Browsing: FinTech

Critical Steps to follow for a successful Tech acquisition. www.theexchange.africa

Since 2015, over one-third of acquisitions in the African tech space have involved South African companies.

According to Disrupt Africa’s 2022 South Africa Startup Ecosystem Report, the South African startup environment is the best in the world for exit mergers and acquisitions.

  • Acquiring companies can gain an infusion of technology that creates a competitive edge or provides an entry into a new vertical market. An acquisition can also give an IT vendor additional manufacturing capacity or help a solution provider establish a foothold in new geographies.
  • The value of South African mergers and acquisitions increased by 958 per cent from the same period in 2020 to US$52 billion in the first half of 2021, from a total of 169 deals.
  • 2022 began with Volaris Group’s $88 million acquisition of software, and IT firm Adapt IT in January.

According to Refinitiv Data, the value of South African mergers and acquisitions increased …

  • Nigeria is the region’s top remittance receiver with US$17.6
  • Kenya is East Africa’s leading remittance receiver with US$3.7 billion
  • Remittance flows to Tanzania have been growing over the past years

Remittances to Tanzania just got a shot in the arm as two companies, Nala and Selcom, set the stage for seamless and cost-effective inbound remittance flow to Tanzanians’ mobile wallets.

The partnership inked at Selcom’s premises in Dar es Salaam comes after an increasing inflow of cash to Tanzania from the United Kingdom and the United States diaspora.

The newly inked deal comes to complement Tanzania’s government efforts to incorporate the diaspora’s collective aspirations to propel Tanzania’s economic growth.

According to Tanzania’s Ministry of Foreign Affairs and East African Cooperation, the value of diaspora remittance went up by 42 per cent, equivalent to around US$570 million, up from US$400 in 2020.

The two tech-driven companies have stepped up to bridge …

  • In Nigeria, where an estimated 38 million people, or 36% of adults, remain financially excluded, the government has set a target of 95% financial inclusion by 2024
  • Interswitch secured US$110 million joint investment from LeapFrog Investments and Tana Africa Capital
  • The firm can be termed as the backbone of Nigeria’s online banking system and is well-known for its point-of-sale terminals, online consumer payment platforms, Quickteller, and Verve

Accelerating financial inclusion across Africa is increasingly on the agenda of most if not all countries across the continent. 

This has seen the creation of a lot of fintech firms working relentlessly to bring the unbanked and underbanked populations into the formal financial sector. 

In Nigeria, where an estimated 38 million people, or 36% of adults, remain financially excluded, the government has set a target of 95% financial inclusion by 2024. 

While this may seem like an ambitious goal, that will require institutions

  • Over the years, the continent’s FX market has been growing exponentially largely driven by the increased access to mobile devices and internet connections across the region
  • While retail forex trading in Africa may only represent a small segment of the global currency markets (approximately 5.5) the continent has registered substantial growth over the past few years
  • African investment in the stock market was reserved for a particular set of elite people, viewed as an investment tool for those who had enough wealth to afford to buy huge sums of shares and hire stockbrokers 

Over the past decade, fintech in Africa has been triumphing over traditional structures and changing how financial services are delivered across the continent. 

This has made it possible for about 95 million people (57% of Africa’s population) to access affordable financial products and services despite them not necessarily having a traditional bank account. 

Mobile payment solutions being

  • The firm’s CEO Olugbenga Agboola has now come forward to address claims levelled against him in an email to employees
  • This is the first time the CEO has spoken in regards to the claims reported by West Africa Weekly, a Substack newsletter written by journalist David Hundeyin
  • The report highlighted several allegations against the startup and Agboola including fraud and perjury to insider trading as well as sexual harassment

Over the past two weeks, Nigerian fintech startup Flutterwave has been under fire after the firm’s Chief Executive Officer was accused of allegedly committing fraud, perjury to insider trading and sexual harassment.

