Naija Giants: The Fearless Founders Driving Nigeria's Fintech Renaissance

From the hustle of Lagos to the tech-savvy streets of Abuja, a dynamic shift is stirring in Nigeria's financial landscape. Fueled by a population that's youthful and tech-adept, the digital banking and fintech ecosystem in Nigeria has evolved into an impressive powerhouse, shaping the future of finance not just locally, but on the global stage.

Despite a worldwide financial slowdown and a 64% drop in investments from Q2 2022, Nigeria persists as Africa's leader in fintech, contributing a staggering 42% share of deals in the second quarter of 2023. In a nation where traditional banks have struggled to foster inclusion, fintech is opening doors, with a majority of Nigerians now preferring app-based banking to conventional methods.

Building on the momentum of our previous exploration into Egypt's burgeoning fintech scene, we pivot to Nigeria, another titan in Africa's digital revolution. This is fresh off the heels of the Seamless North Africa 2023 conference, where the two nations signed a Memorandum of Understanding to create an Egypt-Nigeria fintech bridge.

For Nigeria, fintech isn't a fleeting trend. Over the past eight years, from 2011 to 2018, fintech investments in Nigeria amounted to more than US$200 million, positioning Nigeria as the nexus of financial innovation in Africa. Currently, more than 150-200 fintech companies operate in Nigeria, disrupting everything from payment systems to online banking. These pioneering ventures are not just reshaping the financial fabric of Nigeria, but also making bold strides in defining the future of finance in Africa.

However, it's not all smooth sailing. The COVID-19 pandemic has cast a shadow over the global fintech landscape, leading to a significant dip in investments and an increased challenge in securing funds. Additionally, the imminent threat of a "brain drain", with talented individuals being lured away to the Western world, adds another layer of complexity to the situation. Companies such as Flutterwave, amidst others, are grappling with the challenge of nurturing and retaining local talent in the face of these adversities.

Yet, the energy in Nigeria's fintech scene is palpable and undeterred. In this feature, we take a closer look at the remarkable companies leading the charge, shaping the industry, and crafting the narrative of Nigeria's fintech revolution.

Flutterwave

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Founders: Olugbenga Agboola, Iyinoluwa Aboyeji, Adeleke Adekoya

Flutterwave was established in 2016 by three experienced tech experts, Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya. The company was created in response to the payment system fragmentation in Africa, which Aboyeji experienced firsthand while co-founding Andela, a coding jobs and training platform. The high transaction fees and lengthy processing times led to the creation of Flutterwave, a digital payments infrastructure providing solutions that connect all payment systems on the continent. Agboola, now the CEO, contributes his expertise from roles with major tech firms and banks, including PayPal and Google Wallet, while Adekoya lent his background as Head of Digital Banking at Access Bank. Their joint efforts led Flutterwave to achieve unicorn status in 2021, with a valuation of $1 billion after Series C funding.

The company has not been without its concerns and controversies, including allegations of fraud and security breaches. Nevertheless, Flutterwave continues to strategically focus on international business development in the U.S. and Europe, including a recent deal with Microsoft. Its success despite these scandals points to its prominence in the African tech ecosystem.

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Interswitch

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Founder: Mitchell Elegbe

Interswitch, a Nigerian fintech unicorn, was founded by Mitchell Elegbe with a singular mission: to resolve a pressing issue he experienced firsthand—inefficient and unsafe cash withdrawal methods in Nigeria. Elegbe was inspired to take action after an ATM abroad seized his card, leaving him stranded. He soon noticed a similar lack of ATM infrastructure in Nigeria, with people enduring hours-long waits in banks, withdrawing excessive amounts of cash to avoid frequent bank visits, creating safety concerns.

His solution was based on the "Tropical Savannah method," contrasting with the Silicon Valley strategy. This method emphasized understanding the affordability of a solution and ensuring it meets the customer's immediate needs, thereby paving the way for monetization. Elegbe's conservative approach to fundraising, stringent in proving the model before scaling, and shrewd cost management allowed Interswitch to be profitable in its first year, with only half the targeted funding. Despite challenges such as inadequate power and telecoms infrastructure, Interswitch was instrumental in revolutionizing Nigeria's cash-based system, even attracting substantial investments from international entities like Visa. Interswitch's journey underscores Elegbe's belief in seizing opportunities and creating impactful solutions to pressing problems.

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Okra

Founder: Fara Ashiru

Fara Ashiru is the woman behind Okra, a Nigeria-based fintech startup acting as a "super-connector" to facilitate the secure exchange of real-time financial information among customers, applications, and banks. As the co-founder, CEO, and CTO, she raised a $1M pre-seed round, a notable achievement given the rarity of such funding for African women entrepreneurs. Born in Nigeria and raised in the United States, Ashiru found her inspiration for Okra when she returned to Nigeria and discovered that financial management applications she had used in the U.S. didn't connect with Nigerian banks. Drawing on her significant software engineering skills, including proficiency in over 20 programming languages, she began to develop the solution to her own problem, thereby laying the foundation for Okra.

