|Africa||Pesapal 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|
|Africa||Why Kenya and Nigeria’s fintech ecosystems are different Here, Micheal Kimani opines the reasons for the difference between Kenya and Nigeria's Fintech. Twitter|
|Nigeria||OPay 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.
|Global||Zepz (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.|
|Africa||PawaPay 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|
|Nigeria||Awabah 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|
|Africa||Karri 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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