Fintech remains the most attractive category of startups in Africa for investors

Fintech is the most dominant component of Africa’s startup space, with the majority of startup funding over the past four years flowing into this sector. And for the past six and a half years, African fintech startups have raised about $900 million, more than twice that raised by startups in any other space over the same period, according to Disrupt Africa. The biggest funding news this year in this space was that of Flutterwave, an Africa-focused payment technology company, raising $170 million in a Series C round.

With more than half of the adults on the continent still unbanked, these startups fill gaps in traditional financial services by innovating and putting up digital systems and infrastructure. Diversifying allows them to fill these gaps while leveraging technology and the opportunities it offers in banking, payment, and credit.

Technology enables fintech startups to innovate and reach new customers

Technology provides innovative solutions for reaching customers. The most popular combinations, the report says, include payment, remittance, and business admin platforms; payment, lending, and financing companies; and investtech and personal finance platforms.

Businesses can scale geographically or vertically, Jackson says, “and often adding new verticals to your product suite is easier as you are simply offering a new  service to your existing customer base, who hopefully already use and trust you, as opposed to having to attract a whole new base in a new, and probably quite different, market”.

On the customer side, Jackson says, there’s a “pull factor”, as customers “ideally” want to carry out all their financial transactions in one place.

Sign up to the Quartz Africa Weekly Brief here for news and analysis on African business, tech, and innovation in your inbox.

📬 Sign up for the Daily Brief

Our free, fast, and fun briefing on the global economy, delivered every weekday morning.