Yahui Zhou - Afrikan Heroes

Africa-focused Fintech, Opay, Secures $400m From Softbank, At $2bn Valuation

August 23, 2021

OPay, a Chinese-backed and Africa-focused fintech business, raised $400 million in new funding led by SoftBank Vision Fund 2 on Monday, valuing the company at $2 billion, according to Bloomberg.

Existing investors Sequoia Capital China, Redpoint China, Source Code Capital, and Softbank Ventures Asia participated in the round, which marked the Fund’s first investment in an African firm. The fresh financing round included participation from other investors such as DragonBall Capital and 3W Capital.

“Opay wants to be the power that helps emerging markets reach a faster economic development,” OPay CEO Yahui Zhou said.

The fresh money comes two years after OPay announced two funding rounds in 2019, one of $50 million in June and the other of $120 million in November.

Why The Investors Invested

“We believe our investment will help the company extend its offering to adjacent markets and replicate its successful business model in Egypt and other countries in the region,” Kentaro Matsui, a managing director at SoftBank Group Corp, said.

According to Bloomberg, the company’s monthly transaction volumes currently top $3 billion.

Opay expanded to Egypt last year, which the company claims is an entrance point into the Middle East market.

A Look At What Opay Does

The company, which was launched in 2018, had an exclusive presence in Nigeria, where it offered a wide range of digital services at low prices to consumers, ranging from mobility and logistics to e-commerce and fintech.

The company’s mobile money division is currently thriving. OPay’s monthly transactions increased 4.5 times last year to over $2 billion in December, according to its parent firm Opera. OPay also claims to handle around 80% of bank transfers among Nigerian mobile money providers and 20% of non-merchant point-of-sale transactions. The company also announced last year that it had obtained an international money transfer license, with a WorldRemit collaboration in the works.

Opay Softbank Opay Softbank

OPay Sounds Positive as Platform Processed $2 Billion in Transactions In December 2020

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer

Africa-focused Fintech Startup OPay Raises $120 Million From Chinese Investors

November 18, 2019

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