99% of Fintech funds in East Africa goes to only country.

99% of Fintech funds in East Africa goes to only country.

Tony254

Tony254

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99% of Fintech funding in E.Africa goes to Kenyan apps - report
  • April 20, 2018
  • Written by Alon Mwesigwa
Kenyan finance and technology (Fintech) start-ups take a lion's share of 99 per cent of all funding in the region - leaving Uganda, Rwanda and Tanzania to share the remaining 1 per cent, a new research report has shown.

The study, which looks at Fintechs in the region, was supported by Financial Sector Deepening Uganda (FSD), East African Venture Capital Association, UKaid, and FMO bank.

Shika-App.jpg

Kenyan developers receive 99% of all funding for Fintechs in the East African region. Photo: techweez
“The East African technology support (hubs, incubators and accelerators) is concentrated in Nairobi, ‘Africa’s Silicon Valley’, said the study titled Fintrek, exploring new frontiers in Fintech investments in East Africa. “Very few ecosystem support players also exist with Tanzania and Rwanda having only one tech incubator.”


It is little wonder then that Kenya, the biggest economy in the region, had its tech companies receive the highest amount of funding between 2010 and 2017. Fintechs in the region received up to $206.4 million in investment between 2010 and 2017 but 99 per cent of this money went to Kenyan established Fintechs.

Also, locally owned Fintechs had fewer deals compared to foreign owned deals with the latter having at least 105 Fintechs able to raise money compared to just 63 in the former category between 2010 and 2017. The report also found limited funding from local sources with more than 80 per cent of funding into Fintechs in East Africa originated from outside Africa.

It also pointed out that there was lack of specific Fintech support for start-ups in the region thus very generic support is provided.

Meanwhile, the report shows that Fintech partnerships have centred on the multinational organisations due to their large customer base, marketing and distribution capability as well as brand credibility.

But even then, some of these partnerships lack of open Application Programming Interfaces (APIs) – standards that allow software components to communicate and exchange information – between the players which hinders effectiveness of these partnerships.

“The region has a huge gaps in a key Fintech talent including data scientists and software engineers. Academic institutions are focused on theoretical rather than practical learning,” the report said.

Very few partnerships witnessed between incumbents and non-telco Fintechs as competitors, rather than collaborators.

Evans Osano, the capital markets development director at FSD Africa, said: “The Fintech sector in East Africa is gaining momentum and has grown tremendously. Fintech innovations continue to disrupt financial markets. We expect this disruption to spread further into the capital markets,” Osano said.

Jacqueline Musiitwa, the FSD Uganda executive director, said the report highlights that Africa attracted $2.2 billion in venture funding between 2010 and 2016 - is no doubt that Fintechs are key solutions for Uganda to meet its financial and technology inclusion goals by 2022.

“I affirm that to achieve this goal, there needs to be collaboration and commitment by all the relevant players ranging from the government to the private sector,” Musiitwa said.

amwesigwa@observer.ug



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99% of Fintech funding in E.Africa goes to Kenyan apps - report
 
Tony254 said:
The Observer
LOG IN
Updated today
Most Popular:
9 - Spotlight: Greg exacts his revenge on Chris
8 - Govt for testing Ugandans with HIV positive relatives
7 - MPs protest Bunyoro ministry’s Shs 800m budget
6 - UNBS: Half of goods on market are inferior
5 - World Bank lauds Uganda on social media tax
4 - 99% of Fintech funding in E.Africa goes to Kenyan apps - report
3 - PLE for teachers: UNATU demand apology from Nakaseke LCV
2 - UNBS lists 10 most inferior commodities
1 - Museveni, Archbishop Lwanga agree trade-off
99% of Fintech funding in E.Africa goes to Kenyan apps - report
  • April 20, 2018
  • Written by Alon Mwesigwa
Kenyan finance and technology (Fintech) start-ups take a lion's share of 99 per cent of all funding in the region - leaving Uganda, Rwanda and Tanzania to share the remaining 1 per cent, a new research report has shown.

The study, which looks at Fintechs in the region, was supported by Financial Sector Deepening Uganda (FSD), East African Venture Capital Association, UKaid, and FMO bank.

