By Jeph Ajobaju, Chief Copy Editor
Andela, a global computer engineering network, has just raised $200 million in Series E funding to upgrade its valuation to $1.5 billion and expand its coding talent job training in Lagos, New York, and elsewhere.
It joined other tech startups, Opay, Flutterwave, and Wave, to attract offshore funding that shot their combined valuation to $6.2 billion.
Andela is based in New York and has skill training and job offering offices in five African cities – Lagos, Nairobi, Kenya, Kigali, and Kampala.
Since 2014, it has raised $381 million in over 10 funding rounds, according to Crunchbase data.
The new Series round was led by SoftBank Vision Fund 2 with participation from existing investors, including Generation Investment Management, Chan Zuckerberg Initiative, and Spark Capital, and Whale Rock, a new investor, per The Nation.
Andela to expand talent offering
Andela said the investment would see Lydia Jett, SoftBank Investment Advisers founding partner, and one of the most respected consumer technology investors in the world, join its board of directors.
The new fund will be invested in developing products to simplify global hiring and make the lives of engineers easier.
It will also be used for expanding talent offering beyond software development to include new verticals such as design and data.
“We believe Andela will become the preferred talent partner for the world’s best companies as remote and hybrid work arrangements become the norm,” Jett enthused.
“We are delighted to support Jeremy (Andela CEO/co-founder) and the Andela team in their mission to connect these companies with brilliant engineers, and in the process, unlock human potential at scale.”
Andela Learning Community Director, Agnes Muthoni, said: “This new round of funding enables Andela to strengthen our already extensive network of incredible talent in Africa and across the world, as we systematically connect the best software engineers with global opportunities.
“Being backed by a diverse group of renowned and experienced investors is a testament to the growing importance of remote work, and how Andela is at the forefront of helping companies scale their engineering teams at a rapid pace.”
Andela’s last valuation was placed at $700 million after raising $100 million in a Series D funding two years ago.
OPay processes 80% bank transfers of Nigeria’s mobile money operation
OPay, China-backed and Africa-focused fintech, raised $400 million in August in new financing led by SoftBank Vision Fund 2.
Bloomberg reports that the funding catapults its value to $2 billion.
The round, which marked SoftBank’s first investment in an African startup, drew participation from existing investors which included Sequoia Capital China, Redpoint China, Source Code Capital, and Softbank Ventures Asia.
DragonBall Capital and 3W Capital also took part in the round.
This news comes three months after The Information reported that OPay was in talks to raise “up to $400 million at a $1.5 billion valuation” from a group of Chinese investors.
It also comes after OPay announced two funding rounds in 2019 – $50 million in June and a $120 million Series B in November. This Series C round is the largest on record in Africa’s tech scene, on par with Jumia’s identical raise in 2016.
OPay CEO Yahui Zhou said the company “wants to be the power that helps emerging markets reach a faster economic development.”
OPay was founded in 2018. It initially provided digital services for everyday life, from mobility and logistics to e-commerce and fintech at cheap rates.
TechCrunch reports that OPay’s mobile money and payment arm thrives the most.
OPay has grown at an exponential rate by enabling unbanked and underbanked users in Nigeria to send and receive money and pay bills through a network of agents.
It plays in a highly competitive fintech market in Africa’s most populous nation, with a large share of its population underbanked and unbanked, which makes fintech the most promising digital sector in Nigeria.
The same can be said for the continent as a whole. Mobile money services have long catered to the needs of the underbanked.
Global Service for Mobile Communication Association (GSMA), which represents mobile network operators globally, said Africa has more than 160 million active mobile money users who generated over $495 billion in transaction value last year.
Parent company Opera reported that OPay’s monthly transactions grew to over $2 billion in December last year.
OPay claims to process about 80 per cent of bank transfers among mobile money operators in Nigeria and 20 per cent of non-merchant point of sale (POS) transactions.
Last year, it acquired an international money transfer licence with a WorldRemit partnership also in the works.
OPay’s monthly transaction volumes exceed $3 billion at the moment, according to Bloomberg.
Last year, it expanded to Egypt, marking inroad to the Middle East market.
SoftBank Group
SoftBank Group Managing Director Kentaro Matsui, 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.”
SoftBank joins a growing list of high-flying investors (Dragoneer, Sequoia and SVB Capital, among others) that have set eyes on African ventures this year as the continent continues to show promise.
Fintech has produced the most megarounds so far. TymeBank raised $109 million in February and Chipper Cash $100 million in May.
OPay’s fundraise is the largest of the lot in size and value, making it the second African fintech unicorn after Flutterwave and the third after e-commerce giant Jumia.
The three make up the $5 billion tech firms on the continent, which include Interswitch and Fawry.
Wave raises $200m, the largest in Series A
Wave, a fintech based in the US and Senegal, has also joined the unicorn club.
It raised $200 million in a Series A round, the largest Series A in Africa that puts Wave’s valuation at $1.7 billion.
The funding was jointly backed by Sequoia Heritage, an endowment-style fund and a separate entity that operates independently under the Sequoia brand; Founders Fund; payments giant Stripe; and Ribbit Capital.
Others included existing investors, Partech Africa and Sam Altman, former CEO of Y Combinator and current CEO of OpenAI.
Growing African mobile money market
The mobile money market in sub-Saharan Africa is growing exponentially. This past year, up to $500 billion was moved through the accounts of 300 million active mobile money users in the region.
But despite being one of the largest alternative financial infrastructures known globally, this represents only a fraction of the overall market.
According to the GSMA, 64 per cent of the $2.1 billion transacted daily through mobile money platforms last year happened in sub-Saharan Africa.
The International Monetary Fund (IMF) estimates that as of 2017, only 43 per cent of adults in sub-Saharan Africa were “banked” by a traditional bank or mobile money account.
When it comes to growing that proportion, however, mobile money – based on simpler technology and with an easier onboarding process – wins out, and it is set to capture more market share faster than traditional banking in the region.
And this has investors, especially foreign ones, excited and looking to get on board.
Flutterwave closes $170m funding
Another unicorn, African payments company Flutterwave, closed $170 million, valuing the firm at over $1 billion.
New York-based private investment firm Avenir Growth Capital and US hedge fund and investment firm Tiger Global led the Series C round.
New and existing investors who participated included DST Global, Early Capital Berrywood, Green Visor Capital, Greycroft Capital, Insight Partners, Salesforce Ventures, Tiger Management, Worldpay FIS, and 9yards Capital.
The Series C round comes a year after Flutterwave closed its $35 million Series B and $20 million Series A in 2018. In total, it has raised $225 million and is one of the few African startups to have secured more than $200 million in funding.
Launched in 2016 as a Nigerian and US-based payments company with offices in Lagos and San Francisco, Flutterwave helps businesses build customisable payments applications through its Application Programming Interface (API).
When it raised its Series B, it was reported that it had processed 107 million transactions worth $5.4 billion. Those numbers have increased to over 140 million transactions worth more than $9 billion.
The company also helps businesses outside Africa to expand their operations on the continent, and has as clients international companies such as Booking.com, Flywire, and Uber.
Flutterwave said more than 290,000 businesses use its platform to carry out payments “in 150 currencies and multiple payment modes including local and international cards, mobile wallets, bank transfers, Barter by Flutterwave.”