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Join on Telegram Fez – The business media platform Afridigest has announced the 2021 list of “mega-round” African startups, showing the startups that succeeded to cross $100 million in revenues this year. FinTech (Financial Technology) startups dominated the list, highlighting that this industry is tremendously progressing on the continent.
Surprisingly, no single Moroccan startup was featured among the 11 most grossing African startups.
Morocco’s startup scene is barely a decade old but shows promising signs of development and growth in different fields, such as climate change, agriculture, transportation, and digital appointment booking.
However, Morocco’s startups are still lagging behind compared to their African counterparts who are clearing their path in the business world and catching investors’ attention, especially in the FinTech industry.
Understanding FinTech
FinTech encompasses any technology used to provide innovative solutions to improve and rethink the financial sector.
When you send money to another person miles away from you only via your mobile bank app, pay services using cryptocurrencies, or arrange your trip from scratch online, you rely on FinTech to perform these tasks.
FinTech is behind all of these small jobs that a customer can run without the assistance of an office or agency. FinTech platforms enable consumers to run their own tasks, easing the customers’ lives by providing automated and improved financial services.
This industry is still new to the business world and has proven its value amid the ongoing COVID crisis. The contactless interactions that FinTech startups provide have helped customers to reduce direct contact and hence reduce the chances of contracting the virus.
FinTech startups in Africa
In recent years, FinTech startups have gained considerable ground across Africa, with many startups grossing a yearly revenue of $100 million.
OPay, a Nigerian-based startup that provides mobile money services, raised more than $400 million this year, according to data compiled by Afridigest.
OPay provides a wide array of services ranging from paying bills to food and grocery delivery. The startup’s app receives thousands of orders and transactions every day.
Wave, a Kenyan-based mobile money services startup, has grossed more than $200 million this year. It allows customers to save, transfer, or borrow money to run their businesses or provide for their families.
The startup aims to bring digital finance to everyone in Africa, helping to lift African people out of poverty.
Andela, a Nigerian-based startup that provides information technology (IT) services, has raised more than $200 million this year.
Founded in 2014, Andela provides multiple services, including software development and consultation services for companies looking for engineering and technology professionals.
TymeBank, an exclusively digital retail bank based in South Africa, has earned more than $180 million this year. Founded in 2012, TymeBank provides online banking services to its customers via its app and website. More interestingly, it does not possess any physical bank branches.
Flutterwave, a Nigerian-based startup that provides payment infrastructure for global merchants and payment service providers, has raised more than $170 million.
Read also: What Does The Future Hold for Morocco’s Startups and Digital Economy?
Chipper, a mobile and cross-border money transfer services startup based in several African countries, has raised more than $150 million this year.
JUMO and MNT Halan, banking services startups based in South Africa and Egypt respectively, have raised more than $120 million each.
Meanwhile, Morocco’s startups did not feature in this year’s list of most grossing African startups. With FinTech startups dominating the list, Morocco’s startups still have a long way to go if they wish to secure a spot among the continent’s best enterprises.
FinTech in Morocco: A nascent industry
The FinTech startup scene is still new to the finance industry in Morocco. Having seen the light of day only a couple of years ago, Morocco’s underdeveloped Fintech scene appears to be in dire need of guidance from the country’s major players in the finance industry.
These players need to take FinTech startups under their wings to show them the road, accompany them in the first steps of their journey, and provide them with a successful model to follow.
In May 2021, Morocco’s Deposit and Management Fund (CDG) hosted a webinar on FinTech startups in Morocco, discussing their future potential and providing solutions for Moroccan entrepreneurs willing to compete with their African counterparts.
The webinar witnessed the participation of prominent figures and experts in the country’s finance industry. Participants included Abdelhakim Agoumi, Director of the Customer Services and Alternative Channels Division of CIH Bank, and Abdeslam Alaoui Smaili, CEO of Hightech Payment Systems (HPS).
Also present at the event were Fintech expert Yassine Regragui, a former executive of Alipay in China, and Jean-Michel Huet, Partner at Bearing Point. Youssef Mamou, Director of the 212 Founders Program at CDG Invest, moderated the meeting.
Sharing their thoughts about the FinTech industry in Morocco, the experts highlighted the reasons that stand against its developments and offered recommendations to remedy such problems.
One of the major impediments to FinTech development in Morocco is people’s reliance on cash in their daily transactions.
According to Jean-Michel Huet, Moroccans don’t fully trust online payment and other Fintech-related services. Moroccans are still reluctant to use services that require credit card credentials. For example, when having dinner at a restaurant, they prefer to go to the ATM and get cash to pay the bill rather than paying by credit card.
Yassine Regragui agreed. Over the years, Moroccans have come to trust established institutions such as banks, he explained in his presentation. As such, he pointed out, gaining users’ trust remains the major dilemma facing Moroccan startups.
According to Regragui, Morocco’s startups need to seize hold of the market’s emerging needs and meet the users’ demands. Only by following this method can startups establish trust relationships with Moroccan users or customers.
Another obstacle standing in the way of FinTech startup development is the poor relationship that Moroccan entrepreneurs have with the “culture of failure.”
Abdeslam Alaoui Smaili pointed out that innovation is not concerned only with finding an idea but also implementing such an idea in the market. Moroccan entrepreneurs need to take initiative and look for opportunities. They need to consult established firms and ask for help and guidance.
The HPS CEO notes that the entrepreneurial spirit is still not adequately mature among young Moroccan entrepreneurs who greatly fear failure.
For his part, Abdelhakim Agoumi indicated that CIH Bank is ready to welcome young Moroccan entrepreneurs and guide them through the excruciating process of actually launching a successful business. He stated that the real challenge today is to have Moroccan entrepreneurs who are willing to take risks without fear of failure. Help is available, but it must be sought.
Meanwhile, all of the participants also stressed the state’s significant role in encouraging people to trust FinTech startups’ services, indicating that the government needs to intervene and highlight the benefits of such services to the public.
FinTech is one of the most promising industries in the world today. Following the revenues it generates yearly, the industry has been catching investors’ attention willing to expand their fields of investments. Many established firms have collaborated with FinTech startups to provide their customers with modernized services that answer today’s fast-moving worldly demands.
Hence, Morocco’s startups and enterprises have to bring together their expertise and share their visions to create a successful model that can see the country compete with other leading nations in the FinTech industry.
