Recent report has revealed that Africa’s Fintech startup ecosystem has been on a growth trajectory, with the number of startups operating in the space increasing by 17.7 percent to 678 in 2023 as compared to 2021.
In the latest edition of Disrupt Africa’s Finnovating for Africa publication, the number of Fintech startups active in Africa increased by 125.2 percent between 2017 and 2023.
The growth is reportedly taking place across the continent, with all major markets such as South Africa, Egypt and Nigeria growing relatively fast. The number of Fintech companies based in these countries have leaped by 66.7 percent and 50 percent respectively over the last two years.
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The Fintech space in Africa leads the way for investments, when it comes to both funding and exit activity. A report by Disrupt Africa revealed that since 2015, 540 Fintech startups from 25 countries have raised an extraordinary US$ 3,635,823,965 three times more than any other sector.
Since 2016, total investment per year has been on a fairly steady upward trajectory, and growth has been 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.
Meanwhile, not only are African fintech startups more likely to raise funding than their peers, they are also more likely to be acquired.
Disrupt Africa tracked 26 fintech startup acquisitions between June 2021 and July 2023, compared to just seven between 2019 and 2021, and accounting for over 60 per cent of the 43 such deals reported since 2011.
In 2023, Disrupt Africa identified fintech startups operating across 25 African countries, the same as in 2021. The number of ventures per country ranges from one, in places such as Algeria, Burkina Faso and Mali, to 217 in Nigeria, which over the last couple of years has overtaken South Africa to become Africa’s most fintech-populated country.
South Africa has been for a long time being the most populated market, but has now fallen to second with 140 ventures. This accounted for 20.6 percent of Africa’s 678 fintech startups, behind Nigeria’s 217 ventures of 32 percent.
Kenya falls in third place with 102 companies in operation, 15 percent of the total. It is worth noting that 459 (67.7%) of Africa’s fintechs are located in either Nigeria, South Africa or Kenya, a percentage share that barely differs from a 67.9 per cent share in 2021 and 65.2 percent in 2019.
The share of Fintech activity contributed by the “big three” markets of South Africa, Nigeria and Kenya maintained its 2021 levels, with 459 (67.7%) of the startups tracked.
Notably, there were three new fintech markets to emerge for the first time in the 2023 edition of this report, which are Burkina Faso, Lesotho and Namibia.
While clearly levels of activity hugely differ, with different ecosystems at vastly different points in their lifecycle, fintech has certainly infiltrated markets across the continent, and is changing financial markets and boosting access to financial services.