According to the results of the latest Disrupt Africa study, the number of fintech start-ups based on the African continent has grown to 576 in 2021. This figure represents a jump of 17.3% from the 491 start-ups operating on the continent in 2019. Overall, the number of fintech start-ups in Africa has grown by around 90% from the 2017 figure of 301.
Leading the charge in this continued African fintech growth is the West African region, where “Nigerian figures have grown by 42.6 per cent over 2019.” In Ghana, fintech companies grew by 25% over the same period, while the Ivory Coast calculation grew by 100%.
However, as the study findings show, three countries – Nigeria, South Africa and Kenya – completely dominate the continent’s fintech start-up space. For example, the findings show that of all the fintech start-ups tracked during the period between 2019 and 2021, 391 were found in these three countries. Of these 391 start-ups, 154 are based in South Africa, while Nigeria is not far behind with 144. Kenya is a distant third with 93 start-ups start-ups.
Covid-19 Induced Revival
Meanwhile, study results suggest that this resurgence of fintech growth in the “big three” markets could be linked to the limits associated with Covid-19. For example, the data show that after the marginal fall of 2019, the proportion of payments and remittances from new technology start-ups has increased in these three countries.
South Africa’s initial payments and remittances grew by 27.3%, a figure seven percentage points higher than its 2019 growth rate. In Kenya, the number of fintech start-ups increased by 21.5%, more than the 15.4% growth recorded in 2019. However, in Nigeria – which has consistently surpassed both South Africa and Kenya since 2017 – the number of payments and shipments related fintech start-ups grew by 33.3%. This is only slightly higher than the 2019 growth rate of 32.7%.
In terms of money raised, the study results show that Nigerian fintech start-ups have dominated since 2015. The study report explains:
Of the 277 fintech financial rounds tracked by Disrupt Africa between 2015 and mid-2021, 108 of these rounds went to Nigerian startups, a total of $ 467,901,000 in investment and account for 53.4 per cent of funds raised since tracking began. This is a much higher total dollar than any other country in Africa.
Meanwhile, South Africa, which is Nigeria’s closest competitor, grossed a total of $ 216,124,800 over the same period. However this figure is only slightly higher than the total amount of Nigerian funding in 2021 to date which is $ 208,225,000.
In addition to tracking new start-ups, the Disrupt Africa report also recorded the number of fintech failures. Explaining these new flaws, the report reads:
As noted earlier, 109 of the fintech projects featured in the 2019 edition of this report have since closed their doors. That accounted for 22.2 percent of the total 2019. Closures in themselves are obviously not positive things, but the countries and verticals in which most of these “failures” have occurred suggest a market that is correcting itself.
Interestingly, the Disrupt Africa study found that more fintech start-ups now operate in more than one category. As the results show, the continent had 143 multi-category endpoints operating in 2021, up from 73 seen in 2019. Leading in this category is Nigeria, which has 39 followed by South Africa, which has 31, while Kenya is not far behind with 30.
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