Shika-App.jpg

Kenyan developers receive 99% of all funding for Fintechs in the East African region. Photo: techweez
“The East African technology support (hubs, incubators and accelerators) is concentrated in Nairobi, ‘Africa’s Silicon Valley’, said the study titled Fintrek, exploring new frontiers in Fintech investments in East Africa. “Very few ecosystem support players also exist with Tanzania and Rwanda having only one tech incubator.”


It is little wonder then that Kenya, the biggest economy in the region, had its tech companies receive the highest amount of funding between 2010 and 2017. Fintechs in the region received up to $206.4 million in investment between 2010 and 2017 but 99 per cent of this money went to Kenyan established Fintechs.

Also, locally owned Fintechs had fewer deals compared to foreign owned deals with the latter having at least 105 Fintechs able to raise money compared to just 63 in the former category between 2010 and 2017. The report also found limited funding from local sources with more than 80 per cent of funding into Fintechs in East Africa originated from outside Africa.

It also pointed out that there was lack of specific Fintech support for start-ups in the region thus very generic support is provided.

Meanwhile, the report shows that Fintech partnerships have centred on the multinational organisations due to their large customer base, marketing and distribution capability as well as brand credibility.

But even then, some of these partnerships lack of open Application Programming Interfaces (APIs) – standards that allow software components to communicate and exchange information – between the players which hinders effectiveness of these partnerships.

“The region has a huge gaps in a key Fintech talent including data scientists and software engineers. Academic institutions are focused on theoretical rather than practical learning,” the report said.

Very few partnerships witnessed between incumbents and non-telco Fintechs as competitors, rather than collaborators.

Evans Osano, the capital markets development director at FSD Africa, said: “The Fintech sector in East Africa is gaining momentum and has grown tremendously. Fintech innovations continue to disrupt financial markets. We expect this disruption to spread further into the capital markets,” Osano said.

Jacqueline Musiitwa, the FSD Uganda executive director, said the report highlights that Africa attracted $2.2 billion in venture funding between 2010 and 2016 - is no doubt that Fintechs are key solutions for Uganda to meet its financial and technology inclusion goals by 2022.

“I affirm that to achieve this goal, there needs to be collaboration and commitment by all the relevant players ranging from the government to the private sector,” Musiitwa said.

amwesigwa@observer.ug



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99% of Fintech funding in E.Africa goes to Kenyan apps - report
Click to expand...

My take: Basically almost all the funding for financial technologies in East Africa goes to Kenya. Enyewe usingizi yenye watu wengine wamelala enyewe hata si ya pono, sijui ni aina gani ya usingizi
 
Mk254 nadhani wewe ni mtu wa I.T unasemaje kuhusu hii report especially kuhusu hawa mandugu zetu waliopata one percent of the funding
 
ndio nafika nikae pembeni nikingoja wanapovuu waje kutiririka humu😀
Tony254 said:
Mk254 nadhani wewe ni mtu wa I.T unasemaje kuhusu hii report especially kuhusu hawa mandugu zetu waliopata one percent of the funding
Click to expand...
 
With 95% of fintech products monopolized by Safaricom Mpesa and Mpesa Loans, its a shame that all this money spent on startups goes to waste. Atleast Tz with little or no Fintech funding is having a level playing field in money trasfer and banking services.There is better hope for the 1% funded Tz fintech companies to move from startup model to a commercial business model.
Hopefully, Gok will breakup Mpesa monopoly..though very unlikely as Uhuru's CBA bank is the principal lender behind the scenes for mpesa loans
 
Tony254 said:
Mk254 nadhani wewe ni mtu wa I.T unasemaje kuhusu hii report especially kuhusu hawa mandugu zetu waliopata one percent of the funding
Click to expand...

The problem with these neighbors, most of them are too slow, sluggish, lethargic and will find an excuse against anything that requires aggressiveness.
Right now Kenya is the epicenter of mobile money, where it all begun. Our people are always very fast at adopting technological solutions. They make it easier for us...very encouraging. Right now Kenyan techies are overwhelmed, the demand far outweigh supply, coders are left typing their keyboards day and night with no time to enjoy trappings of life. People in R&D are not sleeping....

