PayPal and eBay model worked well, Does it work today?

In 2010, eBay generated 80% of PayPal 's revenues, The business outside Ebay would require years of continuous investment to match that... ?? --- BUT more important is the fact that "success on ebay powers success beyond ebay". ??

In short, ebay accelerated PayPal's success because no other competitor had a platform like eBay on their side. Until this day, builders are trying to replicate the eBay-PayPal strategy, Trying to power their fintech by using a large existing business or loads of data from a bigger non fintech player.

That's the west ???? , would this strategy work in Africa? I have listed a few examples of what we see across the continent from Nigeria ???? to Tanzania ????.

1. Sarafu with Bakhresa Group, It is an ecosystem approach where AzamPay which builds both Sarafu and AzamPesa brings together mobile money wallets, e-commerce and payments leveraging the scale and the brand of a larger group in Tanzania and beyond.
2. Watu Credit with Car & General Trading Limited, The lender has helped the later to boost its sale of motorcycles and tuk-tuks as it funds sales of the two and three-wheeled autos including brands sold by C&G.
3. PalmPay with Transsion & NetEase, Building on the widest reach and footprint of Africa's largest handset seller, In Africa, These guys sell more phones than Samsung and Apple in a calendar year.
4. InTouch with TotalEnergies, Total decided to entrust InTouch with the distribution of digital services and payments across all service stations.
5. Moment with MultiChoice Group ?? trying to capture at least an almost assured $3.5 Billion opportunity spanning tens of countries where DStv has customers.

Do you think it's a great strategy to use a bigger player to accelerate your growth as a fintech in Africa? What are the issues that comes with it and what would be the exit strategy if any?

Let us look at the below case studies and see how they faired in the world where everyone wants to launch a fintech, Fintech was eating the world, now it seems like the world's is trying to swallow fintech.

1. Marcus by Goldman Sachs and the whole consumer fintech was basically a miserable failure and wastage of investors' money . The reasons are clear but the facts are murkier but at the end they had to dump it and run as fast as possible.
2. NCBA loop and the whole idea of launching their own independent fintech with their separate Board and CEO seems like a child's play. It would house all the tie ups they have with mobile money operators across a few markets with M-shwari in Kenya as the jewel.
3. GTBank with their fintech ambitions seems more like it was the noise that was created by post covid era of ambitions and optimism that the behaviours of digital would stick longer for financial services, but I see few reports there.
4. Momo by MTN seems to work well as you see their valuation and bringing Mastercard as a strategic investor, what can we learn from these guys?
5. Airtelmoney by Airtel Africa seems to work better as you see their valuation and attractded in 萬事達卡 & TPG what can we learn here?
6. Mpesa by Vodacom and Safaricom seems like something bigger but not trying to invite outside investors because of incumbrances with GOK.
7. Apple Pay by Apple as a fintech within the smartphone seller seems to hit numbers after numbers, It is crazy how it seems to get better day by day.
8. WechatPay by Wechat , This is what, on my opinion, I think Whatsapp should be trying to replicate in Africa given its dominance, That would become MetaPay's most impressive fintech operations.
9. Alipay by Alibaba , This worked so well to spinning off and creating their own $300 billion Anti group which would later became a threat to China.
10. Others may include Grab pay by Grab, UberMoney by Uber, Twitter pay by X, shop pay by shopify, JioPay by Jio Platforms.

The two giants I think, might be, sleeping on launching their own fintech outfits or at least spinning one off their existing operations are Ecobank and Google.

Ecobank Transnational Incorporated has been reporting their payments business in annual reports as a separate line showing users, growing revenues and not very encouraging volumes, I think spinning it off would add more transparency, speed and seek a clear valuation for a pan african fintech giant.

谷歌 unlike Meta and 亚马逊 , they have been slow and not sure if they are aggressive enough to seriously launch a fintech mega player. I have seen their numbers and they are doing well it is just that they need clear leadership there and spin it off like Waymo , this may seek better returns, valuation and growth.

What I have come to establish as the 5 pointer strategies to make sure that the spin off grow to become a truly larger independent fintech player are here below:

Start by incorporating founder-led leadership, true independence, a viable exit strategy, VC funding, and Control are crucial components for ensuring the success and sustainability of a fintech spin-off.

1. Founder-Led Leadership: Empower founders to lead the spin-off with a clear vision, passion, and deep understanding of the market landscape like how Jack did with Alipay . Ensure founders have a long-term commitment to the spin-off's success, aligning their interests with those of stakeholders and fostering a culture of innovation and accountability.
2. True Independence: Grant the spin-off full autonomy in funding, management, and strategic decisions, allowing it to operate independently from the parent company. Provide the necessary resources, including capital, talent, and infrastructure, to support the spin-off's growth, valuation and development without over reliance on the mothership.
3. Strategic Exit Plan: Develop a strategic exit plan that provides a clear pathway for the spin-off to eventually exit from the mothership with minimal dependency and consequences. Facilitate a gradual transition process, allowing the spin-off to gain independence over time while maintaining stability and continuity in operations.
4. VC Funding: Forge strategic partnerships with venture capital firms to secure funding and propel the spin-off towards its ambitious goals beyond the mothership as led by the founders. Ensure the spin-off has access to sufficient capital to fuel innovation, scale operations, and capture market opportunities in the dynamic fintech landscape.
5. Stakeholder Equity Management: Preserve founder control and ownership in both the spin-off and the mothership to keep feeding both religiously, allowing founders to retain a controlling stake in both entities at least before exit. Enable the mothership to maintain a non-controlling stake in the spin-off, aligning incentives and fostering collaboration while safeguarding the spin-off's independence and agility.