Growth of Nigeria’s Fintech Industry

Nigeria is a major adaptor of financial technology and has seen a significant increase in the number of startup companies over the past 5 years.

From a paltry 12 companies in June 2008, the industry currently comprises 240 companies operating across the financial services value chain, from digital wealth management and credit-tech to payment and remittance platforms as well as bespoke digital banking platforms amongst others.

According to the Central Bank of Nigeria, the fintech industry in Nigeria attracted more than $400 million in investments in 2019 alone, enabling the country rank amongst the top three destinations for fintech investments in Africa (alongside Egypt and South Africa).

This rise and adaptation did not just occur overnight; the disruption commenced in the early 20th century in Nigeria and climaxed around year 2015, when African Startups became the second most popular destination for Venture Capital Investment. In that year alone, the continents Fintech startups received around  $320 million in investments. This led to the rapid development of products and services leading up to year 2018. By this time, banks and conventional retail outlets had awakened to the global digital economy and had begun to overhaul their digital banking offerings and technology services.

It is impossible to speak about fintech disruption in Nigeria without mentioning Interswitch, the company that pioneered the first digital transaction switching and electronic payments processing in Nigeria. Established in 2002, the company also owns Quickteller, online payment and wallet mobile app and Verve, a pan-African chip and pin payment card and lastly. By November 2019, the company was valued by the African Private Equity & VC Association at $1billion following a $200million investment (for a 20% stake) by Visa.

How much did VC firms invest in Nigerian firms?

Furthermore, in 2019, Africa received over $1billion from the African Venture Capital investments, with Nigeria receiving the highest share of over 50.5%  ($663.24 million). Nigerian-focused startups; Interswitch, OPay, Andela, and Palmpay, accounted for most of the top venture deals on the continent in 2019, according to Decoding Venture Investments In Africa 2019 Report by WeeTracker.

The beginning of this year’s Fintech investment is also looking promising with TLcom, a venture capital firm recently raising $71 million for its TIDE Africa Fund in February 2020, to support and invest in sub-Saharan African startups, and several other investments and collaborations springing up such as Paga partnering with Flutterwave.


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