Despite hiccups here and there, Nigeria’s fintech space is definitely growing, and this at an exponential rate.
So Africa-focused Fintech company company OPay earlier this week raised $400 million in a new financing round led by SoftBaank Vision Fund at a staggering $2 billion valuation.
Five other venture capital companies were also part of the funding round namely Sequoia Capital China, DragonBall Capital, which is the venture arm of Chinese food-delivery giant Meituan, Redpount China, Source Code Capital, SoftBank Ventures Asia as well as 3W Capital.
OPay CEO Yahui Zhou in his comment on the raise is quoted as saying that OPay “wants to be the power that helps emerging markets reach a faster economic development.” Why not if not you would say especially when such pledge turns in billions monthly for the company.
Founded in 2018, the company has gone on to record a number of firsts powered by its Chinese funders.
With this raise, OPay enters the exclusive club of super startups called unicorns, the fourth in Nigeria and fifth in Africa.
What Does All Portend For Nigeria’s Fintech Space?
From all indications it’s all shards of great as this essentially shows the possibilities inherent in the Nigerian market. It also shows albeit saliently, that the Nigerian market holds even yet more potentials.
According to OPay’s parent company, Opera, in it’s report released earlier in March this year, the fintech company posted an impressive performance of a total gross transaction volume of over $2 billion in the month of December 2020 alone, a growth of 4.5%. Meanwhile the company says Point if Sale (POS) terminals deployed across it’s agent and merchant network represented 20% of all offline payments in Nigeria as at year-end.
Right now, OPay boasts of being Nigeria’s leading platform for payments.
What this means is that Nigeria is a hotbed of potential simply waiting to be explored. Even with the figures reeled out above, we are yet to scratch the surface of payment.
With an economy and infrastructure that is lagging and a significant portion of un-banked/under-banked population, a huge chunk of Nigerian still rely on mobile services for commerce. With a total of 185 million mobile cellular subscribers as at 2019 to a population of 201 million, the potential indeed is enormous.
For the Fintech industry it’s a big boost. Despite various policy and regulations from Nigeria’s financial watch-man, the Central Bank of Nigeria of which many have complained as being anti-progressive, such milestones as this is a testament that no amount of stifling will bring the sector down. As the popular saying goes, tech is the new oil and the Fintech sub-sector is a pointer to this.
*Featured image courtesy Startup Lagos
Interestingly, several hinderances continue to plague access to banking services even by the banked population. Many continue to encounter difficulty in cash retrieval through the use of ATM machines which are yet inadequate in themselves, thus resulting in more reliance for POS agents and merchants.
The fintechs are going to the places over looked by the banks and this points to the possibilities that will yet be unravelled in the nearest future. Will fintechs like OPay take over or even buy out banks? Only time will tell but from the metrics being churned out, this is hardly an impossibility.
The growing number of fintechs being churned out is a welcome development as it shows a healthy solutions growth in tackling Nigeria’s payment problem.
