Report Shows 57% of Nigerian Fintech Startups Earn Over $5M Annually
According to a survey of 290 startups conducted by Ernst & Young in partnership with the FinTech Association of Nigeria (FintechNGR), 57% of fintech startups (that is 165) in Nigeria generate annual revenue of more than $5 million.
The report points that, 85% of these startups have gone past the early stage and are already post-revenue, with 76% of these profitable post-revenue startups being fintech. This alludes to the Nigerian fintech startups being the cash cow of Africa’s startup ecosystem, producing the country’s only two unicorns Interswitch and Flutterwave. With 40% of the Nigerian’s population financially excluded, there remain vast opportunities for Nigerian fintech startups to explore.
While the Ernst & Young report does not offer a breakdown of how this revenue is generated, Techpoint infers from the Briter Bridges and Catalyst Fund report that it is possible these startups generated their revenue from commissions received on transaction charges.
Given the track record of success, Nigerian fintech startups seem capable of tackling the financial inclusion challenge in the country. We can expect more innovation and radical approaches to bringing more Nigerians into the financial fold. However, care must be taken, as the Nigerian government have proven to crack down on business moves it considers too drastic – this is deducible from the introduction of the Regulatory Sandbox and the ban on cryptocurrencies.
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