Nigeria’s OPay raises $400m at $2bn valuation, led by SoftBank

Nigeria-based fintech company, Opay has raised $400 million in a funding round led by SoftBank Vision Fund 2, the venture capital arm of Japanese conglomerate, SoftBank. This investment signals the first time SoftBank Vision Fund is investing in an Africa-based startup.

Existing investors like Sequoia Capital China, Redpoint China, Source Code Capital, and Softbank Ventures Asia also participated in the financing round. Other investors include DragonBall Capital and 3W Capital. This latest financing shoots the valuation of OPay to $2 billion, making it the latest Unicorn in Africa.

We reported three months ago that OPay was looking to raise $400 million at a valuation of $1.5 billion from a group of Chinese investors which would mint the startup as a Unicorn. OPay has surpassed that goal with this latest financing.

This brings the total amount raised by the Nigerian mobile payments company to $570 million. It has previously raised two funding rounds in 2019 – $50 million in June and a $120 million Series B in November.

“We want to be the power that helps emerging markets reach faster economic development,” OPay’s Chief Executive Officer, Yahui Zhou said of the funding.

Founded in 2018, OPay operated exclusively in Nigeria where it offered ride-hailing, logistics, and fintech services at cheap rates for consumers. The fintech arm is currently the most active part of the business as it had to shut down its ride-hailing platform due to a government ban on motorcycles in Lagos.

The company claims its monthly transaction volume now exceeds $3 billion, with over 300,000 agents and more than 5 million users across Nigeria. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions.

Last year, the company also said it acquired an international money transfer license with a WorldRemit partnership also in the works.

The startup is also looking to expand to other African countries and across the MENA region. It hopes to use this latest funding to drive that expansion. “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 Group Managing Director, Kentaro Matsui said.

Opay currently operates in a very competitive fintech market, where the likes of Paga, TeamApt, and Kudi are working very hard to increase their market share in a bid to provide financial services to millions of Nigerians who are unbanked and underbanked.

Last year, Opay expanded to Egypt and according to the company, that’s an entry point to the Middle East market.

Kentaro Matsui, a managing director at SoftBank Group Corp, 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.”