Africa’s startups raised a record $195 million in 2017, a sharp increase of 51 per cent, according to a report by Disrupt Africa. Almost a third of this venture capital went into financial technology, indicating an investor assumption that more and more Africans will move to mobile banking in the coming years.

Somewhat like Indians, 83% of Africans remain outside the formal sector. Some analysts believe the success of M-Pesa and similar mobile digital payments in Africa indicates many Africans will skip traditional banking and go straight from cash to mobile based bank accounts.

African fintech startups like Flutterwave and Paystack have raised more than $ 100 million in three years. Nigeria overtook South Africa when it came to raising venture capital last year, but largely because of a single $ 40 million deal for the coding school Andela. Kenya is the number three startup country. But last year even war-ravaged Somalia not only produced some startups, at least one attracted investor interest. 

 

January 31, 2018

About the Author

Pramit Pal Chaudhuri writes on political, security, and economic issues. He previously wrote for the Statesman and the Telegraph in Calcutta. He served on the National Security Advisory Board of the Indian government from 2011-2015. Among other affiliations, he is a member of the Asia Society Global Council, the Aspen Institute Italia, the International Institute of Strategic Studies, and the Mont Pelerin Society. Pramit is also a senior associate of Rhodium Group, New York City, advisor to the Bower Group Asia in India, a member of the Council on Emerging Markets, Washington, DC, and a delegate for the Confederation of Indian Industry-Aspen Strategy Group Indo-U.S. Strategic Dialogue and the Ananta Aspen Strategic Dialogues with Japan, China and Israel. Born in 1964, he has visited over fifty countries on five continents. Mr. Pal Chaudhuri is a history graduate from Cornell University.