Africa’s newest unicorn: OPay raises over $400 million as SoftBank makes its first bet on Africa

Opay raises $400 million to reach unicorn status - Startup Lagos

In a Vision Fund 2 round led by SoftBank, and participated in by Sequoia Capital China, DragonBall Capital, Redpoint China, Source Code Capital, SoftBank Ventures Asia, and 3W Capital, OPay has raised over $400 million. This marks SoftBank’s first investment in Africa and heralds the spiraling growth of startups, especially fintechs in Africa.

OPay’s successful funding on SoftBank’s Vision Fund 2 is the largest raise this year, topping those of Flutterwave’s March raise of over $170 million, TymeBank’s raise of $109 million in February, and Chipper Cash that hit about $100 million in May. This takes OPay to unicorn status alongside the big four African tech companies, with billion-dollar valuations, Jumia, Interswitch, Fawry, and Flutterwave.

Founded in 2018, the company creates value within the industry by offering digital alternatives to cash and other legacy methods of payment, that help to ensure financial and information security.

In 2020, the company had to halt its ride-hailing and logistics services in Nigeria, citing the harsh business environment and the devastating effects of the lockdown during the COVID-19 peak periods in Nigeria. The decision saw the company suspend its services such as ORide, OCar, and OExpress, sticking to its payments services alone within the country. This payments service enables users to easily send and receive money and initiate transactions through OPay’s network of agents across the country.

The company has been constantly backed by Japan’s SoftBank and China’s Meituan Dianping, with its services spread across the geographical markets of Ghana, Nigeria, Egypt, South Africa, and Kenya. The company is, however, keen on expansion to the Middle East, replicating its successful business models in adjacent geographical markets.

Opera reported that OPay’s monthly transactions grew by over 4.5 times its previous value to over $2 billion in December of 2020, and getting well over $3 billion presently, with claims that the company processes over 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions. Yahoo Finance reports that Norway’s Opera Limited, sold over 29% of its stake in OPay, earlier in June this year, profiting over $31.1 million from the sale.

In an emailed statement, OPay Chief Executive Officer, Yahui Zhou said,

We want to be the power that helps emerging markets reach faster economic development.

Commentators argue that even with the significant growth and increase in funding to the fintech sector, many fintech companies would need to be on their toes in innovating and pivoting their initiatives towards service tech, and not merely facilitation of payments. This is so that fintechs are constantly providing value and do not lose relevance in the long run, with an overdue focus on payments infrastructure alone.

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