Two Y-Combinator Startups, and is Fintech Nigeria ready for explosive growth?

Looking at Africa’s Fintech map, the usual suspects are Kenya and South Africa. While Kenya’s growth over the years has been primarily around mpesa, South Africa came third in EY’s Global Fintech Adoption Report 2017. The report highlighted that with 71% growth rate, South Africa was just behind China and India in Fintech adoption. However, if we are looking for the next big market for Fintech in Africa, we cannot go wrong with Nigeria.

Gold globe with many gold coins

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The country has been grappling with a recession and is finally in recovery mode. The market potential for Fintechs in Nigeria can be explained by the growth of mobile phone lines. Like the cashless revolution that’s ongoing in India (thanks to Demonetization) and the growth of Mobile payments in China (thanks to Alipay/Tencent), Nigeria has been undergoing its own leap frog moment. Mobile transactions have grown from an average monthly value of $5 million in 2011 to $142.8 million in 2016.

The more interesting statistic for me is the potential for Financial inclusion. As per Bank Verification Number data in Nigeria, less than 50 Million people (of population of 170 Million) had bank accounts.


The Federal Government of Nigeria has been spearheading the cashless drive through its Payments Systems Vision (PSV). This has helped translate internet penetration and smart phone adoption into consumer mobile payments use cases.

SMEs often play a critical role in Fintech adoption. About 70% of Nigerian traders own a mobile phone and 74% of them are prepared to learn a new technology. On that note, let me discuss a couple of startups that are thriving in Nigeria.

Releaf  (and they are not purely Fintech): They are an online business to business marketplace, offering a solution that empowers Agropreneurs with the ability to locate and transact with trusted buyers and sellers. The platform allows them to trade directly with individuals along the value chain. By disintermediating the value chain, Releaf enables both parties the full value of the transaction.

The platform also acts as a transparent marketplace where prices along the trade corridor are visible to all parties. Availability of pricing information helps farmers to set the right market prices for their produce and optimizes their distribution by highlighting where market prices are higher than their immediate area. Farmers can also interact with each other and plan bulk sale of produce. As farmers can now look beyond their immediate markets, their post harvest wastage is also reduced.

Releaf were finalists in the Harvard Startup competition for Africa Innovation. They also were part of Y Combinator programme in Q3 last year.

Flutterwave is a platform that enables seamless payments experience across the African continent. Flutterwave have created a layer that payment service providers and global merchants can integrate with. In doing so, these providers get access to payment channels, methods and local currencies in different African countries.  The Flutterwave’s API enables merchants to pay and get paid from millions of cards, mobile money wallets and bank accounts in several African countries almost immediately.

They are an alum of Y Combinator and have their head quarters in San Francisco. Their offices are based in Lagos, Nairobi, Accra, and Johannesburg. They have so far done over $2 Billion worth of transactions on their platform and have partnered with 43 Banks across Africa.


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They have three key capabilities,

  • Rave: A Flutterwave product that accepts payment methods from customers around the world.
  • Moneywave: A Flutterwave product that allows users to make payments to anyone around the world.
  • Barter: A more recent product of Flutterwave that lets users manage virtual and physical cards for retail, loyalty and expense management

While they have managed most of their growth in 2017, 90% of their transactions are still based out of Nigeria. They have managed to sign partnerships with 43 banks in 2017 primarily because of their go-to-market strategy and stayed clean from a regulatory stand point too. The banks and payments solutions took care of growth and compliance, while they just focused on the technology. More recently they also helped Transferwise relaunch their platform in Nigeria through a partnership.

While I picked the two most interesting companies (for me), the Nigerian Fintech ecosystem has a good variety of use cases across most Fintech clusters. The use cases are still quite simple as there are genuine gaps in value chain to be addressed, however the skills, ambition and more importantly the market is there to take firms with the right products to scale.

Arunkumar Krishnakumar is a Fintech thought leader and an investor. 

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