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Investors who ignore Nigeria now have to ask themselves: What do I know that Patrick Collison [Founder and CEO of Stripe] doesn’t?

Perhaps the most symbolic action that points to the progress of the African startup scene over the past two decades is this tweet from Paul Graham, one of the most revered technology leaders as well as founder and ex partner of Y combinator; the world’s most respected startup incubator.

Also Read: Is Agritech the Future? See 5 Agritech Startups that are transforming Farmers’ lives

His tweet was in response to the announcement that the Nigerian payment app Paystack has been acquired by Stripe for the sum of 200 million United state dollars.

To paraphrase Mr Graham, investors will be dumb to overlook the opportunity to invest in Nigerian and by extension, African startups.  

Over the years there has been a boom in the number of African startup founders and there has been no shortage of young and amazing companies addressing some of the most pressing needs that are peculiar to Africans, contributing in their own little way to the growth and development of this continent. Today, we will look at six (6) of these life changing startups beginning with Paystack. 

PAYSTACK

paystack app
Paystack App

The poster child of Nigerian startups. Paystack is a payment processing company that bridged the gap that had always existed in the collection of online sale proceeds prior to its founding.

To understand the problem Paystack solves, imagine having to register a US or UK branch –  complete with a foreign business account – for your Nigerian online e-commerce company just so that you could accept online payments through payment processors like Stripe or Paypal from these countries before finding ways to send the money back. This is almost comical today but in the most recent past, pre 2015, it was the norm.  Here is an extract from one of many interviews of Paystack’s founder, Shola Akinlade, from 2015.

When I founded my first startup in 2010, we needed a way to accept payments online, there was no solution locally, we had to work around using Avangate BV and creating accounts in the UK. 5 years later, there’s still no easy way.

In pre Paystack Nigeria, merchants had no way of accepting recurring or even one click payments. Local payment infrastructure remained archaic even as the country witnessed enormous investments in and adoption of e-commerce platforms like Konga, Dealdey, Jumia.

To further illustrate, there had been about $43B worth of card transactions in the year prior to 2015, of which only $0.4B was from online card transactions clearly highlighting a need that Paystack with over 60,000 merchants and a number of others now fills.

Although there’s still a long way to go to reach the level of payment processing where simply your fingerprint or perhaps iris is needed to pay for goods online in Nigeria; or where Nigerians can simply pay with their bank account connected social media app (like it is with AliPay in China), it’s safe to say that Paystack and every other startup innovating in the payment processing space are moving us towards an era or unbelievable ease in payment in Africa.

FAWRY

fawry app
fawry app

When Fawry listed on the Egyptian stock exchange in 2019, Reuter reported that “Egyptian digital payments company Fawry IPO oversubscribed 30 times”.

The payment processing company is the equivalent of Paystack for Egypt but with perhaps even more financial offerings than its Nigerian counterpart. Its payment processing solution processed 600.1 million transactions last year with a total value of 34.2 billion Egyptian pounds as reported by investment bank EFG Hermes.

Fawry’s network spans over 190,000 small and medium scale businesses and to further highlight the infrastructure behind Fawry, here’s a paragraph from the company:

…Fawry’s technology was built to offer businesses and governments alike cost-efficient solutions based on easy and painless integration, allowing records to reflect real-time settlement of transactions, live access to their accounts through our gateway or, for those with legacy systems, the ability to export from our bill warehouse.

Today Fawry’s patented technology is in full compliance with ISO 27001 and PA DSS standards and offers authentication, non-repudiation, data confidentiality and integrity, segregation of duties, and network security and physical security at all infrastructure levels.

PAGA

paga app
paga app

The company founded in Nigeria by Tayo Oviosu enables its clients to digitally send and receive money to and from its mobile wallets or agents across the country.

Its wallets, which are activated for users after submitting their name, mobile number, full residential address and a valid Identification card, also serves as a platform to pay for local bills and goods and services at retail outlets around the country. 

Once they have an account, users can receive and pull money from their various bank cards into their Paga wallets where they can more securely pay for utilities using just their mobile phone.

With over 12 million customers, 20,000 agents and a combined total of over $10 million raised from venture capital funds till date, Paga represents a force in the financial technology industry not only in the Nigerian market but in every other African location it serves.   

COWRYWISE

cowrywise app
cowrywise app

Cowrywise is a Nigerian startup helping thousands of people – currently, approximately 220,000 users, develop healthy savings and better wealth management habits. Here’s a paragraph from the company on its  mission:

Cowrywise helps make saving and investing seamless. Cowrywise takes away the stress and planning required to save and invest on a regular basis through its automated and easy-to-use platform. Your savings also generate interests until a set maturity date…

Founded by Razaq Ahmed, the company recently raised a $3 million pre series A funding led by Quona Capital to increase its customer base, and introduce new product offerings, support more fund managers in Nigeria and build out its proprietary investment management infrastructure.

MONEYFELLOWS

moneyfellows app
moneyfellows app

MoneyFellows is a contributory savings and loans startup founded by Ahmed Wadi, with over 150,000 users. The company provides a platform for individuals such as friends and work colleagues to contribute toward a pool of funds that anyone of the party could request to use for future goals.

The Cairo based startup recently raised $4 million in a Series A investment for further expansion into more Egyptian cities. 

FLUTTERWAVE

bater by flutterwave
bater by flutterwave

Flutterwave is a Nigerian payment powerhouse founded in 2016  by Olugbenga Agboola, a man who is known around the financial technology industry as an engineer and has helped implement payment solutions in companies like Paypal, Standard Bank, amongst others before starting flutterwave: 

Flutterwave is an end-to-end payment platform that makes it easy for banks and businesses to process their payments across Africa and over the world. They eliminate the need for domiciliary accounts and separate currency accounts for customers’ international transactions by customizing their payments in their own currency seamlessly in one Flutterwave account.  

Flutterwave is one of Nigeria’s and Africa’s most recognizable payment platforms. 

Till date flutterwave has raised over $20 million in funding from venture capital funds to lunch and further grow some of their increasing line of products including: Rave and Barter which is a consumer based product used  to facilitate personal and small merchants between people in the same country and across the world.

YOCO

yoco app
yoco app

This South African startup with over 80,000 customers is helping small scale businesses with solutions to accept in-store card payments.

Its offering includes a mobile-connected device for accepting card payments by smaller retailers, POS software solutions, a retail-focused CRM platform, and various financing options. The company has raised total funding of over $23 million to date.

While it is true that we have covered much ground in the area of online payment and fintech in Africa, it is also true that there’s still so much more ground to cover and a lot more opportunities in this space. There is no doubt that this list will look different in the next five years than it currently does. Until then, these innovative companies and a number of others in African markets are the new school leaders of the African financial technology payment sector.

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