OPay an example for Africa’s aspiring unicorns
African tech start-ups looking up to build their ventures can learn from China- backed OPay which became the latest regional unicorn (a tech start-up with a valuation of at least US$1-billion) after raising US$400-million and securing a valuation of US$2-billion.
Africa is home to several other unicorns, including Flutterwave, Jumia, Flutterwave Fawry and Interswitch.
Rahul Shah, head of financials equity research at an emerging markets advisory company Tellimer Research, said: “Payments is the most promising area of Fintech activity” from where the next billion dollar African ventures could emerge.
“Wannabe African unicorns should focus on strategic partners, management expertise and building customer trust,” explained Shah.
This is especially because of Africa’s large unbanked population. The population in regional hubs such as Nigeria and the Democratic Republic of the Congo (DRC) is projected to triple by 2100, according to research published in The Lancet.
In a blog post on WeeTracker, Henry Nzekwe said OPay has benefited from its “unyielding focus with which it returned to its original payments business following the forced dismantling of its e-hailing project” notwithstanding “a pandemic no one saw coming”.
Analysts have projected a rise in digital banking numbers for Africa.
Nick Maynard, lead analyst at Juniper Research, said the continent is primed for high growth in digital finance in the next five years.
“Africa & Middle East has one of the highest rates of digital banking growth, with the user base anticipated to exceed 780 million in 2026, growing by 260% between 2021 and 2026,” said Maynard.
OPay has largely been backed by Chinese and Asian financiers such as SoftBank, Sequoia Capital China, IDG Capital, SoftBank Ventures Asia, and GSR Ventures.
Since January 2015, about 277 African Fintech start-ups have “banked US$875 million in funding, more than twice that raised by any other vertical over the same period,” according to a report by Disrupt Africa.