mPharma does it again
MARCH 14, 2021
This newsletter is a weekly in-depth analysis of tech and innovation in Africa that will serve as a post-pandemic guide. Subscribe here to get it directly in your inbox every Sunday at 3 pm WAT

On a radio show last Thursday, the host asked me a question: how did Flutterwave do it?

One of Flutterwave’s responses is that they grew at an average rate of 226% annually between 2018 and 2020. The growth might have benefitted from the rise in online payments due to the pandemic. But it reflects the increasing opportunity for tech to impact Africa and return value for bold actors.


We think this has sent a surge of inspiration to dreamers across the continent, from Bamako to Banjul, as well as wealth managers in Boston and Brussels.

Brace for the rush

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 for 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.


Olanrewaju Odunowo/TC Insights

The continent where the median age is 19, where 60% of the population is under age 25 and expected to double by 2050 seems the best place to channel new money in hopes of best returns. Africa’s Gen-Z digital natives are driving the adoption of savings and investment apps, as well as products from neobanks like Carbon and Kuda.


[ Read: How Kuda designs banking for young Nigerians ]


Demography is not destiny. An older generation of policymakers that currently controls regulatory levers can significantly slow progress if it feels threatened.


But the evidence of the last decade’s startup boom and unicorn trickle is that Africans will not shirk the responsibility of solving the continent’s problems.


Flutterwave’s founders and staff rose to the challenge, shooting the company into a vaunted elite as Africa’s fastest ever unicorn. The countdown to those who follow in their footsteps has begun.

mPharma, the Ghana-based health startup, has launched operations in Ethiopia. That adds to Ghana, Nigeria, Zambia, Rwanda, and Kenya where mPharma serves about a million patients every year through over 300 partner pharmacies. The startup has raised over $50 million and has ambitious growth plans.
Speaking of Ethiopia, the Africa Development Bank has approved a $2.33 million grant for EthSwitch, the country’s e-payments provider. The money will be used to modernise the delivery of digital financial services in Ethiopia, continuing a trend that has seen the coutnry become more open to technology-driven economy.
And in other funding news, Savannah Fund has announced the close of a $25 million fund to invest in seed and series A startups in Africa. There will be a special focus on women-led enterprises. Kenya, South Africa and Nigeria are the core markets of interest, but what other countries do they plan to expand to?

Much ado about unicorns


Two things happened in 2016: Africa produced its first unicorn (Jumia) and saw the birth of the startup that would be the fourth unicorn. But no one knew it then. Startups with billion-dollar valuations were rare in Africa. 


Flutterwave attaining unicorn status this year is a major milestone. However, Africa still lags the rest of the world in the volume of unicorns.

This isn’t surprising.


Africa’s tech industry is relatively young, there’s generally a lack of enabling infrastructure and the markets are slightly more complex. Consequently, funding into the continent is low compared with other regions as investors are cautious about the opportunities.

African startups reportedly
received $701.5m 2020. It is an impressive increase from 2019 but it barely scratches the surface.


In Latin America, the fintech sector alone received $8.1b in funding. The frequency at which startups attain unicorn status is directly proportional to the volume of funding, especially late-stage capital flowing into a region.

Unicorn =/= Invincible


Becoming a unicorn does not shield a startup from recording losses. Globally, a dozen unicorns who had gone public or were likely to, recorded combined losses of $14 billion in 2018.


After Jumia became a unicorn in 2016, it recorded a couple of losses that dropped its valuation by 75% to $250m. While this might have been because of internal issues, it is worth noting that Africa is still a tough place to do business. Becoming a unicorn is not a magical step to being immune to losses.


A fixation on wanting to attain unicorn status could be unproductive for African startups especially for those in the early years. Interswitch became a unicorn 17 years after it was founded; Fawry, Jumia and Flutterwave were 12, 4 and 5 years respectively. Age is not the perfect indicator of growth but startups must go at their own pace.


Infact, some have proposed gazelles as an alternative to unicorns. A gazelle is under less venture capital pressure to blitzscale, but grows by a consistent revenue margin year-on-year.

So while the unicorn wave is to be encouraged, it should not be the prime indicator of African tech’s maturity and progress. For a continent known for its unique wildlife range, we should explore all the various exotic options of what defines success for African startups.

Download TechCabal’s Nigeria Fintech Future report here and get other TechCabal’s reports here and send us your custom research requests via


Written by Michelle Adesina

Have a great week ahead!

Thank you for reading today’s edition of The Next Wave. Stay safe when you are out in public places – protect others by wearing your mask and sanitizing your hands.


Subscribe to our TC Daily Newsletter to receive all the technology and business stories you need each weekday at 7 AM (WAT).


Follow TechCabal on TwitterInstagramFacebook, and LinkedIn to stay engaged in our real-time conversations on tech and innovation in Africa.


– Alexander O. Onukwue, Staff Writer, TechCabal

Share this newsletter
Sign up for The Next Wave 
by TechCabal
View this email in your browser
You are receiving this email because of your relationship with TechCabal. Please reconfirm your interest in receiving emails from us. If you do not wish to receive any more emails, you can unsubscribe here.
This message was sent to by
18 Nnobi Streeet, Surulere, Lagos, Lagos 101283, Nigeria

Unsubscribe from all mailings Unsubscribe | Manage Subscription | Forward Email | Report Abuse

This is a Test Email only.
This message was sent for the sole purpose of testing a draft message.

Alexander Onukwue Author

Get the best African tech newsletters in your inbox