Fintechs in Africa have raised USD 1.8 Bn in 2021 as of 30th November. This accounts for almost 60 percent of all funding raised by all startups so far. Fintechs also raised the most funding by any sector for each of the last 3 years, totaling upto USD 3 Bn across 398 deals.
Now, a new report by the American Research Group, the Brooking Institute, has revealed that the majority of fintech funding across Africa is geared towards supporting mobile money ventures.
Mobile money ventures are various financial transactions that one can do on a mobile device using technology. These include payments, money transfers, credit and savings among others.
Africa is home to half of the world’s registered mobile money accounts according to Statista. Approximately 70 percent of global mobile money transactions take place in Africa and so do two-thirds of the transaction volume by value.
The popularity of mobile money can be attributed to the low financial inclusion rates in Africa. Mobile money is used by the millions of people in rural areas who are either under-banked or unbanked. Fintechs also depend on the increasing internet penetration and mobile phone penetration rates.
The report further reported that fintechs could potentially revolutionise the financial sector and the fast growth of the sector will most likely attract more foreign investors on the continent.
This year alone, the famed Masayoshi Son of Softbank made his first investment in Africa leading OPay’s USD 400 Mn Series C. Global Fintech giant Stripe invested in Wave Mobile Money USD 200 Mn Series A.
Other standout mobile money deals this year include Flutterwave’s USD 170 Mn Series C in March, while Chipper Cash also closed out a USD 250 Mn Series C this year. OPay, Flutterwave, Chipper Cash and Wave Mobile Money all became unicorns this year.
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