fintech Africa - Afrikan Heroes

Fintech Startups Gulped 50% of African Tech’s $2bn Funding in 2021

February 12, 2022

African-tech-startup-funding-rises-51-to-195M-in-2017

There seems to be a preference for Africa’s fintech sector by investors and the markets alike as it gulped half of the more than US$2 billion raised by tech startups on the continent being sucked into the space.

This is according to the seventh edition of our African Tech Startups Funding Report, which is available free to all as part of an open-sourcing initiative in partnership with Novastar Ventures, MFS Africa, Quona Capital, 4Di Capital, MEST Africa and Future Africa, 564 African tech startups raised a combined US$2,148,517,500 in 2021.

More so than ever before, fintech is the most popular sector for investments. An extraordinary year saw new unicorns minted, round size records tumble, and fintech startups break the US$1 billion funding barrier, something the African tech space as a whole only managed for the first time in 2021.

Fintech companies raised US$1,038,456,500, up 547.7 per cent on US$160,319,065 in 2020. This took fintech’s share of total funding to just shy of the 50 per cent mark, a significant increase on 2020, when it accounted for less than a quarter.

These impressive figures were driven primarily by Nigeria, which saw major rounds for the likes of Flutterwave (US$170 million), Kuda (US$25 million and US$55 million), Moove (US$63.2 million) and FairMoney (US$42 million), and accounted for more than half of fintech investment. Egypt’s MNT-Halan (US$120 million) and South Africa’s Yoco (US$83 million) also contributed significantly.

The relentless growth of Africa’s fintech space should not, however, detract from positive developments elsewhere. Non-fintech startups still raised over US$1 billion between them in 2021, with many sectors more than doubling the amount of funding secured the previous year. E-commerce and retail-tech saw total funding leap 271.5 per cent to US$326,156,000, transport investment grew 102.4 per cent to US$105,445,000, logistics saw an increase of 134 per cent to US$86,751,000, and ed-tech funding jumped 516.3 per cent to US$81,030,000. So while fintech shone the brightest, it was an impressive year all round.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

How Traditional Banks Can Gain an Edge in African Fintech Transformation

November 12, 2021

Africa is in the midst of a fintech transformation. Millions of Africans are now connected to financial services as a result of hundreds of start-ups. However, with the right mix of innovation and partnerships, Africa’s established commercial banks can gain an edge in the continent’s digital finance revolution.

This latest report in CR2’s Market Insight series discusses how Africa represents a massive market that is providing opportunity for investors to bring large segments of the continent’s unbanked online. The surge of start-ups has been a major factor throughout this transformation, but they are not the only players on the continent. Established banks are also building on legacy infrastructure and client networks to offer novel digital finance services.

Read this report to learn how many longstanding financial institutions in Africa are pursuing innovation—such as online wallets and digital payments services—to bank the unbanked and meet the preferences of an on-demand generation. Africa’s banks shouldn’t make this journey alone, however, partnering with fintech start-ups and technology partners can accelerate their route to success.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

South Africa, Kenya and Nigeria Ranked World’s Top 100 Fintech Startup Ecosystems

December 5, 2019

South Africa has been ranked 37th on the world’s fintech startup ecosystem map, closely followed by Kenya at 42 and Nigeria at 52, Ghana at 58, Egypt at 60 and Uganda at 64, according to the latest Global Fintech Index City Rankings 2020. The Global Fintech Index City Rankings 2020 identifies emerging hubs, fintech companies and trends. The Index algorithm ranks the fintech ecosystems of more than 230 cities across 65 countries incorporating data from global partners including StartupBlink, Crunchbase and SEMrush.

“The rankings in the report are proof of how much, and how fast, the world is changing, ” noted Simon Hardie, CEO and Founder of Findexable — the company behind the Ranking

‘‘The Index is the inspiration of thousands of hours of interviews, surveys and internet searches — and the product of four months of algorithm development to create, for the very first time, a fully global ranking of fintech countries and cities,’’ he further added.

Here Is All You Need To Know

The ranking of 238 cities was compiled by Findexable, a fintech research firm, in conjunction with partners like Crunchbase, the global startup funding database, and the Africa Fintech Network.
According to the report, the city of Johannesburg, South Africa is ranked the 62nd fintech city in the world and first in Africa. This is closely followed by Kenyan city of Nairobi at 63, Lagos; Nigeria at 71 Cape Town, South Africa at 87; Accra, Ghana at 123; Kigali, Rwanda at 132; and Kampala, Uganda at 168.

