Insyte Weekly: A Review of The Latest Entrepreneurship News

Tech Startup News

Startups continue to lay off employees to try to reduce costs. As reported by Startup Daily, Mr Yum decided to lay off approximately 17% of its employees in a bid to navigate through uncertain capital markets. Surprisingly, CEO Kim Teo attributed the layoffs to the startup 'growing too fast' as Mr Yum raised more than $100 million in six months. This is becoming a worrying trend in the startup ecosystem. According to layoffs.fyi, there have been 73785 layoffs in 2022 and 169757 layoffs since. [Source: Startup Daily]

The 'tap-on-phone' market promises to grant small business owners more innovative and efficient ways to receive payments as South Africa's fintech industry grows. BusinessTech reported that iKhokha recently launched iK Tap on Phone- a payment technology that enables merchants to accept payments by simply using their Android smartphones. Benefits include eliminating the cost of card machines, portability, extra payment points, and avoiding disruptions caused by power outages. [Source: BusinessTech]

Fintech startups continue to attract interest within the startup ecosystem. As reported by Ventureburn, Level Finance got accepted into Grindstone's accelerator program. Level Finance, an SA fintech, describes itself as 'an earned wage access platform that builds wealth and dignity for employees through savings, automated budgeting and access to pay when they need it - all before payday arrives.' This allows employees to access their wages at any time rather than incur debt/cashflow problems due to unforeseen circumstances. Grindstone's accelerator will give Level Finance a chance to network, gain knowledge and learn growth strategies before seeking funds from investors. [Source: Ventureburn]

Instagram takes a leaf out of BeReal's playbook

BeReal is an emerging social media app that encourages users to share authentic photos. BeReal's users are randomly asked to capture & share photos in two minutes. Such a limited timeframe means people do not have enough time to curate the 'perfect' picture. According to TechCrunch, Instagram is internally testing a new feature that is similar to BeReal's core feature. At the moment, BeReal has approximately 43 million lifetime downloads whereas Instagram has over 2 billion active users. Therefore, Instagram's strategy is likely a case of preventing a newbie from gaining too much market share. Nonetheless, in a world of influencers and pressure to be flawless, such a social media trend could be positive. [Source: TechCrunch] 

What is the impact?

Startups need to be more intentional in creating sustainable business models. Stories of cashflow problems and employee layoffs after large fundraising rounds are becoming the norm around the world. It is important for founding teams to make wise financial and hiring decisions in order for investor confidence to remain high. 

I expect more growth in the 'tap-on-phone' market as the value proposition is very appealing to retailers and aspiring entrepreneurs. This will mean small businesses in the informal sector would seamlessly accept payments thus seizing growth opportunities. I expect more Point-of-Sales providers to leverage the technology as well. The competition will be fierce but the sheer size of the market means every provider can profit from the next wave of innovation.

Level Finance has a very compelling value proposition as well. Employees usually incur unnecessary debt and fall prey to predatory loans simply because they are unable to access their wages in cases of emergency. I am keenly watching Level Finance's journey to see the impact it will have in the future. I expect investors to buy into Level Finance's vision and I want to find out how sustainable its revenue model will be in the future.