The African fintech sector is gaining interest from global investors. Recently, Algerian super app Yassir announced that it had raised US$150 million in Series B funding – making it North Africa’s most significant funding to date.
Participating investors led by growth-stage VC firm BOND include DN Capital, Dorsal Capital, Quiet Capital, Stanford Alumni Ventures (aka Spike Ventures), Y Combinator, and more. This is in line with the trend of the industry looking to unleash the potential of fintechs in the continent with 56 countries.
In 2021, a Mastercard study found fintech startups in Africa grew by 81 percent and recorded an 894 percent year-on-year growth in funding. The sector scored 61 percent of the R46.71 billion (US$2.7 billion) deployed across the continent last year. South Africa, Kenya, and Nigeria – which produced two unicorns – emerged as the key startup hubs in the region.
Africa’s diversification into fintech
Africa’s diversification into fintech and knowledge-intensive services away from commodity dependency is encouraged by UNCTAD, United Nations Conference on Trade and Development. Its report projected investments in the sector could reach R69.20 billion (US$4 billion) by the end of this year. There was a jump from R6919 million (US$400 million) in 2017 to over R34.60 billion (US$2 billion) in 2021. Having global investors also mean the quality of domestic fintech products and services is developing based on international standards.
This is a boon for local consumers and eases the way for future export, especially with the implementation of the African Continental Free Trade Area (AfCFTA).

Paul Akiwumi
“You have venture capital firms from India, the United States, or Europe coming to Eastern and Southern Africa through Mauritius because Mauritius is now a financial hub. Firms are coming in because good standards exist there,” said Paul Akiwumi, Director of UNCTAD’s Division for Africa, “So, if money is coming from America, it [Mauritius] maintains the standards American firms require.”
“It’s a matter of pursuing the right policies. Mauritius decided they would diversify away from textiles, sugarcane, and tea. And they said their financial sector would be the gateway to Eastern and Southern Africa. Now, if you go to Mauritius, local financial firms know all about global rules and regulations.”
African financial services are growing
A recent McKinsey report projected the African financial services market to grow by 10 percent per year and reach R3978 billion (US$230) billion by 2025. Three sectors that could grow the fastest are blockchain, payments, and wallets. South Africa, Nigeria, Kenya, and Egypt are where the fintech funding is being focused on currently.
However, seven countries are attracting attention with their rising potential: Cameroon, Côte d’Ivoire, Ghana, Morocco, Senegal, Tanzania, and Uganda.
Challenges for the African fintechs
The report also observed four challenges that African fintechs must overcome to be sustainable. First, reaching scale and profitability could be hindered by infrastructure constraints as the level of development differs across the continent. Some markets may have weak mobile and internet penetration, lack identification coverage, and limited payment rails to support digital money transfers.
Achieving profitability could be more challenging due to Africa’s lower disposable income and customer loyalty. The report noted that it is four times more difficult to achieve profitability in Africa than in Latin America. And 13 times harder when compared with the European Union.
Second, navigating an uncertain regulatory environment is also a concern since the countries are in different stages of development. However, the AfCTA is paving the way for a more standardised financial regulatory framework to ease the flow of products and services, including fintech.
Third, managing scarcity is vital as resources like time, money, and talent are finite. The fintech firms are exposed to global economic downturns, which affect foreign investors, and the fight for talent as remote working opens up more opportunities for people to work with Big Tech or overseas companies which could offer higher salaries.
Fourth, building robust corporate governance foundations is crucial to nurture positive organizational culture. As a company grows, it is essential to create a healthy and stable workplace to allow the momentum to continue.
Local tech startup Yassir overcoming challenges
Yassir was founded in 2017 and operates in six countries with more than 8 million users on its all-in-one ecosystem. It offers on-demand, ride-hailing, food and grocery delivery, financial services, and more.
Noureddine Tayebi, founder and CEO of Yassir, who has a Ph.D. from Standford University and had spent more than 15 years in Silicon Valley before returning to Algeria, is already on the right track to overcoming the challenges and building more significant growth.

Noureddine Tayebi
“Yassir was founded with a threefold mission. First, we want to create a local tech startup success model which will be emulated by others and, more so, by the Yassir team members. Second, we want to empower the local talent and, more importantly, the technical talent which often leaves the region, mainly to Europe, to pursue further studies or find jobs,” Tayebi said.
“We, in fact, hire engineering talent in each country we operate in to expand that mission. And finally, we want to make the lives of our people easy while infusing social values via our products, such as trust and mutual help,” he added.
Future of fintech in Africa
It is clear that the future of fintech in Africa is bright. With the right mix of infrastructure, government support, and private sector investment, fintech can help Africa leapfrog ahead in terms of financial inclusion and access to financial services.
While there are many challenges to overcome, the potential rewards are great. As such, the future of fintech in Africa is of great promise.
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