Chinese-backed and Africa-focused fintech company OPay raised $400 million in new financing led by SoftBank Vision Fund 2, Bloomberg reported Monday, valuing the company at $2 billion.
The round which marks the Fund’s first investment in an African startup had participation from existing investors like Sequoia Capital China, Redpoint China, Source Code Capital, and Softbank Ventures Asia. Other investors including DragonBall Capital and 3W Capital also took part in the new financing round.
This news comes three months after The Information reported that the company was in talks to raise “up to $400 million at a $1.5 billion valuation” from a group of Chinese investors. The new financing also comes two years after OPay announced two funding rounds in 2019 — $50 million in June and a $120 million Series B in November.
In an emailed statement, OPay CEO Yahui Zhou said OPay “wants to be the power that helps emerging markets reach a faster economic development.” The company, founded in 2018, had an exclusive presence in Nigeria where it provided an array of digital services ranging from mobility and logistics to e-commerce and fintech at cheap rates for consumers.
Right now, the company’s mobile money arm thrives the most. 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. Last year, the company also said it acquired an international money transfer license with a WorldRemit partnership also in the works.
Per Bloomberg, the company’s monthly transaction volumes exceed $3 billion at the moment.
OPay plays in an extremely competitive fintech market. Nigeria is Africa’s most populous nation, and with a large share of its people underbanked and unbanked, fintech is arguably the most promising digital sector in the country. The same can be said for the continent as a whole. Mobile money services have long catered to the needs of the underbanked, and per GSMA, Africa had more than 160 million active mobile money users generating over $495 billion in transaction value last year.
Last year, Opay expanded to Egypt and according to the company, that’s an entry point to the Middle East market.
Kentaro Matsui, a managing director at SoftBank Group Corp, said “We believe our investment will help the company extend its offering to adjacent markets and replicate its successful business model in Egypt and other countries in the region.”