Nigeria-based digital payments company OPay reportedly in talks to secure $400 million in funding which will allow it to expand to more countries on the continent. The company is in talks with investors to raise funding that could see its valuation go above $1.5 billion which is three times its current valuation.
OPay raised a total of $10 million in 2019 in two funding rounds, $50 million in June and $120 million in November in a Series B round. This funding came from investors like Sequoia Capital, IDG Capital, Source Code, GSR Ventures, Opera and Meituan-Dianping.
Launched in 2018, OPay has displayed aggressive efforts to penetrate Africa’s most populous market with over 200 million people and that is Nigeria. It started with a bike hailing service known as ORide which is no longer in existence because of a restriction of bikes in high-end areas in the country that resulted in a significant loss in revenue for the company.
The Opera owned company has also explored other business areas like food delivery OFood and OCar which have since stopped operating with its main focus on digital payments.
OPay reportedly in talks to secure $400 million to fuel expansion
OPay reportedly in talks to secure $400 million in funding as it has expressed plans of expanding to Ghana, South Africa and Kenya during its Series B round. The company has only been present in Nigeria until December last year when it launched in Egypt. Although the company blamed the pandemic for its shortcomings, it managed to set up shop in North Africa by expanding to Egypt.
With little success from its other services, OPay is performing quite well in the fintech sector processing $1.4 billion in payments in October 2020. This year, its parent company Opera reported that 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.
The company is also working on new products like new debit and credit cards.
Despite the company’s great success, it operates in an extremely competitive market that is dominated by telecom companies, Airtel and MTN that provide mobile money services to millions all over the continent. While fintech upstarts are trying to capture as much market share as possible, telcos like MTN and Airtel, with operations in multiple African countries, are spinning off mobile money service arms as billion-dollar businesses to compete as well.
The need for mobile money services has grown over the years as the services cater for the unbanked and underbanked who are denied banking services because of stringent restrictions. This has made the fintech ecosystem one of the most promising sectors in Africa today with over 160 million active mobile money users generating over $495 billion in transaction value last year.