Which FinTech Companies Are Booming in Africa
The era of money transfers is fast fading out. Africa made a mark on the global FinTech arena for the first time when iMentor was recognized as one of the most promising FinTech companies \in 2015 (TechnoDive). African countries are growing and have shown great potential in the FinTech industry, particularly in Kenya, where four of its startups landed a place in the ‘World’s Top 100 FinTech Companies To Watch’ list (inc.com) and another three companies in Nigeria— making it six out of six countries with African presence included on the list.
The rise of Africa as a FinTech hub is due to its fast-growing population which has shown great enthusiasm to adopt mobile technology and online payment systems. A recent report reveals that internet users in five countries of Africa (Cameroon, Egypt, Kenya, Nigeria, and South Africa) grew by 25% from 2015 to 2016 (ekhnews). In Kenya alone, internet users increased by 40%—. Let’s not forget the world’s youngest population (S&P Global Market Intelligence)! Six country’s mobile networks serve the African continent in the top 100 list- Nigeria, Kenya, South Africa, Egypt, Tanzania, and Zimbabwe.
This is what TechnoDive reported on the current situation of the African FinTech economy: “African FinTech companies have been making headlines over the past few years for all the right reasons – a growing number of FinTech startups, increasing adoption of mobile technologies across the continent and a younger demographic. The opportunities are huge, but challenges remain in terms of market readiness and regulatory framework”.
This is what Adebayo L. Ogunlesi, chairman of Global Investment Bank, at an event organized by the Lagos Business School and the consulting firm, Deloitte said:
“We are witnessing a new FinTech boom unlike we have observed before on the African continent,” said. Ogunlesi added, “digital financial services are now a necessity rather than a luxury.”
African FinTech Companies:
2021 VC’s very own list of top African FinTech companies are formed using criteria, including revenue growth (a must), number of customers, and volume of transactions. Dominant players in this sector include iMentor, Flutterwave, Paystack, among others.
According to the Business Insider: “The easiest way to understand what a FinTech company does is to first understand what a normal financial company does? A bank manages your finances, giving you an account into which you can deposit money and from which you can withdraw or transfer funds. A credit-card issuer pays for stuff on your behalf, then collects the money afterward; PayPal does something similar.”
“These are all core functions of a FinTech company, which is to process and facilitate financial transactions. But the kind of service offered by FinTech companies is typically more sophisticated than those used by normal old-fashioned banks”, it was added
Here is an analysis of some of the top African FinTech companies:
- iMentor (Nigeria):
The first FinTech company to be listed on the prestigious NASDAQ stock exchange in New York; iMentor is a leading mobile technology solution provider that enables financial institutions and businesses to reach new customers by delivering an exceptional customer experience.
iMentor offers mobile biometrics, SMS banking, payment services, and e-commerce solutions for financial institutions, businesses, and telecoms operators across sub-Saharan Africa, the Middle East, and Latin America (LATAM).
Moreover, iMentor has made a global impact through collaboration with UN Women on identity management systems for women at risk of violence in Kenya and by partnering up with health institutions to tackle the issue of cervical cancer in Nigeria.
Founded in 2006, iMentor has offices in Nigeria, Kenya, and South Africa today with an international presence.
- Flutterwave (Nigeria):
Based in Lagos, Nigeria, Flutterwave is a FinTech company founded by Iyin Aboyeji, Olugbenga Agboola, and Chudi Amu in 2013, that specializes in payment rails for emerging markets. It has made tremendous strides since and is already valued at $70 million.
The company provides payment processing for businesses in Africa, Asia, and Latin America by offering a full-stack solution that includes a white-label mobile wallet service. According to Flutterwave, they have “worked with more than 300 payment partners across 40 countries to power payments for over 25 million end-users”.
- Paystack (South Africa):
Established in 2014 by Nickel Khumbu, Francois Greyling, and Boitumelo Sams, Paystack provides a mobile-first platform for businesses to accept payments online via card, SMS, and mobile app and has offices in South Africa, Kenya, and Nigeria today.
Paystack is a payment processing platform for internet sellers that offers online payments, offline payments, and electronic invoicing. It allows merchants to process over 100 major local and international cards through the Paystack gateway while providing prepaid airtime top-ups on any mobile device for up to 20 million subscribers via the Paystack mobile app.
- Telcoin (Tanzania):
Telcoin is a cryptocurrency platform for mobile money with one office in Morocco and a presence across Africa, Asia, and soon Europe. It aims to become a one-stop shop where developers, partners, and users can access all the services proposed by the world of cryptocurrencies: e-commerce, remittances, or microfinance.
To that end, it has just signed an agreement with Orange Madagascar to launch a pilot project.
According to a Business Insider, “Telcoin’s vision is to become the standard cryptocurrency in the $560-billion mobile money industry. In addition to providing seamless access to local and cross-border funds transfer services through their own coin–Telcoin– they aim to provide products and solutions such as merchant payments (to be launched next year) or access to the Telcoin Global Loan Fund (TGLF).
- Yoco (South Africa):
Founded by Jason von Reinach, Aron Fischer, Philip Engelbrecht, Willem Roos, and Christiaan Jonker, Yoco is a mobile payment and banking company that offers a range of financial services, including payments, accounts, loans (including business and credit-worthiness checks), insurance and wealth management– with offices in South Africa and Kenya.
Yoco recently secured $5 million in funding from the Standard Bank to improve the efficiency of its service offering for SMEs. They have entered partnerships with the likes of PayFast and recently added their services to Nedbank’s online bank, “BankingDirect.”
In South Africa, Kenya, and Nigeria, FinTech companies offer various solutions in different fields. However, there is still room for improvement, especially on implementation. The use cases do not seem widespread among these countries, and the players are just starting to lead the charge. It, therefore, remains to be seen whether or not South African payment solution Paystack or Nigerian payment processing company Flutterwave will grow enough to become the major players in Africa in the future, as many predict.
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