Visa, a global leader in digital payments, announced on Wednesday strategic venture investments in four startups that graduated from the inaugural Visa Africa Fintech Accelerator program cohort. This move underscores Visa’s commitment to supporting Africa’s fintech ecosystem, fueling digital transformation, and advancing financial inclusion across the continent. The investments not only highlight Visa’s focus on emerging markets but also emphasize its strategy to back innovative companies transforming the financial landscape in Africa.

The Four Fintech Startups Selected by Visa

The four startups, each with unique solutions and broad regional reach, are Oze, Workpay, OkHi, and ORDA. Operating across multiple African countries, these fintechs were selected for their ability to drive meaningful impact in digital payments, financial access, and operational efficiency.

1. Oze (Ghana):
   Based in Ghana, Oze is a fintech startup that provides digital record-keeping and embedded finance tools specifically designed for small and medium-sized enterprises (SMEs). Its platform enables SMEs to manage transactions, access affordable capital, and expand their businesses. Oze also offers a Loan Management System (LMS) for financial institutions, which uses machine learning to power credit scoring and improve lending decisions. By facilitating better credit access for micro, small, and medium enterprises (MSMEs), Oze addresses a critical challenge faced by African SMEs: limited access to capital.
   According to Meghan McCormick, CEO of Oze, “This investment marks a pivotal moment in our journey, allowing us to scale our innovations and continue supporting MSMEs across Africa. We and our shareholders are passionate about empowering these businesses, and Visa’s backing only strengthens our mission.”
2. Workpay (Kenya):
   Kenya-based Workpay is a comprehensive HR and payroll technology company that manages the entire employee lifecycle, from payroll processing to performance management. With a platform that covers over 35 African countries, Workpay helps companies streamline HR processes, including employee benefits administration and compliance with local regulations. The startup’s “Employer of Record” service is particularly valuable, allowing businesses to employ staff remotely without needing an in-country entity, which simplifies workforce expansion across borders.
   Workpay’s co-founder and CEO, Paul Kimani, expressed excitement about Visa’s support, stating, “Having Visa in our corner pushes us toward delivering innovative solutions for African businesses, helping them operate smoothly and meet payroll requirements effortlessly.”
3. OkHi (Nigeria):
   Nigerian-based OkHi addresses the challenge of inaccurate or non-existent addresses in many African regions through its smart addressing and digital verification system. The platform helps businesses and financial institutions accurately collect and verify addresses, improving delivery logistics and facilitating access to financial services. OkHi’s solution is particularly impactful in rural and underbanked areas, where lack of proper addressing systems often hinders economic participation.
   Timbo Drayson, OkHi’s co-founder and CEO, commented on the partnership, “With Visa’s support, we aim to redefine identity verification in Africa. Our solution not only makes deliveries more efficient but also opens doors for individuals to participate fully in the digital economy.”
4. ORDA (Nigeria, Kenya, South Africa):
   ORDA, a cloud-based restaurant software provider, has digitized over 1,500 restaurants across Nigeria, Kenya, and South Africa. Its tools cover everything from order processing to inventory and financial management, enabling restaurants to streamline operations and improve customer service. ORDA’s platform also offers payment solutions that are essential for smaller restaurant businesses aiming to modernize and grow in Africa’s fast-evolving digital economy.
   Guy Futi, co-founder of ORDA, noted, “Visa’s investment is a mark of trust in our vision to bring innovation to Africa’s restaurant industry. Together, we’re set to drive digital adoption and efficiency in this sector.”

Visa’s Broader Vision for Africa’s Fintech Future

Visa’s investment in these startups aligns with its broader commitment to Africa. In 2023, Visa announced a $1 billion investment pledge to support digital transformation and financial inclusion initiatives across the continent by 2027. This initiative focuses on partnering with local innovators to help address the unique challenges in the African financial landscape.

