FINTECH INVESTMENT IN NIGERIA

FINTECH INVESTMENT IN NIGERIA

The term “Fintech” is derived from the combination of the words “finance and technology”. It means the application of technology to improve financial activities in the financial industry. It is provided as an end-to-end process via the internet. Many Fintech companies in Nigeria, have turned out to become formidable players to watch out for in the Fintech industry and are at the forefront of the Fintech revolution in Africa.

 

A 2020 publication by Fintech news estimated that were over 200 Fintech companies in Nigeria. Further, by 2022, the country’s Fintech sector is expected to bring in revenues of $543 million; this implies that there is stiff competition in the industry. The central bank of Nigeria has made strides in this space recently, with the recent launch of the “e-naira”.

 

Fintech investment in Nigeria can be traced back to 2016, the launch of two Fintech companies, Pay stack and Flutter wave. According to Techpoint, Nigerian Fintech startups raised almost $800 million in 2021. This was 120% higher compared to what they raised three years earlier, which was $360.7 million.

 

2020 proved to be a good year for investment in Fintech in Nigeria, it picked up a majority of the funding that came into the country, with 44% of the total startup funding deals. The adoption of digital financial services is also growing steadily. According to Fintech news in 2019, $256 billion was transferred electronically, up from $48 billion in 2014.

 

Even though Fintech is still relatively young, a youthful population, increasing smartphone penetration, and a focused regulatory drive to increase cashless payments combine to create the perfect recipe for a thriving Fintech industry. Below is a brief description of some companies that have invested heavily in the Fintech industry in Nigeria.

 

 

1. FLUTTER WAVE

Founded in 2006 by Olugbenga Agboola and Iyinoluwa Aboyeji, flutter wave is a heavy-weight Fintech company in Nigeria. Today, it is being valued at over $1 billion.

 

2. PAY STACK 

Pay stack was recently acquired by an American company called Stripe in a deal worth over $200 million. Pay stack boasts of laying claim to 50% of all online payments in Nigeria. With over 60,000 registered business customers and a strong online and offline service, it allows merchant clients to integrate with a host of payment options, including card, bank transfers, USSD, apple pay, visa QR, and mobile money. Pay stack has expanded its operations from Lagos to Ghana and South Africa.

 

3. OPAY

According to Fintech news online, Opay has hit a valuation of $2 billion. Though it is a Japanese-owned company, its’ headquarters is in Lagos and its status as one of the top Fintech companies in Nigeria is unquestionable. Opay’s mobile money services include utility payments, P2P transfers, and also offer offline banking and savings services through which users that don’t have smartphones can still carry out transactions. In 2021, Opay was the only African startup to be listed in CB insights Fintech 250 2021.

 

4. PAGA

Paga was founded in 2009 by Tayo Oviosu, with its headquarters based in Lagos; Paga has over a 17million users. It has raised $36.7 million in funding and counts as one of the biggest names in the Fintech industry. It is a mobile money solution that offers transfers, bill payments, top-up, and even remittance services. Paga provides services through a mobile money agent network as well.

 

5. INTERSWITCH

Mitchell Elegbe founded Interswitch in 2002; it is one of the earliest Fintech companies in Nigeria. It is valued at close to $1 billion. The company provides a broad spectrum of digital financial solutions. Through partnerships, it has recently launched a digital address verification service and has been working on a block-chain based infrastructure. Interswitch also unveiled a corporate payment management platform for businesses of all sizes.

 

 

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6. KUDA

Kuda started its operation in 2019. Although its’ headquarters are based in London, it is currently focused on the Nigerian market. With its total customer base of 1.4 million users, the company is valued at $500 million. Kuda accounts come with a free debit card, budgeting, and spending controls, and transfers and savings functions as well.

 

7. PIGGY VEST

In 2016, Piggy Vest started as a savings-only platform, its founders Joshua Chibueze, Nonso Eagle, Odunayo Eweniyi, and Somto Ifezue have done well to provide their three million customers with savings and investment tools. The company offers fixed, flexible, goal-oriented, and automated savings in 2018 the company raised a total of $1.1 million and has recently acquired its competitor “save.ng” for an undisclosed fee. 

 

8. CARBON

Carbon is a digital bank that provides loan facilities and investment opportunities, in addition to usual digital banking features such as debit cards. It currently has over two million customers and according to the “TechCrunch report” in 2020, it processed $241 million in transactions a jump of 89% from 2019. Loans reached $63 million, up 9.1% from the previous year, while investments surged 365% to reach $32.5 million.

 

9. FAIR MONEY

A digital bank focused on lending. According to Fintech news, Fair Money processes over 10,000 loans every day, with one loan disbursed every eight seconds. In 2020, Fair Money raised $42 million and had disbursed loans to the tune of $93 million.

 

10. REMITA 

Launched in 2005, Remita is arguably one of the oldest Fintech companies in Nigeria today. It is a one-stop-shop for payments for businesses, consumers, and even the government. The Nigerian government chose Remita as the default payment for its treasury single account. It provides a range of customer, business, and developer-focused payment solutions.

 

CONCLUSION

Investment in the Fintech industry is booming and promising. Technology advancement in Nigeria today has made a lot of things possible. With the introduction of online banking, Fintech solutions are on the rise and making life easier. This has caused companies to invest in the booming market. These companies have been able to harness the technological opportunities in the financial service industry; however, there is still room for more investments.

 

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