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African fintech startups raised over $30 million in 2017
African tech startups raised funding in excess of US$195 million in 2017, up 51 per cent on 2016, with the number of startups securing funding also increasing to 159, according to a report by Disrupt Africa, an African startup information portal. The report reveals South Africa, Nigeria and Kenya were the top three destinations for tech investors in 2017, both in terms of numbers of deals and total amount of funding, while there were also impressive years for Egypt and Ghana.
The fintech sector received the most funding, with 45 startups raising one-third of total funding
the report found while the e-commerce sector saw the biggest percentage growth as compared to the previous year. In 2016 the fintech sector received the most backing as well, with startups in this space raising a combined US$31.4 million, 24 per cent of the overall total.
According to the Finnovating for Africa: Exploring the African Fintech Ecosystem Report 2017, payments and remittances startups account for the majority of Africa’s over 300 fintech startups, followed by lending and financing startups. However, African blockchain startups are the most successful in percentage terms, with almost 40 per cent of them securing funding.
WeeTracker Research found that the total amount poured into the fintech sector in 2017 was standing at a disclosed amount of $ 30.68 Million, representing 18% of the total funding secured. Out of this, $ 10 Million has been grabbed by Flutterwave of Nigeria, a payments company that builds infrastructure to ease payment process. This marks the largest deal for the sector .
“Fintech in Africa is more about creating access than replacing the old with the new. This may change at a later stage but at the moment the biggest opportunities are still green fields, and at Yoco we find this very exciting” Lungisa Matshoba, Yoco Co Founder told WeeTracker Research. Yoco is a point-of-sale and payment provider to small and medium businesses in Africa.
Investors bet on consumers turning to more formal financial services in a region where just 17% of the population have banking accounts. Among the investors who made a mark in closing some noteworthy deals in 2017 were : Knife Capital, Chandaria Industries, Kalon Venture Partners, Omidyar Network, Algebra Venture and 4Di Capital.
Given promising macro trends across African markets (increasing mobile/smartphone/internet penetration rates, a gradual rise of the middle & consumer class, rapid urbanisation, and strong working-age population growth), the momentum continues into 2018 with entrepreneurs and investors in Africa and beyond continuing to explore opportunities for progress and profit across the continent.