With a growing youth population and a GDP that outstripped South Africa’s in 2020, Nigeria is at the forefront of digital and financial innovation. Historically, transferring money to Nigeria has been fraught with difficulty, and new Central Bank of Nigeria (CBN) directives that state money can only be transferred to local accounts in dollars, instead of the local currency. This creates additional hurdles. Albeit frustrating, these challenges create great room for opportunity. African fintech has leapfrogged developments in the West and new providers are offering services directly on mobile, with increased internet and mobile phone usage contributing to the expanding marketplace. M – Pesa, for instance, which is ‘Africa’s most successful fintech company and largest fintech platform’ is the go-to way for people to make payments due to the apps safety and convenience factors. Catering to both the banked and unbanked, M-Pesa now has 42 million customers. Nigeria has seen major growth in fintech startups, which Erlystage has previously covered. This is why it comes as no surprise that an increasing number of venture funds are quick to invest in promising startups coming out of the country. 

African fintech has leapfrogged developments in the West and new providers are offering services directly on mobile, with increased internet and mobile phone usage contributing to the expanding marketplace.

One company that aims to make processes smoother and easier is Okra, an open finance data infrastructure startup. Founded in 2019 by Fara Ashiru Jituboh and David Peterside, Okra provides businesses and developers with access to financial data and secure payments and allows customers to connect their bank accounts to other apps. Okra is connected to all banks in Nigeria and has launched beta versions in Kenya and South Africa. With its seamless integration and connection to a large number of financial institutions, Okra has caught the eye of several investors. Earlier this month, the startup closed its seed round of $3.5m with investment from funds, including US-based Susa Ventures and Accenture Ventures. 

Leading consultancy Accenture’s investment in Okra is indicative of the rising movement amongst large corporates that promote growth by putting their money into promising young companies. Accenture’s venture arm was set up in 2015 and aims to help innovative startups, by giving them access to the consultancies clients, who they can work with to identify solutions for the gaps and challenges that these clients face. The venture arm has invested in over 30 companies to date and has over 50 partners. In November 2020, Accenture Ventures launched ‘Project Spotlight’, which Okra is part of. This initiative provides access to Accenture’s G2000 client base and allows startups to see real-world challenges and provide scalable solutions. Tom Lounibos, managing director of Accenture Ventures explains that Okra is ‘a rising fintech star in the high-growth global digital financial services arena, and in the African market,’ and ‘has the potential to address critical challenges in Africa.’ The continent has the largest unbanked population, which serves as a great opportunity for players like Okra to tap into this market and create products for its underserved consumers. This is the venture fund’s first investment in Africa, and Accenture’s involvement in Okra’s seed round signals greater international optimism towards the startup environment in Africa. Furthermore, a study by Accenture in 2019 found that by 2025, ‘fintech startups could capture as much as $78 billion, or 3.9% of the projected $2 trillion total global banking payments market.’ Along with its involvement in ‘Project Spotlight,’ Okra will also have access to the consultancy’s global innovation network and the opportunity to work with software engineers, systems architects, and payments experts at Accenture. Additionally, by taking advantage of what Accenture Ventures is able to offer, Okra will be able to grow into new markets and expand its business. Vukani Mngxati, chief executive of Accenture Africa states that Okra’s inclusion within its program “will increase the reach and impact of innovation and help African economies accelerate progress and value for all.” Accenture Ventures also launched its Black Founders Development Program, which is part of Project Spotlight and aims to create opportunities for Black technology startup founders and entrepreneurs, by providing them with investment, mentorship, and support. Judging from the range of companies that the venture arm has formed ‘strategic partnerships’ with, it seems that Accenture Ventures invests in companies at all stages of the funding series.

Accenture is not the first consulting firm to venture into venture capital. Bain Capital Ventures is the venture capital arm of Bain Capital, which was founded in 1984 by partners from consultancy, Bain & Company and is one of the worlds leading alternative investment firms. The venture fund partners with founders wanting to make a difference across a range of industries, such as SaaS, fintech, healthcare, commerce and consumer tech. Bain’s investments range from $1m in seed money up to $100m of growth equity, with the added value of using Bain Capital’s platform to connect founders with the fund’s network and clients to help them scale. Bain Capital Ventures has helped many companies achieve success and has a diverse portfolio that includes Docusign, Rent the Runway, Linkedin and Grid AI. Companies like Accenture and Bain investing in businesses can give founders and their startups an edge over competitors, as they gain access to a rich network and the opportunity to work with leading professionals to create a leading product or service. 

What we are seeing today is greater demand for ease, convenience and security when it comes to banking services. Traditional players in the banking and financial services industry have been slow to respond to this internationally and have not been able to keep up with new companies that have the agility to cater to changing consumer needs. With a young population, scores of talent and now growing international interest, Africa provides the ideal playing field for fintechs hoping to reform the country’s banking system. Given its growing importance as an emerging market, we can predict greater investment from funds such as Accenture’s, which will be able to benefit from the products and services startups provide, whilst helping foster development and innovation. What remains to be seen is who will emerge as Africa’s leading fintech in the future.