The year that was 2020 brought profound challenges to every continent across the globe, and Africa was no exception. As well documented as the pandemic and politics are, we are reading far less on some of the positive side effects of this year- and there are some, if you know where to look.
One such area is in the laying of foundations for the rise in technology companies, both in Financial solutions (Fintech) and otherwise. There have been some huge milestones that have occurred recently. Jumia Technologies (JMIA) one of the largest e-commerce startups in Africa, listed on the New York Stock Exchange in 2019. In doing so, it became the first African startup to list on a major global exchange and opened the world’s eyes to what can be achieved by a company that is, by its own admission, ‘100% Africa’. The year 2020 was pivotal for the company, with the share price movement of the ‘Amazon of Africa’ growing from a 52-week low of $2.15 to currently trading at >$40. What an incredible achievement and return for shareholders.
Events like this on the global stage brings a lot of attention for the region. It was huge news in the Fintech space when Ugandan Ham Serunjogi and Ghanaian Maijid Moujaled’s firm Chipper Cash received further investment. The company offers mobile-based, no fee, P2P payment services in seven countries: Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya and raised a $30 million Series B funding round led by Ribbit Capital with the participation of Bezos Expeditions — the personal Venture Capitalist (VC) fund of Amazon CEO Jeff Bezos. In my opinion, this is just scratching the surface of the investment coming to Africa. Global VC firms are already very interested in countries like Nigeria, Kenya and Egypt. We will see the interest from foreign investors widen much further in 2021, with other countries such as Rwanda and Ghana showing great promise. At the last UK-Africa Investment Summit held in London, I witnessed this first-hand with the doors of investment fully open between the two regions.
Technology companies are normally born to help solve a problem, and in the current climate, there are arguably more problems than ever that need urgent attention. This is part of the reason as to why thousands of African start-ups are now coming to life, particularly in cities like Nairobi and Cape Town. All over Africa, but particularly in Nigeria, we are seeing a boom in companies focused on the Cryptocurrency space, riding on the renewed hyper-interest shown for Bitcoin (recently hitting $34k).
A large proportion of these companies are focused on the finance sector generally, with many- like my company Equiti Group/ EGM Securities (fxPesa)- determined to help improve financial literacy for the ever-growing population. Recent reports predict that population growth rates in Africa far outpace all other regions, with 2020 total population of 1.35 billion moving to 4.4 billion by the end of the century. It is critical that this growing population are financially savvy and attentive to their financial futures.
So the challenges that this pandemic brings creates an opportunity like no other for certain industries and entrepreneurs. Iconic companies such as Airbnb, Slack, Square and Whatsapp were born in the last recession (2008-2010), and this pandemic and subsequent economic downturn will force the same. In the Fintech sector, the future is exceptionally bright and we will see more ‘unicorns’ (start-ups valued at $1 billion or more) springing up across the world and Africa will find its own representatives for that club.
I’m committed to servicing the financial needs of Africans, improving economic knowledge and in doing so adding to an industry that will be creating much-needed jobs well past this pandemic. If you want to understand this mission more, please join me on Twitter @bjmyersUK