Godfrey Sullivan, Visa’s Senior Vice President of Products, Partnerships, and Digital Solutions for Central Europe, Middle East, and Africa (CEMEA), emphasized the significance of these investments: “Visa stands behind its commitment to innovation in Africa, working alongside visionary fintech founders to shape the future of digital payments. Each investment supports not only our goal of driving financial inclusion but also Africa’s broader economic growth.”

Visa’s partnership with African fintech startups also reflects its strategic interests in leveraging digital innovation to reach underserved populations. Africa’s high mobile penetration rates and increasing adoption of mobile money services provide fertile ground for digital payment solutions, which are often more accessible than traditional banking services. By investing in fintechs that cater to unbanked and underbanked populations, Visa aims to expand financial access and inclusion, which is pivotal for economic empowerment on the continent.

Upcoming Demo Day for the Visa Africa Fintech Accelerator Program

On December 2, graduates from the second cohort of the Visa Africa Fintech Accelerator program will showcase their innovations at a Demo Day in Cape Town, South Africa. This event offers an invaluable platform for fintech startups to pitch their solutions to a wide array of stakeholders, including venture capitalists, angel investors, ecosystem enablers, and potential business partners.

The Visa Africa Fintech Accelerator, which is a three-month intensive program, provides startups with 1:1 mentorship, business training, and exclusive opportunities for funding and partnerships. With its unique focus on Seed to Series A companies, the program plays a crucial role in nurturing early-stage startups that might otherwise struggle to access the resources they need to scale. The accelerator is supported by Amazon Web Services (AWS), which offers free cloud services to program participants, further enabling the startups to leverage cutting-edge technologies to enhance their products and services.

Collaborative Potential for Global Fintech Partnerships

Visa’s investment in these four African fintech startups also reflects the growing potential for cross-border collaborations in fintech. In recent years, African fintechs have attracted attention from global investors and corporations due to their ability to innovate in areas like mobile banking, digital wallets, and payment processing. As Visa continues to strengthen its presence in Africa, it is likely that similar partnerships will emerge between African fintech companies and global financial institutions, fostering a more interconnected fintech ecosystem.

The increased attention to Africa’s fintech sector is not unwarranted; fintech innovations have shown significant potential in addressing various socio-economic issues on the continent. According to a 2023 report by McKinsey, Africa’s fintech market is projected to grow at a compound annual growth rate of 10% over the next five years, reaching $150 billion in annual revenue by 2028. Visa’s investments in Oze, Workpay, OkHi, and ORDA are indicative of the sector’s growth prospects and underscore Visa’s commitment to tapping into this emerging market.

The Broader Impact on Africa’s Economic Ecosystem

Visa’s investments in these startups could catalyze a broader transformation in Africa’s digital ecosystem. By supporting businesses that focus on payroll management, credit scoring, digital addresses, and restaurant technology, Visa is helping to develop a more robust infrastructure that will benefit various industries, from e-commerce to logistics and hospitality.

Furthermore, the ability of these startups to scale their solutions across multiple African countries highlights the importance of regional integration in driving economic growth. Africa’s digital economy is projected to be worth $180 billion by 2025, with fintech expected to be a major contributor. Visa’s involvement in this space will not only support the growth of the selected startups but will also contribute to Africa’s broader economic development by fostering innovation, creating jobs, and enhancing financial inclusivity.

Conclusion: A Step Forward for Africa’s Digital Financial Landscape

Visa’s strategic venture investments in Oze, Workpay, OkHi, and ORDA exemplify the company’s commitment to driving financial inclusion and innovation across Africa. By investing in these startups, Visa is not only supporting fintech innovation but is also fostering a future where more Africans have access to digital financial services. This initiative aligns with Visa’s broader vision of empowering communities and enhancing connectivity across the continent.

With ongoing investments and support from large players like Visa, Africa’s fintech sector is well-positioned to continue its upward trajectory, bringing with it transformative benefits for the continent’s economies, businesses, and individuals. The Visa Africa Fintech Accelerator and similar programs will likely continue to be a launchpad for the continent’s next generation of fintech leaders, each contributing to Africa’s increasingly vibrant digital economy.

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Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

8th November, 2024