Exploring new frontiers in fintech investments in East Africa 2018

FSD Africa in partnership with East Africa Venture Capital Association (EAVCA), Intellecap and FMO have published the findings of their sector study on the investment opportunities in FinTechs within East Africa.

The report’s core explores the funding options currently available for the sector: ranging from debt offering, grants and equity provision. With the increased success of FinTech players in East Africa, investors are keen to understand the opportunities available for capital deployment in East Africa’s FinTech space. The report assesses the financing options currently available in the market for target investors. It also explores the risks associated with the sector and how other investors deal with such risks. Finally, the report has explored returns available for FinTech investors in East Africa, to provide guidance on the region’s earnings potential.

Some highlights from the report:

  • Africa is the second fastest growing region for Fintech investments, with an 87% Compound Annual Growth Rate (CAGR), after Asia Pacific;
  • US$ 200 million was raised for Fintech businesses in East Africa in 2017;
  • 98% of funds raised in East Africa went to Kenyan companies;
  • Lending segment of Fintech sector attracted the highest number of funds raised between 2010 – 2017; and
  • Equity financing accounted for 71% of total funds raised; debt financing 6% and hybrid financing 23%.