African fintech startups are increasingly moving from focusing on niche areas such as payment, lending and insurance and to offering a wide range of complementary services. Nearly 25% of the fintech startups tracked this year operate in multiple categories. This has increased from 15% in 2019 and 8% in 2017. The diversification trend is most common in Nigeria, where 27% of fintech startups are in several categories, such as Flutterwave, Kuda, Cowrywise and OneFi. This is followed by South Africa with 22% and Kenya with 21%. The Covid-19 pandemic has also contributed to the trend, with investors more willing to finance the expansion of activities in existing fintech startups compared to financing new entrants.
Fintech is the most dominant and important component in Africa’s start-up sectors, with the majority of start-up funding flowing into fintech over the last four years. And in the last six and a half years, African fintech startups have raised about $ 900 million; more than double what is started by startups in any other space in the same period. With more than half of the continent’s adults still without a bank, these startups fill gaps in traditional financial services by innovating and creating digital systems and infrastructure. Diversification allows them to fill these gaps while taking advantage of the technology and opportunities it offers in banking, payment and credit.