The report describes Africa as the fintech the gamechanger, stating that the Africa region has the greatest need (fewer than half of all citizens there have a bank account) as it is currently still trailing the rest of the world — with the smallest number of fintech hubs in total, and only 6 in the top 100 globally.
It however notes that Africa, which is the home of mobile payments,and which currently lacks banking legacy, is the region where the fintech’s future is likely to arrive fastest.
With Johannesburg, Cape Town, Nairobi and Lagos all ranked among the top 100 cities for fintech ecosystems, it further conforms with a trend which sees nearly half of the top 100 cities located in emerging markets.
The rankings also reflect that those cities are home to Africa’s most valuable tech ecosystems and typically accounting for the most startup investment received on the continent annually.
In recent times, however, there are clear signs major Western industry leaders think so as well with PayPal, Visa, Mastercard and Stripe all investing in African fintech startups in the past 18 months. There is also strong concerted interest from the East as China has emerged has a strong player in the space over the past few months: OPay and PalmPay, two fintech companies in Nigeria have jointly received over $210 million in funding mainly from Chinese investors this year alone.

A Look At The Global Fintech Ecosystem Globally

Top of the Global Fintech Index City Rankings 2020 is the San Francisco Bay area, followed by London, New York and Singapore. The United States also tops the list for fintech countries followed by the United Kingdom and Singapore. Lithuania, a country with a population of about a third of that of London, lies fourth in the global list thanks to its active encouragement of fintech companies and regulatory approach.
By country and region, the USA and the rest of the Americas form the biggest single area by number of fintech hubs. At the same time Europe’s diversity of centres (both old and new), its commitment to progressive regulation, and to ensure that rules are applied evenly, contribute to its position as the region with the second highest number of hubs globally.

The rankings were compiled by scoring several factors including the number of fintech startups and hubs in cities, the scale of investment in those startups as well as the local regulatory environment — ranging from ease of doing business to startup incentives and internet censorship — where the startups operate.
Many of the cities which traditionally top the lists of leading financial centres are conspicuously absent from a new league table of global fintech hubs. Financial giants such as Frankfurt, Shanghai and Zurich have been replaced by cities including Sao Paulo, Bangalore, Mumbai and New Delhi.

Download the Global Fintech Index City Rankings 2020: http://bit.ly/2020GFI

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

Blockchain startup DappRadar raises $2.33m seed round led by Naspers Ventures

September 7, 2019

Naspers, Africa’s largest company is investing in blockchain technology, and it has chosen DappRadar, the leading US-based global platform for discovering and analysing blockchain-based decentralised applications (“dapps”). With $2.33 million in seed funding, DappRadar will be looking to commit more into Research & Development (R&D), developing new functionality that will help the business expand its service and reach the next stage in its growth.

Here Is The Deal

The investment was led by Naspers, a global internet group and one of the largest technology investors in the world, through its Naspers Ventures division, with participation from Blockchain.com Ventures and Angel Invest Berlin.
DappRadar will use the investment primarily for R&D, developing new functionality to help the business expand its service and reach the next stage in its growth.
Naspers is a global consumer internet group and one of the largest technology investors in the world. The group operates and partners a number of leading internet businesses across Asia, the Americas, the Middle East and Africa, and Central and Eastern Europe in sectors including online classifieds, payments and fintech, food delivery, travel, education, health, and social and internet platforms. Naspers has invested in, acquired or built startups, including Avito, Brainly, BYJU’S, Codecademy, eMAG, Honor, ibibo, iFood, letgo, Media24, Movile, OLX, PayU, SimilarWeb, Swiggy, Takealot, and Udemy.
Blockchain Ventures is a venture capital fund and a subsidiary of Blockchain, the leading provider of cryptocurrency products and creator of the world’s most popular crypto wallet. The fund supports and invests in cryptocurrency and blockchain technology projects that advance the industry and provide positive societal impact.

“In the short time since we founded DappRadar, we’ve seen the technology mature quickly and its commercial prospects are clearer,” says Skirmantas Januskas, DappRadar CEO and co-founder. “With Naspers Ventures’ international consumer expertise and Blockchain.com’s industry knowledge, we are in an excellent position to harness this momentum to expand our business further.”

Why Naspers Invested

The investment is led by Naspers Ventures, offering further validation of the space as the company joins a portfolio that includes other leading global internet companies. Banafsheh Fathieh, Principal and Early Stage Investment Lead at Naspers Ventures, will join the DappRadar board.

‘‘Naspers Ventures’ strategy is to invest in companies and sectors with high, long-term growth potential. Blockchain is beginning to disrupt and revolutionise a number of key industries and DappRadar has succeeded in creating a strong commercial brand and product in the space. We are excited for our partnership and the opportunity that lies ahead for the company,” says Fathieh.

Blockchain.com Ventures makes long-term venture investments in businesses using blockchain technology to provide product differentiation or enhanced utility, rather than leveraging crypto as a tool for financial speculation.

“DappRadar is playing a vital role in bringing trust, transparency and discovery to the fragmented world of dapps,” says Samuel Harrison, Managing Partner at Blockchain.com Ventures. “We hope to play a role in accelerating their impact on the ecosystem.”

