The pace of development in Africa has gained momentum, and businesses are smack in the middle of it. As venture capital, amongst many other things, comes through more than ever, many enterprises are looking to spread their tentacles.
From sector to sector and country to country, African businesses see a prime opportunity to reap the fruits of what is the fastest-emerging market in the world.
OPay – the latest entry into the African superapp category – has become the most recent definition of business expansion. From what was majorly fintech-based to an interesting array of digital services intersecting a collection of Nigerian industries, the business’ model – even though not yet profitable – proves to be interesting.
In less than six months, the company has closed two mega rounds from a group of Chinese investors. The first, being USD 50 Mn, was raised in July, while the second USD 120 Mn came through in November.
Backed by Chinese investors, there could be a few things other African startups can learn from this disrupting fintech about business expansion.
The Right Time
OPay Country Manager, Iniabasi Apkan, says the company is expanding rapidly because it sees a ‘right-now’ tremendous opportunity in Africa for fintech services.
“There are millions of people across Africa excluded from accessing financial services due to the lack of traditional financial institutions. In Nigeria, 123 million people remain unbanked which equals 60 percent of the total population,” Apkan told WeeTracker.
According to him, the business sees the banking deficit as must-take opportunity to deliver financial services to Africans with free, safe, and easy-to-use mobile products to promote financial inclusion.
Speaking of which, the level of financial inclusion in Sub-Saharan Africa as at 2011 was just over 23 percent. The jump to 43 percent in 2017 signalled a substantial increase mothered by digital financial services. Mobile money use in every other region of the world is lower than 10 percent.
Apkan says: “Financial services should be available for everyone without regard for physical borders, boundaries, or even social status. With the right services and right scale, now is the right time for us to expand”.
The Right Way
OPay started major expansion when it branched into bike-hailing, with ORide. Ever since its Series A, the business launched OFood, OList, OTrike, and OBus.
On the back of its just-closed Series B, it is going head to head with Uber and Bolt having launched cab-hailing service OCar. The company has not been operating in Lagos alone, as it has touched almost all the cardinal points of Africa’s most populous nation.
Apkan, who is anything but new to the Nigerian IT sector, says business expansion in African is not a one-size-fits-all approach.
“Being thoughtful about expansion and actively monitoring the regulatory environment is essential as these companies scale across African countries. We are focused on providing people of these countries a better set of services than what exists today”.
Apkan went on: “We have stated that OPay has further plans of expanding its brand visibility to other African countries like Kenya, Ghana, and South Africa.
Currently, we’re focused on leveraging our growing user base and brand awareness to create even more engagement and more frequent touchpoints that benefit our customers in their daily lives”.
Nigeria remains a tough place to do business, despite being the recent Ease of Doing Business ranking, but OPay is trying to beat the odds.
Funding and expansion – for African businesses – have almost become synonymous. Well, that makes sense. But with different models and market behaviors, it is important to observe all the details.
There are many genuine business reasons to establish a presence in another sector or country. As far as the intention it so become fully-fledged and leverage in a viable entity, expansion makes sense.
Featured Image: Techpoint.Africa