Over the past several years, the landscape of financial technology in Africa has undergone a remarkable transformation, marked by significant growth in startup funding, deal activity, exits, and investor participation. This evolution has propelled Africa onto the global stage as a hotbed of fintech innovation and investment.

In this overview, we delve into the dynamic realm of African fintech, analyzing key trends and developments that have defined the industry during this period. We'll explore the surge in startup funding, examine notable deals and exits that have shaped the ecosystem, and assess the changing landscape of investor activity driving fintech growth across the continent.

Evolution of African Fintech Funding

In the realm of African fintech, funding has experienced remarkable growth from 2019 to the first quarter of 2024. The number of deals surged from 42 in 2019 to a peak of 288 in 2022, representing a staggering 586% increase over this period.

Total funding raised followed a similar trajectory, escalating from $578.35 million in 2019 to a peak of $2.42 billion in 2021, marking an impressive 318% growth.

However, funding levels moderated in subsequent years (2022 and onwards) due to a downturn influenced by factors such as concerns about a potential economic recession, geopolitical tensions including the Russia-Ukraine war, and broader macroeconomic uncertainties.

Despite these challenges, the overall trend underscores the robust momentum and evolving landscape of fintech investment across the continent.

Nigeria leading the way!

Nigeria takes the lead in African fintech, boasting 323 deals and raising $2,678.26 million from 2019 to Q1 2024. Following closely, South Africa secures 145 deals and $1,749.86 million. Kenya and Egypt also make significant strides, with Kenya securing 130 deals and Egypt with 81, raising $541.97 million and $1,201.11 million respectively.

The data reveals a notable concentration of fintech funding in Africa's largest markets—Nigeria, South Africa, Kenya, and Egypt. These countries collectively represent about 81.89% of the total number of fintech deals and account for approximately 91.80% of the total funding raised from 2019 to Q1 2024. This distribution underscores the uneven allocation of fintech investment across the continent, emphasizing the potential for growth and development in other regions.

Most Funded Fintech Startups In Africa

MNT-Halan

MNT Halan, Africa's most funded fintech startup with $815 million across 6 major deals, is focused on digitally banking the unbanked and advancing cashless solutions. They offer diverse services including mobile wallets, digital payments, and a unique BNPL e-commerce platform for home appliances and FMCG sectors, showcasing their innovation and commitment to financial inclusion in Egypt and Africa.

Opay

OPay is a leading mobile platform in Africa, offering payments, transfers, loans, and essential services. With 35+ million registered users and 500,000 agents in Nigeria, OPay plays a crucial role in financial transactions. It's the second most funded fintech startup in Africa, raising $570 million through 3 major deals.

Flutterwave

Flutterwave, founded in 2016 by African finance and technology veterans, is a leading payments company. They provide technology for businesses and banks to offer seamless and secure payment experiences. Flutterwave is one of the world's fastest-growing fintechs, with $455 million raised across 3 deals, ranking as the third most funded fintech in Africa.

Examining Fintech Exits

Over the period from 2019 to Q1 2024, African fintech experienced notable exits, totaling 50 transactions worth $1.26 billion. Among the top exits were Sendwave's acquisition by WorldRemit for $500 million, DPO Group's acquisition by Network International for $288 million, and Paystack's acquisition by Stripe for $200 million. These exits highlight growing investor interest in African fintech and demonstrate the industry's maturation and global impact.

A Glimpse into 2024

In the first quarter of 2024, African fintech experienced a decline in both deal activity and total funding. The number of deals dropped to 30, down from 94 in 2022 and 38 in 2023. Similarly, total funding decreased to $200.60 million, compared to $751.39 million in 2022 and $614.66 million in 2023. This trend suggests a temporary slowdown in fintech activity during Q1 2024, potentially influenced by broader market conditions and economic factors.

Top Deals In Q1 2024

The first quarter of 2024 witnessed notable fintech deals in Africa, with valU securing $18.70 million, Planet42 raising $16.00 million, and Watu obtaining $15.00 million in funding. These transactions highlight ongoing investment activity in key sectors of African fintech despite the overall decrease in deal volume and funding during this period.

Most Active Investors In Q1 2024

In the first quarter of 2024, Hyperithm stood out as a prominent investor in African fintech with 4 deals. Launch Africa and Baobab Network also showed notable activity, each completing 2 deals during this period. These investors contribute significantly to fostering fintech innovation and supporting startup growth across Africa.

The period from 2019 to Q1 2024 has marked significant growth and evolution in African fintech. Despite a slowdown that began in 2022, overall trends demonstrate the resilience and potential of the industry. Nigeria, South Africa, Kenya, and Egypt have emerged as key fintech hubs, yet there is room for broader development across the continent.

Notable exits, like Sendwave, DPO Group, and Paystack, highlight the maturation of African fintech startups and global recognition of their innovation. Looking forward, with ongoing innovation and supportive environments, African fintech is poised for continued growth and impact, driving financial inclusion and economic progress across Africa.