OPay and Nigeria’s Mobile Money Wars
This piece was originally published on the newsletter Emergent.
Fintech has proved to be one of the most fertile categories for entrepreneurs to innovate in globally over the past decade. Finance is the engine that powers an economy both at an individual level — bank accounts, mortgages and credit — and at a business level — payment processing, loans, point-of-sales systems. Fintech’s tremendous popularity as a category for entrepreneurs has been driven by the huge unbanked populations across countries globally, the dominance of cash as a method of transacting worldwide and the limited access most people — even those with bank accounts — have to financial services.
In particular, the continent of Africa has been simultaneously a laggard in financial inclusion and a global pioneer in specific categories of fintech, particularly mobile payments where Kenya’s MPesa has become the best in-class mobile money product globally. In fact over half of the world’s mobile money products are based in Africa.
One of the most exciting fintech startups globally today is the Nigerian mobile money startup OPay. Uniquely Opay was incubated and initially funded by the Norwegian internet browsing company Opera, one of the most unique origin stories for a startup anywhere in the world. Opay was founded in 2018 and has achieved an incredible amount in under 3 years:
- $38 million in revenue in 2020 (ended 2020 with an annualized revenue run rate of nearly $70 million)
- Raised $570 million in funding
- Valued at $2 billion
- Built a network of 300,000 offline agents to serve as real-world bridges to its financial products
- Serving nearly 10 million Nigerians today
- Processing about 1/5 of point-of-sale (POS) payments in Nigeria today
OPay’s incredible scale is not unique for mobile money startups globally or even in Nigeria. However, the company’s recent $400 million round of funding gives it a huge warchest of capital to fuel its expansion in Nigeria and across the continent.