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Fintechs in Nigeria, others raised $3bn in 2021 – Report

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Financial technology companies raised close to $3bn of the nearly $5bn African tech startups raised in 2021, dominating fundraising in Africa.

According to a report by TechCrunch, the amount raised in 2021 was nine times more than what was raised five years ago.

It said, “Fintechs dominated the fundraising, accounting for nearly $3bn, or two-thirds of all the investment realised by startups across the continent last year, a report by markets insights firm Briter Bridges shows.

“This amount was also more than double the $1.35bn investment that fintechs in Africa raised in 2020, and triple the amount in 2019.”

According to the report, among the largest beneficiaries of the fintech capital were Opay, which raised $400m in Series C funding; Flutterwave, which got $170m in a Series C round; and TymeBank, which raised $180m in a Series B.

It noted that Jumo and MNT Halan raised $120m rounds, as digital payments gateway MFS Africa received $100m.

“This was as Zepz (formerly WorldRemit) raised $292m in Series E financing, while Chipper Cash raised $250m, Tala $145m and Wave sealed $200m in funding. And, given the incremental funding for fintechs in Africa over the years, capital injected into these startups is only likely to increase with deepening mobile phone usage and internet penetration,” it said.

According to the report, mobile subscriber penetration in Africa is expected to increase by four per cent and hit 615 million subscribers by 2025.

The Director at Briter Bridges, Dario Giuliani, said, “While the payment space begins to see scale-ups such as Flutterwave, Chipper, MFS Africa, Cellulant and Jumo playing alongside global, established providers such as Visa, Mastercard and Stripe, the next few years are likely to (in fact, we already do) see increased movements across other fintech verticals, from lending to KYC, SME management software, and decentralised finance.”

The report added that startups in digital and mobile payments had received the greatest financing, followed by banking/lending startups and insurtechs.

It said the digital payments space in Africa was experiencing the greatest growth in terms of funding received and total transactions volume in the last 10 years.

It described Africa as the world’s second-fastest growing and profitable payments and banking market after Latin America.

According to the report, the continent is a global leader in mobile money adoption, accounting for the bulk of the mobile money transactions made in 2020, with mobile money success only likely to increase due to ease in access brought by advancements in telecommunications technology.

It said, “Lending and banking startups have made credit accessible to a majority of people with no credit scores, and who were previously cut out by formal financial institutions due to a lack of banking history data.

 

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