Under Ashiru’s leadership, Okra raised its $1M funding in less than six months after launch, even amidst a global pandemic, an achievement that set the company apart. Investor TLcom, despite not having previously invested in fintech and typically participating in larger funding rounds, took on the entire round for Okra, seeing the potential in the platform as a vital infrastructure for a robust digital economy. Ashiru continues to wear the hats of both the CEO and CTO, believing that for a highly technical business like Okra, having the vision for the product and technology closely aligned with the company's overall vision is a key advantage. Despite the challenges of balancing these roles, she remains committed to driving the company's growth and impact.

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Piggyvest

Founders: Joshua Chibueze, Somto Ifezue and Odunayo Eweniyi

PiggyVest, a burgeoning fintech platform founded by Joshua Chibueze, Somto Ifezue and Odunayo Eweniyi, is transforming the investment and savings landscape for Nigeria's youth. Spotting a massive service gap in the existing banking infrastructure, Eweniyi leveraged advanced digital technologies and mobile solutions to develop PiggyVest, a tool aimed at democratizing financial services. Starting six years ago, Eweniyi and her co-founders envisioned a platform that made saving and investing easier and more accessible for Nigerians, who typically required around US$2,000 to access basic investment opportunities.

Today, PiggyVest serves around 3.7 million users, providing a revolutionary micro-savings and micro-investment solution that enables users to automate their savings towards specific targets. PiggyVest's investment marketplace simplifies the investing process, making it accessible to anyone, even those with a modest budget. Furthermore, the platform's digital inclusivity extends beyond just addressing the needs of the unbanked, also aiding those who are not sufficiently included due to limited digital literacy or access. By focusing on the mobile population, particularly young people with smartphones, PiggyVest is reshaping the financial future of a new generation.

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Paystack

Founders: Ezra Olubi and Shola Akinlade

Paystack, a Nigerian startup founded in 2014 by Babcock University graduates Shola Akinlade and Ezra Olubi, has emerged as a powerful player in Africa's fintech scene. The idea for the platform was born from Akinlade's work as a software consultant for Nigerian banks, where he noticed a gap in efficient payment solutions for small and medium-sized businesses (SMBs). Together with Olubi, he developed Paystack, a multi-channel payment processor designed to simplify the integration of local and international payment methods for merchants.

Their solution filled a crucial need in the market, enabling businesses to easily accept and process a wide range of payments, a feature that was particularly significant amidst the booming Nigerian e-commerce sector. Paystack's approach also focused on developer-friendly tools, establishing a strong ecosystem of builders. Their strategy to maintain control over the company was reflected in their choice of investors, opting for "strategic investors" over venture capitalists. The company was acquired by Stripe in 2020 for over $200 million, a significant milestone not only for Paystack but for the African digital economy as a whole.

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Bamboo

Founders: Yanmo Omorogbe, Richmond Bassey

Bamboo, an innovative online brokerage firm, was founded in 2019 by Richmond Bassey, who serves as the CEO. This Nigerian startup has made significant strides in simplifying investment processes for Africans by enabling real-time investment in local and foreign asset classes. From investing in popular publicly-listed U.S. companies to purchasing ETFs, mutual funds, or fixed-income products, Bamboo offers fractional investment opportunities to its users. In 2023, Bamboo obtained a digital sub-broker license from Nigeria's Securities and Exchange Commission, allowing the company to operate in the Nigerian capital market and include Nigerian securities on its platform.

The ambitious company has also expanded its services beyond Nigeria, launching in Ghana as the first trans-national west-African brokerage app in partnership with 10th Capital Investments. This development came after a successful series A funding round and the receipt of a No Objection Letter from Ghana's SEC. Despite facing regulatory challenges in its home country, Nigeria, Bamboo has maintained a proactive relationship with regulators, working closely with them to ensure mutual satisfaction. With its continued growth and commitment to empowering Africans with investment opportunities, Bamboo is poised to transform the investment landscape across the continent. Since its launch in 2019, Bamboo has attracted a significant user base, raising $15 million in a series A funding round in January 2022, followed by an additional $17.4 million later that year.

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Lidya

Founders: Tunde Kehinde and Ercin Eksin

Lidya, a pioneering fintech company in Africa, was originally established as a digital lender with the goal of providing accessible, quick, and efficient funding to SMEs. Under the visionary leadership of CEO Tunde Kehinde, the company has achieved notable growth, disbursing over $100 million in credit across more than 32,500 loans, with a remarkable default rate of just 1%.

