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African Fintech is still the preferred sector for global VCs to invest in

Yoco Raises $16M Series B Led by Partech

Image Credit: Yoco

With traditional banks still struggling to reach the 95 million unbanked adults across Sub-Saharan Africa, it comes as no surprise that in 2018, investors (locally and internationally) are still backing the new wave of African Fintech startups that are levelling the playing field for the unbanked and underserved across the continent.

Disrupt Africa’s African Tech Startups Funding Report 2017 revealed that African tech startups raised funding in excess of $195M in 2017, with sector-specific research indicating that 45 fintech start-ups received almost a third of the funding.

African Fintech innovation goes beyond just having bank account. Here, we look at some of the different areas this sector is addressing and who’s doing what, in what has been a landmark year for tech & finance across Africa.


The payments ecosystem in Africa is evolving and we’re seeing a shift where African consumers are turning to making online transactions as opposed to the traditional cash. As a result, merchants are turning to digital payments service providers, and this has not gone unnoticed by investors, who’ve dug deep this year to ensure they are powering the players who’ve amassed sizeable client bases, such as Cellulant ($47.5m Series C), Flutterwave ($20m Series A), Ecobank Mobile App and Paystack ($8m Series A) to help them meet this growing demand from consumers. In South Africa, where credit card penetration is extremely high compared to the rest of the continent, POS payments provider, Yoco ($16m Series B), simplifies commerce for SMBs by providing access to affordable card readers. Additionally, there are new players who are distinguishing themselves from pre-existing payment providers; Tanzania’s NALA with their offline functionalities and South Africa’s WhatsApp Chat Banking Clickatell, both of whom are 2018 winners of AppsAfrica Awards.


One solution that has taken the Fintech sector by storm across Africa is access to credit. Without a form of credit score or repayment history, banks and lenders lower their risk by holding assets as collateral in the case of default payments, cutting off potential low and middle income borrowers. Over the past two years, a growing number of micro-lending platforms have emerged with the aim of determining the creditworthiness of consumers. By collecting data about phone owners, startups such as StawikaJUMO ($52m), PaylaterBranch ($70 million Series B) and Mines ($13 million Series A) are serving those who lack access to bank accounts and assets by finding other tangible means of building a financial profile of customers. By doing so, credit as a service is offering a lifeline to potentially hundreds of thousands of people who may be in need of some money before payday.


Savings across Africa have generally taken the more traditional route such as storing cash in a hidden place, or through an informal savings club, popularly known as ‘Esusu’. The rise of mobile has also seen a growing number of fintech players, who are bridging the gap between informal and formal savings. Some examples are who, just one year out of Google’s Launchpad Accelerator closed on a $1.1m Seed round, and aim to promote a savings culture among Nigerian millennials by automating the process of saving and restricting withdrawals until a date set by the user. Another similar digital savings app is Kolopay, who allow users to save from multiple accounts and have integrated an e-commerce feature. As well as providing credit to lenders, JUMO also helps individuals and small businesses access savings.


The popularity of feature phones as well as the affordability of smartphone devices is driving the digitisation of cash and growing digital payment options in Africa. As mobile money grows, we’ve seen money transfer services such as MFS Africa ($4.5m Series B) and M-Pesa drive financial inclusion across the continent by connecting African mobile wallets to each other. Recently, two of Africa’s mobile operators and mobile money providers, Orange Group and MTN Group, joined forces to launch Mowali, a mobile wallet interoperability, which allows users to send money between mobile money accounts across any mobile money provider. As more companies make mobile money interoperability a reality, digital payments across Africa will become easier and more common.

Whilst investors are looking for the ‘next big thing’ , African Fintech still remains at the forefront for investment. For now. As Fintech startups continue to underpin consumers’ daily transactions, not only have they attracted a high calibre of global investors (i.e. TPG Growth & Partech Ventures), but local investors and high net worth individuals are also participating and leading in investment funds (i.e. Leadpath Nigeria & CRE Venture Capital), debunking the belief that the local tech ecosystem is not financing African ventures.

The Africa Tech Summit Kigali 2019 takes place on February 13th-15th at the Kigali Convention Centre in Rwanda. The three day event will feature three tracks – The Future SummitThe Africa Start-up Summit and The Creative Summit and will drive interaction and a future line of sight on Fintech; Artificial Intelligence (AI); Blockchain; Space; Payments and Credit; Mobility; Cloud and IoT; Connectivity; Investing; Mobile and Data; Tech & Talent; Future Trends; mCommerce; mHealth; EdTech; AgriTech; Drones; Virtual Reality (VR); Digital Media; Music; Film; Gaming.

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