2019: FinTechs attract over $400m investment

The Financial Technology (FinTech) firms have become some of the fastest-growing technology firms in Nigeria, attracting over $400 million as investment in 2019 alone.

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.

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.

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 at May 2019, and also operates Quickteller, a leading multichannel consumer payment platform, driving financial inclusion across Nigeria.

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.

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.

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.

Founded by Tosin Eniolorunda, TeamApt supplies financial and payment solutions to Nigeria’s largest commercial banks including Zenith Bank Plc, UBA Plc, and ALAT among others. For Eniolorunda, launching the fintech startup means competing with his former employer, Interswitch.

On performance, TeamApt claims 26 African bank clients and processes $160 million in monthly transactions, according to company data. Though it does not produce public financial results, it claimed revenue growth of 4,500 percent over a 3-year period.

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.