More than 300 fintech startups are active across the African continent, disrupting the financial services landscape with innovative solutions that are attracting the attention of banks and investors.
According to the Finnovating for Africa: Exploring the African Fintech Ecosystem Report 2017 released by Disrupt Africa today, 301 African fintech startups are currently active; following a boom in fintech startups launching over the last two years in particular.
The data shows fintech startups are spread across the African continent, with the Southern, West and East African regions equally active, while North Africa lags behind. South Africa is the top destination for fintech startup activity – home to 31.2 per cent of the continent’s fintech startups – while Nigeria and Kenya follow in second and third place respectively.
A number of other countries are also emerging as vibrant fintech destinations; especially so in West Africa, where Ghana and Cameroon are increasingly prominent markets.
Of the nine fintech categories covered by the report, payments and remittances startups dominate the market, with 41.5 per cent of all startups focused on this space. Lending and financing also proves a popular priority for Africa’s fintech innovators.
“With so many of Africa’s citizens still without access to basic financial services, the work being done by the continent’s fintech innovators is of crucial importance and impact. We’re glad to report such thriving activity among Africa’s fintech community, and believe these local entrepreneurs are creating a new model for financial services – and financial inclusion – in Africa,” said Gabriella Mulligan, co-founder of Disrupt Africa.
Since the fintech startup boom began in earnest in 2015, the research finds the continent’s fintech startups have secured US$92,679,000 in investment.
While the payments and remittances, and lending and financing sub-sectors saw the highest values of investment secured, a novel trend uncovered by the data is that blockchain startups have proven the most likely group of startups to raise external funding – with 38.9 per cent of Africa’s blockchain startups securing funding since the beginning of 2015.
This points to the fact that investors are drawn both to startups busy addressing the lack of basic financial services on a local level, as well as those innovating around globally relevant cutting-edge technologies.
“Fintech is clearly a vibrant space within the African tech scene, perhaps the most vibrant of all. Increasingly, investors are seeing the huge potential the space has to offer. We hope this report will provide valuable insights and leads to both startups and funders in the space, and contribute to the evolution of the sector for the benefit of all,” said Tom Jackson, co-founder of Disrupt Africa.