Amid difficulties in the business environment in the country, Nigerian startups raised a total of $559.85 million, accounting for 35.2 per cent of the total $1.589 billion raised by African startups, and topping funding to the business on the continent in the first quarter of 2022.
Flutterwave a Nigerian fintech that provides a payment infrastructure for global merchants topped the table with $250 million according to the latest quarterly report by Techpoint Africa,
Techpoint Africa a digital media company that amplifies the best innovations out of Africa through publications, data, and events noted that African startups in the financial services space announced $752.62 million in funding In Q1 2022 with a total of $1.589 billion raised by startups on the continent.
“Throughout Q1 2022, African startups collectively announced $1.589 billion in funding, with participation from institutional investors and African entrepreneurs and beyond,” the report stated.
“Flutterwave’s $250 million Series D is the biggest round of the quarter, with two of the top five raises coming from financial services providers. No week goes by without the phrase, “African fintech startup, … raises…” in media headlines. For African fintech startups, it seems it’s always a case of “shut up and take my money.”
“In Q1 2022, African startups in the financial services space announced $752.62 million in funding — 47.1 per cent of the total amount raised. Companies in the marketplace industry came close, reporting $291.35 million and accounting for 18.2 per cent. However, no other sector reached 10 per cent.
“Financial Services received $752.62 million. Nigerian startups raised $559.85 million, followed by Kenya with $429.79 million,” the report said.
According to the report, total announced deals for the quarter stood at $1.589 billion with111 funding deals, 45 seed rounds, 27 pre-seed rounds and 14 Series A rounds.
Amid the huge funding in FinTechs, several still lacks corporate governance structure, hindering them from scaling up the Group Head, Payments, Cash Management and Client Access, Ecobank Group, Isaac Kamuta.
“A lot of FinTechs struggle because they overlook governance, they overlook control, they overlook regulation and these core are like weapons of mass destruction just waiting to explode at any point in time”, stated Kamuta on Friday at the virtual Ecobank Fintech Breakfast Series: Partnering for a stronger ecosystem,” he had said.
Fintech, coined from financial” and “technology,” is a relatively new, and often unclear term that applies to any emerging technology that helps consumers or financial institutions deliver financial services in newer, faster ways than was traditionally available.
The aspect of trying to be faster than traditional banks makes Fintech not pay attention to governance and control structure that later become bottlenecks that hinder them from scaling up.
Speaking on the theme, “How bank-Fintech collaborations can drive ecosystem growth”, he however assured of Ecobank’s commitment to supporting African FinTechs to grow in order to boost employment opportunities on the continent.
“As a bank, we are committed to supporting anybody out there that has a dream to succeed and that was why Ecobank was started. It was started to help Africans and deliver banking services to Africans on the continent. So we have a mission in ensuring that any African that has a dream, can get that dream fulfilled. So that is the starting point, we want everybody to succeed. We want more snd more unicorns to come out of Africa- generate employment, make banking services available to everybody.
He said all the FinTechs that are out there to solve problems actually need banking services, which Ecobank is available and ready to provide because the bank is always looking at helping FinTechs to scale up.
According to Kamuta, “It’s one thing to just have a solution, with the experience we have in this sector, we are always able to provide advisory service. As a bank we see everything, working with the big guys, working with the small guys in all sectors. From Agriculture to transport and when we sit down in a room and the focus we have is FinTechs, this has enabled us to provide advice and ask about whatever problems you want to solve, and how we can provide insight.
“As we provide this insight through a banking mindset, we are also not doing it from Nigeria’s point of view but a pan African view because we operate in 33 countries in Africa. We are in Senegal in the West to Zimbabwe in the South, to Sao Tome and Principe, to Gabon to East Africa, there is no part of Africa where we don’t have a significant presence. We are always going to sit down with you, listen to the problems, and bring in the African perspective, the local knowledge and the country of origin. And of course, governance is important.
“So when we sit down with FinTechs and point out these small things that bankers consider like an advisory board, add a few people to enable you to have a well thought out business case. That you should also look at how big the problem is. So that you are not just looking at the problem and this ensures that you don’t have problems with scale. So as I have said we are going to make sure that every African FinTech that has an idea is given a chance.”