Your Curated Weekly Tech News Across Africa, Tuesday, September 17, 2024

UK Maintains FinTech Dominance Amidst European Market Slowdown

In the latest newsletter, we examine the current state of the European FinTech market, highlighting key trends and developments from Q2 2024, among other stories.

European FinTech Investment Landscape

The European FinTech sector has experienced a significant downturn, with deal activity plummeting by 77% year-over-year in Q2 2024.?Despite this overall decline, the United Kingdom has managed to maintain its position as the leader in the European FinTech market.

UK's Continued Dominance

The UK secured its top spot by capturing a third of all FinTech deals in the region during Q2 2024.?While the absolute number of deals decreased from 341 in Q2 2023 to 87 in Q2 2024, the UK's market share increased slightly, demonstrating its resilience in a challenging environment.?

Other Key Players

Following the UK's lead:

1.??? France: 43 deals (16% market share)

2.??? Germany: 26 deals (10% market share)

Both countries saw significant reductions in deal numbers compared to the previous year, reflecting the broader challenges the European FinTech sector faced.

Spotlight: German FinTech Success

Despite the overall market contraction, there are still success stories emerging from the European FinTech scene. One notable example is Finmid , a Berlin-based embedded FinTech solution provider.

Finmid's Series A Funding

Finmid secured the largest deal for a German FinTech in Q2 2024, raising $25 million in a Series A funding round.?This investment values the company at $107 million post-money, highlighting the continued interest in innovative FinTech solutions.

Finmid's Market Position

Finmid specializes in offering payment and financing options for marketplaces, targeting two-sided businesses looking to improve their margins through integrated financial services.?With growing demand among European SMBs for alternative financing sources, Finmid is well-positioned to capture a larger share of the European embedded finance space.

Looking Ahead

While the European FinTech market faces challenges, opportunities for growth and innovation remain. Companies that can address the evolving needs of businesses and consumers in the financial sector are likely to attract investor interest and thrive in this competitive landscape.

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PayMob Secures $72M in Series B Funding for MENA Expansion

PayMob , Egypt's leading digital payments infrastructure provider, has successfully raised $72 million in a Series B funding round. This significant investment marks a major milestone for the company and sets the stage for its ambitious expansion plans across the Middle East and North Africa (MENA) region.

Funding Details

The Series B round was led by Kora Capital, PayPal Ventures, and Clay Point, with participation from notable investors including:

• Helios Digital Ventures
• British International Investment
• Nclude

This latest funding brings PayMob's total capital raised to date to an impressive $108.5 million.

Company Background

Founded in 2015 by Islam Shawky , Alain El Hajj , and Mostafa Menessy , PayMob has established itself as a key player in Egypt's fintech landscape. The company's innovative payment infrastructure enables businesses of all sizes to accept online and in-store digital payments.

Expansion Plans

With this fresh injection of capital, PayMob is poised to:

1.??? Accelerate its expansion across the MENA region

2.??? Enhance its product offerings

3.??? Invest in talent acquisition

The company aims to capitalize on the growing demand for digital payment solutions in emerging markets, particularly in countries with low banking penetration rates.

Market Opportunity

The MENA and the greater Africa region presents a significant opportunity for PayMob, with:

• A large population of over 1.8 billion people
• Rapidly increasing smartphone adoption rates
• Growing e-commerce sector

Impact on Financial Inclusion & Wellness

By providing an accessible and user-friendly payment infrastructure, PayMob is playing a crucial role in promoting financial inclusion across the region. The company's solutions enable small businesses and individuals to participate in the digital economy, fostering economic growth and innovation.

Looking Ahead

As PayMob embarks on this new chapter of growth, the company is well-positioned to become a dominant player in the MENA fintech landscape. With its strong track record, innovative technology, and now substantial funding, PayMob is set to shape the future of digital payments in the region.

