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Issue 104
Aug 22 - Aug 28, 2021

Hi there,

Tochukwu here - This is a great time to be a fan of Manchester United Football Club. Cristiano Ronaldo just returned to the team and now I'm super pumped for the season! I can't say the same though for fellow writers and Arsenal supporters, Bolaji and Osaro, who are yet to see their team score or win a Premier League game this season. I still wish them good luck as they might need it next year: I hear Middlesbrough is a great away team to play in the Championships.

As always, please wear a mask and try to get vaccinated as soon as you can.

Folu and Tochukwu
Product Specialists, Paystack
Payments
AfricaPesapal acquires licenses to expand in Kenya and launch in Tanzania Pesapal, a Kenyan payments company, has received a National Application Service License from the Tanzania Communications Regulatory Authority (TCRA). The payments company also received approval from the Central Bank of Kenya to carry out Payment Gateway Services in Kenya. PYMNTS
Conversations
NigeriaIs African fintech getting overfunded? On the back of OPay’s recent $400m fundraise, Eloho Omame and Jason Njoku debate rising valuations and underlying unit economics of African fintech startups. Twitter
AfricaWhy Kenya and Nigeria’s fintech ecosystems are different Here, Micheal Kimani opines the reasons for the difference between Kenya and Nigeria's Fintech. Twitter
Fundraising
NigeriaOPay raises $400M at $2B valuation. This round of funding will be used to enhance its market position in Nigeria and Egypt and fund expansion efforts in Africa and the Middle East. The Nigerian fintech had previously raised $120 million in Series B and $50 million in Series A in 2019. This brings total investments in the company over the last year to $570 million. This round was led by Softbank and marked its first investment into an African fintech. Other participating investors in this round include - DragonBall Capital, Sequoia Capital China, and Meuitan.  Bloomberg
EDITOR'S NOTE

At a valuation of $2B in less than 3 years, OPay has become an African unicorn in record time. OPay, which officially launched in 2018, initially offered a host of online and offline consumer products but has since focused its efforts on financial services including lending, agency banking and P2P payments.

According to the company, OPay has acquired millions of active users across Africa, processing over $3B monthly in transaction value. While it has taken advantage of a gap in digital financial services, it has also heavily relied on subsidies, promotions and referrals to acquire and retain users. These costs, as we have written in earlier issues, are expected to rise in short-term with rising competition all focused on users with mostly low per capita incomes.

Interesting questions have been raised about unit economics and the lofty valuations of fintechs. However as we also noted earlier, there is long-term value to be unlocked from transitioning a predominantly cash-based economy to a digitally enabled one. This will require significant customer education at a scale that comes with high upfront costs. If successful, this great reorientation will expand per user long-term value and directly benefit OPay and the rest of the ecosystem.

Ultimately, we still need to be intentional about building profitable and sustainable multi-decade fintech companies. OPay will have to perform an important balancing act of teaching millions of people new financial behaviours without setting an expectation of perpetual subsidies and discounts.
GlobalZepz (formerly World Remit) secures $292M in Series E Round. Zepz is a digital cross-border payments platform operating two leading brands (WorldRemit and Sendwave, which they acquired in 2021). The company has secured funding to drive investments in its technology and product development. This round of funding values the company at a $5B valuation. The funding round includes new equity investor Farallon Capital as well as existing investors Leapfrog, TCV and Acce Ventures. PYMNTS
EDITOR'S NOTE

In Issue 73, we highlighted that World Remit acquired Sendwave in a $500million deal. Following the acquisition, the company has integrated both World Remit and Sendwave and has rebranded to the holding company, Zepz.
AfricaPawaPay raises $9M in seed funding The African-focused payment company which spun off from African betting provider, betpawa has secured seed funding from 88 mph and MSA Capital. The funding will be used to scale its operational presence, recruit talent and expand into new markets. Other participants in this round include Zagadat Capital, Kepple Ventures and Vunani Capital. TechCrunch
NigeriaAwabah raises US$320,000 from angel investors and Techstars Awabah, provides pension access to Africa’s self-employed. This funding will help Awabah expand to expand its services across Nigeria and expand to Ghana. The Nigerian fintech company raised $200K from early stage investors and $120K as a participant of the Techstars London accelerator program.  Disrupt Africa
AfricaKarri and Kwara selected for Mastercard incubator program Karri, a South African payments company, and Kwara, a digital bank platform, will join 9 other fintech startups from around the world in the Mastercard Start Path programme. All startups will receive mentorship, resources and tech support from Mastercard Disrupt Africa
EDITOR'S NOTE

In Issue 39, we reported Kwara as part of six African startups to be selected for the Catalyst Fund accelerator programme. We're excited to see how this new opportunity impacts the company's trajectory.
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Do you have an announcement, event, or job posting you'd like to share, or have you come across an interesting bit of African fintech news recently? Hit reply and let me know! I might be able to include it in next week's newsletter.
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