The African fintech space saw 26 startup acquisitions between June 2021 and July 2023, up 271 per cent on just seven in the preceding two-year period, with M&A activity in the sector really hotting up.
Disrupt Africa’s Finnovating for Africa publication, released every two years since June 2017, tracks the extraordinary development of the fintech ecosystem across Africa.
The fourth edition of the report is released in partnership with AZA Finance, an African fintech company offering secure and efficient financial infrastructure for payments, foreign exchange, and settlement; and Curacel, an insurance infrastructure company that helps insurers and partners in Africa and other emerging markets increase the reach and functionality of insurance through cloud-based tools and APIs.
The fintech startup ecosystem is continuing on its growth trajectory from an activity perspective, with the number of startups operating in the space increasing by 17.7 per cent to 678 in 2023 as compared to 2021.
Meanwhile, fintech ventures have raised more than US$2.7 billion in VC funding in the last two years, having seen unprecedented growth. And there has also been an uptick in M&A activity.
Indeed, Disrupt Africa data suggests you are much more likely to be acquired as a fintech business than in any other vertical. Twenty-six ventures were bought out in the last 24 months, up from just seven in the preceding two-year period between 2019 and 2021.
South Africa has generally led the way, accounting for 10 of the deals over the last two years, and 16 overall. The most famous ones remain the acquisition in 2011 of mobile financial services provider Fundamo by Visa for US$110 million, and the buyout of SnapScan by Standard Bank in 2016.
Nigeria was the location for the flagship fintech acquisition of recent years – Paystack’s reported US$200 million acquisition by Stripe in 2020, a big moment that ignited increased interest in the continent’s fintech space. It too has had a strong couple of years from an M&A perspective, with nine deals done since July 2021.
Startups in Morocco, Ivory Coast, Egypt, Kenya, Rwanda, Zambia, and Tunisia have also been acquired in the last two years.
“These numbers are obviously still relatively small compared to more developed ecosystems, but the near-on quadrupling of fintech acquisitions within a two-year period is a significant statistic. It suggests there is a desire to “buy in” innovative services on the continent, and also signals consolidation is finally happening within the wider financial services space, as many of these deals are “startup-on-startup”. All of this will serve to embolden both investors and entrepreneurs in the sector,” said Disrupt Africa co-founder Tom Jackson.
