It’s no surprise Africa’s tech ecosystem is increasingly being scrutinised by more and more big-money investors as the scale of the continent’s opportunities and the calibre of its start-ups draw greater global attention.
At the end of last year, Amazon chief Jeff Bezos's personal venture capital fund joined a US$30 million funding round for African cross-border payments start-up Chipper Cash. Ribbit Capital also joined the funding round.
Chipper Cash was founded in 2018. It’s a mobile app that enables customers to transfer money across borders, fast and cheaply. It claims to already have three million users, making 80,000 transactions a day. Chipper Cash is currently available in seven African states - Ghana, Kenya, Nigeria, Rwanda, South Africa, Tanzania and Uganda - as well as the UK.
The funding round is just the tip of a sizeable iceberg that’s seeing smart money backing a whole host of African tech firms. In October last year, Stripe bought Lagos-based payments firm Paystack in a deal reportedly worth more than US$200 million. Elsewhere, Visa bought a stake in Nigerian payments processor Interswitch, while rival Mastercard-backed e-commerce specialist Jumia went public with a listing on the NYSE.
It's now a well-established path that followed M-Pesa's mobile phone payments and micro-financing service, launched in 2007 by Vodafone Group plc and Kenyan network operator Safaricom. It has also rapidly expanded to cover numerous other African countries including Tanzania, Mozambique, Ghana, Egypt and South Africa.
The Mobile Money Revolution
It’s clear many investors are rapidly waking up to the scale of opportunities in Africa, driven in part by the penetration of mobile phones as a direct tool for money management right across the continent.
Billions of dollars’ worth of microloans are now available to people in developing countries via their mobiles. Many who work outside the banking mainstream can now be directly reached and offered credit, thanks to ratings generated by payment and transactional data held on prospective borrowers’ phones. Not only is micro-lending helping lift people out of poverty by offering fast and smart access to appropriate credit and other financial services, it also offers sole traders the power to build their own future.
At FICO, we’re continually on the lookout for ways we can help support the ongoing development of financial inclusion and the evolution of microcredit and microfinance. They’re not new concepts given they’ve been around since the late 1990s, but the guiding principle has always been that citizens can help pull themselves out of poverty by borrowing small and appropriate sums. Now, with the widespread adoption of mobile phones we’re enabling a new financial drive right across the continent of Africa.