Africa has produced about eight unicorn companies, and out of eight, five are Nigerian unicorn companies; this is something to be proud of as a nation.
To many people outside the business world, the word “Unicorn Company” is strange; the term refers to privately owned companies that have reached a $1 billion valuation in less than ten years. Close to the word “Unicorn,” we’ve got “Soonicorn,” referring to a mini unicorn business founded in at most five years with amassed funds of over $100 million and has the potential of becoming a unicorn enterprise soon.
In a statement made by Collins Onuegbu, “Alliance Founder,” he is opposed to using the term ‘Unicorn’ for African startups preferring using the word ‘Gazelle’ a sleek, stable creature adapted to the harsh situations in Africa, considering the struggle African startups go through to be recognized.
About six years ago, Africa doesn’t have a single Unicorn company. Today, she accounts for about eight startups with over $1 billion valuation, with Nigeria accounting for 5; below is the list of Nigerian Unicorns.
1. Opay
Opay is Nigeria’s youngest Unicorn Company based in Lagos, founded in August 2018 by Chinese billionaire Yahui Zhou. Opay, in the space of three years, grew from a quirky startup into a $2 billion financial service firm, making it the fastest African startup to reach the $1 billion valuation.
Opay attained this status after surpassing Flutterwave when it secured $400 million in funding compared to Flutterwave’s $170 million. Opay set a new record as there has never been a company in Africa to raise such an amount of money in a single round; the company successfully achieved this feat with the participation of SoftBank, a Japanese investment firm, and Sequoia Capital China in the funding series. According to founder Yahui Zhou, “Opay aims to help emerging markets boost their economic development.”
Opay focuses on agent banking, with its Point of Sales machine and software to operate like banks and ATM. It opens bank accounts, accept deposits, and process withdrawals, being more advantageous than the normal banking process as it is always open 24/7. Opay, as of May 2020, had over 300,000 agents across Nigeria who execute $3 billion in transactions monthly. In the app alone, peer-to-peer payments are made, assets are managed, meals can be bought, and instant messaging is allowed. Opay is focused on payments in Egypt and Nigeria.
In 2019 Opay raised $50 million in funding and then six months later raised $120 million, which set the groundwork for taking over Africa’s fintech sector.
Opay was SoftBank’s first investment in Africa, also part of SoftBank’s $40 billion Vision 2 Fund, paving the way for other African companies.
Opay has raised $570 million in funding over three rounds, $50 million in series A led by IDG Capital, Source Code Capital and Sequoia Capital China in July 2019. The series B in November 2019 raised $120 million with two new investors, Redpoint Ventures China and Bertelsmann Asia investments and the other three from series A. And Opay attained its unicorn status in its Series C round in August 2021 with $400 million in funding from seven several Chinese based investors, which include Redpoint Ventures China, 3W Capital, Source Code Capital, SoftBank Ventures Asia Longzhu Capital, Sequoia Capital China, and SoftBank Vision Fund as the lead. Asides from being the youngest and fastest Nigerian company to reach the $1 billion Status, it is also the first African-focused company with a $2 billion valuation.
It would interest you to know that the word Opay is coined from two separate words Opera and Paycom.
2. Andela
Andela is a global company with operations across five components of the world. Andela was founded in 2014 by Iyinoluwa Aboyeji, Ian Carnevale, Jeremy Johnson, and Christiana Sass, four professionals in the online education and recruitment Business, and two other contributing founders in persons of Nadayar Enegesi and Brice Nkengsa. The company is a talent network connecting emerging African Software engineering talents with companies globally. Andela also serves as a training company to match developers in technology hubs.
In the first funding in Series A led by Spark Capital, $14 million was raised after the $3 million raised in the seed and angel rounds with 16 participant investors. Also, in the series, B round in June 2015 and 2016, which Chan Zuckerberg Initiative led, Learn Capital, GSV Ventures, and Omidyar Network, a whopping sum of $24 million was raised.
The Company, in October 2017, further completed a $40 million funding in Series C led by CRE Venture Capital and a $100 million funding in Series D round in January 2019 led by Generation Investment Management and twelve other participant investors.
In 2021 Andela raised a total of $381 million in funding in multiple rounds, with the company’s latest funding from a series E round in September 2021, which brought the company’s valuation to $1.5 billion, with its investors being Spark Capital and Generation Investment Management, SoftBank Vision Fund, Whale Rock Capital and Chan Zuckerberg initiative as its five lead investors and 40 other participating investors.
