In a recent Disrupt Africa report, African Fintech startup space recorded a significant twenty-six (26) startup acquisitions between June 2021 and July 2023, up 270% from 7 in 2019-2021.
South Africa led the way, accounting for 10 of the deals over the last 24 months and 16 overall. One famous acquisition was the deal, which saw MFS Africa, a South African digital payment company that describes itself as Africa’s largest digital payments gateway, announce the acquisition of Baxi, a Nigerian fintech startup.
Nigeria occupied the second place, accounting for 9 Fintech startup acquisitions. The country has reportedly become the location for the flagship Fintech acquisition in recent years.
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One acquisition reported to have ignited increased interest in the country’s Fintech space is the acquisition of Nigerian Fintech startup Paystack, by Stripe in 2020, for over $200 million.
Other African countries which include Morocco, Ivory Coast, Egypt, Kenya, Rwanda, Zambia, and Tunisia all recorded the acquisition of one (1) startup.
Check out some notable acquisitions of African Fintech startups in 2022;
- – Nigerian lending startup Payhippo’s acquisition of traditional bank Maritime
- – Kenya’s BNPL Lipa Later acquisition of e-commerce startup Sky.Garden
- – South Africa’s TymeBank acquisition of lend tech Retail Capital
- – Pan-African fintech Chipper Cash acquisition of Zambian fintech Zoona
- – UAE-based fintech Galaxy acquisition of Underlie
- – Egypt’s MNT-Halan acquisition of e-commerce Talabeyah
In the first half (H1) of 2023, there were 6 African fintech Mergers & Acquisitions deals which were mostly undisclosed. These include;
- ~ Nigerian regtech Smile Identity’s acquisition of Ghanaian fintech Appruve
- – UAE-based web3 Blockfinex acquisition of Nigerian crypto startup, Fluidcoins
- – Nigerian lend tech FairMoney’s acquisition of PayForce
- – Nigerian vehicle financing Autochek’s acquisition of Egypt-based Autotager
- – Pan-African Cross Switch acquisition of Moroccan fintech, Vantage Payment Systems (VPS)
- – Private Equity firm Infinite Partners acquisition of South African fintech, e4
As fintechs in Africa continue to grow significantly, they have began to attract strategic partnerships which has led to some of these startups being acquired by larger financial institutions. These acquisitions are often aimed at leveraging local expertise and customer bases.
Also, the increase in the acquisition of African Fintech startups, suggests that there is a desire to buy innovative services on the African continent, and also signals consolidation is finally happening within the wider financial space, as many of these deals are startup-on-startup.
While the acquisitions of African Fintech startups continue to record an increase, the big fintech giants like Mastercard, Visa, and PayPal are expanding into new African markets in their bid to be global players. These expansions are happening through mergers and acquisitions.
Notably, the African Fintech market is poised for significant revenue growth, with a projected $65bn by 2030. This will make it the world’s fastest-growing region, alongside Latin America, which is predicted to see 12.5-fold growth.
The continent’s youthful population, which is increasingly digitally literate, combined with its low credit card penetration, presents a tremendous opportunity for digital banking.