Band Claire Obae
- 8 African fintech companies successfully raised $100m in 2021
- Much of the investment came from foreign investors who showed strong interest in the fintech sector
A new class of African startups just got a major stamp of approval with eight startups hitting the $100 million mark in fundraising. These companies were responsible for raising $4 billion, or about 40% of the total. Africa has long been overlooked, but it looks like the pandemic has sparked something to shake things up and increase check writing.
Why it matters: When it comes to venture capital, Africa is no longer the newcomer. The visits of Alibaba (BABA -5.95%) CEO Jack Ma and Block (SQ -7.43%), formerly known as Square, CEO Jack Dorsey, as well as a first IPO by the giant e-commerce company Jumia (JMIA -8.65%) signaled a new era for tech startups on the continent. Opay and Fltutterwave led with a collective of $600 million who were responsible for starting the fire. It should be noted that female-led startups have won out in raising millions in 2021.
Imagine a startup raising $100 million all at once. A few years ago this would have been considered impossible. So how did we get here and what kind of companies are raising this money?
There is no doubt that Africa is becoming an increasingly important market for technology companies. The continent is home to over 1.2 billion people and has a growing middle class with increasing purchasing power.
Unique funding opportunities in Africa have played a key role in providing startups with access to capital, including many initial injections of cash from individual or corporate investors. It all boils down to the fact that Africa itself is changing and rapidly creating new opportunities for its local businesses and entrepreneurs.
And after: The African tech ecosystem has grown at a rapid pace and more than ever, many companies are becoming household names. Currently, the continent has a fintech landscape dominated by financial services and mobile money. However, from the results of 2021, we are now seeing the emergence of new verticals in areas such as payment, lending, e-commerce and others. It is possible that the focus will be on developing an ecosystem that promotes collaboration between different stakeholders rather than competition.
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