If you follow the right accounts for young African tech entrepreneurs and their startups on Twitter, it can feel like there’s a never ending debate about who gets funding or not in Africa. Like many Twitter debates the 140 characters and even the endless threads don’t capture all nuance of the issue, but while many of those debates have grown, founders from one sector of the startup space have been more positive than most: fintech.
Take Flutterwave, a payments company which builds infrastructure to ease processing payments across Africa, it’s just raised $10 million in its Series A round. It’s one of the largest Series A rounds by an African startup. Significantly, the round was led by leading Silicon Valley venture capital funds Greycroft and Green Visor Capital, with participation from Y Combinator and Glynn Capital. It helps that Flutterwave was co-founded by Iyin ‘E’ Aboyeji, who has a track record, and star power, as a co-founder of developer training company, Andela. But it’s also true that Flutterwave’s raise is the latest in a string of African fintech startups that have raised money over the past three years.
Fintech startups are the “most attractive,” for tech investors looking towards Africa, according to a recent report by Disrupt Africa. Nearly 20% of fintech startups tracked raised money in the last two years and in 2016, there was a 84% increase in the number of fintech startups secured investment compared to the previous year. In total, since 2015, fintech startups in Africa had raised $93 million in investment as of June 2017. Flutterwave’s raise takes that total past the $100 million mark.
Some of that activity is simply down to a larger pool of startups which investors can pick from. Following a recent surge in launches, over 300 fintech startups—more than half of which set up shop in 2015 or 2016—are currently operational in Africa. But it’s not just down to having more choices, investor interest in fintech startups is also linked to just how important they are for the future of business in Africa.