Africa-focused digital payment company, OPay, is talking to investors over a possible $400 million funding raise, according to The Information, a San Francisco-based news media.
The funding is expected to enable the payment company to expand into new markets as well as new services.
OPay would also be able to take its valuation to $1.5 billion from $500 million, becoming the next unicorn fintech company operating in Africa. Interswitch and Flutterwave are the two unicorns in digital payment services in Africa.
OPay had in 2019 secured about $120 million from Chinese investors – Sequoia Capital, IDG Capital, Source Code, GSR Ventures, and Meituan-Dianping – which pushed its valuation to $500 million.
Founded in 2018, OPay has seen remarkable growth. At the end of 2018, the company had 2,400 agents and by 2019, it had pushed that number to 40,000 agents. In May 2020, the company said it had 300,000 agents.
The company’s payment transactions rose 4.5 times on a monthly basis in 2020 to over $2 billion in December.
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Before going into payment full time, OPay was also a major player in ride-hailing, in the days of motorcycle ride-hailing in Lagos State. The company brought intense competition to the likes of Gokada and Max.Ng, until the Lagos State placed a ban on commercial motorcycle business over concerns around insecurity, forcing the likes of OPay to pivot to logistics.
The logistics pivot, however, was not as lucrative as ride-hailing due to a “harsh business” in Nigeria that affected other businesses as well. It soon packed up the logistics business including verticals such as e-commerce platforms, OMall and OTrade; and its food delivery feature, OFood, was closed down. It also meant the death of OPay’s super app ambition as it focused its energy on digital payment.
The 100 percent attention may have paid off as the company said in March 2021 that it recorded a spectacular year in 2020 amid the pandemic that contributed to increased adoption in electronic payment channels. Point of Sale (PoS) terminals the company deployed in its mobile money agent and merchant network represented roughly ⅕ of offline payments in Nigeria by the end of 2020, according to Joshua Yau, managing VP for OPay in Nigeria. Its mobile wallets had more than 2 million wallets with balances totalling over $17 million.
While the report from The Information does not say exactly what the expansion plans entail, in March 2021, OPay gave an indication of what it is looking at doing more.
According to Oladipo Omogbengun, VP Payments Solutions and Corporate Partnerships, the growth plans in 2021 will rely on developing and deepening OPay’s strategic partnerships in the financial services ecosystem with banks, regulators, card schemes, payment processors, payment service providers, other key service providers and other key players.
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