<\/p>\n
You can also listen to this podcast on iono.fm here.<\/p>\n
SIMON BROWN: I\u2019m chatting with Adesoji (Soji)\u00a0Solanke, head of Fintech and Banks investment banking origination at Absa CIB. Adesoji, appreciate the time. African fintech \u2013 I want to say it\u2019s on the rise, maybe on the re-rise.<\/p>\n
We had two fintech listings last year: Optasia locally, Cash Plus in Morocco. My sense is both are showing improved potential but also investor appetite. It shows confidence in the sector, its ability to scale, its ability to create real liquidity events such as the listing. They were both big stories.<\/p>\n
ADESOJI SOLANKE: Yes, that\u2019s correct. First, thank you for having me on this discussion today. So yes, that\u2019s correct.<\/p>\n
Those two assets did come to the public market in 2025, and essentially what you\u2019ve seen is two scaled businesses that had previously been backed by private capital now exploring an exit for those investors. One of the listings happened in South Africa, on the JSE, and the other in Morocco.<\/p>\n
The other interesting thing you find is in terms of the nature of investors that came into both companies. It was a combination of domestic, retail and institutional capital \u2013 but also international investors.<\/p>\n
Read:
Optasia secures more than $300m in syndicated refinancing
After decent year, two blockbuster JSE listings await in 2026
Optasia is officially trading on the JSE
Optasia debuts on the JSE<\/p>\n
I\u2019ll say significantly more international investor participation on the JSE listing, and on the Moroccan side relatively more participation on the domestic side, just given the nature of development of that market as well. Just important differences to keep in mind.<\/p>\n
But the main thing here is that skilled opportunities are essentially finding exit routes via African capital markets, and that\u2019s a trend which is happening for large fintech companies and long may it last.<\/p>\n
SIMON BROWN: Agreed, long may it last. Are there potential more listings out there, or maybe other sorts of corporate activity? I\u2019m thinking maybe mergers and acquisitions and the like. These are unlikely to be isolated events.<\/p>\n
ADESOJI SOLANKE: That\u2019s correct. Certainly not isolated events. So if you take a step back, what you also have to keep in mind is the quantum of capital that has been invested in African fintech companies over the last 10 years.<\/p>\n
The number we are talking about is north of $20 billion. So from that perspective it\u2019s only natural to expect that there are certain scaled opportunities now or, let\u2019s say, companies where entrepreneurs have built very successful businesses that are profitable, growing, and gaining market share.<\/p>\n
And it\u2019s only natural for the investors that have backed them for all these years to consider an exit opportunity. So that\u2019s one thing.<\/p>\n
From an exit perspective, yes, capital markets, but also M&As [merger and acquisitions]; and from the M&A perspective that is certainly picking up as well.<\/p>\n
South Africa, unsurprisingly, is leading the charts in terms of M&A activity in the fintech space in Africa. There has been significantly more activity where you\u2019re finding large incumbent players \u2013 whether it\u2019s in banking, retail or even in the fintech space \u2013 actually acquiring other technology companies on the continent.<\/p>\n
Read:
FirstRand takes stake in Jordaan-backed fintech Optasia
SA banks step up Africa drive amid fintech rivalry
Fintech Lesaka to acquire Adumo in R1.6bn deal
Absa sees more Fintechs in African IPO pipeline<\/p>\n
There\u2019s also, to a limited extent, some cross-border activity; but this is still intra-Africa M&A. There are more limited international into-Africa technology M&A deals happening.<\/p>\n
So the key summary is that there\u2019s significantly more domestic in-country M&A happening; to more limited extent intra-African M&A, and to a much smaller extent international Inter-Africa M&A on the tech side.<\/p>\n
SIMON BROWN: Gotcha, gotcha. And what are the main sectors within African fintech? My sense is payments. My sense is probably lending. But payments goes all the way back to the original sort of M-Pesa.<\/p>\n
ADESOJI SOLANKE: Correct. A combination of those two \u2013 so yes, payments, yes, credit. But the unique thing about Africa is that the nature of the business models that have been built within this segment are also quite unique, and perhaps quite different from what you find in other developed markets.<\/p>\n
So that also just means that as an investor looking to get a deal done in Africa you need to make sure you walk with advisors who really understand the nuances of the business models that are quite unique in an African context. And that\u2019s one of the main areas where we spend a lot of our time guiding our clients.<\/p>\n
Read:
Digital payments in Africa: Can regulation keep up with the rapid innovation?
