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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.

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Harsh reviews trail FinTech Apps on popular app store.

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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Financial Technology FinTech, Job loss, Accion Venture Lab, Fintech: Growth frontier of the next decade 

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.

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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.

[READ MORE: Digital technology and blockchain altering conventional banking models – Emefiele]

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.

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

Highlights

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.

Visa/Interswitch 

  • 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.

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  • 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.

TeamApt

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.

Andela

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.

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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.”

[READ ALSO: CBN OMO Blues: Your FinTech saving app could suffer bigly)

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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.

Patricia

Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - [email protected]

1 Comment

1 Comment

  1. Mytrip ng

    January 31, 2020 at 11:00 pm

    And there’s no mentioning of paystack? I feel that’s the biggest startup so far

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Corporate Press Releases

Customers to win salary-4-life, business grants, rent advance and cash rewards in Diamondxtra quarterly draw

The DiamondXtra Reward Scheme is the most rewarding way to save.

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Access Bank, Scam Alert: Access Bank issues warning to customers over fraudulent acts , Director, West Africa region, IE, Onyekachi Eke, Access Bank lists N30 billion bonds on NSE , Access Bank, Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc, Zenith Bank Plc, Access Bank Plc and United Bank for Africa Plc, A new BVN guideline to curb e-fraud is coming soon - CBN announces , Access Bank donates 66 laptops to children in underserved communities, Access Bank postpones closed period for 2019 Year-End financial statement, Access Bank dispels rumour about its CEO being arrested, Access Bank set to establish subsidiary in Cameroon after acquiring Kenyan bank, Access Bank finally acquires Kenyan bank, Transnational Bank Plc, Herbert Wigwe: We are clamping down on malaria with the Malaria-To-Zero Initiative, Access Bank to list N15 billion green bond on Luxembourg Stock Exchange 

Leading retail bank in Nigeria, Access Bank Plc is set to reward more than 1,000 DiamondXtra customers with various grants and cash prizes in the second DiamondXtra quarterly draw of Season 12 scheduled to hold on Wednesday, July 15, 2020.

According to Adaeze Umeh, Head, Consumer Banking, Access Bank Plc, “We are gearing up for the DiamondXtra quarterly draw this month and we will be rewarding more than 1,000 lucky customers with various cash prizes, business grants, family health insurance, rent advance and other exciting rewards. It is the bank’s little way of rewarding its loyal customers and creating more value to meet customer needs during these trying times.  We rewarded ten customers last month with N1million each at the monthly draw and we are here again to reward more customers in the quarterly draw.”

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To join the winning train, all you need to do is keep saving if you have a DiamondXtra account already. “If you don’t have an existing account, simply dial *901*5# to open a DiamondXtra account with just N5, 000 and save multiples of ₦5,000 to increase your chances of winning,” Adaeze told newsmen in Lagos.

Some of the DiamondXtra rewards for the quarterly draw include:

  • Salary4Life (N100,000 every month for 20 Years)
  • Rent for a Year for 21 lucky customers
  • One Year Family health coverage for 7 lucky customers
  • N1Million business grant for 6 lucky customers
  • ₦500,000 for 15 lucky customers
  • ₦100,000 for 45 lucky customers
  • ₦50,000 for 300 lucky customers
  • ₦20,000 for 300 lucky customers
  • ₦10,000 for 300 lucky customers

The DiamondXtra Reward Scheme is the most rewarding way to save, don’t miss out on this opportunity to become a millionaire or a star prize winner.  To participate; simply open a DiamondXtra account, save in multiples of ₦5,000 and you stand the chance to win amazing prizes in the quarterly draw this month.

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Hospitality & Travel

FG bars aides of VIPs from airport terminals, to grant loans to airlines, others at 5%

The minister insisted that face masks must be worn at all times inside the airport and airplane.

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has barred all non-travelling aides of public office holders and very important personalities (VIPs) from gaining access into the Airport terminal. 

This is part of the measure and aviation protocol designed to contain the spread of the coronavirus disease and ensure safety of the passengers and workers in the aviation sector. 

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This was disclosed by the Minister of Aviation, Hadi Sirika, during Monday’s briefing of the Presidential Task Force (PTF) on COVID-19. 

Sirika said that this measure applies especially to Governors, Ministers, National Assembly Members, Judicial officers and Military officers as the practice of having their Personal Assistants and Special Assistants, who they insist on seeing them off up to the aircraft though not travelling with them, would be stopped. 

The Aviation Minister in his statement said, ‘’Henceforth, all VIPs will no longer be permitted to bring non-travelling aides into the Airport Terminals. This especially applies to Governors, Ministers, NASS members, Judiciary and Military officers.’’ 

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While speaking on the new procedures during this COVID-19 era, the minister said that mandatory temperature and symptoms checks will be carried out at the airport terminals and frequent washing of hands should be done at the airports. He also said that face masks must be worn at all times inside the airport and airplane and anyone who does not do that will not be allowed inside the airport terminals. 

He pointed out that physical distancing will be maintained at all times just as unruly passengers will not be allowed to board the aircrafts or fly as no pilot will be allowed to fly a plane carrying an unruly passenger. 

He revealed that the processes of compression, heating, cooling and filtration that aircraft cabin air is subjected to, takes out 99.9% of all organisms including viruses etc. that’s why cabin air is safer than most other environments.  

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The aviation minister also stated that operators in the aviation sector including airlinesground handling firms and others, will be given loan at 5% interest rate with effect from 2021. He, however, noted that the modalities for the loan is being worked out with the Central Bank of Nigeria and the Federal Ministry of Finance, Budget and National Planning 

It can be recalled that Sirika stated this in an interactive session with the senate committee on Aviation where he said that any VIP coming into the airport this time around as a personality, minister or even members of the national assembly will not be carrying their aides into the airports anymore. 

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Appointments

Vodacom Nigeria gets new MD

Vodacom Business is a leading pan-African telecommunications provider wholly-owned by the Vodacom Group.

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Vodacom Nigeria gets new MD

Vodacom Business (Nigeria) Limited has appointed Mr Valentine Chime as the Managing Director of its operations. According to a statement from the company on Monday, the appointment is at the instance of the board of directors.

He will now drive the company’s vision of becoming Africa’s leading cloud and digital service provider, the statement read.

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Prior to this appointment, Valentine Chime was with Aruwa Capital, a private equity company investing across West Africa. He also worked at Kaizen Venture Partners, a private equity company focused on distressed assets. He has held various C-suite positions in a number of portfolio companies in different sectors.

READ ALSO: Africa seeking extra $44 billion to deal with COVID-19 pandemic

Chime expressed his enthusiasm to take up the position and challenge of building the Vodacom brand in the country. He said:

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“Vodacom Business Africa (Nigeria) Limited is well-known and very respected in the industry, and I look forward to taking up this mission.

“Covid-19 has accelerated digital transformation, and we are perfectly positioned to deliver intelligent connectivity through seamless delivery of cloud and digital services and technologies to our clients.”

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Vodacom Business is a wholly-owned subsidiary of the Vodacom Group, and a leading pan-African telecommunications provider that came into Africa since 1992.

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