In the first half of 2023, Kenya has positioned itself as one of the leading countries in Africa, securing a substantial share of fintech funding.
According to data from the Afridigest Fintech Transactions Database, Kenya has successfully attracted a significant sum of $280 million (Ksh40.47 billion) through 13 significant deals during this period.
While Kenya holds a prominent position, Egypt and South Africa have taken the lead with funding amounts of $402 million (Ksh58.1 billion) and $304 million (Ksh43.94 billion), achieved through seven and eleven deals, respectively.
Several other nations, including Senegal, Uganda, and Cameroon, have also joined the fintech funding landscape, each securing $0.1 (Ksh14.45 million) million in funding from one, two, and three deals, respectively.
The distribution of funding types reveals an interesting trend. While equity funding for African fintechs in H1 2023 has experienced a decline of 40% compared to the previous year, debt funding has surged by over 80%.
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This shift can be attributed largely to two significant deals: MNT-Halan’s issuance of a $140 million (Ksh20.23 billion) securitized bond and M-Kopa’s successful raising of $200 million (Ksh28.91 billion) in debt financing. Excluding these substantial deals, there still remains a slight year-on-year increase in H1 debt funding.
In terms of specific sectors within fintech, the Banking/Lending vertical has taken the lead, capturing a significant portion of funding. This vertical accounts for $0.66 (Ksh95.40) of every equity dollar raised and an impressive $0.96 (Ksh138.77) of every dollar raised through debt financing in H1.
Notable players in the Banking/Lending sector include lending platforms like MNT-Halan and Lulalend, digital banks such as TymeBank and FairMoney, and asset financing platforms like M-Kopa and Planet42.
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Aside from equity and debt financing, there has also been a slight increase in fintech mergers and acquisitions (M&A) activity throughout Africa. The first half of the year witnessed a total of 15 announced M&A deals, compared to 13 in the corresponding period of the previous year. This highlights the evolving dynamics within the African fintech landscape, showcasing a drive toward growth and innovation.
