July 14, 2020

Weekly Roundup May 4 – May 10

Hi,

Welcome to the week’s edition of the RoundUp.  We’re witnessing a gradual return to business as Libra Association appoints a Chief Executive to court the regulators.  We’re also seeing the impact of the lockdown as Airbnb’s employee strength is reduced due to the impact of Covid-19 on the travel industry.

We hope you find this insightful.

 

 

 

  • Libra Association, a consortium of companies comprising mainly of card and payment processors, has announced the appointment of Stuart Levey as its first CEO. Libra is led by Facebook.  Prior to this appointment,  Stuart was the Chief Legal Officer at HSBC.  Before HSBC,  he was the Under-Secretary for  Terrorism and Financial Intelligence under the George W. Bush and Obama’s Administrations.  He has deep experience in illicit and terror financing. Link

 

Why this is important:

Libra has run into series of rejections and misgivings on the side of the regulators. It has seen members like Visa,  MasterCard,  EBay and Paypal tacitly pull out of the consortium over time.  The underlying concern has been with its deep involvements with Facebook. Facebook has had run-ins with regulators mainly at home and in Europe especially with the passage of the GDPR.  Lawmakers fear a regulatory arbitrage of the financial system as Facebook has shown in its dealings with data privacy.

Levey, having served in two different administrations confirms the value he brings to the table. To a great extent,  the problem with Libra has much to do with perception and understanding and this,  hopefully,  should be Levey’s major preoccupation on the job.

Libra’s growth may unintentionally lead to countries digitizing their currencies as Japan intends to do, all in a bid to stay ahead of the curve.

Finally,  withdrawn members may separately pursue their payment platform initiatives as Vodafone has shown.

 

 

  • Helium Health,  a full-service technology solutions for healthcare stakeholders in Africa,  has secured a $10m Series A fundraise led by Global Ventures and Africa Healthcare Masterfund (AAIC).  The fresh round will be used for its proposed expansion into North and East Africa and Francophone West Africa.  Link

Furthermore,  the raise will be used in building out a number of products such as Helium Pay,  a billing and payment that enables healthcare facilities to accept payments from multiple sources linking them to patient invoice. In addition,  the raise will fund the execution of a superapp and build out its telemedicine practice.

 

Why this is important: It’s a good signal to the availability of opportunities in Nigerian tech space beyond Fintech –which seems to the bride at the moment — and other sectors.  The last Investment in 54gene  strengthens this case.

Having tested out its telemedicine offering and with plans to use a part of this raise for it,  it clearly shows there’s some adoption for the service.  Covid-19 could have been a strong catalyst.

 

 

  • Zoom, the video conferencing app has made its acquisition.  It acquired Keybase,  a security software company for an undisclosed amount.  With this acquisition,  Zoom has now cleared the users and regulators’ doubts about data privacy on its platform.  I wrote about some optionsopen to Zoom in order to stand a chance at protecting its progress made this Covid-19 period. Link

 

Why this is important:  This acquisition now makes Zoom less of a concern especially to regulators for now,  as it grows.  To the competitors,  this acquisition further heightens their fear of Zoom’s plan to take away more marketshare from them.

Importantly,  the encryption feature from the Keybase acquisition for paying customers.  We expect to see this impact the bottomline soon.

 

 

  • Short-term rental marketplace,  Airbnb has a brewing problem on its platform.  Property hosts are leaving the platform to build their own direct booking websites.  As a marketplace, this disintermediation will in the long term,  create an imbalance on the supply side of the platform. Link

 

Why this is important:   This new development casts a long shadow on the company considering it had a planned IPO just weeks before the Covid-19 pandemic and had recently raised $2b at a valuation of $18b.

Its business model now begins to look outdated considering these churned hosts did not go to Airbnb’s competition but rather,  went to start their own respective websites disregarding marketing and other overhead costs.

Businesses with similar models in adjacent segments/industries could feel the impact of this new development with time.

 

 

Numbers:

Airbnb has let go 1900 or 25% of its employees, as it continues to fight for survival.  Link

$199: Price of the new Microsoft Surface Earbuds. A competitor to Apple’s Airpods.  Link

 

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