African fintech investment declines 17% to $331m in Q1 2023

By Onome Amuge

The African fintech sector  recorded a significant decline in the first quarter of 2023 compared to the corresponding period of 2022 as fintech investments in the continent  declined 17 per cent year-on-year to $331 million, according to  fintech investment stats published by FinTech Global.

The world’s leading provider of  financial technology  information services, also noted that 37 fintech deals were recorded in Q1 2023, a 69 per cent  drop from the same period in 2022,

“Removing MNT-Halan’s deal, African FinTech companies only raised $71m in Q1 2023. The largest deal in Q1 2022 was from m-kopa ($75m), which provides connected asset financing solutions. When removing these two large deals from the figures, African FinTech investment in Q1 2023 dropped 78 per cent,” the report stated.

FinTech Global noted that Nigeria was the most active country for fintech dealmaking in Africa during Q1 2023 with 12 deals, a 32 per cent share of the continent’s total deals. South Africa was the second most active fintech country with six deals, a 16 per cent share of deals, while Kenya was third with five deals, a 14 per cent share of deals.

MNT-Halan, an Egyptian digital lender, emerged the largest African fintech deal in Q1 2023 after its latest $260m private equity round, led by Chimera Investment. The round, according to the report, propelled them to unicorn status with a post-money valuation above $1 billion.

Meanwhile,Paytech was rated the most active fintech subsector in Africa during  the period under review with nine deals, a 24 per cent share of total deals. The second most active was Lending Technology with seven deals, a 19 per cent share of deals, while InsurTech and RegTech were joint third with four deals each.

Despite the decline in the number of deals and investments in Q1 2023, the report emphasised that the second largest continent in the world by population and landmass, is on track to have a total transaction value of $146bn, a 1.5 per cent share of global transaction value in 2023. It also projected that Africa is set to have the highest growth for digital payments/total transaction value of any region globally at a compound annual growth rate CAGR of 16.1 per cent from 2023 – 2027.