What DappRadar Does

Dapps are applications that run on peer-to-peer computer networks, rather than on centralised machines or servers. Their code is typically open source and the core function is handled by open source smart contracts deployed on a blockchain. Due to the nature of blockchain technology, a decentralised application’s data is transparent and cannot be tampered with, enabling the community to build on top of it without requiring permission.

DappRadar tracks over 2,500 dapps across six blockchains, including Ethereum, EOS and TRON, with plans to expand to others. DappRadar filters through dapp data, removes fake and irrelevant activity and provides actionable market intelligence. Dapps are tracked in terms of their active users, token volume and transaction activity to provide insight into the trends in the dapp ecosystem. DappRadar has become the starting point for dapp discovery and acts as a distribution channel for dapp developers that are looking to reach new consumers.

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.

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Here Is Why Nigeria, Kenya, and South Africa Hold The Highest Potential for Fintech Investors

August 1, 2019

Expect investors who invest in Africa’s fintech sector to cash out big. Investment deals in Africa’s fintech sector shot to a record $357 million in 2018. This is partly because more people are using mobile money services in Sub-Saharan Africa (SSA) than in any other sub-regions in the world. In fact, over the last 12 to 18 months, Sub-Saharan Africa (SSA) has now emerged as one of the fastest-growing financial technology (Fintech) hubs in the world in terms of investments, albeit from a low base.

Here Is All You Need To Know

In 2018 alone, investment in African fintechs nearly quadrupled to $357 million, with startups in Kenya, Nigeria, and South Africa accounting for the largest share. This trend continued into 2019, with a number of high-profile deals.
For example, three Nigerian fintech start-ups — Kudi, OneFi and TeamApt, each raised around $5 million in funding during the first half of the year.
These statistics are from the Global System for Mobile Telecommunications Association (GSMA).
GSMA said huge opportunities await Fintech’s investors, with emerging markets including Nigeria, Kenya, and South Africa holding huge potential for fintech innovations.

The Numbers

GSMA further added that 395.7 million registered mobile money accounts now exist in the region and that nearly nine in 10 registered mobile money accounts are in East and West Africa.
According to the body, which is in charge of over 800 telecoms companies globally, over the past year, several underserved markets in the region have taken steps to accelerate mobile money adoption and, by extension, financial inclusion among citizens.
The body noted that in Nigeria, regulatory reforms introduced in October 2018 allow mobile operators to obtain licenses to operate payment service banks (PSBs), while in Ethiopia, an ambitious financial inclusion strategy has been attracting investment into mobile money services.
Indeed, reforms in Nigeria have seen MTN getting Super Agent license on Tuesday from the Central Bank of Nigeria, with other telecoms to follow suit.

Integration of Mobile Money Platforms With Broader Financial Ecosystem Will Change The Game

GSMA noted that Angola’s national bank plans to submit new laws governing payment systems, including mobile payments, to parliament for approval in 2019.

The telecoms body said these developments notwithstanding, future growth of mobile money services in the region will be largely driven by the interoperability of mobile money services.

Account-to-account (A2A) interoperability gives users the ability to transfer between customer accounts held with different mobile money providers and other financial system players.

It also disclosed that Tanzania led the way in 2014, but several countries across the region, including Kenya, Rwanda, Nigeria, and Ghana, have now launched interoperability projects and use cases.

According to GSMA, mobile money providers’ integration with banks is one particular use case that has significantly increased volumes moving between mobile money and banking systems.

The body, while charging Nigeria and other countries, informed that a next step in the interoperability journey will be the implementation of innovative solutions to integrate mobile money platforms with the broader financial ecosystem.

“A number of options exist around central switching infrastructure for the industry to enable nascent use cases to scale, including merchant payments and efficient connections to domestic and international financial system players. This is already happening at sub-regional levels.

“For example, the eight countries 11 of the West African Economic Monetary Union (WAEMU) are building an interoperable system that will connect 110 million people to more than 125 banks, dozens of e-money issuers, and more than 600 microfinance institutions.

“However, much of the existing bank-focused infrastructure is not optimal for mobile money. In an effort to solve this, MTN and Orange, with the support of the GSMA, launched a joint venture to enable interoperable payments across Africa.

“Known as Mowali (‘mobile wallet interoperability’), the service is open to any mobile money provider in Africa, as well as banks, money transfer operators and other financial services providers.

“With its pan- African footprint allowing for economies of scale and a cost-recovery commercial model, Mowali has the potential to drive down the price of services offered to lower-income customers.

“Additionally, Mowali could shape the future of the mobile money ecosystem in the region by creating a common mobile money acceptance brand with the potential to connect fintechs, banks, merchants and other ecosystem players to nearly 400 million mobile money accounts across Africa,” GSMA stated.

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.