According to a new report by Disrupt Africa, the fintech startup ecosystem in Africa grew by almost 20 per cent in size and attracted US$2.7 billion in investment over the last two years. The report, titled Finnovating for Africa 2023, tracks the development of the fintech industry across various sub-sectors, regions, and funding stages.
The report reveals that fintech is the most populated and most funded vertical within Africa’s wider tech ecosystem, with 678 active startups operating in 28 countries as of July 2023. This represents a 17.7 percent increase from the previous edition of the report in 2021, when there were 576 fintech startups.
The growth of fintech startups is taking place across the continent, with all major markets except South Africa posting an increase in the number of active ventures. Egypt and Nigeria are leading the way, with the number of fintech companies based in those countries growing by 66.7 per cent and 50 per cent respectively over the course of the last two years.
Fintech is also by far the most popular vertical for investment within the wider African tech space. Since Disrupt Africa began tracking funding in the African tech startup space in 2015, 540 fintech startups from 25 countries have raised an extraordinary US$3.6 billion, three times more than any other sector.
The total investment per year has been on a steady upward trajectory since 2016, but growth has been especially impressive in the last two years. The number of funded ventures has almost doubled since 2021, and more than US$2.7 billion has flooded into the ecosystem in the last 24 months.
The report also highlights that African fintech startups are more likely to be acquired than their peers in other sectors. Disrupt Africa tracked 26 fintech startup acquisitions between June 2021 and July 2023, compared to just seven between 2019 and 2021. This accounts for over 60 per cent of the 43 such deals reported since 2011.
The report covers various sub-sectors of fintech, such as digital banking, digital payments, personal finance, lending, and investment. It also provides insights from industry experts and partners, such as AZA Finance, a cross-border payments provider; and Curacel, an insurance infrastructure company.
The report shows that Africa is on the rise and leveraging technologies such as AI, blockchain, cloud, and data to create innovative and inclusive solutions for its diverse and dynamic markets. Fintech is proving to be a key driver of economic growth and social impact on the continent, and there is still much room for further development and disruption.
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