Opay; an African fintech company, has declared plans to raise $400 million from investors. OPay is one of the biggest fintech companies in Africa and is valued at$1.5 billion.
While Opay is an Africa-focused company, it is backed majorly by Chinese investors. The Nigeria-based fintech is backed by Chinese companies like Meituan, a multi-billion-dollar Chinese shopping platform.
Since its launch in 2018, Opay’s performance in Nigeria has been quite impressive, and the new push for funding can only mean that the company has bigger plans.
In July 2019, OPay raised $50 million from Sequoia Capital, IDG Capital, Source Code, GSR Ventures, and Meituan-Dianping. Opera itself also invested in the round. Four months later, OPay raised a massive $120 million in a Series B round.
The $170 million raised so far came from mainly Chinese investors who have collectively begun to bet big on African startups over the past few years. Some of them include SoftBank, Sequoia Capital China, IDG Capital, SoftBank Ventures Asia, GSR Ventures, and Source Code Capital.
With this new fundraising which is coming two years after, OPay is looking to raise funding to finance its expansion plan, having expanded to Egypt this year.
No doubt, OPay owes its staggering growth to the pandemic. Covid-19 protocols, such as social distancing made banking halls challenging to access, and this compelled people to rely on mobile money services. The company also has plans to roll out debit and credit cards.
At one time, OPay seemed to be the only company growing its agent network, other rivals have now tapped into the same network. Telcos like MTN and Airtel, with operations in multiple African countries, are spinning off mobile money service arms as billion-dollar businesses to compete as well.
Mobile money services have long catered to the needs of the underbanked, and per GSMA, Africa had more than 160 million active mobile money users generating over $495 billion in transaction value last year.
Fintech is arguably the most promising digital sector in Nigeria, Africa’s most populous country, as a large share of people in the country are either underbanked or unbanked. This leaves fintech upstarts like OPay to capture as much market share as possible.
It will be interesting to see Opay’s plans unfold after this funding round is completed.