The wonderful world of the African start-up scene

The wonderful world of the African start-up scene, 3 examples from finance

To westerners, the African start-up scene is not known as a success story. While huge investments from China flood many African countries, the money goes into a much-needed infrastructure rather than innovative ideas. 95% of the start-up fundings on the African continent flow in Nigerian start-ups, mostly to Lagos (sometimes named the African Silicon Valley). The fundings in Africa are still low with less than $2b in the last 10 years for the whole of Africa and even plunged in 2020 due to Covid-19.

On the other hand, there never before have been so many interesting start-ups in Africa as now. Investors from SV are noticing and behind doors you often hear sentences like “Africa is the next big market”.

Paul Graham (co-founder of Y Combinator) telling there’s “something going on”

The similarity of countries like South Africa, Egypt and Namibia to the western world allows for direct applicability of ideas as a source for inspiration. Innovation happens mostly in finance, telecommunications and delivery — basically all infrastructure.

Let’s take a look at one of these spaces, with 3 examples in finance that made news in the last few months.

TymeBank — get over your “bank fears” by instant VISA cards in-store

TymeBank is the first digital-only bank in South Africa. Their concept reminds of French bank Nickel whose main distribution channel is small tobacco shops (5,700 stores). The stores of Pick n Pay and sub-brand Boxer (together 1,628 stores) give them a wide network of branches. Virtual kiosks with displays are used to create bank accounts, print VISA cards immediately and withdraw money. TymeBank got an investment of $109m in February 2021 and currently has 2.71 million customers.

Get over your “bank fears”

Link: (currently blocked in Germany)

Paystack — smart routed payments and the easiest way to create an online shop

The Nigerian based Paystack is an API based payment processor. It is already used for over 50% of all web-based payments in Nigeria. Paystack showed up in international news when Stripe (the US-based payment processor) bought Paystack for $200m in October 2020.

Online shops can start taking payments with-in under 15-minutes. Either by using their APIs or several ready-to-use integrations. No fees for maintenance or integration. “Paystack only charges a tiny fee per successful transaction, which means we literally only make money when you do” — and that describes their main strength. Smart routed payments ensure that each payment succeeds (a huge advantage in Nigeria). They route the payments through a well-designed process: Step 1: direct bank integrations with all big Nigerian banks, Step 2: different payment processors and gateways and finally, if that does not succeed, Step 3: suggestion of alternative payment methods to the customer (like QR-code based payments in any shop).

In December 2020 “Paystack Storefront” was introduced — a tool everyone can use to easily create an online shop. With no costs (except the standard payment fees for Paystack). To advertise the new offering they created an online pop-up store. For customer service, they included a WhatsApp integration. That might be the start of a new success story — a “Shopify lite”.

Paystack Popup Shop to advertise the new shop solution


kuda — “the bank of the free”

The least-known example on this list is a newcomer — the Nigerian based app-only kuda bank. Founded in 2019 it recently grew to 1m downloads, although still in beta mode. It raised $10m in November 2020 from prominent investors like Target Global and SBI — which does not sound like much but is significant for Nigeria. Great hashtag and line #thebankofthefree. By taking the “zero-cost”-scheme to the extreme they attract young customers.

“break free” with Kuda


Just three examples of the inspiring world of African start-ups. Business managers in western countries often treat African companies as aliens which you can’t compare to the equivalents in the west. I can’t count the times I heard “if this is an African company it is not relevant”. This article is meant to be an eye-opener that there are many fantastic start-ups on this huge continent — some might rise to the top. Take a look from time to time and get inspired.

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