The firm’s CEO Olugbenga Agboola has now come forward to address these claims levelled against him. 

In an email to employees, Agboola termed the allegations as false, condemning the impact these claims had had on the firm. 

“I’m writing today because I want you to know how concerned I

  • Pyypl’s card services are used in over a hundred countries with over a hundred different currencies, giving it connections to numerous global financial institutions facilitating cross-border money transfers
  • The financing is meant to help the firm continue its rapid growth in its core GCC markets and expand further into Africa with a focus on Kenya and Mozambique
  • Fintech startups in Africa have continued to gain a lot of attention from investors who have been pouring billions of dollars to support the industry

United Arab Emirate’s Pyypl is set to open shop in Kenya following the US$11 million series A financing received from a group of investors from Europe, North America and Asia.

The firm is a blockchain technology-based fintech company providing digital payments and financial services for smartphone users to carry out online transactions, without the need for a bank account or credit card. 

Apart from entering the Kenyan market,

  • As more companies opt to digitize their operations across the board, most firms initially work with one or two payment processing providers
  • The need to onboard more payment providers arises over time as enterprises expand to different regions and work to meet their customers’ growing needs
  • The pandemic presented one of the best opportunities for e-commerce firms and FinTechs all over the world to achieve massive growth with the majority of people working and schooling from home

There is currently an untapped opportunity in Africa for the creation of unified payment Application Programming Interfaces (API) that enable e-commerce businesses to run seamlessly. 

While Payment APIs have the power to optimize payment processes for both businesses and shoppers, a majority of small and large enterprises across the continent are yet to adopt such platforms in their day-to-day transactions. 

This is particularly the case for businesses that operate in more than one

  • Data by the World Bank reveals that at least a quarter of the African population has internet access, a nearly fifty-fold increase in internet usage since 2000. 
  • The rapid spread of the internet across the African continent has been lauded as a key driver of prosperity and a sign of the continent’s technological coming of age. 

Over the past few years, the wealth management industry has seen a significant amount of diversification, from traditionally having products geared towards institutional investors and high net worth individuals to offering more accessible products to low and middle-income earners. 

While WealthTech is not a new concept in Africa, there is room for market players to leverage consumer demand for wealth management products that are more digitally accessible and easy to use. 

WealthTech or wealth management technology is the combining of technology such as AI, big data, SaaS, with financial assets, such as savings, investments,

  • Norrsken Foundation has set up a US$200 million fund aimed at backing Africa’s future tech giants
  • So far, the fund, dubbed the Norrsken22 African Tech Growth Fund, has raised US$110 million
  • The firm will make 20 investments at an average ticket size of US$10 million and may go as high as US$16 million, including follow-on rounds in some portfolio companies

Stockholm-based Norrsken Foundation has set up a US$200 million fund aimed at backing Africa’s future tech giants. 

The non-profit organization that seeks to find solutions to problems including poverty, famine, environmental issues, and mental health has its sights set on key markets across the continent to fast-track the growth of African tech firms. 

The announcement comes barely two months after the foundation opened its Norrsken House in Kigali, Rwanda, which plans to accommodate thousands of entrepreneurs by next year.

The foundation has now partnered with thirty unicorn founders and a

  • At the close of 2021 Capitec Bank boasted a market capitalization of ZAR 220 billion (US$ 13.82 billion)
  • Capitec is a spectacular outlier with its share price rising an astounding 183.75% in 2021
  • Capitec shares have grown in value by 150,385.61%
Capitec Bank is a special company by any definition of the word and by any stretch of the imagination.

At the close of 2021 it boasted a market capitalization of ZAR 220 billion /US$ 13.82 billion) which is roughly the same and marginally larger than that of Africa’s largest lender by assets, the Standard Bank Group!

This feat borders on blasphemy. That a company that is barely 25 years old could rival and eclipse in terms of market value a financial juggernaut that has a presence and footprint in nearly every country in Africa and has been doing business for over 150 years!
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