OPay Reportedly Raises $400M at $1.5B+ Valuation

OPay Seeks $400 Million Funding to Fuel Expansion

Fintech platform OPay, backed by Chinese investors and focused on the African market, is reportedly in discussions to secure up to $400 million in new funding. This information was released today by The Information.

Recent Funding History

This potential fundraising round arrives two years following OPay’s previous funding announcements in 2019. These included a $50 million investment in June and a subsequent $120 million Series B round in November.

To date, the $170 million in capital secured has primarily originated from Chinese investment firms. These firms have demonstrated increasing confidence in African startups over the past several years.

Key Investors

• SoftBank
• Sequoia Capital China
• IDG Capital
• SoftBank Ventures Asia
• GSR Ventures
• Source Code Capital

Early Expansion and Diversification

OPay was initially launched in Lagos in 2018 by Opera, well-known for its internet browser and search engine. The company quickly pursued an aggressive expansion strategy within the city, utilizing its ORide ride-hailing service – now discontinued – as a gateway to a broader range of services.

Since its inception, OPay has experimented with various verticals. These included OBus, a bus-booking platform; OExpress, a logistics delivery service; OTrade, a B2B e-commerce platform; and OFood, a food delivery service. However, these ventures have largely been discontinued.

Fintech Focus and Growth

Despite the limited success of its diversified offerings, OPay’s core fintech and mobile money division continues to thrive. Opera, OPay’s parent company, reported a 4.5-fold increase in monthly transactions, exceeding $2 billion by December of last year.

OPay asserts that it currently processes approximately 80% of bank transfers among mobile money operators within Nigeria, and handles 20% of the nation’s non-merchant point of sales transactions. Furthermore, the company obtained an international money transfer license and is developing a partnership with WorldRemit.

Competitive Landscape

OPay operates within a highly competitive fintech market. Nigeria, as Africa’s most populous country, presents a significant opportunity due to its large underbanked and unbanked population. Fintech is considered a particularly promising digital sector within the nation, and across the continent.

Mobile money services have long addressed the needs of those without traditional banking access. According to GSMA data, Africa had over 160 million active mobile money users, generating more than $495 billion in transaction value last year.

Alongside startups like OPay and Paga, major telecommunications companies, including MTN and Airtel, are also establishing substantial mobile money service divisions to compete for market share.

Geographical Expansion and Future Plans

Interestingly, despite the capital raised, OPay remained focused solely on Nigeria until December of last year. Plans to expand into South Africa and Kenya, initially discussed during its Series B funding round, have not yet materialized.

The company attributed these delays to the pandemic, but has since expanded into North Africa with a launch in Egypt. This anticipated funding round, likely a Series C, will be crucial for supporting both geographical expansion and the development of new product offerings.

The Information reports that OPay’s valuation is projected to increase to approximately $1.5 billion, representing a threefold increase from its 2019 valuation.

OPay was contacted for comment but declined to provide a statement at this time.