Nigeria’s Opay Gets Listed On CB Insight’s Top Global 250 Fintech Companies

Africa’s fintech sector has continued to be the most dominant component of Africa’s tech startup space. The sector remains the most alluring category of startups in Africa for investors, with the majority of funding over the past four years flowing into the sector. Over the past six years, African fintech startups have raised about $900 million, more than twice what was raised by startups in any other segment over the same period, according to a report by Disrupt Africa.

The biggest funding in the sector this year is that of Nigeria’s OPay, a pan-African payments technology company, which raised $400 million in funding led by SoftBank. Other African fintech companies including Wave, Flutterwave, TymeBank, and Chippercash have also gained traction and raised impressive amounts this year, but OPay is the only one dominant enough to make this year’s CB Insights’ ranking of the Top 250 fintechs in the world. Last year, OPay, PalmPay and South Africa’s Yoco were the only African fintechs to feature in CB Insights’ 2020 Fintech Top 250 list.

According to CB Insights, this year’s selection came from a pool of over 17,000 companies around the globe, and while some of these companies applied for themselves, others were nominated. The fintechs were chosen based on several factors like data submitted by the companies, company business models and momentum in the market, and Mosaic scores —a CB Insights proprietary algorithm that measures the overall health and growth potential of private companies. OPay, which only recently attained its unicorn status following the $400m SoftBank-led funding, was listed in the Payments Processing and Network subsector.

In the space of three years of its establishment, OPay has grown and positioned itself as one of the leading fintech solutions in Africa. The company has however had its own share of struggles and setbacks on its way to the top. In November 2019, the company faced a series of backlash after it suddenly increased its charges to 2 percent of every transaction carried out. Following the outcry, OPay was compelled to apologize and announce a new price system. Nevertheless, this did not hold its users back from seeking more favourable options elsewhere.

OPay’s parent company, Opera, also found itself under probe by regulators when several of its fintech apps including CashBean (India), OKash (OPay, Nigeria), and OPesa (Kenya) came under threat of being removed from Play store. But OPay has since triumphed over these challenges and has cemented its standing as Africa’s leading fintech company. In December 2019, it launched a USSD service for mobile transactions to allow users to bank without data, thus becoming a pacesetter in the attempt of fintech companies, including the likes of Paga and TeamApt, to bank the unbanked.

OPay’s biggest investors include Sequoia Capital, IDG Capital, Source Code Capital, GSR Ventures, and Meituan Dianping. The company has over 300,000 agents and touts more than 5 million users across Nigeria. OPay has also extended its operations to other countries, although its attempt to expand to South Africa and Kenya failed due to the COVID-19 pandemic. The company however successfully expanded to North Africa and now has a physical location in Egypt. Despite the failed expansion to South Africa and Kenya, OPay’s pan-African ambitions, which include entering markets in other African countries, remain unchanged. In addition to African countries, OPay has its eyes set on markets in the Middle East.