Global Themes /

Africa's fintech hubs: The search for tomorrow's Silicon Valley

  • The four main fintech hubs in Africa are Egypt, Kenya, Nigeria and South Africa.

  • These centres attracted 85% of total investment capital deployed across the continent in 2019.

  • South Africa has some similarities with developed market fintech hubs like Silicon Valley.

Africa's fintech hubs: The search for tomorrow's Silicon Valley
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Rohit Kumar
Nkemdilim Nwadialor
Tellimer Research
3 May 2020
Published byTellimer Research

The four main fintech hubs in Africa are Egypt, Kenya, Nigeria and South Africa. These markets have distinguished themselves from the rest of Africa through their support for innovation (for example, via regulatory sandboxes) and the widespread establishment of strategic partnerships (such as Nigerian fintech, Paga's partnership with WorldRemit for international remittances). As a result, these centres have to date attracted the lion’s share of the investment capital deployed across the continent (85% of total funding in 2019). Ghana, Uganda, Cameroon, Rwanda are up-and-coming locations.

Figure 1: Distribution of African fintechs by geography

Source: Central bank publications, Irrational Innovations


Figure 2: Fintech product mix by geography

Source: Irrational Innovations. *ROA = Rest of Africa


South Africa

South Africa is arguably the heart of African fintech, housing a third of all African fintech firms, with the majority of these located in Johannesburg. As the most diversified hub, South Africa has some similarities with developed market fintech hubs like Silicon Valley, such as the integration of fintech into central payment systems and high technology adoption rates by the local population, which can make it easier for local fintechs to attract external funding. Lending fintechs account for the largest proportion of players in this market (c30%). Despite having the largest and most diverse fintech space, South Africa has recorded a decline in both the number of fintech deals and value of funding to fintech in 2019. However, given improving financial access/ inclusion in South Africa, we note that insurtechs (such as Lukmani, Simply, Pineapple, MicroRe) are on the rise, offering customised insurance products at the point of sale.


Kenya is the second largest hub. It hosts around one-sixth of the African fintech population and has a strong focus on the payments segment. Nairobi alone is home to more than 50 fintech companies. Following the success of M-Pesa, Kenya has seen a rise in personal and SME lending-focused fintechs such as Branch, Tala, Lendabale and Pezesha. A niche of agricultural lenders has started to develop over the past few years, such as FarmDrive, Tulaa and Appollo Agriculture, with a primary focus on small-scale farmers.


Nigeria is the third-largest hub, with most of its fintechs based in Lagos. The payments segment has the largest number of players. However, there has recently been a rise in lending (RenMoney, Migo) and investech companies (CowryWise, PiggyVest), as the unmet needs of the real sector shift from payments to credit availability and investment products.


Egypt is also led by payments players, as the focus remains largely on improving woeful levels of financial inclusion. Local fintechs tend to collaborate with traditional banks to provide users with access to several financial services, including payments facilitation, electronic cash and loans. Several innovative fintechs also offer standardised versions of local financial practices such as savings circles.

Strategies by market

Kenyan and Nigerian fintechs, which were the continent’s largest recipients of funding in 2019, are more focused on expanding into new markets than fintechs in other markets. Such expansion backed by appropriate funding has the potential to expose the products/services to a broader market and increase the customer base. South African fintechs may be demonstrating less interest in geographic expansion as they are typically more established fintechs that may already have expanded their footprint (eg GetBucks has a widespred Southern Africa presence in Lesotho, Botswana, Namibia etc). Interestingly, Egyptian fintechs are the least interested in expanding into new markets which in our view is testament to the significant opportunities that exist in the domestic market.

Figure 3: Breakdown of future plans by markets

Source: Tellimer Research, company disclosures

Introducing new products is a common strategy across all markets, but the rest of Africa seem to lag behind the four major hubs. This might be due to the lower uptake of fintech offerings within those regions and/or restrictions on the activities of non-licensed financial institutions by central banks.

Identifying new market segments is most common with Egypt fintechs and the rest of Africa, which we think is due to the greater extent of financial exclusion within those regions.

Investment in technology infrastructure enables fintechs develop new products/ services, increase their reach or improve their existing service offerings, which all encourage increased usage. Egyptian fintechs seem most keen to ramp up on technology infrastructure as they hope to penetrate unbanked or excluded segments of the market.

Fintechs in Egypt and other parts of Africa (Ghana, Ethiopia, Senegal and Zambia) are keen on partnering with incumbents like banks, mobile network operators or other fintechs as this would help them increase their reach and gain new customers.

Other future plans include potential mergers (Egypt) and potential listings on the local stock exchange (Egypt and Nigeria).

Figure 4: Fintech funding in 2019 by country

Source: Partech 2019 Africa Tech Venture Capital report
*Outer circle = % of total funding. *Inner circle = number of funding deals


For more detail on the fintech environment in Africa see our recently published in-depth report The Ultimate Guide to African Fintech. In the report we provide the results of our survey of 150+ fintechs across 20 African markets, showing their product and customer niches, as well as identifying their unique success factors.