Fintechs fly planes of cash into Zimbabwe to meet demand for dollars<\/p>\n
So there are just more nuances when it comes to Africa \u2013 the number of countries, the variances in the business models. You\u2019ve mentioned two big categories being payments and credit. But even underneath those umbrellas there are just so many unique business models that have been built within those categories.<\/p>\n
Mobile Money is also another large segment as well \u2013 large, growing and profitable businesses. I think for international investors this is also an area where there\u2019s a lot of explaining perhaps required, just to explain how unique these business models are in an Africa context.<\/p>\n
SIMON BROWN: I take your point around that. I\u2019m thinking in the US, for example, there\u2019s PayPal, there\u2019s Venmo. But those are kind of app-based, whereas you have Mobile Money, we have M-Pesa \u2013 the process around there. There\u2019s ultimately the same outcome, but a very different road as to how we get there and how we\u2019ve used ingenuity to solve problems.<\/p>\n
Read: Vodacom in talks to add stake in R157bn Kenya telecom giant<\/p>\n
ADESOJI SOLANKE: Yes. And you\u2019ve hit the nail on the head, and the reasons for those differences should not be surprising because when you look at the developed markets you\u2019re talking about, say, the United States \u2013 so smartphone penetration, bank internet penetration and ATM penetration is extremely high.<\/p>\n
When you come to Africa, the infrastructure for cash-in, cash-out is actually not ATMs. We do have ATMs, don\u2019t get me wrong. But the most skilled infrastructure for cash in, cash out is actually agent networks that are typically owned by either telecoms companies or financial technology companies.<\/p>\n
The magnitude of difference in terms of number of ATMs per 100\u00a0000 adults in Africa is maybe like four to five ATMs for every 100\u00a0000 adults. But for the agent network, I\u2019m talking of 20 to 30 agents for every 100\u00a0000 adults.<\/p>\n
So that\u2019s just a magnitude of difference when it comes to the cash in, cash out infrastructure that you find in Africa for the agent network vis-\u00e0-vis the bank ATM infrastructure.<\/p>\n
Read:
The rise of digital wallets in Africa and SA is leading the way
Digital payments in Africa: Can regulation keep up with the rapid innovation?
PayInc steps up push to move South Africa to digital payments
Rivals should fear Shoprite\u2019s tilt at banking<\/p>\n
So, given what I\u2019ve just described, and how important it is when it comes to digital payments, you first of all need to be able to have the infrastructure to digitise cash \u2013 and in Africa that is largely being done by the Mobile Money agent network.<\/p>\n
But you\u2019re also finding out that how the customers then transact once money sits in that wallet has historically been very USSD [Unstructured Supplementary Service Data] based \u2013 also because there just have been more 2G, 3G phones in the hands of African consumers. But that is changing.<\/p>\n
This is where the long-term growth trajectory of Africa is quite exciting, because as more people evolve from 2G, 3G, USSD to more app-based models, there just are more digital transactions.<\/p>\n
That also continues to happen as internet penetration continues to increase. Smartphones become cheaper; internet costs get cheaper as well. Urbanisation rates also continue to improve.<\/p>\n
There\u2019s just a significant flywheel effect that helps to drive the growth across the entire ecosystem. That\u2019s definitely the trend that we\u2019re finding happening across quite a number of African countries so far.<\/p>\n
Read:
Africa\u2019s next payments leap: Stablecoins on every corner
Absa unveils executive overhaul to drive pan-African growth strategy<\/p>\n
SIMON BROWN: Absolutely. It\u2019s that flywheel, as you say, and it just gathers momentum.<\/p>\n
We\u2019ll leave that there. \u2013 Adesoji Solanke, head of Fintech and Banks investment banking origination at Absa CIB, appreciate the time.<\/p>\n
#African #fintech #USSD #smartphone #apps<\/p>\n","protected":false},"excerpt":{"rendered":"
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