Know Your Unicorns: Everything About Africa’s Most Valued Startups

African startups have continued to show that they are up to the competition with their global counterparts. While it may have taken some time for the startup space in Africa to get to its current state, the space has recorded impressive milestones. Today, Africa boasts of not one or two startups that are valued at nothing less than a billion dollars. Today we can count a handful of African-bred/focused startups that have become unicorns and put the continent in the spotlight.

These startups are not just unicorns. Collectively, they boast of millions upon millions in transaction volumes.  They have also successfully carved niches for themselves, from which they meet a certain problem that the continent is plagued with.

Among these startups, fintechs are the most popular. This is because Africa has millions of both underbanked and unbanked people which creates a huge opportunity for these startups. These startups have recorded tremendous success and continue to raise the bar for the traditional banking system. In the past, startups were believed to be bound for failure because of factors such as lack of funding, cost implications, the requirement of huge capital, competition from the traditional or existing system, etc. But the narrative has changed today! Not only do startups in Africa have a better enabling environment compared to the past, they also have access to funding. African startups now attract investors all over the world, including the biggest names. Most of the challenges previously faced by startups in the past have become old news.

In Africa and also globally, startups have shown resilience and have continued to improve their business model. This may be their secret to attaining unicorn status. The number of startups has also grown and will continue to as there lay endless opportunities for them. As of February, the total number of startups reached a thousand (specifically 1,042 at a cumulative valuation of $3,426 billion), according to CB Insight, and 31 percent of these unicorns were valued at exactly a billion dollars.

For newbies that may not know what the term unicorn means, it simply refers to a startup or company that is worth at least a billion dollars.

Here is a list of Africa’s ten most valued unicorns and all you need to know about them.

Flutterwave

Flutterwave recently became the most valued startup in Africa after it raised a series D round of $250 million in February this year that took its valuation to $3 billion.  The startup was valued at $1 billion after its Series C round where it raised $170 million from investors. Its backers include Tiger Global, PayPal, Greycroft Capital, and a host of other big names.

Flutterwave is among the various fintech startups capitalizing on Africa’s booming payments market. It is an African-centered startup operating with the aim of making it easier for Africans to build global businesses that can make and accept payment anywhere in the world and with any currency.

Flutterwave’s valuation has raised a lot of eyebrows considering the fact that it is valued more than top Nigerian banks. The question is if Flutterwave is really worth more than top Nigerian banks which have more presence and perform more transactions.

Flutterwave was founded by software engineer and serial investor Olugbega “GB” Agboola. The startup is present in 34 African countries and processes 200 million transactions worth more than $16 million. It also boasts of 900,000 businesses on its platform.

At the moment, nothing has been said concerning an initial public listing (IPO).

Opay

Opay formerly held the title of Africa’s most valued startup before Flutterwave yanked the title. Opay is currently valued at over $2 billion. Opay is the only African startup to make CB Insight’s top global 250 fintech companies. Opay was founded by Chinese billionaire Zhou Yahui but its roots go back to Telnet, a digital transformation company.

Telnet was founded in 1985 and from it two unicorns have emerged today – Interswitch and Opay. Today’s Opay is the combination of two different business entities – Opera and Paycom. Paycom was a Nigerian platform that allowed people to make transfers as well as buy and send airtime. Opera made its entry into the African space with its acquisition of Paycom, and Opay was born in 2018. The business has undergone changes to become what it is today. It operated multiple businesses before deciding to focus on its financial infrastructure. Opay used to be a super app that housed its other businesses including its mobility businesses – Oride, OTrike, OBus, and its food delivery businesses – OFood, its delivery business known as OExpress, and OKash and OWealth – businesses that provided loans and investment opportunities for people.

While it seemed like the business was doing too much (it was losing a lot of money from a handful of its subsidiary businesses), most of its businesses underwent regulatory actions and eventually, its best plan moving forward was to focus on providing financial services.

Opay’s backers include SoftBank, Meituan, Sequoia Capital, IDG Capital, etc.

Chipper Cash

Valued at more than $2 billion, Chipper Cash is one African startup that cannot be overlooked. When the phrase “African startups” is mentioned or raised, Chipper Cash will always be one of the startups to make the cut, and this is not because of its valuation. Chipper Cash is a game-changer when it comes to cross-border payments. It eradicates the outrageous rates and difficulties posed by regulations and restrictions that these cross-border payments are associated with.