There is an upsurge in fintech startups with opportunities in crypto-currency and blockchain, insurance technologies, group savings, lendings, payments etc
 
Mkikuyu- Akili timamu said:
With 95% of fintech products monopolized by Safaricom Mpesa and Mpesa Loans, its a shame that all this money spent on startups goes to waste. Atleast Tz with little or no Fintech funding is having a leveled playing field in money trasfer and banking services.There is better hope for the 1% funded Tz fintech companies to move from startup model to a commercial business model.
Hopefully, Gok will breakup Mpesa monopoly..though very unlikely as Uhuru's CBA bank is the principal lender behind the scenes for mpesa loans
Click to expand...

Don't you think by Safaricom/Mpesa having the biggest fintech products uptake is beneficial in the wider picture? Mpesa has demistified otherwise what would have seemed to be mumbo jumbo to the common man.
The domestication of fintech products through the likes of Mpesa is the way to go if the general populace has to tap in. Otherwise it would have remained for the savvy elite and closed club of a few!
 
Tony254 said:
My take: Basically almost all the funding for financial technologies in East Africa goes to Kenya. Enyewe usingizi yenye watu wengine wamelala enyewe hata si ya pono, sijui ni aina gani ya usingizi
Click to expand...

It all boils down to the beauty of a society always on the move! Kenyans will embrace and run away with any hint of gain and sustainability,risks not withstanding but then that's why we live...taking risks! Eventually it pays off with bolts and nuts along the way to fix the loose parts and Voila! Kenya on the run!
 
KichwaNgumu254 said:
Don't you think by Safaricom/Mpesa having the biggest fintech products uptake is beneficial in the wider picture? Mpesa has demistified otherwise what would have seemed to be mumbo jumbo to the common man.
The domestication of fintech products through the likes of Mpesa is the way to go if the general populace has to tap in. Otherwise it would have remained for the savvy elite and closed club of a few!
Click to expand...
You dont know what you are talking about. This Money is given to startups in fintech space not to safaricom.Most of it goes to waste since these startups dont go commercial. I remember a company called Cellulant that was having alot of businesss connecting Mpesa to Banking systems back in 2007-2012 using USSD but since Safaricom has now developed their own API, They have lost most of that business and most of the coders either left or stayed to work as outsourced developers for american/European clients.
There is a glass ceiling in fintech, and its called Safaricom..Breaking that ceiling is the same as picking a fight with uhuru kenyatta
 
KichwaNgumu254 said:
Don't you think by Safaricom/Mpesa having the biggest fintech products uptake is beneficial in the wider picture? Mpesa has demistified otherwise what would have seemed to be mumbo jumbo to the common man.
The domestication of fintech products through the likes of Mpesa is the way to go if the general populace has to tap in. Otherwise it would have remained for the savvy elite and closed club of a few!
Click to expand...

Mpesa is the poster-child of fintech, and especially the way they have improved on their API that simplifies integration of systems with Mpesa, they are truly here to stay. Building products that compliments Mpesa, working in tandem instead of competing will see an endless horizon of opportunities.
 
Nyingine ndio hii hapa. Inaitwa M-survey, last week it raised $3.5 million (ksh 350 million) from abroad. Hapa kazi tu!



Lists [HASHTAG]#StartupLife[/HASHTAG]APR 19, 2018 @ 03:55 PM 420 The Little Black Book of Billionaire Secrets
mSurvey Secures $3.5m To Scale Conversations Across Africa


Mfonobong Nsehe , CONTRIBUTORI chronicle Africa's success stories and track its richest people mSurvey, a Kenyan SaaS Mobile Consumer Feedback Company, has this week announced a VC raise of $3.5m, to help its continued growth in Africa, as well as build on its infrastructure and partnerships. The Series A investment was led by Africa focused venture firm TLcom Capital with investment from Social Capital, Kapor Capital, Golden Palm, Cross Culture Ventures and Richard Owen; founding team of Net Promoter Score (NPS).

