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Breaking Down the Top 5 Fintech Sectors Garnering Investor Interest in SA


The African tech ecosystem reached a noteworthy milestone by the end of 2022, surpassing the US$3 billion mark in investments, indicating a remarkable growth of 55.1% compared to the previous year. The Fintech sector in South Africa, in particular, is undergoing a revolution, witnessing the emergence of innovative solutions that are reshaping the financial landscape weekly. Local fintechs are attracting increasing attention from investors, primarily due to two key factors: their potential for scaling and their impressive company growth.

According to Finch Technologies’ co-founder, Michael Bowren, South Africa has a large population of over 59 million people, with approximately 23.5% remaining unbanked. This presents a substantial market for financial services and fintech solutions. Furthermore, Africa’s relatively slower adoption of fintech technologies compared to more developed nations opens up opportunities for companies to grow and for the rise of unicorns in sectors such as payments, document reading, and remittance.

The investment community acknowledges the untapped potential of Africa’s fintech landscape and recognizes the transformative impact that technology can have in bridging the gap in financial inclusion. As a result, Africa’s fintech sector has become an appealing investment opportunity for those seeking to capitalize on this emerging market.

Alternative funding solutions

The fintech industry in South Africa has witnessed the rise of over 130 alternative lenders, establishing themselves as influential players in the market. These funding solutions and marketplace platforms have proven to be transformative forces within the industry, offering innovative models that connect borrowers and lenders. This alternative financing approach has revolutionized how businesses access funding, challenging the traditional dominance of financial institutions.

Among these platforms, FundingHub has emerged as a prominent leader in the business finance marketplace landscape. It enables small and medium enterprises (SMEs) to compare offers from multiple lenders, providing them a convenient and efficient way to access funding. Leveraging advanced technology, FundingHub offers live end-to-end offers, streamlining the borrowing process. The platform’s commitment to continuous improvement has been evident since its acquisition by Finch Technologies in 2020, as it consistently enhances its seamless comparison platform.

Online Payment Processing

Africa’s domestic e-payments market is experiencing impressive growth, with an estimated compound annual growth rate (CAGR) of 20%. Projections indicate that this market could reach around $40 billion by 2025. As the market continues to evolve, we can expect the emergence of more startups like Paystack, Yoco, and Revio that will redefine how Africans conduct transactions. This insight comes from Ryan Hodgson, a Fundraising Analyst at The Delta.

The rapid growth of e-commerce and digital transactions in Africa has created a strong demand for secure, efficient, and convenient payment solutions. Fintech companies specializing in online payment processing are stepping up to meet this demand. Investors are particularly interested in supporting ventures enabling seamless cross-border payment experiences for businesses and consumers.

One notable example is Yoco, a trailblazer in mobile card readers. This innovative startup has empowered small and medium enterprises (SMEs) with a seamless platform to accept card payments. Yoco’s success in addressing this market need is evident as it secured an impressive $83 million in a series-C funding round in 2021. 

The substantial investment in Yoco was primarily motivated by the strong demand from small businesses in search of digital payment solutions. The funding round attracted prominent investors who recognized the potential of Yoco’s offerings in the African market. Notably, Dragoneer Investment Group, venturing into African investments for the first time, participated in the funding round, demonstrating their confidence in Yoco’s growth prospects. Other notable investors included Breyer Capital, HOF Capital, The Raba Partnership, 4DX Ventures, and TO Ventures. 

Regtech and Fraud Analysis Software

Investors increasingly recognize the value of regulatory technology (regtech) and fraud analysis software in enhancing compliance, mitigating risk, and combating financial crime, particularly in open banking environments. These technologies provide sophisticated tools for monitoring and ensuring regulatory compliance, thereby strengthening the integrity of financial institutions. Michael Bowren further emphasizes their significance in this regard.

One notable example is Gathr, a Know Your Customer (KYC) solution that reduces human error and fraud and facilitates smoother customer onboarding processes. As the global market for regtech and fraud analysis software is expected to reach $22.3 billion by 2027, with a compound annual growth rate (CAGR) of 19.8%, investors are keenly aware of the importance of robust systems in 

Solar Finance

Africa’s vast  solar energy potential has catalyzed the growth of solar finance solutions. Fintech companies in this sector are actively developing innovative financing models enabling individuals and businesses to access clean energy solutions. This sustainable approach to energy financing has garnered significant interest from investors, who recognize the dual benefits of environmental impact and financial returns.

Sun Exchange, a solar leasing platform that empowers individuals and corporations to own and earn from solar assets in emerging markets, is an exemplary case. The company’s founder, Abe Cambridge, explains that the platform was initially created to enable people worldwide to purchase solar cells in projects that power schools and other organizations in South Africa.

Sun Exchange’s impact has extended beyond individual investors, as corporate sustainability initiatives have broadened the participants’ demographic in their solar project crowd sales. Over a hundred businesses, corporations, and investment funds worldwide have joined in, leveraging their balance sheets and Environmental, Social, and Governance (ESG) funding to drive sustainable energy development.

The success and potential of Sun Exchange have garnered equity investments from renowned investors in the industry. Techstars, Alphabit Fund, and ARCH Emerging Markets Partners are prominent investors who have shown their support and interest in Sun Exchange’s core business. This demonstrates the confidence and backing received from local and international venture capitalists, further solidifying Sun Exchange’s position in the market.


The Digital Remittances industry in South Africa is poised for substantial growth, with a projected growth rate of 6.02% between 2023 and 2027. This growth is expected to culminate in a market volume of US$345.30 million. Fintech startups specializing in payments and remittance services are at the forefront of this transformation, revolutionizing how money is transferred across borders. 

Investors actively support ventures that provide low-cost, secure, and transparent remittance services, recognizing the vast market of Africans living abroad who regularly send money back to their home countries. These ventures cater to individuals seeking efficient and affordable remittance solutions.

One example in this sector is Mukuru, a South African fintech startup that has made remarkable progress in facilitating digital remittances. Mukuru has demonstrated its commitment to providing innovative and convenient solutions for sending money across borders.

Mukuru is a notable player in the digital remittance industry, providing affordable international money transfer services, specifically focusing on African migrants sending funds to their home countries. The company has secured significant backing from private equity investors, with Emerging Capital Partners being one of the notable supporters. This demonstrates the support and confidence of local funders in the payments and remittance sector.

Investors are drawn to sectors that offer financial potential and contribute to transforming finance, driving financial inclusion, and addressing pressing market needs. As investors continue to explore opportunities in the African fintech landscape, it is expected to witness further growth, innovation, and positive impact. The convergence of investor interest and entrepreneurial drive is set to shape the future of fintech in Africa, bringing about meaningful change and advancement.


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