Investors pour almost $400m into Nigeria in one week

Investors have poured almost $400 million into payments companies based in Nigeria in the past week, in a sign of how seriously venture capital firms are taking the opportunity to build financial networks across the continent.

OPay, the Africa-focused, Chinese-backed payments company founded by Opera, on Monday announced it had raised $120m from a group of investors including Sequoia Capital China and SoftBank Ventures Asia, following a $50 million undraising in June.

The news came just days after Visa announced a $200 million nvestment in Lagos-based Interswitch and another local fintech company, PalmPay, said it had raised $40m in a round led by China’s Transsion.

“The growth in the payments space is probably like no other on the continent at the moment,” said Segun Agbaje, chief executive of Guaranty Trust Bank, Nigeria’s largest lender by customer base and a pioneer in digital payments. 

“There is so much untapped potential . . . this is a space where people are growing 20-30 per cent, month on month — that tells you why the money is pouring in.

The tally announced by the three companies in the past week is a significant slice of the total $1.2 billion in venture capital raised across all of Africa last year, according to data from Partech Ventures.

All three companies suggested they would use the infusion of cash to expand across sub-Saharan Africa, where only a third of adults have bank accounts.

Each is aiming to become the first pan-African payments company, a goal that has been hamstrung by complicated foreign exchange controls, inefficient cross-border trade and complicated, diffuse regulatory regimes. All are using Nigeria — the biggest economy in Africa — as a launch pad for their expansion.

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