INSUBCONTINENT EXCLUSIVE:
Africa-focused fintech startup OPay has raised a $120 million Series B round backed by Chinese investors.Located in Lagos and founded by
consumer internet company Opera, OPay will use the funds to scale in Nigeria and expand its payments product to Kenya, Ghana and South
Africa — Opera’s CFO Frode Jacobsen confirmed to TechCrunch.Series B investors included Meituan-Dianping, GaoRong, Source Code
Capital, Softbank Asia, BAI, Redpoint, IDG Capital, Sequoia China and GSR Ventures.OPay’s $120 million round comes after the startup
raised $50 million in June. It also follows Visa’s $200 million investment in Nigerian fintech company Interswitch and a $40 million
raise by Lagos-based payments startup PalmPay — led by China’s Transsion.There are a couple of quick takeaways
Nigeria has become the epicenter for fintech VC and expansion in Africa
And Chinese investors have made an unmistakable pivot to African tech.
Opera’s activity on the continent represents both trends
The Norway-based, Chinese-owned (majority) company founded OPay in 2018 on the popularity of its internet search engine.Opera’s
web-browser has ranked No
2 in usage in Africa, after Chrome, the last four years.The company has built a hefty suite of internet-based commercial products in Nigeria
around OPay’s financial utility
These include motorcycle ride-hail app ORide, OFood delivery service and OLeads SME marketing and advertising vertical.“OPay will
facilitate the people in Nigeria, Ghana, South Africa, Kenya and other African countries with the best fintech ecosystem
We see ourselves as a key contributor to…helping local businesses…thrive from…digital business models,” Opera CEO and OPay Chairman
Yahui Zhou, said in a statement.Opera CFO Frode Jacobsen shed additional light on how OPay will deploy the $120 million across Opera’s
OPay looks to capture volume around bill payments and airtime purchases, but not necessarily as priority. “That’s not something you do
We want to focus our services on things that have high-frequency usage,” said Jacobsen.
Those include transportation services, food
services and other types of daily activities, he explained
Jacobsen also noted OPay will use the $120 million to enter more countries in Africa than those disclosed.Since its Series A raise, OPay in
Nigeria has scaled to 140,000 active agents and $10 million in daily transaction volume, according to company stats.Beyond standing out as
another huge funding round, OPay’s $120 million VC raise has significance for Africa’s tech ecosystem on multiple levels.It marks 2019
as the year Chinese investors went all in on the continent’s startup scene
OPay, PalmPay and East African trucking logistics company Lori Systems have raised a combined $240 million from 15 different Chinese actors
in a span of months.OPay’s funding and expansion plans are also a harbinger for fierce, cross-border fintech competition in Africa’s
This includes OPay going head to head in Kenya with Africa’s highest volume mobile money product, M-Pesa
Parallel events to watch for include Interswitch’s imminent IPO, e-commerce venture Jumia’s shift to digital finance and WhatsApp’s
likely entry in African payments.The continent’s 1.2 billion people represent the largest share of the world’s unbanked and underbanked
population — which makes fintech Africa’s most promising digital sector
But it’s becoming a notably crowded sector, where startup attrition and failure will certainly come into play.Not to be overlooked is how
OPay’s capital raise moves Opera toward becoming a multi-service commercial internet platform in Africa.This places OPay and its
Opera-supported suite of products on a competitive footing with other ride-hail, food delivery and payments startups across the continent
That means inevitable competition between Opera and Africa’s largest multi-service internet company, Jumia.Finally, Opera’s Chinese
backed Africa moves will add a new component to debate around China’s engagement in Africa
In previous years, the country’s interactions with African startups were relatively light compared to deal-making on infrastructure and
Chinese actors investing heavily in African mobile consumer platforms lends to looking at new data-privacy and security issues for the