Powered by Africa’s most powerful communications tool, the mobile phone, mSurvey leverages SMS and mobile messaging technology to simplify access to credible, on-demand information from Africa and other emerging regions. In short - the company is helping businesses understand what their companies feel about them, as companies across the continent start to make the connection between reducing Customer Acquisition Costs [CCA] and Customer Retention Costs [CRC], with bottom line profitability. Africa’s fight for the consumer, starts here - through improved knowledge of how to attract them in the first place, as well as detailed insight into how to keep them. More and more companies are asking themselves, how can I keep my customers loyal to me? And they are reaching to the likes of mSurvey, as a strategic partner, to help tackle these questions.

For some years now, mSurvey has quietly been growing an impressive client base, including the likes of Commercial Bank of Africa, Kenya Commercial Bank, Safaricom, Airtel, Java House, Liberty Insurance, and Britam as well as US-based companies and institutions including Harvard, Emory and CNN - all of whom are getting ahead of the curve when it comes to mapping customer journeys and customer experiences. This approach to business, a prominent marketing discipline in the West, is in its earliest stages in Africa. I caught up with Kenfield Griffith, CEO and co-founder of mSurvey, to learn more about his company’s Series A fundraise, how his team is pioneering this field, as well as the impact businesses are having on their bottom line, thanks to mSurvey.





https%3A%2F%2Fblogs-images.forbes.com%2Fmfonobongnsehe%2Ffiles%2F2018%2F04%2FKenfield-Griffith-mSurvey-CEO_1-200x300.jpg
Kenfield Griffith
Kenfield Griffith mSurvey CEO

You’ve raised $3.5m from VCs including TLcom Capital - how will mSurvey be deploying this Series A raise?

This round of investment comes shortly after our launch in Nigeria and we are excited that our investors are actively supporting what we are trying to achieve, which is to enable businesses of any size operating in Africa - local and international - to connect with and better understand African consumers.

We’ve seen considerable traction in Kenya, conducting over 12M conversations with consumers so far, and we’ve been able to achieve this because of strategic partnerships built with the likes of Safaricom. With this investment, we plan to continue to build partnerships and infrastructure, in order to scale and expand into more countries on the continent, such as South Africa.

mSurvey Secures $3.5m To Scale Conversations Across Africa
 
MK254 said:
The problem with these neighbors, most of them are too slow, sluggish, lethargic and will find an excuse against anything that requires aggressiveness.
Right now Kenya is the epicenter of mobile money, where it all begun. Our people are always very fast at adopting technological solutions. They make it easier for us...very encouraging. Right now Kenyan techies are overwhelmed, the demand far outweigh supply, coders are left typing their keyboards day and night with no time to enjoy trappings of life. People in R&D are not sleeping....

There is an upsurge in fintech startups with opportunities in crypto-currency and blockchain, insurance technologies, group savings, lendings, payments etc
Click to expand...
Thank you for that expert opinion.
 
MK254 said:
The problem with these neighbors, most of them are too slow, sluggish, lethargic and will find an excuse against anything that requires aggressiveness.
Right now Kenya is the epicenter of mobile money, where it all begun. Our people are always very fast at adopting technological solutions. They make it easier for us...very encouraging. Right now Kenyan techies are overwhelmed, the demand far outweigh supply, coders are left typing their keyboards day and night with no time to enjoy trappings of life. People in R&D are not sleeping....

There is an upsurge in fintech startups with opportunities in crypto-currency and blockchain, insurance technologies, group savings, lendings, payments etc
Click to expand...
Where it all begun eh???

Mobile Money Interoperability

Wakati Tanzania tunafanya haya mambo hapo juu, wakenya walikuwa wanatembea na simu mbili mbili mifukoni ndio waweze kutumiana pesa from one network to the other. If Kenyans are coding all night long how come we haven't see any thing significant the likes of Facebook or WhatsApp? Mna jaribu tuu kama waafrika wengine your not there yet.
 
Mkikuyu- Akili timamu said:
You dont know what you are talking about. This Money is given to startups in fintech space not to safaricom.Most of it goes to waste since these startups dont go commercial. I remember a company called Cellulant that was having alot of businesss connecting Mpesa to Banking systems back in 2007-2012 using USSD but since Safaricom has now developed their own API, They have lost most of that business and most of the coders either left or stayed to work as outsourced developers for american/European clients.
There is a glass ceiling in fintech, and its called Safaricom..Breaking that ceiling is the same as picking a fight with uhuru kenyatta
Click to expand...

