It was reported that 17% of the African population had banking accounts in 2017. In 2017 investors were encouraged by the fact that consumers were to shift to financial services. Almost a third of the funding raised by African startups came from Fintech sector in 2017. Venture funding for African startups moved to $19 million in 2017.
Fintech sector attracted more investors in Africa. 45 startups managed to raise one-third of the total funding. Success from mobile money services proved that there is still untapped potential. M-Pesa success in Kenya and the rest of East Africa is a good example. African financial sector influenced the success of M-Pesa. M-Pesa is the preferred mobile money service in Kenya and the rest of East African region. It also relied on Fintech and ventured for funding.
Fintech is seen as disrupting the traditional financial sectors in more developed countries. But in Africa, it is filling the gap that has not been filled by the banking industry for long. African Fintechs startups managed to raise more than $100 million. That came between 2015 and 2017. The startups included Paystack and Flutterwave. Investors also influenced e-commerce and agri-tech in 2017.
E-commerce recorded four times increase to $16.7 million. Kenya, South Africa, and Nigeria recorded the highest funding raised in 2017. The countries remained consistent with their 2016 records. Nigerian’s funding was more than the South African’s. This was despite the fact that many South African startups raised funds, Nigerian’s was up by $40 million raised by coding school Andela. This was almost the same amount raised by all startups in 2016.
Apart from the three countries, investors also pitched tents in Egypt and Ghana. There is also interest shown to Somali-based-startup by the investors. This will be the first one for Somali. Venture funding urge is coming up in Morocco, Uganda, and Tunisia. This is one of the most interesting and encouraging news in Africa.