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Exclusive: Funding gap excludes Black-owned startups from South Africa’s booming digital economy – TalkOfNews.com

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Funding gap excludes Black-owned startups from South Africa’s booming digital economy

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South Africa’s digital industry is among the fastest-growing segments of its economy. However, the low level of racial inclusion in funding and general financial muscle to compete is a growing concern, which will likely widen inequality in the future if left unaddressed. This is according to a provisional report by the country’s competition regulator, the Competition Commission (CompCom), on dominance abuse and anti-competitive behavior of online intermediation (B2C) platforms within its borders.

CompCom said a lack of funding due to exclusion from business networks, scarcity of wealth and asset accumulation blocked historically disadvantaged persons (HDPs), most of whom are Black, from being active players in the country’s digital economy.

The report further said startups founded by HDPs face greater pre- and post-revenue funding barriers when compared to those by white entrepreneurs. They also experience greater challenges when joining major B2C sites.

“The Inquiry has found a distinct lack of participation by HDPs in online platform markets and even low representation amongst the business users on the intermediation platforms,” CompCom said in its findings.

“Whilst in some cases this reflects the lack of transformation of the industries served by the platforms, such as tourism and estate agencies, it is striking how even more untransformed the online economy is relative to the traditional economy even in these categories. Given the pace of movement to the online economy, these barriers to participation threaten a new and deeper level of exclusion for South Africa,” it said in the report.

In the e-commerce sector, for example, HDP businesses were found to face great hurdles “when securing domestic distribution agreements for products where there are existing long-standing distributors,” while white-owned tier one businesses got more support and had their onboarding fast-tracked.

CompCom said that exclusion of HDPs from South Africa’s digital economy was a compounding result of the apartheid system, which upheld segregationist policies and institutionalized racial oppression from the 1940s to the early 1990s. South Africa, a country whose population is majorly Black — 80% — is the world’s most unequal society, with 10% of its population owning more than 85% of the household wealth, according to the Thomas Piketty-backed World Inequality Lab, which also found half of the country’s population to have more liabilities than assets.

“The lack of wealth accumulation by HDPs due to exclusion from the economy under apartheid has created a substantial barrier to accessing pre-revenue funding from a family or associate ‘angel investor’, unlike their white counterparts,” said the regulator.

It also added that many VCs were not keen to support startups from townships unless they were mandated to, adding that such directives were scarce anyway, that even one of the largest VC in SA, Naspers Foundry, “could cite only a single small investment in an HDP entrepreneur.”

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The regulator drew these conclusions following a public inquiry about the market dominance and anti-competitive behavior of tech platforms in the country, which also saw the participation of entrepreneurs and venture capitalists, including the South Africa Venture Capital Association.

“At the stage where the VC industry gets involved, HDP start-ups continue to face far greater barriers to funding support than white entrepreneurs. The VC industry concedes that it lacks transformation itself, that it perceives the risks in township economies to be higher than they actually are, and that it does not actively seek out HDP opportunities unless there is a mandate to do so from funders,” it said.

“This set of circumstances clearly places HDP entrepreneurs in a significantly disadvantaged position relative to their privileged white peers. The primary VC fund with an HDP mandate for 75% of funding is the SA SME Fund, a joint initiative by the government and the CEO initiative of large corporations.”

CompCom said that while the government had set aside a fund for SMEs, it was necessary to have more targeted funding, through DFIs or the fund mandate model (for VCs to disburse), to HDP entrepreneurs in the digital space.

The issue of inequity in startup funding is not unique to South Africa, as Kenya’s ecosystem, one of the big four markets in the continent in terms of funding received, is facing a similar challenge — where white founders are found to have an easier time raising capital.

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Exclusive: Ex-Meta employees reveal that they are not getting the severance they were promised – TalkOfNews.com

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Ex-Meta employees reveal that they are not getting the severance they were promised

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A few weeks ago, Meta terminated a large number of people across its workforce from all over the world. All in all, about 13 per cent or roughly 11,000 people were terminated as the company was preparing itself for some tough times ahead. While terminating, the social-media-turned-tech giant had promised a handsome severance package to all the employees it had terminated. However, a group of ex-Meta employees are now reporting that they are not getting the severance they were promised.

Meta employees were told that they will receive 16 weeks of base pay, plus two additional weeks for every year with the company, and 6 months of health insurance for family members. However, some employees are getting only 8 weeks of basic pay and 3 months of health insurance. Image Credit: AFP

When they were being terminated, Meta employees were told that they will receive 16 weeks of base pay, plus two additional weeks for every year with the company. Zuckerberg also said that health insurance for those employees and their families will continue for six months.

A group of Meta workers who joined the company via a corporate training program have revealed that they are receiving inferior severance packages as compared to other workers who were recently laid off.

