Economy
Investments in Nigerian Startups Under Threat as Softbank May Cut Funding
By Adedapo Adesanya
Nigerian startups may face a drop in investment as one of the key investing partners in the world, Softbank, has announced that it may cut its startup investments this year by more than 50 per cent.
This was disclosed by the chief executive, Mr Masayoshi Son, at the company’s earnings call on Thursday.
As per TechCrunch, the move is the latest high-profile investor to become vocally cautious about opportunities in the private markets amid a global slowdown.
According to its numbers, the Japanese conglomerate reported a loss of about $29 billion on investments at its Vision Fund 1 and Vision Fund 2 for the year ending March 31.
“It depends on our LTV levels and investment opportunities, and we strike balance, but I will say compared to last year, the number of new investments will be half or could be as small as a quarter,” said Mr Son.
This will have a ripple effect on Nigeria’s growing investment field, meaning it may reduce the number of investments that will enter the country which had the highest percentage of startups destinations in the African country.
Business Post had reported that Nigeria had the highest share of the $4.7 billion that came into the African continent in 2021.
Softbank was one of those key investors last year with investments in companies like OPay, Andela, among others.
This will further impact the projected increase in investments expected this year. In 2021, investments were twice as much as the total volume that was raised by African startups in 2020 just as there was also a 25 per cent increase in the total number of deals last year compared to the number of deals that were announced in 2020.
SoftBank joins a list of a number of investors including Tiger Global, Coatue and Dragoneer that have slowed down the pace of their investments as well as the amount of capital they are putting into startups this year.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its bullish run on Friday, July 31, by 0.99 per cent.
This raised the NASD Security Index (NSI) by 43.54 points to 4,431.71 points from 4,388.17 points, and lifted the market capitalisation by N26.13 billion to N2.659 trillion from N2.633 trillion.
The growth came amid a significant decline in the activity level, as the volume of securities decreased by 73.0 per cent to 690,990 units from 2.6 million units, the value of securities slid by 15.0 per cent to N75.0 million from the preceding session’s N88.3 million, and the number of deals contracted by 31.6 per cent to 26 deals from the 38 deals recorded a day earlier.
The most active stock by value on a year-to-date basis remained Great Nigeria Insurance (GNI) Plc, with a turnover of 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and Central Securities Clearing System (CSCS) Plc with 76.6 million units exchanged for N5.5 billion.
The most active stock by volume on a year-to-date basis was also GNI Plc, with the sale of 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units traded for N415.7 million.
Investor sentiment was bullish yesterday after a positive market breadth index triggered by five price gainers and two price losers, led by 11 Plc, which gave up N14.99 to close at N225.01 per share versus the previous day’s N240.00 per share, and MRS Oil Plc, which shed N14.55 to settle at N132.00 per unit versus N146.55 per unit.
However, Nipco Plc gained N41.50 to sell at N456.50 per share compared with the preceding session’s N415.00 per share, FrieslandCampina Wamco Nigeria Plc appreciated by N12.93 to N147.93 per unit from N135.00 per unit, Nitrox Industrial Gases Plc improved by N1.00 to N20.00 per share from N19.00 per share, CSCS Plc soared by 54 Kobo to N102.00 per unit from N101.46 per unit, and Industrial and General Insurance (IGI) Plc jumped by 1 Kobo to 50 Kobo per share from 49 Kobo per share.
By Adedapo Adesanya
The value of the Nigerian Naira weakened against the United States Dollar in the different segments of the foreign exchange (FX) market on Friday, amid fresh forex demand pressure.
In the black market, the domestic currency depreciated against the greenback by N5 to sell for N1,405/$1 compared with the previous day’s N1,400/$1, and at the GTBank FX desk, it lost N4 to quote at N1,374/$1, in contrast to the previous session’s N1,370/$1.
Similarly, in the Nigerian Autonomous Foreign Exchange Market (NAFEX), it slipped by N1.49 or 0.11 per cent to settle at N1,368.22/$1 compared with the preceding day’s N1,366.73/$1.
In the same vein, the local currency depleted against the Pound Sterling by N3.50 to close at N1,837.79/£1 versus Thursday’s price of N1,834.29/£1, and against the Euro, it shed 90 Kobo to finish at N1,573.87/€1 compared with the preceding session’s N1,572.97/€1.
Data from the Central Bank of Nigeria (CBN) indicated that interbank FX turnover marginally grew above the previous day by 0.97 per cent to $58.990 million from $58.423 million, with the number of deals executed by financial institutions down by 2.82 per cent to 69 deals from 71 deals, as the nation’s foreign reserves further declined to $51.922 billion from $51.938 billion.
A look at the cryptocurrency market showed that Bitcoin (BTC) fell by 1.4 per cent to $62,004.42 as renewed US–Iran tensions lifted oil prices and strengthened the US Dollar.
Iran said it attacked two oil tankers attempting to cross the waterway under US military escort. Tehran also claimed it turned back four other vessels, while ship-tracking data showed that traffic through the strait remained thin.
The development carries greater market risk than an isolated attack on commercial vessels because the presence of a US escort raises the possibility of a direct military response.
This negatively impacted the crypto space, with Ripple (XRP) down by 1.5 per cent to $1.06, and Ethereum (ETH) losing 1.2 per cent to trade at $1,867.85. Solana (SOL) depreciated by 0.9 per cent to $72.91, TRON (TRX) shrank by 0.4 per cent to $0.3271, and Dogecoin (DOGE) crashed by 0.3 per cent to $0.0698.
However, Cardano (ADA) appreciated by 0.9 per cent to $0.1711, and Binance Coin (BNB) went up by 0.1 per cent to $589.78, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 apiece.
By Dipo Olowookere
The range of investment opportunities available to investors in the nation’s capital market has been deepened with the listing of five billion ordinary shares of AVA Capital Plc on the Nigerian Exchange (NGX) Limited.
The local investment firm joined the country’s flagship stock exchange on Friday through listing by introduction of its equities at N7.50 per share, with a market capitalisation of N37.5 billion.
The listing marks a significant milestone in the company’s growth journey, reinforcing its commitment to sustainable growth, strong corporate governance and long-term value creation, while enhancing its visibility within Nigeria’s capital market.
The chief executive of AVA Capital, Mr Kayode Fadahunsi, described the admission of the organisation on the main board of the exchange as a defining moment in its evolution.
“Our admission to the main board of Nigerian Exchange is more than a listing; it is a public affirmation of the business we have built and the future we are committed to creating.
“We have established a resilient institution with a clear growth strategy, strong governance culture and an unwavering focus on creating sustainable value for our shareholders.
“Becoming a listed company deepens our accountability, broadens our visibility and positions us to seize new opportunities as we continue our growth journey,” he said.
On his part, the chief exchange of NGX Limited, Mr Jude Chiemeka, said the admission reflects the continued confidence of businesses in Nigeria’s capital market as a platform for sustainable growth.
“[The] listing reflects the confidence that forward-looking companies continue to place in the Nigerian capital market.
“By joining the main board of Nigerian Exchange, AVA Capital Plc is embracing the transparency, governance standards and market discipline that define public companies, while positioning itself to access a broader investor base and unlock long-term value.
“We are delighted to welcome AVA Capital Plc to the NGX family and look forward to supporting its continued growth,” he stated.
