Nigeria Fintechs take lead in Africa, attract $122 million fund in 2019

The Financial Technology (Fintech) industry in Nigeria has come to stay, as it took the lead in Africa attracting $122 million in funds in 2019. This was disclosed in the 2019 African Tech Startups Funding Report.

The report stated that African tech startups, with 311 companies secured $491.6 million worth of investment in 2019 and Nigeria got 24.8% of that fund. The number of investors in African tech startups jumped by 61% to reach 261.

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Details: The report details how Kenya and Nigeria emerged as the premier investment destinations on the continent in 2019, attracting US$149 million and US$122 million in funding respectively.

Egypt continued its development into a major continental tech hub, with more startups from the North African country securing investment than anywhere else. South Africa’s growth slowed, according to the report, which also contains in-depth data on the investment landscapes in Ghana and Uganda, as well as an overview of activity in 13 other countries.

What you need to know about Fintech: The sector remained the most popular among investors, though its share of total funding fell to 21.8% as other sectors, notably logistics, transport, e-commerce, agri-tech, and e-health, enjoyed bumper years.

The report also provides information on funding activity in six African countries; figures on the number of deals per location, and average deal sizes; data on growth in funds and deals over the past five years; highlights of key deals across the continent; sector-specific breakdowns across 13 sectors, and tracking of acquisitions in 2019.

Meanwhile, Nairametrics had reported that the transactions recorded by some Fintechs in 2019.


With the entrance of new players into the payment services market and the strengthening of the financial networks, a growing number of underserved Nigerians had access to cost-effective banking services.


  • On November 12, 2019, Interswitch, Africa-focused integrated digital payments, and Visa (NYSE: V), announced a strategic partnership that further advances the digital payments ecosystem across Africa.
  • As part of the agreement, Visa will acquire a significant minority equity stake in Interswitch at a total company valuation of $1 billion. Visa is thought to be paying $200 million, valuing Interswitch at about $1 billion (N360 billion)
  • Founded in 2002, Interswitch reportedly generates annual revenue of N30 billion, suggesting that the current value is about 10x its current revenues. Interswitch is also now valued higher than FBNH (N208 billion), UBA (N225 billion) and Access Bank (N327 billion). Zenith Bank still owns a 5% stake in Interswitch and is currently valued at N538.4 billion.
  • In addition to its switching and processing services, Interswitch owns Verve, the largest domestic debit card scheme in Africa with more than 19 million cards activated on its network as of May 2019, and also operates Quickteller, a leading multichannel consumer payment platform, driving financial inclusion across Nigeria.

Transsion/OPay & Palmpay

In two separate rounds, Chinese investors put $220 million into OPay and PalmPay, two fledgeling startups with plans to scale in Nigeria and the broader continent.

  • PalmPay, a consumer-oriented payments product, went live in November with a $40 million seed round led by Africa’s biggest mobile-phone seller, China’s Transsion.
  • The startup was upfront about its ambitions, stating in a company release, its goals to become “Africa’s largest financial services platform.”
  • To that end, PalmPay conveniently entered a strategic partnership with its lead investor. The startup’s payment app will come pre-installed on Transsion’s mobile device brands, such as Tecno in Africa, for an estimated reach of 20 million phones.


Nigerian Fintech startup, TeamApt also raised $5.5 million capital in a Series A round led by Quantum Capital Partners in February. The Lagos based firm is expected to use the funds to expand its white label digital finance products and pivot to consumer finance with the launch of its AptPay banking app.


Another Tech startup, Andela raised $100 million in Series D funding in January 2019. Generation Investment Management (Generation IM) led the current funding round.

Proceeds of the funds, according to Andela’s country director, Omowale David-Ashiru will be used for expansion.

“Due to our unwavering commitment to our mission throughout the last four years, Andela has grown into a thriving platform for hundreds of technologists in Nigeria. With this investment, Andela will accelerate the development of Africa’s best tech talent in Nigeria and beyond.”

Lilly Wollman, Co-Head of Growth Equity at Generation Investment Management stated that the private equity firm believes there is room for growth in Andela’s area of operations.

She said, “The global demand for software engineers far exceeds supply, and that gap is projected to widen. Andela’s leading technology enables firms to effectively build and manage distributed engineering teams. We are great admirers of the outstanding team, mission and culture Andela has built across two continents and five countries.”

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Hurdles of the industry

Like other sectors, FinTech also has its challenges. From lack of appropriate regulation to access to credit, lack of established database, strategic partnership and corporate governance limitations among others, the industry still has a long way to go.

No wonder, FT Partners declared that the nation’s journey to becoming the Giant of Africa, especially in financial inclusiveness, is farther than it appears, as its payments market fell behind other African nations like Kenya, and South Africa.

In FT Partners’ FinTech Industry research, it found that 6% of the nation’s bankable population has mobile money accounts. The report, which was obtained by Nairametrics, rated the most populous black nation behind Kenya’s 73% and South Africa’s 19%.

Also, Nigeria’s Smartphone penetration (27%), accounts in financial institutions (39%) and debit/credit card ownership (35%) all fell behind Kenya’s 60%, 56%, 44%, and South Africa’s 64%, 67%, 43% respectively.

In all, while the firms are trying to keep their heads above water, Emefiele explained that as part of the bank’s priorities for 2020, it would also, sustain these efforts in 2020 as part of its plan to reduce financial exclusion rate to under 20% over the next year.

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