This is Africa’s biggest Series B deal of 2019. China is once again drawing out a battle line against leading e-payment platforms in Nigeria. Opay, Opera’s Africa-focused fintech startup has added a new $120 million to its $50 million series A round which it raised in June this year. This $120 million Series B round was backed by Chinese investors. With this investment, we are still returning to the fact that Nigeria has become the epicenter for fintech VC and expansion in Africa.
“Opay will facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem. We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman Yahui Zhou, said in a statement.
Here Is The Deal
- This latest round of investment was led by investors including Meituan-Dianping, GaoRong, Source Code Capital, Softbank Asia, BAI, Redpoint, IDG Capital, Sequoia China and GSR Ventures.
- OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.
- Since its $50 million Series A raise, OPay in Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.
- According to Opera CFO Frode Jacobsen, OPay will deploy the $120 million across Opera’s Africa network. OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority.
“That’s not something you do ever day. We want to focus our services on things that have high-frequency usage,” said Jacobsen.
- Those include transportation services, food services, and other types of daily activities, he explained. Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.
Startups Are Hurtling To Grab A Market Share In The Growing West African Fintech Ecosystem
It looks like a war has just been declared across West Africa’s technology-backed financial payment systems. Recall Visa’s $200 million investment in Nigeria’s Interwitch, amidst the company’s impending IPO. On its own, e-commerce venture Jumia has recently shifted to digital finance, and WhatsApp is most likely to enter Africa’s fintech ecosystem payments.
2019 Has Been A Great Year For Chinese Investors In Africa
What a year! 2019 for one thing has announced that China is coming for Africa. Opay, fully backed by Chinese investors is already displacing fintechs in Nigeria. Lori Systems, in a newly sealed $30 million deal with Chinese investors is also squaring up to Nigeria’s Kobo360. Another fintech startup PalmPay, backed by Chinese mobile-phone maker Transsion has not only been launched in Nigeria, but is starting its life on a platter of gold after raising a $40 million seed-round from Transsion.
But one thing is clear: Chinese are building from the scratch! They seem not to be making any direct or indirect investment in existing startups founded by Africans. Therefore, it is still far-fetched to lay hands on as many Chinese venture capitalists as possible. There is simply not many out there.
Africa’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked population. This fact makes fintech Africa’s most promising digital sector in the world. But it’s becoming a notably crowded sector where startup attrition and failure will certainly come into play.
A Look At What Opay Does
Located in Lagos and founded by consumer internet company Opera, Opay has built a hefty suite of internet-based commercial products in Nigeria around OPay’s financial utility. These include motorcycle ride-hail app ORide, OFood delivery service, and OLeads SME marketing and advertising vertical.
Not to be overlooked is how OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.
This places OPay and its Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent. That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world