Nigeria's Fintech Investments

The fintech industry in Nigeria has been evolving as more companies leverage technology to change how the financial industry operates. Data from the National Bureau of Statistics shows that some 87 million transactions worth $5 billion were completed through mobile banking platforms in 2018, up 82% from the previous year. The growth of the local fintech industry has been supported by the increased use of smartphones, which has changed consumer behaviour, making convenience and accessibility a priority. Nigeria has the largest mobile market in Africa with 162 million mobile subscribers in 2017. This represents an 84% penetration rate, up sharply from 53% in the previous year. According to a report released by online retailer Jumia, smartphone users account for 13% of all mobile subscriptions, at 21 million, with the increasing availability of lower-priced handsets helping to drive take up.

The wide acceptance of fintech and the solutions it provides continues to make the sector attractive to investors. The country has witnessed increased deal activity over recent years, with 11 deals worth $113.99 million in 2018 compared to one valued at $700,000 in 2010. Asoko research shows that a total of $209 million was secured in disclosed deals between 2010 and 2019 by 16 companies, with eight of these firms tapping investors on multiple occasions to fund growth. Financing has ranged from $50,000 to a record $47.5 million raised by Cellulant in its 2018 Series C round, the largest to date for an African-only focused fintech firm. Investment has been primarily focused on firms offering payment solutions, which has been the main sub-sector within Nigeria’s fintech space. However, fundraising activity by other segments, such as savings and agritech platforms, has been rising of late.