Fintechs in Africa continue to overshadow all other startups in funding gained

Fintechs in Africa continue to overshadow all other startups in funding gained

Image Credits: Busakorn Pongparnit (opens in a new window) / Getty Images The year 2021 saw more and bigger deals closed in Africa, as tech startups across the continent raised close to $5 billion . This amount was double the previous year’s investment, and nine times what was raised five years ago, an indication of how much the startup scene has transformed over the last few years.

Fintechs dominated the fundraising, accounting for $3.1 billion, or two thirds of all the investment realized by startups across the continent last year, a report by markets insights firm Briter Bridges shows. This amount was also more than double the $1.35 billion investment that fintechs in Africa raised in 2020, and triple the amount in 2019.

Among the largest beneficiaries of the fintech capital were Opay , which raised $400 million in Series C funding, Flutterwave , which got $170 million in a Series C round, and TymeBank , which raised $180 million in Series B. Jumo and MNT Halan raised $120 million rounds, as digital payments gateway MFS Africa gained $100 million. This was as Zepz (formerly WorldRemit) raised $292 million in Series E financing, while Chipper Cash raised $250 million , Tala $145 million as Wave sealed $200 million 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.

Mobile subscriber penetration across the continent is predicted to increase by four percentage points to hit 615 million – half of the continent’s population – by 2025 according to the GSM Association. It is also poised for greater growth as the adoption of lending, digital payments, banking and insurance services grows.

Financial Technology Partners, an investment banking firm focused exclusively on fintech, in a past review of the sector in Africa said that the continent, with its rapidly growing population, some of the fastest-growing economies and an underdeveloped financial services ecosystem, presents an attractive opportunity for fintechs.

“While the payment space begins to see scale-ups such as Flutterwave, Chipper, MFS Africa, Cellulant, 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. This, and greater M&A activity, as the ecosystem moves towards maturity and […]

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