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FINTECH GROWTH IN AFRICA UNLOCKING THE CONTINENT’S POTENTIAL
Africa’s fintech industry has experienced remarkable growth and investment in recent years, positioning it as a leading force in global financial technology innovation. With large financing rounds, the emergence of unicorn startups, and increasing customer traction, the momentum of Africa’s fintech sector shows no signs of slowing down. In this article, we delve into the key findings of a report by Financial Technology (FT) Partners, highlighting the growth of fintech in Africa and the exciting prospects it holds for the future.
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RECORD-BREAKING FUNDING AND TRANSACTIONS
Despite a temporary dip in global fintech funding trends, Africa witnessed a record-breaking year in 2022 for financing transactions. With 135 announced deals, representing a 17% increase from the previous year, investors continue to display strong confidence in the potential of African fintech. This surge in funding showcases the enthusiasm for supporting young and promising startups in the region.
Key Sub Sectors Leading The Way
Analysing funding trends, the report identifies the payment and banking/lending tech sub sectors as the frontrunners in securing funding since 2017. These two categories have amassed a total of US$2 billion and US$1.6 billion, respectively. Furthermore, they account for over 50% of fintech financing transactions, with 157 deals in payments and 91 deals in banking/lending tech. This emphasis on payment solutions and inclusive banking reflects the industry’s focus on addressing the needs of consumers and businesses across Africa.
NOTEWORTHY DEALS & MERGERS
Several remarkable fintech deals took place in 2022, demonstrating the diversity and potential of African fintech companies. Companies such as Interswitch, MFS Africa, Wasoko, and Flutterwave secured significant funding rounds, ranging from US$100 million to US$250 million. These deals highlight the increasing recognition and support that African fintech startups are receiving, both domestically and internationally.
Additionally, the year witnessed a rise in fintech exits through mergers and acquisitions. Notable transactions included the acquisition of Nigeria’s payment orchestration startup, Orchestrate, by fintech infrastructure provider Bloc, as well as Egypt’s open banking startup, Underlie, being acquired by UAE-based Fintech Galaxy. These acquisitions underscore the maturing nature of the African fintech sector and its attractiveness to investors and acquirers.
