The Nigeria-based, Chinese-owned mobile payment platform OPay closed its latest funding round with $400 million of new investment in a deal that values the company at an impressive $2 billion.
This latest fundraising round marks was led by Japanese global venture capital heavyweight Softbank, already an investor in OPay. It marks the first time that Softbank’s massive $40 billion Vision Fund 2 is placing a bet on an African company.
While Softbank led the round, it was by no means alone and included a number of China’s largest venture capital firms including Sequoia Capital China, Redpoint China, food-delivery giant Meituan and 3W Capital among others.
The deal also marks a triumphant return for OPay CEO Zhou Yahui who abruptly pivoted the business last March when he shrunk the company by shedding its unprofitable ride-hailing, food delivery, and logistics businesses to focus primarily on mobile payments.
In total, Zhou has raised $570 million, mostly from investors in China and Japan — a huge sum by African technology start-up standards. Zhou closed a $50 million Series A round in June 2019 and then followed up with a Series B for $120 million later that same year.
OPay said in a statement on Monday that it plans to use its new warchest to expand into Middle East and North African markets with Egypt being a top priority. The company may pull back from its presence in South Africa and Kenya that haven’t fared well due largely to the economic downturn brought on by the COVID crisis.
It will also need the additional capital to ward off a host of new competitors including telecom majors MTN and Airtel that are moving into the mobile money sector.
OPay is Well Positioned For The Coming Fintech Battle in Africa
- FINTECH: OPay’s monthly transactions grew 4.5x last year to over $2 billion in December. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions. (TECHCRUNCH)
- HUGE POTENTIAL: With more than half the African population still unbanked due to gaps in the formal financial system, investors are increasingly betting on a mobile-fuelled financial revolution buoyed by increasing access to mobile phones and other digital channels found to appeal to a young population. (WEETRACKER)
SUGGESTED READING:
- Bloomberg: SoftBank Makes First Africa Bet on OPay at $2 Billion Valuation by Gillian Tan
- Techcrunch: African fintech OPay valued at $2B in SoftBank Vision Fund 2-led $400M funding by Tage Kene-Okafor
