Over the years, the Financial Technology space has challenged the culture of money use and financial activities in Africa. From transfers to payments, deposit to lending, the money culture of many African societies is fast evolving. It has widened the horizon of financial inclusion and let the whole of Africa do business and wire money without much hindrance.
For instance, Citi Research has posited that over 70 per cent Kenyan adults used mobile money in 2017, this ranks the country as one of the world’s foremost mobile money penetration nation. In a similar vein, Uganda, Tanzania, and Ghana jack up the trend with over 40 to 50 per cent mobile money users.
Finding a common definition for Fintech can be limited to its functionality but, it’s commonly known to cover tech startups focused on mobile money, payments, money transfers, loans, fundraising, amongst others.
With the obvious boost in innovative solutions across the continent, Nigeria is not left behind in the FinTech rave, the numbers of Fintech solutions that have emerged from the country bares it all, with over 40 fintech startups solving key challenges ranging from payment, lending, merchant services, cryptocurrency, to savings/finance management services.
In our last count, Nigeria possesses over 40 startups providing financial solutions.
We cannot but agree that Fintech is one sector in this current technology revolution that has every potential to impact every settlement, or well, almost every settlement in Nigeria. In 2017 alone, startups focused on financial inclusion in Africa raised 45% of the total startup funding for the year.
This indicates a clear pattern: Fintech startups are increasingly becoming attractive for both customers’ and investors. Nigeria’s Flutterwave alone raising $10 million in Series A funding, the largest in the sector for last year, we have also seen Paystack crown their run all the way to YCombinator with an $8million investment round from leading Fintech giants in the world.
In this piece, we lean in to peruse the leading Fintech Startups in Nigeria, one of the top startup investment destinations in Africa; come along.
Flutterwave
Flutterwave is a platform that processes credit card and local alternative payments, which includes mobile money and automated clearing house (ACH) across the African continent. It’s possible on this platform for foreigners to process payments like the normal local African company.
Founded in 2016 by a team led by Iyinoluwa Aboyeji and Fintech Engineer, Olugbenga Agboola; the omnichannel payments processor enables seamless and secure transactions processing across different payment instruments like mobile money, cards, bank accounts, airtime and different channels like web, mobile, agents, USSD and ATM in over 30 African countries.
The company processes over $760 million through 7.5 million transactions for merchants in partnership with financial institutions. With $15.7 million in funding, Flutterwave is empowering Pan-African merchants to execute business on a global scale, processing $1.2 billion in transactions so far.
Flutterwave has now raised over $20 million over two rounds with its largest investors include Green Visor Capital and Greycroft Partners.
Paga
Paga was launched in Nigeria to take advantage of the cash build-up in the system and to create a means whereby financial services are available to all. It works across several platforms including online and via SMS.
Founded by Tayo Oviosu, the start-up has recorded a milestone of 9 million customers and created over 10,000 jobs through its 17,000 agents who hire staff to run their stores since it commenced operations in August 2012.
With Paga, customers are able to deposit and save money, purchase prepaid phone credit, pay utility and cable bills, and make payments to retailers.
The partnership between Paga and Western Union also has the added benefit where Western Money transfers sent to users can be deposited into the users’ Paga accounts. Paga has processed 57 million transactions worth $3.6 billion with a total value of over N660 billion.
Paystack
Paystack is a technology company solving payments problems for ambitious businesses. It is a payments platform that makes the online payments process seamless for both the consumers and the businesses they are trying to pay.
Paystack was developed in 2015 by Ezra Olubi and Shola Akinlade, friends from the same college who identified a gap in how merchants receive payments from customers. With Paystack, you can pay with local and international cards, or directly from their bank accounts. It also supports localized payment channels, including mobile money, QR code, and USSD payments.
Recently, Paystack raised $8 million Series A funding from International Fintech Companies, Stripe, Visa, and Tencent following it’s major $1.3m seed funding in 2016.
Quickteller
Owned by Interswitch, Quickteller is probably Nigeria’s biggest money transfer and bill payment platform. QuickTeller gives you convenient access to different services including recharge, bill payments, donations and state government payments. From DSTV to PHCN bills and recharge that actually tops up your line. The services are also available on bank ATMs, select merchant locations, and via bank’s internet banking portals.
Paylater
This is a loan collection app by OneFinance, led by Chijioke Dozie. It allows users to apply for a quick loan of based on their earning power and credit history. Before now, many Nigerians did not have unfettered access to quick loans and the culture of loan repayments. Paylater is a simple, entirely easy to use online lending platform that provides short-term loans based on customers earning power and credit history to help cover unexpected expenses or urgent cash needs.
Few months back, the start-up hit N4bn in loans, beating their 2017 record by some margin. Paylater mobile app joined the consumer finance revolution in Nigeria with the use of Machine Learning to score customers in real time.
Piggybank
Piggybank is a platform that helps people save money using their debit cards. The user decides how much money it automatically deducts from their account every month to help them save towards a financial goal.
Founded in 2016 by Nigerian entrepreneurs; Somto Ifezue, Odunayo Eweniyi and Joshua Chibueze. Piggybank is to fill a void for tens of millions of Nigerians, who have no access to credit and a profitable savings culture.
The savings platform has secured a seed funding of $1.1M, from High Net Worth Individuals, led by Olumide Soyombo, founder of LeadPath Nigeria, with support from International and Pan-African investors Village Capital and Ventures Platform.
Piggybank has built a savings community of over 53,000 registered users of which approximately 60% are Nigerian Millennials, who have saved in excess of $5M, with a savings growth of 3000% between 2016-17.
CowryWise
Like Piggybank, CowryWise is a personal finance platform that helps users automate their savings, cutting away the stress and planning required to save on a regular basis.
Co-founded by Razaq Ahmed and Edward Popoola, the startup aim is to make personal savings, asset and wealth management services available to everyone Nigeria. Users set daily, weekly or monthly saving plan(s), link their bank accounts, and the platform ensures the set amount is saved automatically on specific days. Having just graduated from Silicon Valley leading Startup Accelerator, YCombinator, the startup has raised their value proposition to include financial advisory, investment consulting amongst others.
Between 2015 and mid-2017, Nigerian Fintech startups had raised $93 million in investment and in 2016 alone there was an 84% increase in the number of fintech companies that had raised investment compared to the previous year. Despite these, fintech startups still face a significant number of challenges that are limiting their potential. Regulations, the long line of parallels between the existing traditional microsystems and the tech-focused startups; there is a need for collaboration therein, the lack of trust on the part of the consumers, the high-risk factor for ventures and many other challenges still stand in the way of these Fintech Heads. The startups on their part need to improve on the user experience and upscale user security. But as we have seen time and again, they rise above the debris of challenges in the way. Their rise is definitely our win.
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