of the most valuable startups in Africa and the Middle East.

P1 Ventures

L-R: Hisham Halbouny and Mikael Hajjar. Image Credits: P1 Ventures

Although most of P1 Ventures’ investments from its initial fund were made in the seed stage, the firm characterizes itself as multistage and occasionally engages in Series A and B investments opportunistically. It is evident that P1 Ventures likely provided small checks during subsequent stages of expansion for companies such as Yassir and Egyptian fintech MoneyFellows, owing to the limited size of its first capital. Nevertheless, it is intriguing that the firm was able to participate in these rounds. Hajjar explained that the partners’ institutional track record plays a significant factor. He also noted specific instances when stage and geographical arbitrage were crucial and emphasized their active involvement in assisting companies with investors for follow-on rounds, talent, and expansion strategy.

“Very few African GPs manage funds with that institutional track record and that allows us to have better visibility on what it takes to build category-defining businesses, especially as we look at inflection points and arbitrage across stages and geographies,” the general partner said, referencing how P1 Ventures picked Chari at the pre-seed stage rather than more popular B2B e-commerce deals in Egypt and Nigeria and MoneyFellows at Series A instead of other pre-seed/seed stage fintechs at comparable price points in Egypt.

On top of that, P1 Ventures was also instrumental in connecting MoneyFellows with CommerzVentures for its Series B round and Chari in several acquisitions it has made in the last two years, Hajjar remarked.

Gameball, an Egyptian software company gamifying loyalty and customer retention with a client base across 70 countries, and General Atlantic-backed healthtech Reliance Health are among P1 Ventures’ 29 early-stage investments in 10 countries since its launch.

P1 Ventures has observed that, on average, its portfolio businesses have secured 35 times more follow-on money for every dollar it has invested, even in the face of a decline in global venture capital funding. The firm, which didn’t disclose its IRR, asserts that the metric stems from the significant value it contributes to its portfolio firms beyond capital. This value is primarily attributed to the partners’ multistage, multisector expertise and extensive networks across the U.S., Europe, and Asia.

“I’m the first Mauritanian to launch a fund; as you can appreciate, this comes with a deep sense of meaning. I know African talent is more dispersed than current VC is. I intend to be this change agent and empower the next generation of African entrepreneurs. Just like people took a chance on me as an emerging fund manager, it’s my duty now to back underdog founders and turn them into regional, if not global, winners,” Hajjar stated.

“Also, what Africa is going through right now, we believe, is very similar to what Europe went through 25 years ago or what Latin America went through eight years ago. We believe P1 is best positioned to emerge as the premier VC just like Index Ventures did in Europe or Kaszek in Latin America.”

Before engaging in angel investing in 2014 and establishing P1 Ventures in 2021, Halbouny previously had a position as a partner at Man Capital, a subsidiary of Mansour Group. Man Capital had invested early in prominent companies such as Uber, Airbnb, and Bolt. He was also managing director at EFG Hermes, one of MENA’s largest investment banks. On the other hand, Hajjar, a Stanford MBA graduate and engineer, held roles in Google, Zum, and Areva.

Along with the partners, P1’s advisory group also consists of investors and operators, including Emil Michael, the former chief business officer of Uber, and Bernard Dalle, a founding team member of London-based Index Ventures. “Innovation across the African continent is booming and P1 is ideally positioned to help African entrepreneurs at the earliest stages build valuable and enduring businesses,” Dalle noted. 



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SpaceX Rocket Suffers Engine Failure In Starlink Mission, Elon Musk Shares What’ll Happen Next

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SpaceX’s Falcon 9 rocket suffered a rare failure on Friday. The launcher lifted off with 20 Starlink satellites at 8:06 am IST from California but failed to deploy them in the intended orbit.

According to SpaceX, the second stage of Falcon 9 did not complete its second burn necessary for reaching the desired orbit. The booster did its job and safely landed on the droneship in the Pacific Ocean. It was SpaceX‘s 70th mission this year.

Currently, the satellites are in a lower orbit than planned.

“SpaceX has made contact with 5 of the satellites so far and is attempting to have them raise orbit using their ion thrusters,” the company said in a statement on X.

ALSO SEE: Japan’s First Private Rocket Launch Ends In Massive Explosion, Video Goes Viral

SpaceX CEO Elon Musk said that it might not work “but it’s worth the shot. He also said that the satellites might fall toward Earth and burn up in the atmosphere if their thrusters are overpowered by the atmospheric drag.

In another post, Musk revealed that the upper stage engine exploded for unknown reasons while trying to raise the orbit. “Team is reviewing data tonight to understand root cause,” he said.

Notably, the reputed rocket by SpaceX has suffered only one full in-flight failure during a mission to the International Space Station in 2015.

ALSO SEE: Chinese Rocket Launches Accidentally, Crashes With Massive Explosion Seconds Later

(Image: SpaceX)





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China Plans To Destroy An Asteroid For Planetary Defense Mission By 2030: Report

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After the impeccable success of NASA’s Double Asteroid Redirection Test (DART) mission, China is now planning to deflect an asteroid later this decade. According to The Planetary Society, the China National Space Administration (CNSA) is preparing its first planetary defense test which is expected to launch by 2030.

Scientists have proposed the near-Earth asteroid 2015 XF261 as a candidate for the mission which will include two probes. One will ram into the space rock to deflect it and the second will conduct impact assessment.

The asteroid 2015 XF261 measures about 100 feet or 30 metres in diameter and it made a close flyby of our planet earlier this month. According to NASA’s Jet Propulsion Laboratory (JPL), the asteroid was about 50 million kilometres from our planet on July 9 and was travelling at a speed of around 42,000 kilometres per hour.

