This Week in Fintech - Africa (2/20)

This Week in Fintech - Africa (2/20)

Hey everyone,

It’s the second Africa edition of This Week In Fintech.

In this episode, I’ll share my:

  • Top three tweets of the week, 

  • Stat of the week

  • Market updates in Africa 

    • VC/Funding activity on the continent

Tweets of the Week

African payment giant, Flutterwave is launching startups as features. Soon, the narrative will shift from “What if Google builds it? To what if Flutterwave builds it?”. Here is a good summary of everything Flutterwave announced as part of its 3.0 era:

Do you agree with Puru’s take?

As a Founder, what shocked you about the fundraising process?

Stat of the Week

Last year, fintechs in Africa captured almost half of the cumulative fintech funding received over the past decade (2013-2021)

The funding proportion holds true even when you look at how startups with at least one female co/founder fared between then and now.

Market Updates

Funding Announcements

Between last week Friday and now, there have been five major fintech funding announcements in Africa. Cumulatively, they total to $281.6M invested in Africa. Two out of the five major investments are in API fintechs (Stitch and MoneyHash), which many, like me, believe to be the next era of fintech in Africa. One out of the five is a later stage round of what has now become the most valuable African startup (Flutterwave).

Calling these out because it’s new. Six years ago, the bulk of my startup and tech reporting was about new startup and product launches, and less about fundraising announcements. It used to be about tech community events and the impact of big tech like Microsoft and Google in Africa. But these days, it’s more about who launched what, who raised what (and at what valuation), M&A deals (albeit, small scale).

The African tech ecosystem is truly coming of age and fintech is leading the charge. Onto the fundraising announcements.

  • Flutterwave lands $250M in Series D funding, led by B Capital

    • The Series D raise was at a valuation of $3 billion, making it the most valuable startup in Africa. 

    • Co-founded by E (previously a co-founder at Andela) and GB (CEO of Flutterwave), they are building what Matt Levinson (Partner at B Capital) referred to as the “Stripe + Paypal of Africa”

    • Following its fundraise announcement, the company hosted an event to talk about its current & future endeavours, Flutterwave 3.0–crowned by a website refresh. Hint: Refer back to the first tweet of the week that I posted at the top

  • Stitch announces the close of its $21M Series A 

    • Pan-African API fintech startup, Stitch—born out of Cape Town—announced its Series A round barely four months after its seed extension of $2m.

    • With a total funding of $27m, the company will focus on building the “financial graph” by expanding its team, developing new products, and launching in new markets.

    • Stitch is among the league of what I like to call “new-age” African fintechs advocating for open banking and/or embedded finance. Others in this category are Mono, Okra, OnePipe, MoneyHash. So far, it’s the most capitalised of the pack.

  • MoneyHash secures $3M pre-seed funding to build a super API in Africa and middle east

    • MoneyHash is an Egypt and US-based pre-seed stage startup. This raise is an extension of an earlier undisclosed six-figure raise

    • They are building Africa’s “first super-API for payment orchestration and revenue operations.”

    • Essentially, when the likes of Mono, and Stitch build payment methods like “Pay with Bank”. MoneyHash will be there to aggregate it alongside other payment methods relevant to their operating region. MoneyHash will offer a unified Payment API that saves its customers time and effort.

  • CrowdForce raises a $3.6m pre-Series A round for its agency banking business

    • Aptly named CrowdForce is leveraging the power of the crowd to drive financial inclusion.

    • In Africa’s most populous nation, Nigeria, agency banking thrives. This is because there are only 5 bank branches and 19 ATM for 100,000 adults, which is less than half of the world’s average. Last week, we wrote about Moni, a service offering loans to agents (also referred to as, PoS entrepreneurs)

    • CrowdForce is going to face a uphill battle with the likes of TeamApt, OPay and other dominant players in the space. However, CrowdForce didn’t set out to build an agency banking business, in the first place. Their first endeavour was a data collection agent network called Mobile Forms which eventually got used for a trader financial empowerment scheme by the Federal Government of Nigeria. So, it was the gap they noticed in delivering funds to these enumerated traders that led them towards agency banking. 

  • Earnipay secures $4m seed funding 

    • Earnipay is providing accrued salaries on-demand to employees. To do this seamlessly they connect to the employer’s payroll system and give the employee visibility and pre-agreed access to the monies they’ve earned while working through the month.

    • Earnipay is the second startup that I’ve seen to focus on the growing working population in emerging markets like Nigeria. The first is a startup whose raise we covered last week, Casava. Casava’s first and only product was and still is an income protection product that provides salary benefits to workers who lose their employment. 

    • It remains to be seen how this young company, piloted in the last quarter of 2021, will convince large enterprise employers to connect their payroll systems to their technology. However, uptake from SMBs has been reported to be strong with over 20 businesses served and salaries accessed 1,000 times by employees.