African Tech Startups You Should Keep An Eye On

Posted on January 8th, 2018
Grow Technology


2017 was the year of Bitcoin with the digital currency remaining solidly in the headlines.

Dominique Collett, head of AlphaCode, a Rand Merchant Investments club for fintech startup entrepreneurs in early 2017  predicted this, saying “In 2017, we will embrace Bitcoin after the world got hyped up on blockchain in 2016. I think banks will soon see that blockchain doesn’t really make sense and there will be a move back to Bitcoin – the largest and original application of the blockchain.”

It is still far from becoming mainstream, but I expect to see more of Bitcoin locally.”

Which fintech trends will we be talking about in 2018? To find out we turn to Collett to Find out why she says we are at the tipping point with cryptocurrencies and the African tech startups we should be keeping an eye on.

Dominique Collett, senior investment executive at Rand Merchant Investments and the head of AlphaCode

Q: What stood out for you as the most important developments in the fintech space in South Africa this year?
At the end of 2016, I predicted that 2017 was going to be the year that the world would embrace Bitcoin. I thought it would go mainstream but I had no idea how mainstream it would become. We have seen the Bitcoin price increasing from $1000 to $12 000.

It’s now covered extensively in mainstream media and most people have now heard of this cryptocurrency. There are lots of naysayers calling a bubble, but they have been calling a bubble since $1000 dollars. Yet Bitcoin keeps on pushing upward and there are some highly rated analysts waiting for $50 000 next year. Speculation is driving up the price – it is a highly risky asset class, yet it can no longer be ignored. It’s now recognised as a store of value and I believe that the price still has a way to run.

The Bitcoin price has almost tripled in the last month from $6,000 to $17,000. Bitcoin now has a market cap of $283bn, this is larger than Goldman Sachs and Morgan Stanley combined. The surge in the Bitcoin price has largely been driven by Bitcoin’s trading debut on Wall Street which happened on the evening of 10 December, giving speculators a chance to bet on the value of the cryptocurrency through a listed and regulated entity, Cboe Global Markets. In its first day of trading, the January 2018 futures contract traded at a high of $18,300.

“We will see the rise of micro and on-demand insurance”

We will shortly find out whether the Chicago Futures Market will decide to trade Bitcoin futures. We are also starting to see the large asset managers saying that they believe their clients should be exposed to Bitcoin and they are trying to structure Bitcoin funds. A lot of serious institutional money is starting to consider Bitcoin, and it can’t be ignored.

For Bitcoin to be used as a payment mechanism or remittance, people need to know about Bitcoin. That is what this year has accomplished so we will see more experimentation and trials like Pick n Pay which piloted whether they could accept Bitcoin. In 2018, we will see more experiments opening Bitcoin rails to see whether customers are open to using Bitcoin as a day-to-day payment mechanism. I believe that in 2018 Bitcoin will emerge as a payment system. However, the volatility will continue.

Q: Are there big developments we should expect in the next year and which are you looking forward to the most?
We are at a tipping point with cryptocurrencies but I am also excited by the rise of Insuretech. Insurers are finally waking up to the digital world and we will see the emergence of some exciting new models that will transform a staid industry.

We saw that Insuretech was the buzzword in 2017 globally at conferences and in fintech research reports. The South African market lags a bit and we are starting to see new Insuretech businesses come into AlphaCode such as Click2Sure, Cascade and Fo-sho. We will see the rise of micro and on-demand insurance. We will also start to see more alternative models like Fo-sho which is a peer-to-peer insurance player or Cascade which is an alternative risk management model in insurance. We track the global trends and we will see more of this.

Our existing insurance industry will not stand still. Insurers are also jumping on the digitisation bandwagon. For example, OUTsurance has rebranded, launched an app, they are creating a much more digitally friendly interface e.g you can log a windscreen claim or you can insure your laptop or your cellphone on the app.

Q: What are some of the startups you think we should keep an eye on in the coming year?

  • Click2Sure allows a customer to purchases a high-value consumer item via an online e-commerce provider and during the checkout process, the customer is offered a policy of insurance on the item they have just purchased.
  • Luno allows you to buy, sell, send, receive and securely store Bitcoin or Ethereum in just three steps with a minimum of R10.
  • Karri is a mobile payment app that allows you to make quick payments for school events. Instead of sending children to school with envelopes of cash for civvies days and class outings, you’re able to make fast payments of exact amounts straight to your school.
  • FinChatBot – intelligent chatbots for the financial services industry.
  • Isazi Consulting is a data science company that applies rigorous, best practice scientific methods to extract meaning from data.
  • Electrum is a payments technology provider that offers a cloud platform that is used by banks and retailers to accept payments, process Value Added Services transactions and enable omni-channel integrations.