Meet The Winners Of The Search – Africa Stop By ADGMby Fintechnews Africa 2 August 2021
The African fintech space is undergoing a phase of radical growth, as speakers at The Search – Africa Stop 1 highlighted.
Africa is at the epicenter of a fintech evolution. What started as a burst of growth in payments tech, has grown into a range of fintech solutions, including blockchain. South Africa, Kenya, and Nigeria have grown to become the continent’s biggest fintech hubs.
The African fintech space is also making itself visible on the global scale. For instance, the Fintech Abu Dhabi Innovation Team kickstarted its startup roadshow The Search last month. The event is a five-month long worldwide search for fintech startups. It will conclude at the Fintech Abu Dhabi Festival in November this year.
The Search started with the UAE, and moved on to the Netherlands, France and Germany last month. This month, it reached Australia and Hong Kong, before its first pitstop in Africa.
The first leg of The Search’s two-part African fintech edition featured pitches from four startups. These were Awabah, a digital pension platform for self-employed Africans, Emata, a farmer financing platform, private equity platform GetEquity and insurance-as-a-service startup Lami.
Winners of The Search – Africa Stop 1
Uganda-based Emata and Kenya-based Lami won this challenge. They will join 98 other similarly-scouted startups, or the Fintech100, at the fifth Fintech Abu Dhabi Festival this year.
Industry: Farmer financing
Founders: Bram van den Bosch, Timothy Musoke
Founding Date: 2017
Emata is a digital farmer financing platform that offers loans to farmers who belong to cooperatives. The company combines farmer data with advanced risk analytics to achieve credit scores for farmers in order to match them with loan products.
Founders: Jihan Abass
Founding Date: 2018
Lami is an end-to-end digital insurance platform for the distribution and servicing of insurance products. The company provides automated underwriting and customer lifecycle management solutions to insurance providers across domains.
Building the future of African fintech
According to a Disrupt Africa 2021 report, the opportunity for African fintech lies in the size of the market. Over half the population lack access to formal finance. “Fintech startups are building inclusion from the ground up,” the report said.
Africa has 576 active fintechs, the report pointed out, a growth of 89.4% from only three years prior.
While this growth is impressive, there are speed bumps for African fintech companies to contend with. Iyinoluwa Aboyeji, Founder and General Partner, Future Africa, noted that raising seed capital for African fintechs is challenging.
“The average income isn’t high enough,”
to bootstrap or raise a friends-and-family round, Aboyeji explained.
In 2020, African fintech companies raised a little over US$ 160 million, and over US$ 874 million in the last six and half years. It brought in a majority of the funding that African tech companies received last year. To be fair, African fintech startups have been able to raise twice as much in H1 2021 as they did in 2020. And yet, a fifth of African fintechs tend to close in two years.
At the same time, a dynamic change is underway, owing to African fintech companies’ capacity for data and the transformation of legacy systems.
“Africa is not an opportunity, Africa is happening,”
Frank Molla, Managing Director and Head of Sub-Sahara Africa at BPC Technologies, concluded.