Nigerian Fintech Firms Raise $135m Capital For Expansion

Nigerian fintech firms have emerged third most attractive for investment destinations for fintech in Africa.

The firms raised $135m for expansion to fall third place only behind Kenya and South Africa.

A report released on Thursday by Catalyst Fund and Briter Bridges titled, “State of intech in Emerging Markets,” unveiled the development.

In the report, the firms surveyed 177 start-ups and 33 impact investors to understand trends in the world of fintech across emerging markets.

The markets include Africa, Asia and Latin America.

“Companies operating in Nigeria($135m), Kenya ($152m) and South Africa ($137m) are the primary investment destinations for fintech in Africa,” the report revealed.

Africa in 2019 witnessed five mega deals in Branch, Tala, World Remit, Interswitch, and OPay which were valued over $775m.

In 2020, it dropped to $362m as companies like Flutterwave, TymeBank, Kuda participated in fundraising, the report said.

The trend in investment in start-ups has been accelerated by the Covid-19 pandemic as people have turned more to embrace fintech.

Based on the Catalyst Fund report, the overall investment in fintech across emerging markets improved last year due to the pandemic.

In Nigeria for instance, fintech startup Kuda raised $25m in a Series A round.

Bankly, a digital savings platform raised a $2m seed round to continue expansion.

With the improvement in funding for fintech companies across Africa, Latin America and Asia the report estimated that fintech firms have received $23bn between 2017 to 2021.

Over the past five years African startups have raised seed funding amounting to over $1.6bn.

“African markets are only beginning to see a few such late-stage deals. In the past five years, only eight of the 244 disclosed deals in fintech between 2017 and 2020 exceeded $100m, and only 36 deals amounted to between $10m and $99m,” said the report.