African unicorn startups
African Startups

Africa’s Startup Ecosystem now Has 4 Unicorns Valued at over $1 Billion each

By now, you should have heard about Flutterwave’s recent ground-breaking accomplishment. But just in case you haven’t, the fintech company’s valuation hit the $1 billion dollars mark after it secured $170 million in Series C funding round led by Avenir Growth Capital and Tiger Global.

Following this development, there are now four African unicorn startups, all valued at over $1 billion each. These startup unicorns include: Fawry, Interswitch, Jumia, and of course Flutterwave. Now, the interesting thing about these startups is that three of them were founded in Sub-Saharan Africa; Nigeria to be precise. Let us briefly examine what each of them do.

Fawry

Egyptian fintech startup, Fawry, is the only unicorn from Northern Africa. The company was established thirteen years ago by Ashraf Sabry, a technology business expert. His plan was to create a technology platform that would make it very easy for Egyptians to conveniently pay for their goods and services while bypassing the rigorous and complex payment system that was peculiar to the the country’s economy. And that was exactly what he did.

Over the years, Fawry has expanded rapidly, thereby establishing itself as a leading player in the Egyptian fintech/payments space. Information obtained from the company’s website noted that over 29 million people use the Fawry app on a monthly basis, even as 3 million transactions are carried out daily. The company also has 194 collection points.

In terms of investments, Fawry has attracted millions of dollars. According to Crunchbase, some of its major investors include the following: Helios Investment Partners, IFC Venture Capital Group, responseAbility, Egyptian-American Enterprise Fund, and Ideavelelopers.

Interswitch

Interswitch is Nigeria’s first unicorn startup. Much like Fawry, the financial technology firm also specialises in facilitating payments. As a matter of fact, Interswitch describes itself as “the getway to Africa’s payment ecosystem”. That’s not a wrong description.

Headquartered in Lagos, Nigeria, Interswitch was established in 2002 by Mitchel Elegbe. It was Nigeria’s foremast fintech startup and has over the years continued to dominate the space. For the past two decades the company has been in existence, it has expanded exponentially both in terms of product offerings and in the number of African countries where it located. These products and services include the all-inclusive payments platform, card networks and issuance services, businesses transaction processing and enablement, amongst others.

Investors who own major stakes in Interswitch include: Visa, TA Associates, Adlevo Capital, and Helios Investment Partners.

Interswitch is not currently listed on any stock exchange. However, on Friday, January January 31st 2020, the company listed a N23 billion bond on the Nigerian Stock Exchange through a Special Purpose Vehicle called Interswitch Africa One Plc. The N23 billion Callable Senior Unsecured Bond is part of the company’s N30 billion debt issuance programme. A statement by the Nigerian bourse explained that the bond has a seven year tenor at a fixed rate of 15 percent.

African unicorn startups
Interswitch’s CEO, Mitchel Elegbe, during the company’s 2020 bond issuance on the NSE

Jumia Group

Jumia is arguably Africa’s most dominant eCommerce startup. Although presently headquartered in Berlin, the company was actually founded in Lagos Nigeria back in 2012 by four Co-founders: Tunde Kehinde, Raphael Kofi Afaedor, Jeremy Hodara, and Sacha Poignonnec. Since its establishment, Jumia has since expanded to more than five African countries including Egypt, Kenya, Ivory Coast, and Morocco.

In April 2019, Jumia conducted an Initial Public Offering, listing its shares on the New York Stock Exchange. At the time, the company was valued at $1.9 billion, according to reporting by Nairametrics.

Cruncbase lists Jumia’s major investors to include the following entities: Mastercard, MTN Group, Goldman Sachs, AXA Group, Rocket Internet, Orange CDC Group, Millicom Systems, etc. Together, these investors have injected total funding of $908.1 million.

Flutterwave

Headquartered in San Francisco, USA, Flutterwave is a Nigerian fintech startup which was established in 2016 by two Nigerian entrepreneurs –  Iyinoluwa Aboyeji and Olugbenga Agboola who currently serves as the CEO. The company provides payment services such as card issuance & management, checkout, invoices, payment links, etc.

According to Crunchbase, Flutterwave has received total funding of $234.7 million from more than forty investors, including the following: Insight Partners, Tiger Management Corporation, WorldPay, Tiger Global Management, Early Capital, 9YardsCapital, Green Visor Capital, Avenir Growth Capital, etc.

What are the similarities between these African unicorn startups?

Writing on LinkedIn, the CEO of SycamoreNG, Babatunde Akin Moses, examined some of the unique features that are similar to these African unicorns. See them below:

  1. Three of them were founded in Nigeria (Fawry is Egyptian).
  2.  With the exception of Jumia, the other 3 are in Fintech. 
  3.  With the exception of Interswitch, none of the them was started by a sole founder.
  4. All founders of these companies had some sort of prior work experience before their startups.
  5.  All founders are educated up to the tertiary level, with many attending very renowned global institutions.
  6. The funding rounds were dominated by foreign investors, with local investors taking minority stakes.

Exclusive: Mitchell Elegbe, Founder & CEO of Interswitch Talks the Future of Africa’s Fintech Industry

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