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Kwara, a Kenyan fintech digitizing credit unions (saccos), more than doubled its client base last year, and its eyeing enormous growth in the coming years after raising a $3 million seed extension, and signing an exclusive digital solutions distribution agreement with the Kenya Union of Savings & Credit Cooperatives (Kuscco), the national umbrella body representing saccos.

Following the Kuscco partnership, Kwara gains connections to a pool of over 4,000 saccos for its banking-as-a-service product. As part of the exclusive deal, Kwara is also set to acquire Kuscco’s subsidiary IRNET, a software company and provider for saccos, for an undisclosed amount.

Kwara says the Kuscco deal comes at the right time in its plan to double down on Kenya.

“We think we’ve barely scratched the surface in the Kenyan market. And so, we are just going to be really investing in products and services that deepen our relationship here,” Kwara co-founder and CEO, Cynthia Wandia told TechCrunch.

“The rationale (of the deal) is clear, first it is an opportunity to generate leads and distribute our core product as fast, and to deepen our competitive moat. We’re entering an exclusive partnership, which also means no other tech company will be able to market with Kuscco. They are stacking their bets on us but we have been able to prove that we can do it as we continue to grow,” said Wandia, who co-founded the fintech with David Hwan in 2019.

The seed extension round had the participation of existing investors DOB Equity, Globivest and Willard Ahdritz, the founder of Kobalt Music. New backers One Day Yes, Base Capital as well as fintech executives including Mikko Salovaara, the CFO of Revolut, also joined the round. The new funding brings the total seed amount raised by the startup to $7 million. Initial round saw participation of several investors including Breega, SoftBank Vision Fund Emerge, Finca Ventures, New General Market Partners.

Kwara, which also has a presence in South Africa and the Philippines, has grown its clientele base to 120 from 50 at the end of 2021, maintaining a 100% customer retention — a proof of the value it delivers to its clients. The automated onboarding process, the startup says, has ensured customer success and growth.

Kwara’s product upgrades the back-office operations of credit unions helping them to shift away from tedious paper-based processes and physical branches, opening up new avenues for them to sign up new members and create novel products.

The company also has a next-generation neobank app that gives members of partner credit unions access to additional services such as instant loans and third-party services such as insurance. It said the user base of the neobank app, which also allows users to deposit money directly into their sacco accounts, and track their finances and payments, has grown 35-fold since launch last year.

The fintech is planning on adding more features to cater to the saccos, and additional products for the neobank app users too.

“We continue to ship more or less enterprise grade features for the large saccos that are well capitalized, the ones who are at the same size and level as some of the banks. There are specific features they need and specific ways they need to be taken care of so we will continue investing in that,” said Wandia adding that Kwara is also investing on improving the neo-banking experience. They are set to add more features that will help members build “a personalized view of their own goals and really start working towards achieving them.” They will also sign more third party partnerships to add more value to the app users.

“We believe that every time a sacco member leaves their sacco to get another service just because the sacco doesn’t provide it is a missed opportunity for that member to actually profit from the returns of that product. all income earned on those products actually flows back to the members as dividends,” she added.

Credit unions are formed by people with a common interest or members of an industry, like farmers or teachers, who buy shares in the institution, save money and take loans. They are popular especially in developing regions due to their low-interest-rate loans and ease in accessing credit when compared to conventional banks. In Kenya only 175 saccos are licensed, as a vast majority remain unregulated.

Kenyan fintech Kwara raises $3M seed extension, signs deal to reach over 4,000 credit unions by Annie Njanja originally published on TechCrunch

Eighteen months after its app was suspended in China, ride hailing giant Didi made a comeback on Monday. The move came as China showed signs of easing up its sweeping regulatory clampdown on the internet sector over the past three years.

In July 2021, Chinese authorities ordered the country’s app stores to remove Didi, citing reasons that the platform was “illegally collecting user data.” Earlier that same month, Didi went public in New York. It was a short-lived celebration for the firm, which raised a hefty $4 billion from the first-time sale, as the event quickly turned out to be the root of its clash with Beijing.

Didi, according to multiple reports and an investor memo seen by TechCrunch at the time, failed to assure the government that its cross-border data practices were secure before going public in the U.S., where the data of hundreds of millions of Chinese citizens could allegedly be subject to scrutiny. The misstep led to a year-and-a-half-long security investigation by China’s top cyberspace watchdog.

It seems like Didi’s period of repentance and rectification is over, as the company posted on Weibo Monday afternoon:

“Our company has taken serious steps to cooperate with the country’s cybersecurity review, deal with the security issues found in the probe, and implement comprehensive rectifications.”

With approval from the Cybersecurity Review Office, a relatively new organ designated to address data security concerns posed by internet firms, Didi was allowed to resume new user registration for Didi Chuxing, its main ride hailing platform, effective immediately.

Aside from a data revamp, Didi was also reportedly ordered to pay a $1 billion fine for breaching rules. It finished delisting from the U.S. in May last year and has been working to relist on the Hong Kong Stock Exchange, an increasingly preferable choice for Chinese tech firms that are navigating rising U.S.-China tensions.

