Africa’s fintech revolution: The rise of the $1bn club

Africa’s $1 billion club has continued to swell with the latest inclusion of Nigerian fintech company, Moniepoint.

The company was founded by Tosin Eniolorunda and Felix Ike in 2015 to provide an all-in-one payment, banking and operations platform for businesses and their customers.

The continent’s tech ecosystem has experienced unprecedented growth in recent years, with several companies, most notably in the fintech and e-commerce space, achieving remarkable success and joining the coveted one billion-dollar club. This exclusive group of startups has transformed the continent’s growing tech landscape and attracted significant investment from global players.

Reaching a $1 billion valuation is a tall dream that many tech startups, especially those from Africa, would like to see come true. However the demand is high, and there is a need to continuously speed up valuation and scale up operations through innovations.

A unicorn is a word used to describe a privately held startup company with a valuation of $1 billion or more. There are hundreds of such startups globally, however, Africa is just stamping its feet and maintaining its growth on the world map. This growth is seen in Flutterwave, now valued at over $3bn, Interswitch, valued at over $1bn, and Opay valued at over $2bn among others today.

These companies carry out millions of transactions annually and have created financial solutions for Africans at home and in the diaspora. For instance, Interswitch, one of the pioneer fintech startups, has supplied over 22 million debit and credit cards through its Verve offering and also has as many as 190,000 enterprises using its platform to process transactions.

Founded in 2002, Interswitch became a unicorn in 2019 when Visa took up a 20% stake in the company for $200 million.

One of Egypt’s unicorns, Fawry, serves around 30 million clients including financial institutions, enterprises, and payers. The company is benefiting from growing venture capital investment in the fascinating Egyptian startup space. Founded in 2008, the e-payments company was listed on the Egyptian Stock Exchange in 2019. And a year later, it announced that its valuation had hit $1 billion.

Another unicorn is Paystack. Founded in 2015, it gained prominence as a payment gateway for businesses, providing secure and convenient payment processing. The Nigerian fintech company became a unicorn in October 2020 after being acquired by Stripe for $200 million.

In 2021, Chipper Cash was valued at $2.2 billion after raising a $150 million series C extension. Headquartered in San Francisco, the company is a global brand with employees based in Kenya, Nigeria, Ghana, Uganda, the UK, South Africa, Australia, Colombia, Tanzania, Canada and more.

Also in 2021, fintech giant OPay became a unicorn after raising $400 million in a Series C funding round led by SoftBank Vision Fund 2. This brought the company’s valuation to $2 billion.

Flutterwave became a unicorn in March 2022 when its valuation surpassed $1 billion after raising $170 million. The funding round was by US-based private equity firms, Tiger Global, and Avenir Growth Capital.

MNT-Halan, one of Egypt’s fastest-growing companies self-described as a ‘super app that banks the unbanked’, broke into Africa’s exclusive $1 billion dollar club in 2022. It started as a ride-hailing app back in 2018 but has since diversified its portfolio. Now it has over five million users across Egypt and offers services like loans, payments and e-commerce.

Moniepoint is the latest addition to the Big Boy club. The fintech company is now valued at $1 billion after Google and others invested $110 million. In its latest Series C round, Moniepoint raised $110 million from British private equity firm, Development Partners International (DPI), Google’s Africa Investment Fund, Verod Capital, and Lightrock.

It is worthy of note that growing mobile penetration, unbanked population, government support, investment, and innovation, are the key factors driving this success. However, Regulatory complexity, cybersecurity, and stiff competition are some of the challenges in the industry.

Africa’s fintech revolution has reached a tipping point, with the $1 billion club membership serving as a testament to the industry’s remarkable growth. As the continent’s fintech landscape continues to evolve, companies must address challenges, innovate, and prioritize customer needs. The future of African fintech looks brighter than ever.

Israel Ojoko, a journalist and data analyst, can be reached via [email protected]