ALSO SEE: NASA Drills Freaky Scenario Where Elusive Asteroid Heads Towards Earth

Apart from China, Japan is also eyeing a ‘kinetic impact’ test mission to deflect an asteroid. The Japan Aerospace Exploration Agency (JAXA) reportedly has plans to repurpose its Hayabusa2 spacecraft to collide with 1998 KY26. The probe which launched in 2014 is expected to rendezvous with the space rock in 2031 and potentially change its orbit.

The said missions by the two nations are driven by the success of NASA’s DART mission launched in 2021 which proved that smacking an asteroid can deflect them. It collided with Dimorphos which circles a larger rock Didymos in September 2022 and changed its orbit by about 32 minutes.

These missions are of immense importance as they enable technologies that could save Earth from a planet-killing asteroid. While predicting an impending asteroid armageddon is predictable, it is also the gravest threat that humanity faces.

ALSO SEE: Collision Of NASA’s DART With Asteroid Dimorphos Changed Its Shape; Finding Excites Scientists



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Uzbekistan mobile bank TBC raises $38.2M to expand its financial products

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Uzbekistan’s only mobile-exclusive bank, TBC Bank Uzbekistan, owned by London Stock Exchange-listed TBC Bank Group, has raised $38.2 million in a fresh equity investment. It plans to expand its local presence in the country and introduce new financial products as well.

TBC Bank Group has led the latest funding in TBC Bank Uzbekistan by infusing $23 million, while shareholders European Bank for Reconstruction and Development (EBRD) and World Bank’s International Finance Corporation (IFC) have participated in the round by investing $7.6 million each.

After serving customers in Georgia, TBC Bank Group decided to expand outside that country’s borders in 2019 and found Uzbekistan as its first international market. The bank started its Uzbekistan operations in 2020 through a separate entity, TBC Group Uzbekistan, which launched the mobile-only bank after its debut, with no physical branches in the country. The plan was to leverage Uzbekistan’s increasing digitization effort and foresee business growth in the country, which has the biggest population after Russia and Ukraine in the region — the second-largest among all the Commonwealth of Independent States countries — and has upright economic and socio-demographics.

“Before TBC came in, there were no banking apps in Uzbekistan … Fast-forward four years, most of the banks have got a mobile app, but TBC is far ahead of the field,” said Oliver Hughes, head of international business at TBC Group, in an exclusive interview.

According to official data, Uzbekistan has a 70% smartphone penetration rate and a 77% internet penetration rate; 59% of its population of 37 million is under 30 years old, making it a viable market for a mobile-specific business.

TBC Bank Uzbekistan offers a mobile app through which customers can open bank accounts and access services, including cash loans and deposits. This omits the requirement of physically going to a bank branch to access banking.

Hughes told TechCrunch that a couple of years ago, customers in Uzbekistan typically had to visit their bank and stand in a queue to get any of their banking work done.

Alongside the mobile-only bank, TBC Group Uzbekistan owns Payme, the digital payments app for individual users and small businesses, as well as the Sharia-compliant credit business called Payme Nasiya. To broaden its coverage, it looks to integrate some experiences from these two businesses within the bank or sync them with the bank’s operations.

For instance, through its app, TBC Group Uzbekistan will offer tips, recommendations and user-generated content on local events, entertainment, concerts and travel to provide complementary services that are not strictly financially related. Some of these features will first arrive on the Payme app but will be available to the TBC Bank Uzbekistan customers over time.

Similarly, Payme Nasiya currently serves Uzbek customers with its point-of-sale and installment loans. To expand the credit business, it will introduce e-commerce and offline buy now, pay later. This is expected to attract more local businesses and eventually help the mobile bank gain more customers.

In addition to the new financial products in the pipeline, TBC Group Uzbekistan plans to bring AI experiences to its mobile bank. Hughes told TechCrunch the group has built a large language model predominantly using its customer dataset and is working on a voice assistant to deliver banking and financial services through a chatbot integrated within its app.

In the fall, TBC Bank Uzbekistan will use the fresh funding to add credit cards and an insurance product next year, Hughes said.

The bank’s roadmap includes additional services such as current accounts, as well as accounting, offline payments, e-commerce payments and lending specifically for small and medium enterprise customers, Hughes added.

“This investment will allow us to further capitalize on the immense opportunities in Uzbekistan, a fast-growing country with a population of over 37 million people where TBC UZ continues to leverage its growth momentum,” said Vakhtang Butskhrikidze, CEO of TBC Bank Group, in a prepared statement.

At the end of 2022, TBC Bank Uzbekistan broke even, and 2023 was the bank’s first full year of profit. As of March 2024, the bank had a user base of 4.8 million unique registered users. It also recorded monthly active users of 1.2 million in the first quarter of 2024.

Overall, TBC Group Uzbekistan, with a registered user base of 15 million users, reached profitability two years after launch and recorded 85% year-on-year revenue growth in the first quarter of this year. The company achieved gross loans of $296 million and deposits of $216 million through all three of its subsidiaries. Its net profit hit $23 million for the financial year 2023, most of which came from Payme. However, TBC did not disclose the mobile bank’s revenues or profits.

“TBC UZ’s impressive growth trajectory and innovative approach align with our mission to support sustainable economic development in the region,” said Andi Aranitasi, head of Uzbekistan, EBRD.

Hughes said that by the end of 2025, TBC Group Uzbekistan is projected to generate $75 million in net profit, most of which would come from TBC Bank Uzbekistan.

“We are encouraged with the progress TBC UZ has made so far and remain confident in its potential to contribute to economic growth and financial inclusion in Uzbekistan,” said Neil McKain, country manager, Uzbekistan, IFC.



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