Prior to the relaunch of user registration, Didi users were still able to use the app if they already had it on their phones. But the app was besieged by hungry rivals. Alibaba-owned mapping service AutoNavi, for example, has been gaining ground as an aggregator of third-party ride hailing services, including Didi.

The era of unfettered growth in the ride hailing space is also long gone. China has been tightening regulatory oversight on the novel business in recent years, putting it more in line with the traditional state-owned taxi industry.

Following the regulatory overhaul, Didi will surely be much more cautious about the government’s red line.

“Going forward, the company will apply effective methods to ensure the security of the platform’s infrastructure and big data in order to safeguard national cybersecurity,” it said in the Weibo post.

Didi gets China approval to relaunch after 18-month security probe by Rita Liao originally published on TechCrunch

Byju’s has made a key change in its sales strategy, moving away from a business practice that attracted the edtech giant criticism over the years.

The Bengaluru-headquartered startup, India’s most valuable, said on Monday its sales people no longer visit students’ homes to pitch to their parents. Instead, the entire sales workforce now works from inside the office and reaches out to those parents whose children have shown a clear interest in subscribing to the platform.

The firm, which employed its early practice in 2017, made the change in October last year and said that the transition brings more accountability and transparency to its workforce and it’s better for both sides of the equation.

The new sales tactic is also allowing Byju’s to expand its reach in the country and is already returning a higher conversion rate, said Mrinal Mohit, the chief executive of Byju’s India business, in an interview with TechCrunch.

“The Covid helped increase the category awareness of online education learning and brand awareness of Byju’s. Plus we now have multiple products. That’s why we are moving to ‘inside sales,’” he said.

“The sales journey now begins only after you have downloaded my app and used it multiple times and for long periods of time. If you don’t download the app, or like our product, we are not going to reach out.”

The Indian edtech has been criticized over the years for its aggressive sales tactic with allegations that some of its personnels made misleading pitches to the parents. Byju’s offers a range of learning platforms to students from free content and classes to hybrid lessons at its centres across the South Asian market.

Mohit, who took over the India chief position last year, said the revamp is bringing more transparency with the parents and what its sales people are telling them.

“I had 120 offices, my download comes from everywhere but I was able to reach only 20% of these users. With inside sales, location is not a barrier. All these calls are recorded, so we know what is being pitched to the parents. We have more transparency with parents,” he said.

If an individual doesn’t know how to precisely answer a parent’s questions, the startup is able to pull more experience and relevant personnels in real-time, he said.

Sales is a key part of Byju’s success. The startup’s classes operate on a two-teacher model, where the lessons are taught through a pre-recorded video while an on-site or live teacher tackles students’ questions.

The startup’s philosophy from the beginning has been to bring the best education to students and this means relying on lessons from certain teachers as the base of its offerings. Sales people are tasked with explaining the benefits of this model.

Indian edtech giant Byju’s changes sales strategy in key revamp by Manish Singh originally published on TechCrunch

ShareChat, the Indian social media startup backed by Twitter, Google, Tiger Global and Temasek, has laid off 20% of its workforce — or over 400 employees — just a month after eliminating more than 100 roles.

The startup informed its employees about the decision on Monday morning. It deactivated access to accounts and wiped out all data of impacted employees, a person familiar with the development told TechCrunch.

In December, ShareChat laid off nearly 5% of its workforce of 2300 employees as a result of shutting down its fantasy sports platform Jeet11.

Informing the new decision to its employees, ShareChat CEO Ankush Sachdeva said in an internal note that the move was to “ensure the financial health and longevity” of the startup. The executive also noted that the startup “overestimated the market growth in the highs of 2021 and underestimated the duration and intensity of the global liquidity squeeze.” The note and layoff was first reported by Indian newspaper Economic Times.

In a statement emailed to TechCrunch, a ShareChat spokesperson confirmed the layoff and said that the decision was taken “after much deliberation and in light of the growing market consensus that investment sentiments will remain very cautious throughout this year.”

“Since our launch eight years ago, ShareChat and our short video app Moj have seen incredible growth. However, even as we continue to keep growing, there have been several external macro factors that impact the cost and availability of capital,” the spokesperson said.

“Keeping these factors in mind, we need to prepare the company to sustain through these headwinds. Therefore, we’ve had to take some of the most difficult and painful decisions in our history as a company and had to let go of around 20% of our incredibly talented employees who have been with us in this start-up journey.”

The spokesperson also claimed that the startup had “aggressively optimised costs across the board, including in marketing and infrastructure, among other cost heads and ramped up our monetisation efforts.”

Exact details on what roles are impacted were not disclosed.

The affected employees will receive the total salary for their notice period and two weeks pay as ex gratia for every year they served the startup. The employees will also get 100% of the variable pay until December 2022 and their health insurance policy cover will remain until the end of June, the startup confirmed.

The startup will also let ESOPs of its affected employees continue to vest per their schedule up until April 30.

“We are doubling down on our efforts behind advertising and live-streaming revenues. With these changes, we aim to sail through the uncertain global economic conditions over 2023 and 2024 and come out stronger,” the spokesperson said.

Google-backed ShareChat cuts 20% workforce to ‘sustain through headwinds’ by Jagmeet Singh originally published on TechCrunch