Chinese investors join $400m round for Nigeria's Opay

SoftBank Vision Fund 2 led the round, making its first investment in an African start-up. It was joined by Sequoia Capital China, DragonBall Capital – an investment arm of online-to-offline services platform Meituan – Redpoint China, Source Code Capital, Softbank Ventures Asia, and 3W Capital.

Opay was incubated by Opera, a Norwegian internet services provider controlled by China's Kunlun Tech. Opera held a 13.1% equity interest as of December 2020. In June, it sold nearly one-third of that stake for $31.1 million, giving the company a valuation of more than $800 million.

In July 2019, IDG Capital, Source Code, Sequoia, Meituan, and GSR led a $50 million Series A. Four months later, the company secured $120 million in Series B funding from Gaorong Capital, Sequoia, Meituan and DragonBall, GSR, Source Code, Bertelsmann Asia Investments, IDG, Redpoint and SoftBank Ventures Asia.

The company operates a mobile wallet that serves what Opera describes as "a market characterized by a massive, unbanked population with low mobile money penetration." It also facilitates bill payments, cash transfers, offline banking, and access to savings products.

There are various other offerings, including food delivery, but ride-hailing and bike-sharing services ended last year following a government ban in response to COVID-19.

Opay is positioned as "agent-focused" fintech for an unbanked user base, whereby cash transactions can be realized via a network of thousands of individual agents. Opera said in December 2020 that 340,000 agents were handling monthly transaction volumes exceeding $2 billion. A year earlier, there were 140,000 agents and a daily transaction volume of $10 million.

Yahui Zhou, CEO of Opay, told Bloomberg that monthly volumes now exceed $3 billion, while the company is pushing into other African countries as well as the Middle East.

Chinese investment interest in African start-ups is underpinned by the view that the continent's young, increasingly tech-savvy consumer markets mirror familiar Asian opportunities, although hesitancy persists due to cultural barriers. The likes of logistics platform Lori Systems, bus-hailing app Swvl, payments provider Gona, and Spotify clone Boomplay have all received funding.

Most recently, Crystal Stream Capital doubled down on a Middle East and Africa strategy by participating in a $40 million investment in Egyptian logistics start-up MaxAB.

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• Topics
• Greater China
• Expansion
• Financials
• Technology
• Africa
• China
• Softbank
• Sequoia Capital
• Source Code Capital
• Redpoint China Ventures
• 3W Partners