You brought up the issue of Mpesa monopoly and mine is a rebuttal. Even though Mpesa doesn't need such funding,they are all reaching out to the common end user who needs same level of service and quality product be it from startups. Most startups fade past R&D phase due to lack of appealing platforms to monetize their services/products with the only option being playing ball with big boys.
As such,it doesn't matter who hogs the market as long as their superior products dictates so!
Startups can incubate and breed then sale their products and talents if viable to them!
 
These people are Quite Lame, Happy about figures and numbers that they dont understand. How many times have Companies in Kenya invested Hundrends of billions in Fintec and Failed? Even big players like Equity bank Eazzypay inconjuction with TelkomKash failed despite million of dollars in funding.
Then you come here remove your panty and celebrate some $200mn given to a startups that will never see the light of day?
The problem with not with funding or who gets the lionshare of the funding and this is true for startups and Larger Commercial players alike.
Unless the field is leveled and Safaricom monopoly stopped, this money is Just a waste.
 
sasa tz ug na rwanda zikona tech scene kweli? hahahaha...hata 99 percent ni kidogo...it should be 100 percent...the only countries with vibrant tech scenes in africa are Nigeria, SA, Egypt and Kenya...hizi zingine ni childsplay... naskia tu kucheka nikijaribu ku imagine a tech scene in tz...somalia stands a better chance...alshabaab are more tech savvy than these bongolalas..ukweli ndio huo
 
KichwaNgumu254 said:
You brought up the issue of Mpesa monopoly and mine is a rebuttal. Even though Mpesa doesn't need such funding,they are all reaching out to the common end user who needs same level of service and quality product be it from startups. Most startups fade past R&D phase due to lack of appealing platforms to monetize their services/products with the only option being playing ball with big boys.
As such,it doesn't matter who hogs the market as long as their superior products dictates so!
Startups can incubate and breed then sale their products and talents if viable to them!
Click to expand...
Who said mpesa is not doing a good service to kenyans? The glass ceiling am talking about is in manyforms but mostly is interoparability fees. Safaricom should either stick to being an MNO or go to fintech and challage paypal and etc. But we all know the Cartels behind safcom and CBA bank for that matter. And these are the greatest obstacles for these small fintech startups in kenya, funding is not!
 
Mwanzi1 said:
Where it all begun eh???

Mobile Money Interoperability

Wakati Tanzania tunafanya haya mambo hapo juu, wakenya walikuwa wanatembea na simu mbili mbili mifukoni ndio waweze kutumiana pesa from one network to the other. If Kenyans are coding all night long how come we haven't see any thing significant the likes of Facebook or WhatsApp? Mna jaribu tuu kama waafrika wengine your not there yet.
Click to expand...

You're off the mark dude! Mobile money is a just a service. What other product derivative that can be used on that service platform is what we are talking about.
As for coding and other infotech ,ask yourself why Google,Oracle,IBM,GE et al are crowding in Nairobi and not in Dar where you were first in network inter-operational switch!

Kenya's tech savvy operatives don't need to reinvent the wheel but can mend the puncture or pad it for smooth ride as they explore something else to invent!
 
Mwanzi1 said:
Where it all begun eh???

Mobile Money Interoperability

Wakati Tanzania tunafanya haya mambo hapo juu, wakenya walikuwa wanatembea na simu mbili mbili mifukoni ndio waweze kutumiana pesa from one network to the other. If Kenyans are coding all night long how come we haven't see any thing significant the likes of Facebook or WhatsApp? Mna jaribu tuu kama waafrika wengine your not there yet.
Click to expand...

There is a massive revolution in technology my friend, and mark you it's not always necessary for a start-up to make fireworks globally, homegrown solutions consumed locally is what matters, it'd be a mistake to attempt to compete against Whatsapp at global arena.

You must take some lessons on how to implement a successful start-up 101, you don't go against the already established global giants, but swim with them, if possible compliments their systems. For instance, I've built corporate system that integrates with API from G Suite with their range of products such as Gmail, Docs, Drive, Calendar etc, same system integrates with Facebook and other solutions and has seen success in its use.

Take your time to read Kenyan statistics on ICT annual growth, ICT contribution to GDP and so on, numbers don't lie....
 
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