3. Flutterwave.
Nigeria unicorn company founded by Iyinoluwa Aboyeji, Olugbenga Agboola, and Adeleke Adekoya in 2016 with a total funding amount of $234.7 million attained the $1 billion valuation unicorn height in 2021. Flutterwave rose to the challenges that characterized 2020, where businesses and individuals had been adversely affected, t. The company launched innovative products and entered strategic collaborations to survive 2020 and emerge more vital in the years ahead.
Flutterwave is a payment technology company with over 200,000 businesses solely trusting it; flutterwave created the Flutterwave store to help enterprises to survive the 2020 Covid-19 disruption; the store allowed companies to upload their products and begin selling online while also providing customers a seamless purchasing experience during the lockdown. The store quickly received a large reception from users as it grew from a thousand users in May 2020 to 5,000 users in July 2020. As of November 2020 increased to 17 000 and presently has over 20,000 users transacting business today.
Flutterwave in Lagos, with its headquarters in San Francisco, California, and operations in about 10 African countries, is worth nearly three billion dollars, employing hundreds of young men and women. Through its APIs, Flutterwave allows its customers to build customized payment applications. Since 2016, the company has processed over $8 billion in transaction values. Flutterwave also provides technology services to enable global merchants, banks, and businesses to build and secure a seamless payment solution for customers.
Flutterwave raised $250 000 funding in the Series A round from LoftyInc Capital Management in April 2017 and later closed $10 million in the final Series A round in October 2018 from six different investors. Led by Headline and Greycroft in participation with ten others, a total of $35 million in funding was raised in August 2020. As of March 2021, the company did raise a $170 million Series funding round led by Avanir Growth Capital and Tiger Global Management, and was the most significant amount ever secured by an African tech start-up and as at then which raised Flutterwave’s valuation to over $1 billion, making it sit pretty as a unicorn company.
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4. Interswitch.
Interswitch is the eldest unicorn startup alongside Fawry; Interswitch was founded in 2002 by Mitchell Elegbe. Interswitch introduced electronic processing and switching in Nigeria, affecting the traditional cash-based payments value chain. As of 2018, only 12% of African transactions were electronic, compared to 54% in Europe and 79% in North America. However, a growth of 35% from 2018 to 2022 in Africa, excluding South Africa, makes Sub-Saharan Africa the fastest growing digital payments market globally. In 2019 Interswitch processed over 500 million transactions per month in Nigeria, developing the financial ecosystem of the Nation and was Nigeria’s leading digital payment channel. Nigeria is Interswitch’s largest market in Africa, a fast-growing electronic market for electronic payments, with a CAGR of about 59% for ATM transactions and 94% for POS transactions between 2013 and 2018, with an expected CAGR of about 63% for POS card transactions by 2023 in Nigeria.
As of May 2019, Interswitch had 19 million activated cards on its network, which happened to be the most significant domestic debit card in terms of volume in Africa.
5. Jumia.
Jumia was founded in 2012 by Jeremy Hodara and Sacha Poigonnec. It targets African countries as it offers a wide range of items for electronic devices, home appliances, and fashion items, amongst other things. Jumia also offers Jumia Logistics, an online service that allows sellers to ship packages to consumers and has a seamless payment plan controlled by Jumia pay.
Jumia sits elegantly as the first African unicorn startup; it attained unicorn status in 2016 after the company announced a $435 million Series C funding. Jumia is also the first African unicorn to be listed on the New York Stock Exchange (NYSE). At this time, the company was valued at $3 billion, operating in fourteen African countries. However, it soon lost its place after some fraud claims in 2019, which brought the company to a $250 million valuation.
In a quarter of 2020, Jumia had a total of 6.8 million customers with over 110,000 active sellers. The company’s valuation has continued to fluctuate; as of September 2022, the valuation was about $984 million at $9.99 per share price. Jumia had its highest value on the first trading day of this year, valued at $1.1 billion and $11.97 per share.
Jumia began operations with ten staff members but currently employs over 5000 people.
A “Gazelle” or a “Unicorn” is most appropriate for these Nigerian companies. Let us know your thoughts in the comments section below.
