Harnessing the potential for intercontinental expansion of African fintech

Nigeria’s startup ecosystem has grown significantly over the past decade. According a report by Partech, $1.8 billion was invested in Nigeria in 2021, or 34% of total equity funding for African startups that year. With 185 equity deals representing 27% of the continental total, Nigeria dominates the ecosystem in terms of investment volume and number of funding rounds.

Additionally, the fintech industry has hosted a great deal of venture capital funding, foreign investment, as well as corporate consolidations and collaborations in the Nigerian tech ecosystem. The industry has generated over 70% ($293.2 million) in start-up revenue in the first quarter of 2021. This clearly indicates that the fintech industry in Nigeria has seen massive development over the years.

However, in recent years, an increasing number of startups have started expanding outside of Africa into other emerging markets. The fintech industry has notably seen a series of intercontinental expansions in an effort to achieve a global presence.

In 2018, paga announced expansion intentions in Mexico and the Philippines in a $10 million funding round that was followed by the expansion of migoa fintech startup that offers credit as a service to large Nigerian companies, in Brazil in 2019.

Additionally, the mobile loan app Lydia also lent $3 million to Eastern European SMEs following its expansion into Poland and the Czech Republic in April 2020, and Get It Done Now (GIDN), a mobile fintech and e-commerce platform, extended in Spain in 2021, among many others.

Despite its rapid expansion, Nigeria’s fintech sector still faces a number of hurdles that continually impede future progress. This includes but is not limited to regulatory hurdles, misinformation, and illiteracy that lead to lack of trust in fintech companies, fraud, and more.

Nonetheless, Nigeria remains a growing fintech hub and there are still prospects for further development of the ecosystem through intercontinental expansions.

The potentials offered by other emerging markets such as Europe are reflected in opportunities such as the free movement of goods and services within the EU, access to local and regional partners and market clusters that offer easy and immediate access to a strong supply chain.

Generally, the barriers to entry into global markets are not as difficult as they once were, as we now operate in a very international economy. There’s no better time to explore global expansion than now.

On November 15 and 16, Fidelity Bank in partnership with TechCabal will host the inaugural edition of the Fidelity International Trade and Creative Connect. The event will bring together leading entrepreneurs, investors and regulators operating in Nigeria’s commodities, services, creative, fashion and fintech sectors, to discuss advancements by players in the technology sectors. and creation. They will also discuss opportunities that can be exploited to evolve the ecosystem. Register here to participate.

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