Twenty-one weeks ago, Paystack was acquired by Stripe. Because an exit is an opportunity to reward investors for their faith, the reaction at the time was that the fear of missing out (FOMO) will lead more investors to bet on more ideas.
FOMO is here again after Flutterwave’s landmark raise and unicorn status. African tech now commands global attention; not based on patronizing platitudes centered around “saving” Africa, but because serious money will be made here.
Yes, this market of 1billion people, 2,000 languages and 40+ currencies is fragmented. Poverty rates and poor infrastructure discourage new ventures from being adopted. A federal or state government can wake up and unilaterally erase a promising sector with vague reasons.
Despite these challenges, African innovators are finding ingenious ways to build million- and billion-dollar companies.
Jamie Reynolds, partner at Avenir Growth Capital, explained that his firm led Flutterwave’s latest funding round because the fintech company is building
the last available payments infrastructure frontier in the world.”
What does that mean?
PayPal, Stripe and Square are cementing their hold over payments in the US. With a combined 90% market share, Ant Group and WeChat Pay are doing the same in China, while gunning for Southeast Asia. But Africa remains an open terrain.
Africa is “available” because unlike developed markets, an upstart can rise through the cracks and break new ground.
But this fertility (encouraged by fragmentation) is not reserved for payments processing companies like Flutterwave, DPO Group, Paystack and Interswitch. Africa is an untapped frontier on digital lending and banking-as-a-service infrastructure, and in non-fintech sectors like logistics, healthtech and e-commerce.
Each of these sectors can birth billion-dollar African companies.
[ Read: The rise of banking-as-a-service APIs in Africa ]
When and how many? It’s not much use predicting time or numbers. Freak events like a pandemic can warp timelines in good or bad ways. What is more important is that demographics point to Africa as the world’s digital future.