The employees who are being shortchanged are members of Meta’s Sourcer Development Program, a program that was intended to help workers from diverse backgrounds obtain careers in corporate technology recruiting. The Sourcer Development Program is part of Meta’s Pathways program, which helps people with non-traditional professional backgrounds obtain apprenticeships at the social networking giant for various roles. Nearly every member of Meta’s Sourcer Development Program was let go from the company as part of its massive layoff.

Members of Meta’s Sourcer Development Program said they are only going to get 8 weeks of base pay and three months of health coverage. The workers said it’s unclear why they are receiving lower severance packages than their colleagues, considering they were full-time employees and not contractual staff.

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On November 16, the group sent a letter to Zuckerberg and other Meta executives, including Meta’s head of people, Lori Goler and chief operating officer Javier Olivan, informing Meta management about their severance situation and asking for help resolving the issue.

“Even our former managers insisted we were confused and that all the information they were getting was that we were offered 16 weeks of pay and 6 months of health insurance,” the group wrote in the letter.

They later added, “Leadership may not have been aware that the last SDP class, which began in April 2022, was repeatedly assured by their leadership that any potential layoff would not impact their current employment but would likely impact the company’s ability to consider them for a full-time role.”

The impacted Meta workers have also said they have not received any replies from Meta’s human resources and management staff explaining their situation.


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Exclusive: London-based Chattermill, which analyzes customer feedback data across channels to give companies actionable insights, raised a $26M Series B led by Beringea (Paul Sawers/TechCrunch) – TalkOfNews.com

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London-based Chattermill, which analyzes customer feedback data across channels to give companies actionable insights, raised a $26M Series B led by Beringea (Paul Sawers/TechCrunch)

#Londonbased #Chattermill #analyzes #customer #feedback #data #channels #give #companies #actionable #insights #raised #26M #Series #led #Beringea #Paul #SawersTechCrunch


Paul Sawers / TechCrunch:

London-based Chattermill, which analyzes customer feedback data across channels to give companies actionable insights, raised a $26M Series B led by Beringea  —  Chattermill, a platform that helps companies unlock insights by analyzing customer feedback data from across myriad digital channels …


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Exclusive: Twitter Notifications Keep Breaking in Wake of Elon Musk's Mass Layoffs – TalkOfNews.com

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Twitter Notifications Keep Breaking in Wake of Elon Musk's Mass Layoffs

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Screenshot: Twitter

Have you gone to your notifications tab on Twitter, only to see nothing there? You’re not alone. Users have increasingly reported broken notifications in recent days. And while Twitter didn’t respond to questions about why, it’s hard not to see a possible correlation with the mass layoffs of software engineers instigated by new owner Elon Musk, who took over the social media company in late October.

Gizmodo has experienced Twitter notifications breaking at least three times over the past week, with the most recent outage happening Monday night. Bringing up the notifications tab, which shows other users responding to your tweets, brings up a rooster graphic on mobile or just a blank page with “nothing to see here” displayed on the web.

Biz Stone, one of the co-founders of Twitter, even posted a screenshot on Monday showing his completely empty notifications. Stone, who has over 2.6 million followers, sarcastically tweeted, “Can’t wait for someone to mention me!”

The notice that users see on Twitter when using the web when notifications have been broken.

The notice that users see on Twitter when using the web when notifications have been broken.
Screenshot: Twitter

Twitter Spaces, a feature where users can host audio chats, has also been having problems over the past week, with one user getting Musk’s attention on the problem. But the entire Twitter Spaces team was reportedly fired during one of Musk’s recent purges.

It’s unclear if the glitches are a direct result of Twitter firing thousands of people in a number of diverse roles, including everything from engineering to sales. While anecdotally there are people on the platform who claim the number of child exploitation images is down since Musk took over, it’s hard to imagine that’s true when Musk has absolutely gutted the child safety team. In fact, the child safety team for all of Asia, based in Singapore, has just one full time employee right now, according to Wired UK. That means just one person is looking out for child exploitation material that may originate in Japan, with 59 million Twitter users, the company’s second largest market after the U.S.

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Musk’s takeover of Twitter was mired in controversy from the start, with the billionaire trying to back out of the $44 billion deal at one point. But Musk was ultimately forced to buy the company and has instituted changes that have alienated advertisers and been friendly to far-right extremists. Even Andrew Anglin, the founder of the neo-Nazi website the Daily Stormer, has been welcomed back on the platform. Meanwhile, high-profile left-leaning accounts like the anarchist collective CrimethInc, are getting purged.

Twitter did not respond to a request for comment late Tuesday. Gizmodo will update this article if we hear back. But given the fact that Twitter reportedly fired its entire communications team, we’re not going to hold our breath.


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