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Disrupt Africa and Partners Release Their Finnovating for Africa 2021 Report

Disrupt Africa together with their partners, release the Finnovating for Africa 2021 report, reimagining the African financial services landscape.

Africa’s fintech sector is growing and maturing, with more startups active in the space and platforms increasingly offering a variety of services, investments, and acquisitions taking place to an unprecedented degree. With this, Startup-focused news and research company Disrupt Africa through their Finnovating for Africa publication begun to track the extraordinary development of the fintech ecosystem across Africa over the last few years.

Disrupt Africa has released the Finnovating for Africa 2021 Report which reports sustained if slower growth in the number of ventures, but also details major developments in terms of ecosystem maturity.

The report is for the first time available for free as part of an open-sourcing initiative in partnership with Flutterwave, GreenHouse Capital, MFS Africa, truID, Paga, DEMARS, Quona Capital, JUMO, Abjel Communications, and Kuda —to make it accessible to those for whom the information is most valuable, mostly African entrepreneurs.

“We are excited to present this open-source edition of Finnovating for Africa 2021 report, together with our fantastic partners so we can continue our drive to make data around the African startup landscape accessible for everyone,” said Gabriella Mulligan, co-founder of Disrupt Africa. Adding that “We hope this report unlocks the fintech landscape for everyone interested.”

Mulligan noted that it has been a busy and stimulating space to watch these past two years, in spite of the Covid-19 pandemic induced in the challenges facing businesses and economies alike.

According to the report, the number of active fintech startups has increased by 17.3 (from 2019) percent to 576, representing a slowdown in growth in the previous two years. But nonetheless, the number of fintech startups active in Africa increased by 89.4 percent between 2017 and 2021.

Notably, the variety of services offered by these startups is on the rise. Though the onset of the fintech revolution in Africa was largely based on startups “unbundling the bank”, focusing on niche segments such as payments and lending, space is now rushing to “rebundle”. In 2021, 143 of the 576 fintech startups tracked in 2021 are multi-category, representing 24.8 percent of the total, up from 73 companies in 2019.

The major developments in the fintech sector over the last two years, however, have come in terms of investments and acquisitions, where space is a continental leader. African fintech startups are far more likely to raise funding or get acquired, than a company operating in any other sector of the continent’s growing tech and innovation space.

Since January 2015, 277 fintech ventures have banked US$874,968,465, more than twice that raised by any other vertical over the same period. The amount raised by fintech startups across Africa is growing each year, at even greater rates, with the sector having already doubled its 2020 total in the first six months of 2021.

The Finnovating for Africa 2021 report finds that fintech businesses are also more likely to be acquired than those in any other space. The sector has seen seven acquisitions in a period of two years, compared with 10 in the previous eight years. The acquisition of Nigerian fintech startup Paystack by Stripe in 2020 for a reported USD$200 million (approx. UGX711 billion) —can lay claim to one of the landmark moments of the African tech space in the last decade.

“We might not be witnessing the same levels of explosive growth in terms of new startups launching in the fintech space as we have seen before, but instead we are seeing the increasing maturity of the fintech ecosystem in Africa,” said Tom Jackson, co-founder of Disrupt Africa.

Jackson adds that “Startups are building out their solutions for the benefit of their customers, expanding to new markets, and raising millions of dollars in capital. It is an exciting time to be involved in African fintech, whether you are an entrepreneur, investor, traditional financial institution, or customer.”

Disrupt Africa, Finnovating for Africa 2021 Report partners.
Disrupt Africa, Finnovating for Africa 2021 Report partners.

Disrupt Africa’s partners expressed their gratitude for playing a key role in this open-sourcing project;

Flutterwave and GreenHouse Capital were the key partners while MFS Africa, truID, and Paga were section partners. The other partners are DEMARS, Quona Capital, JUMO, Abjel Communications, Kuda, FlexClub, E-Settlement, BitLipa, Eversend, Sun Exchange, Kwaba, Finplus, Peach Payments, and LipaLater also supported the project.

“We are excited to partner with Disrupt Africa in making important fintech data and insight available to African entrepreneurs at zero cost. We have always believed in the unlimited potential of young people in Africa, needing support to actualize their dreams. This is our way of making much-needed help available to the growing technology ecosystem in Africa,” Flutterwave and CEO Olugbenga Agboola said in the report. “We believe that when African entrepreneurs win, we all win. The growth of fintech in Africa has been remarkable and to sustain this, we must be data-driven in our processes and strategies. We are happy to be a part of this initiative to improve data access to African entrepreneurs,” Agboola concludes.

“We are thrilled to be a major partner in this project. Such data and analysis are valuable to better understand and appreciate the growth of the African fintech sector. We are proud of our contribution to its growth,” said Bunmi Akinyemiju, partner at GreenHouse Capital.

“We believe that high-quality data is critical in demonstrating the untapped potential of the African fintech market. We are proud to have partnered with Disrupt Africa, in their mission to track the progress of the African fintech sector, in order to inform large corporations, policymakers, and investors of the progress being made by the sector. We believe that this will contribute immensely to attracting more resources across the continent, helping fintech companies serve the underserved,” said Dare Okoudjou, founder and CEO of MFS Africa.

“Disrupt Africa, their name says it all. They’re in the know on all things tech across Africa which means more data, deeper insights, and wider reach than anyone else. They should be everyone’s go-to publication to know more, they’re ours for sure!,” said Paris Valakelis, co-founder of truID.

“With our purpose of making it simple for a billion people to access and use money, we were thrilled at this fitting opportunity to partner with Disrupt Africa to enable African and international businesses to access to and use of rigorous, reliable, and free data to drive real and sustainable transformation across the continent,” said Daniel Oparison, head of growth at Paga.

“DEMARS is privileged to be part of this incredible ecosystem, where one size most certainly does not fit all, and we get to solve big problems – together,” said Shaun Burrow, founder, and CEO of DEMARS.

“We are really excited about the capability we can now offer our customers and partners on the platform,” said JUMO CEO Andrew Watkins-Ball. “We have dropped the cost of risk by 90 percent in the last five years. This allows us to share the benefits of better products with customers and partners. We believe everyone should have access to the best choices. It’s an incredible space that we operate in with lots of growth and opportunity, so we’re really pleased to be partnering with Disrupt Africa to share information on the fintech startup landscape.”

“Data is crucial for the growth and survival of businesses and organizations around the world. It is even more critical in Africa as the continent looks to build a new vision with fintech startups leading the way. This is why we are so pleased to partner with Disrupt Africa as they launch The Finnovating for Africa report, and for the first time, they will be able to offer this for free to the many African startups who would benefit from its content,” said Adisa Amanor-Wilks, CEO of Abjel Communications.

“Partnering with Disrupt Africa to launch this year’s edition of Finnovating for Africa is a move to democratize access to reliable and in-depth reporting on the continent’s fintech startup ecosystem – something that has been a luxury in the past. Distributing this report free of charge resonates with our mission at Kuda, and we’re proud to be associated with Disrupt Africa,” said Bradley Want, head of growth at Kuda.

You can read or download the report from here (USE THIS LINK).

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