Verdant Capital on how Africa's investment landscape is changing
With over $250 million raised in private debt and equity for inclusive financial institutions, Verdant Capital's Managing Director Edmund Higenbottam joins CNBC Africa to discuss how Africa's investment landscape is changing and what can drive consolidation for fintechs.
Wed, 25 Aug 2021 12:05:57 GMT
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AI Generated Summary
- Significant growth and recovery in the African FinTech sector since the second half of 2020, with expected volumes to reach $3 to $4 billion by the end of 2021.
- Verdant Capital's global approach to facilitating transactions with investors from the US, Japan, China, and Europe, resulting in deals executed in 20 African countries.
- Focus on consolidation across borders and segments in the FinTech space, driving synergies between payment solutions and credit tech and leading to the emergence of market leaders with diversified offerings.
Verdant Capital, a leading financial advisory firm, has been at the forefront of shaping the investment landscape in Africa's FinTech sector. With over $250 million raised in private debt and equity for inclusive financial institutions, the firm's Managing Director, Edmund Higgin-Bottom, sat down with CNBC Africa to shed light on the trends and developments in the market. Higgin-Bottom highlighted the significant growth and recovery the FinTech ecosystem has witnessed since the second half of 2020, with expected volumes to reach $3 to $4 billion by the end of 2021, a notable increase from the previous year. While larger deals like OPay's fundraising from SoftBank have captured headlines, Higgin-Bottom emphasized that these deals, while substantial for the region, are not as sizeable when compared globally. The growth in the African FinTech sector comes as no surprise, given the ripe landscape for disruption and the substantial opportunity for innovative businesses with tested products and strong use cases. Despite the challenges posed by the pandemic, which forced investors to rethink their strategies, the resilience and adaptability of the sector have been evident, driving increased deal flow and business model evolution. Higgin-Bottom also discussed Verdant Capital's global approach to business, leveraging themes in the market to facilitate transactions with investors from the US, Japan, China, and Europe. This strategic engagement has enabled the firm to execute transactions in 20 African countries, focusing primarily on tech-enabled businesses providing differentiated credit and payment solutions. As the FinTech sector continues to evolve, discussions around cryptocurrency and blockchain have gained prominence. While acknowledging the need for caution, Higgin-Bottom highlighted the legitimate use cases for cryptocurrencies and their potential to reshape the financial landscape. Looking ahead, Verdant Capital foresees a shift towards Pan-African businesses in the FinTech space, with a focus on consolidation across borders and segments. This trend is expected to drive synergies between payment solutions and credit tech, leading to the emergence of market leaders with a diversified offering. Overall, the future of Africa's FinTech sector appears promising, with projections pointing towards continued growth and strategic consolidation.
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