OPay is reportedly in talks to raise $400 million from investors at a valuation of $1.5 billion, according to an exclusive report from The Information.
OPay is looking to raise funding to finance its expansion plan, having launched in Egypt this year. The payments giant says it processed $1.4 billion in payments in October 2020 alone, and that number also reportedly increased to $2 billion by December 2020.
Having done impressively in Nigeria since its launch in 2018, the new push for funding means that the company has bigger plans.
An Africa-focused company with Chinese backers
While OPay is based in Nigeria, its backers are mostly Chinese companies like Meituan, a multi-billion-dollar Chinese shopping platform.
In July 2019, OPay raised $50 million from Sequoia Capital, IDG Capital, Source Code, GSR Ventures and Meituan-Dianping. Opera itself also invested in the round. Four months later, it raised a massive $120 million in a Series B round.
The company’s initial play seemed to be focused on building a super-app, and it led with its popular bike-hailing service, ORide. But the ban on bike hailing in Nigeria stopped that, and the company focused on what had always been at its core: payments.
The pandemic is one factor that spurred growth for OPay, and as social distancing and Covid-19 regulations made banking halls challenging to access, more people are leaning on mobile money services. The company also has plans to roll out debit and credit cards.
Competition in the mobile payments space is stiff; while at one time OPay seemed to be the only company growing its agent network, other rivals have now tapped into the same network. Telcos like MTN and Airtel are spinning their mobile money arm into standalone businesses as they are betting on it for the future.
It means that at home, where OPay may claim dominance, challengers are arising, and outside Nigeria, grabbing market share from more established players will be no easy feat. Yet, should they successfully raise $400 million, it will be the kind of war chest that makes anything possible.