However, in response to the overwhelming demand for credit and the expansive credit gap in economies like Nigeria, Lidya has pivoted from being a lender to becoming a credit enabler. This strategic shift involves providing other businesses with robust and secure technological infrastructure to acquire customers, originate loans, and collect digital credit. This transition has transformed Lidya into a catalyst for financial inclusion and economic growth in Africa, empowering other lenders to extend credit more confidently, efficiently, and sustainably. By integrating Lidya's innovative credit infrastructure, institutions can scale their lending capabilities with lower risks, leading to more diverse and accessible financial products for consumers, thereby further closing the credit gap.

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Bankly

Founders: Tomilola Majekodunmi and Fredrick Adams

Bankly, a Nigerian fintech startup aimed at servicing the underbanked population, was co-founded by Tomilola Adejana and Fredrick Adams in 2018. The startup focuses on those who utilize the traditional thrift banking system, known locally as 'Ajoo.' By digitizing their funds, Bankly helps market women and artisans secure their money, addressing the security concerns that have plagued the thrift system. Adejana and Adams' vision is to revolutionize Nigeria's financial landscape by leveraging technology to make financial services more accessible and secure for the country's unbanked citizens.

In a fundraising round, Bankly managed to secure $2 million from several investors, including Flutterwave, Vault, Plug and Play Ventures, Rising Tide Africa, and Chrysalis Capital. The raised capital marks a significant milestone for the startup and provides an opportunity to expand its agent network and serve customers more efficiently through both offline and online channels. With a clear understanding of the needs of the unbanked, partnerships, and collaborations, the founders are committed to making their mark in Nigeria's fintech industry.

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Carbon

Founders: Chijioke Dozie and Ngozi Dozie

Carbon, a pioneering pan-African digital bank, was founded by seasoned finance professionals, Chijioke and Ngozi Dozie. The sons of Paschal Dozie, one of Nigeria's leading bankers and founder of the Diamond Bank, the duo has leveraged their extensive industry knowledge and Ivy League MBAs to build upon their father's legacy. Starting initially as OneCredit in 2012, a company that offered consumer loans without collateral, they went on to launch Paylater, Nigeria's first digital lender.

In 2019, the company rebranded as Carbon, evolving into a full-fledged digital bank providing various services from loans and deposit accounts to high-yield savings. Further innovation came in 2021 with the introduction of Carbon Zero, a product that allows users to buy now and pay later in four interest-free installments. As of mid-2022, Carbon has already processed around N96.54 billion, and it continues to set new standards for banking in Nigeria.

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Kuda Bank

Founders: Babs Ogundeyi and Musty Mustapha

Kuda Bank, a digital banking platform that originated in Nigeria, was founded by Babs Ogundeyi and Musty Mustapha in 2019. As industry trailblazers, Ogundeyi and Mustapha have sought to revolutionize traditional banking by offering services that are free, efficient, and entirely digital. The neobank has experienced significant growth over its three-year run, with more than $90 million raised in funding and a customer base exceeding five million users. Kuda provides a range of services including free to low-cost transactions, instant lending, debit card services, and international remittances from the UK, thus earning the nickname "the bank of the free."

Kuda's innovation and success have not gone unnoticed, earning the fintech firm a valuation of $500 million and the potential to reach unicorn status. Kuda's founders are now aiming for global expansion, starting with Pakistan, where they recently received a coveted digital banking license from the State Bank of Pakistan. Partnering with leading local companies, Kuda is poised to broaden financial inclusion and serve the unbanked in Pakistan, much as it has done in Nigeria. With a robust expansion strategy and a commitment to providing accessible digital financial services, Kuda Bank's founders are demonstrating that African fintech startups can indeed build global solutions.

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Paga

Founder: Tayo Oviosu

Tayo Oviosu is the founder and CEO of Paga, a leading financial technology platform in Nigeria. Born in Lagos in 1977, Oviosu moved to the United States for his education, earning an Electrical Engineering degree from the University of Southern California and an MBA from Stanford University. After accruing diverse experience from working in different sectors including tech, telecoms, pharmacy, retail, government, and healthcare at Deloitte Consulting, and serving as a Manager at Cisco Systems, Oviosu decided to return to Nigeria in 2008.

Upon his return, Oviosu identified a gap in Nigeria's financial sector and sought to increase financial transactions' volume and accessibility. Leveraging his broad experience, Oviosu founded Paga in 2009 with the ambition to transform the mobile phone into the primary means of electronic transactions and money transfers globally. Despite initial challenges, Paga has grown impressively, with over 8.2 million users processing transactions worth over $3 billion. Oviosu's journey underscores the significance of experience, networking, and determination in entrepreneurial success. ❖

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Images courtesy of: Paga, PayStack, Interswitch, Lidya, Kuda Bank, Carbon, Flutterwave, BFA Global, Okra, Bankly, Bamboo, PiggyVest