In June 2020, the company closed its Series A round with $13.8 million in funding. Later that same year, it raised $30 million from its Series B funding round. It attained unicorn status after raising a Series C funding of $250 million. It had an initial Series C round where it raised $100 million and an extension round where it raised another $150 million.

Startups like Chipper Cash help to narrow the broad financial inclusion gap that Africa is characterized by. Chipper Cash does this by providing fast and efficient products that power domestic remittances, bill payments, loans, etc.

The startup was founded by Ham Serunjogi and Majid Moujaled in 2018. It is headquartered in San Francisco and has offices in Nigeria, Kenya and the Uk. Among its backers are; Jeff Bezos-funded Bezos Expeditions, Deciens Capital, Ribbit Capital, etc.

Wave

Wave is a Senegal-based mobile money company and became a unicorn after raising $200 million from its Series A financing round. This financing round which raised the startup’s valuation to 41.7 billion is the biggest Series A funding round for the francophone region of Africa.

Wave counts Sequoia Capital via its Sequoia Heritage Founders Fund, Stripe, Ribbit Capital, etc., among its backers.

The startup provides essential financial services and its target is the unbanked and underbanked people. While statistics show that up to $500 billion has moved through the accounts of 300 million active mobile money users in the francophone region, this, however, is only a fragment of the entire market. Wave wants to leverage the opportunities in this region.

Wave is a spinoff of Sendwave founded in 2014 by Drew Durbin and Lincoln Quirk. Sendwave is a company that offers little or no fee remittances from North America and Europe to numerous countries across Africa and Asia, “for anything from family emergencies to buying a friend a beer.” Wave is a mobile money product that Sendwave’s founders were testing. Wave was eventually piloted in 2018 and has gone on to become one of Africa’s biggest startups.

Andela

Andela became a member of Africa’s elite group of unicorns after its Series E round where it raised $200 million at a valuation of $1.5 billion. Amongst its backers are SoftBank via its SoftBank Vision Fund 2, Whale Rock, Chan Zuckerberg Initiative, TLcom Capital, etc.

The company was founded in Lagos, Nigeria in 2014 by Ian Carnevale, Iyinoluwa Aboyeji, Jeremy Johnson and Christina Sass. It started out as a training company with the aim of providing a platform to match developers in developing markets with North American companies. Today, it is a completely remote company and deals with building engineering teams for tech companies on a global scale.

For a startup that isn’t in the major startup category, Andela has done impressively well for itself.

Interswitch

Interswitch is another company to pull out from the Telnet – the same company Opay pulled out from. Today Interswitch is a leading African integrated payment and digital commerce platform. The company facilitates electronic payments ensuring that they are done in a timely manner.

It was founded in 2002 by Mitchell Elegbe, boasts of more than 11,000 ATM networks on its radar and has launched successful products that have helped better the African financial space.

Esusu

Esusu was founded with the aim of building the credit scores of marginalized groups of people as well as to leverage data to bridge the racial wealth gap via rental payments by capturing on-time rental payment data of renters who opt-in to its platform and reports to the three major credit bureaus–Equifax, TransUnion and Experian–to strengthen their credit scores.

In total the startup has raised $144 million dollars and became a unicorn after raising a Series B round of $130 million.

Fawry

Fawry is an Egyptian e-payment and digital transformation platform offering financial services to consumers and businesses through more than 225,000 locations and a variety of channels.

The fintech startup provides people with convenient ways of making payments. Fawry is Egypt’s first unicorn after it reached a valuation of $1 billion. Today, the company has around 3 million transactions daily, serves 29 million customers, offers more than 879 services, and has 166,500 service points nationwide covering every urban area through its channel network including ATMs, mobile wallets, retail shops, post offices, and even little vendor kiosks.

Jumia

Jumia is a popular name in Africa. It is a leading e-commerce marketplace, logistics and payment service. It came into the picture in 2012 and has grown to become one of the leading brands in Nigeria and Africa as a whole.

The startup attained unicorn status in 2016 and is one of Africa’s most powerful brands.