Is Another African Unicorn Rising?

The Nigerian fintech OPay is reportedly seeking $400M at a $1.5B valuation

The Chinese-backed, Nigeria-based fintech OPay is reported to be on the verge of securing up to US$400 million in new funding at a US$1.5 billion valuation. This reporting comes from the U.S.-based financial newsletter The Information.

This funding, if it materializes, would make OPay the newest member of the African Unicorn Club. It’s an unofficial club whose membership is becoming less exclusive. Other African unicorns include Flutterwave, Fawry, Interswitch, and Jumia. All of them Fintechs or eCommerce platforms.

OPay offers a suite of payment solutions for merchants. Its flagship product is a “Mini-POS” that allows merchants to accept card payments anywhere. It also offers merchants a mobile-money terminal to accept digital payments.

The funding — again if it materializes — is being solicited from Chinese tech investors. According to The Information’s reporting, Chinese money is increasingly looking for opportunities in Africa and other emerging markets as the environment for investing in the U.S. sours for political reasons.

From Grindr to OPay

OPay’s main backer is Chinese billionaire tech entrepreneur Zhou Yahui. He made his entrepreneurial bones with the gaming company Beijing Kunlun Tech. He is also the former owner of the U.S.-based hook-up app Grindr, which the U.S. government forced him to sell. He is also famous for having been through China’s most expensive divorce.

The company’s name originates from Opera, the Norwegian mobile browser company that had operations in Africa and was acquired in 2016 by a group led by Zhou. Opera launched OPay in 2018 with $50 million in funding.

OPay’s last major funding round was for $120 million back in 2019. That round was also backed almost entirely by Chinese investors.

A fresh $400 million infusion would likely fuel OPay’s geographic expansion. The company has already launched into Egypt in addition to its home court Nigeria.

Topping $2B in Transaction Value

In many ways, 2020 was a bumpy ride for the fintech. OPay had branched out into ride-hailing and logistics. But it shut those businesses down last year, abruptly according to this report, and decided to focus on its fintech operations. That put to rest any ambitions to turn OPay into a regional super-app.

However, the core fintech business seems to have performed well during the pandemic. Back in March, OPay executives held a press event in Lagos where they shared some details of their company’s 2020 financial performance.

“As a payment company, it grew its total gross transaction value 4.5 times to over $2 billion in December,” said Joshua Yau, Managing VP for OPay in Nigeria, at the March press event.

“The point-of-sale (POS) terminals deployed in its mobile money agent and merchant network represented roughly 1/5 of offline payments in Nigeria by year-end. Its mobile wallets have more than 2 million wallets with balances, totaling over $17 million.”


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