People & Money

There are over 600 Fintech Startups in Africa- Disrupt Africa

Disrupt Africa has released its Fintech Startup report for 2023 titled “Finnovating for Africa: Reimagining the African financial services landscape”. According to the 2023 report, there are about 678 fintech startups in Africa, an increase of 17.7% from the 576 recorded back in 2021, and an increase of 125.2% from the 301 recorded in 2017. 

According to the report, Nigeria leads the way with 217 fintech startups (32%) of the African total, followed closely by South Africa with 140 fintech startups (20.6%), Kenya (102 startups), and Egypt (65 startups) complete the big four. These four countries account for 77.3% of the fintech startups in Africa. If Ghana, with 35 startups and Uganda, 29 startups were added to the mix, the “big six” would account for 86.7% of the fintech startups in Africa. 

Nigeria

In the 2023 report, Nigeria accounts for 217 fintech startups, a 50.1% increase from the 144 startups tracked in the 2021 report. Nigeria’s market share is also growing, reaching 32% from 25% in 2021 and 20.6% in 2019. 

Also Read: Fintechs in Africa continue to overshadow all other startups in funding gained

Of the 217 Nigerian fintech startups, fifty-nine were payments and remittances platforms, 43 were lending and financing startups, 19 were business administration ventures, 23 were invest-tech startups, 9 were insurtech startups, 16 were personal finance ventures, 21 were blockchain startups and 5 were security and ID ventures.  

Concerning funding, of the $3.635 billion raised by African fintech startups since 2015, $1.5 billion (41.6%) went to Nigerian fintechs, which were raised over 257 funding rounds. In fact, in the last two years, Nigerian Fintech startups have raised over a billion dollars in funding, a third of the $2.7 billion that African Fintechs have generated since 2021. According to the report, 91.2% of the funding for African startups has come to Nigerian, South African, Egyptian, and Kenyan startups. 

South Africa 

South Africa is the next big player in the African fintech ecosystem after Nigeria. South Africa accounts for 140 startups or 20.6% of the African fintech space. Of which 35 are payments and remittances ventures, 22 are lending and financing platforms, 15 are business administration ventures, 18 are invest-tech startups, twenty-four are insurtech, four are personal finance ventures, 9 are blockchain startups, and 7 are security and ID startups. 

South African fintechs have raised about $695.5 million over 171 funding rounds since 2015. 

Kenya 

Another important country in the African fintech ecosystem is Kenya. Kenya accounts for about 102 fintech startups in Africa, of which 27 are payments and remittance platforms. 21 are lending and financing companies, 16 are business administration ventures, 12 are invest-tech platforms, 11 are insurtech companies, 5 are personal finance companies, 3 are blockchain companies and 2 are security and ID ventures. 

Kenyan startups have raised about $174.2 million over 104 funding rounds since 2015. 

Overview of the Report 

Between 2019 and 2021, 260 of the active Fintech startups in Africa were established, however, in the last 18 months, the report tracked only 40 startup launches. According to the report, of the 576 startups in Africa as of 2021, 115 had closed down, and South Africa accounted for the highest closure rate with 36 closures, followed by Kenya with 25 closures and Nigeria with 24%. 

Payments and remittances startups lead the African fintech scene, comprising 199 startups, or approximately 29.4% of all active fintech startups. This is a slight decline from the 206 recorded in 2021. However, these startups still contribute significantly, making up around 43.4% (equivalent to $1.58 billion) of the total funding in the African fintech sector.  

The report tracked about 131 lending and financing startups in Africa, approximately 19.3% of the total in the fintech ecosystem. This number is marginally down from the 134 recorded in 2021. Between 2021 and 2023, Disrupt Africa tracked 20 closures in the lending and financing category, and the category also accounted for about $1.37 billion in funding since 2015 (37.8% of the total funding raised in Africa). 

Also Read: Nigeria Trailed Kenya in Startup Investment in 2020 – Report

The business administration category recorded about 85 startups, down from 117 recorded in the 2021 report. However, even though business administration ventures are the third highest in the African fintech space, the category has attracted a measly $82.3 million in funding since 2015.  

Between 2021 and 2023, there have been about twenty-six fintech startup acquisitions in Africa, with South Africa leading the way with 10 deals, followed by Nigeria with 9 deals. 

David Olujinmi

David Olujinmi studies Engineering but his true passion is research and analysis. He writes about finance, particularly the capital market, investment banking, and asset management. More »

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