Africa's fintech space has grown exponentially in recent years, establishing itself as a leader within the broader African startup ecosystem when it comes to both funding and exit activity.
Over $2.7 billion has flooded into the fintech ecosystem in the last 24 months, according to a recent report by Disrupt Africa.
The vast majority of fintech funding in Africa goes to the “big four” startup ecosystems, with Nigeria, South Africa, Egypt and Kenya swallowing up 91.2 per cent of investment. However, this marginally decreased in 2021, when they shared 93% of funding.
Nigeria is by far the leader when it comes to fintech investment in Africa. Since January 2015, over $1.5 billion has been invested in the country across 257 rounds, far more than anywhere else.
It tripled its total raised funding over the last two years, with more than $1 billion invested into its fintech startups in that period.
Egyptian startups, for instance, secured nearly $900 million in funding over the same period, increasing their market share from 5.1% to 25.7%.
Similarly, Ghana's fintech sector, raising only $3.5 million in 2021, attracted over $100 million, claiming a three per cent share of the total funding landscape.
Since Disrupt Africa began tracking funding in the African tech startup space in 2015, 540 fintech startups from 25 countries have raised an extraordinary $3,635,823,965, three times more than any other sector.
Meanwhile, the report noted that African fintech startups have a higher likelihood of securing funding and are more likely to be acquired than their counterparts in other industries.
This trend reflects the growing interest and investment in the African fintech sector as it continues to expand and innovate in response to the continent's unique financial challenges and opportunities.
Disrupt Africa tracked 26 fintech startup acquisitions between June 2021 and July 2023, compared to just seven between 2019 and 2021, accounting for over 60 per cent of the 43 deals reported since 2011.
Also, African fintech startups have made commendable progress, standing out as the most accelerated. No other vertical of Africa’s exciting tech ecosystem is subject to more acceleration or incubation than fintech.
Among the 678 startups monitored by this publication, an impressive 315, or 46.5%, have participated in various acceleration or incubation programs, highlighting the significant focus on fintech within the African tech ecosystem.
Remarkably, 67.7% of all African fintech startups are concentrated in Nigeria, South Africa, or Kenya. This percentage share is consistent with 67.9% in 2021 and 65.2% in 2019, highlighting the continued dominance of these three countries in the African fintech landscape.
South Africa, which had held the position of the most populous market since Disrupt Africa began tracking data, has now slipped to second place with 140 fintech startups, constituting 20.6% of Africa's total of 678.
Nigeria leads the pack with 32% of the market share. Kenya follows in third place with 102 fintech companies, making up 15% of the total.