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Africa’s Fintech Sector Reaches Record Funding Levels


TechInAfrica – The information and communication technology sector in Africa is growing rapidly, with the number of new businesses increasing by more than 60% in the past two years, and financing has reached new records.

After a successful first edition in 2017, Disrupt Africa published Finnovating for Africa 2019 : The reorganization of the African financial services landscape, which sees the number of active fintech companies across the continent increased in 2017 from 491 to 301.

South Africa, Nigeria and Kenya remain the three main markets, with 141, 101 and 78 companies respectively active, representing 65.2% of African start-ups in the high-tech sector. Yet, the share of the overall total claimed by these three countries is declining as the sector spreads across the continent, with start-ups in 28 African countries.

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Although the three major markets are growing, the most important developments are taking place in other markets, with countries such as Uganda, Ghana and Egypt in particular, seeing their local high-tech spaces exploding.

A similar trend can be observed with regard to the type of platforms deployed by fintech contractors. Although start-ups in the area of payments and loans remain the most frequent, the fastest growth is occurring elsewhere, with the number of active start-ups in sectors such as investtech and insurtech, for example, more than doubling in recent years.

At the same time, the number of companies focusing on two or more distinct types of financial services is increasing significantly, as African financial technology companies begin to “consolidate” their activities and as there is a shift towards full-fledged digital banks and all services on the continent. This is a process that is accelerating as the amount of funding entering the sector increases. Since January 2015, African high-tech companies have raised just under US$320 million in financing, and last year’s total of US$132.8 million was the best year to date.

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“The financial services landscape in Africa follows a unique trajectory compared to other geographies. The most remarkable thing about this trajectory is that it is driven by entrepreneurs and their local innovations. We hope that this report will give our readers an interesting insight into the information technology revolution in Africa,” said Gabriella Mulligan, co-founder of Disrupt Africa.

“No space has quite the potential impact of the fintech space when it comes to impact – and profits – in Africa, with start-ups operating such platforms capable of significantly addressing the major problem of financial exclusion on the continent and thus promoting development in all kinds of other areas. It is exciting to see the speed at which the sector is developing, therefore, but also encouraging to see the signs of maturation and consolidation that will ensure its ultimate success and longevity,” said Tom Jackson, co-founder of Disrupt Africa.


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