Tuesday, 15 Jun 2021

Big Tech In African Fintech

By Eric Osiakwan

I ended my May 2021 essay with the hypothesis “…leading fintechs might turn around and start acquiring the banks” and, sure enough, on the 12th of May 2021, the Competition Authority of Kenya in a gazette notice approved the acquisition of 84.89% stake in Century Microfinance Bank by Branch International Limited – a leading global fintech with operations in Kenya. One of the signs of a maturing ecosystem is home grown ventures mature into unicorns, gazelles and zebras, increased mergers and acquisitions and the entry of global tech giants hungry for a piece of the action – the subject of this essay. So, whilst the Branch acquisition was unexpected, it was unsurprising when Twitter announced on 14th April 2021 that they are setting up their Africa HQ in Ghana. On the very same day Amazon announced an investment of $280M in their new 70,000 square meter office complex in Cape Town as their African HQ. Even though Amazon has been in SA since Amazon Web Services (AWS) first established its presence in Cape Town in 2004 and later opened a Joburg office in 2015, this is the biggest investment in an African HQ by a tech company. They subsequently partnered with the South African Post Office (SAPO) to establish the Amazon model in Africa. In February 2021, global music streaming giant Spotify announced, it is now available in more than 80 emerging markets including Ghana, Kenya, Nigeria, Tanzania and Uganda. Even though Facebook has had an office in SA since 2015, Mark Zuckerberg’s visit to Nigeria in 2016 led to the opening of their second Africa office in Lagos in 2021. Amidst the pandemic last year came the big news, Stripe acquired 100% of Paystack a leading African Fintech – this was the strongest signal that big tech in coming into African Fintech. This is because the African fintech sector is heating up and big tech does not want to be left out. 

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