This latest funding round validates PayMob's business model and highlights the increasing investor interest in MENA's burgeoning fintech sector. As the company expands its reach and enhances its offerings, watching how PayMob contributes to the digital transformation of payments across the Middle East and North Africa will be exciting.

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TD Markets Secures Crypto License in South Africa

In a significant move for the African cryptocurrency market, TD Markets has obtained a Crypto Asset Service Provider (CASP) license from South Africa's Financial Sector Conduct Authority (FSCA)

This development marks a crucial step in regulating and legitimizing cryptocurrency services in the region.

What does this mean?

The CASP license authorizes TD Markets to offer regulated cryptocurrency services, enhancing security and consumer protection for traders in the digital asset market.

This move aligns with global efforts to establish oversight in the rapidly evolving cryptocurrency industry.

?Key points:

• TD Markets can now provide a regulated environment for cryptocurrency and related products
• The company operates under TD Markets (Pty) Ltd with the license number FSP49128
• Existing clients won't need to take any action but will benefit from enhanced regulatory oversight

Implications for the African Crypto Market

This licensing is part of a broader initiative by South African regulators to create a safe and transparent ecosystem for cryptocurrency trading.

The FSCA's framework aims to enhance the cryptocurrency market's credibility by establishing rigorous standards for brokers.

Looking ahead:

TD Markets plans to launch new products in line with this development, though specific details have not been disclosed. This move could potentially pave the way for more diverse and regulated cryptocurrency offerings in the African market.

The Bigger Picture

South Africa's approach to cryptocurrency regulation is part of a global trend. The FSCA has been intensifying its efforts to license the cryptocurrency industry, with plans to license approximately 60 cryptocurrency platforms by the end of March this year.

As the cryptocurrency landscape continues to evolve, we can expect to see more developments like this, balancing innovation with consumer protection.

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Mastercard's Bold Move in Cybersecurity: Acquiring Recorded Future

In a significant development in the fintech world, Mastercard has announced plans to acquire Recorded Future, a global threat intelligence company, for a whopping US$2.65 billion.

This strategic move is set to reshape the landscape of cybersecurity in the payments industry.

The Acquisition at a Glance

Deal Value: US$2.65 billion

Expected Closure: Early 2025

Subject to: Regulatory approval

Why This Matters

As cybercrime costs are projected to skyrocket to US$9.2 trillion by 2024, Mastercard's acquisition of Recorded Future is a proactive step toward strengthening its cybersecurity capabilities.

This move is not just about protecting Mastercard's own interests, but also about enhancing security for its vast network of merchants and financial institutions.?

What Recorded Future Brings to the Table

Recorded Future is no ordinary cybersecurity firm. Here's what makes them stand out:

• Real-time threat detection: Using AI and data analysis
• Actionable insights: Provided to governments and Fortune 100 companies
• AI-powered platform: Simplifies threat intelligence and improves risk management

The Synergy

This acquisition isn't just about adding a new company to Mastercard's portfolio. It's about creating a powerful synergy:

• Complementary services: Enhances Mastercard's existing identity verification, fraud prevention, and cybersecurity offerings
• Proven collaboration: The two companies have already successfully partnered on an AI-supported service that improved the detection of compromised payment cards
• Innovation catalyst: Expected to foster the development of advanced cybersecurity practices

Looking Ahead

With this acquisition, Mastercard is not just preparing for the future; it's shaping it. As Craig Vosburg , Chief Services Officer at Mastercard, puts it:

"Together we will innovate faster, create smarter models and anticipate emerging threats before cyberattacks can take place – in payments and beyond."

This move by Mastercard is a clear signal that in the digital age, cybersecurity is not just an IT concern, but a core business imperative. As we move towards an increasingly interconnected financial ecosystem, such strategic acquisitions will likely become more common, setting new standards for security in the fintech industry.

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Stay tuned to #AliTalksTech for more updates on the ever-changing world of FinTech and technology.