Chinese-backed and Africa-focused fintech platform OPay is in talks to raise up to $400 million, The Information reported today. The fundraising will be coming two years after OPay announced two funding rounds in 2019 — $50 million in June and $120 million Series B in November.
The $170 million raised so far comes from mainly Chinese investors who have begun to bet big on Africa over the past few years. Some of them include SoftBank, Sequoia Capital China, IDG Capital, SoftBank Ventures Asia, GSR Ventures, Source Code Capital.
In 2018, Opera, popularly known for its internet search engine and browser, launched the OPay mobile money platform in Lagos. It didn’t take long for the company to expand aggressively within the city using ORide, a now-defunct ride-hailing service, as an entry point to the array of services it wanted to offer. The company has tested several verticals — OBus, a bus-booking platform (also defunct); OExpress, a logistics delivery service; OTrade, a B2B e-commerce platform; OFood, a food delivery service, among others.
While none of these services has significantly scaled, OPay’s fintech and mobile money arm (which is its main play) is thriving. This year, its parent company Opera reported that OPay’s monthly transactions grew 4.5x last year to over $2 billion in December. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country’s non-merchant point of sales transactions.
Last year, the company also said it acquired an international money transfer license with a partnership with WorldRemit also in the works.
It’s quite surprising that none of OPay’s plans to expand to South Africa and Kenya (countries it expressed interest in during its Series B) has come to fruition despite its large raises. The company blamed the pandemic for these shortcomings. However, earlier this year, the country set up shop in North Africa by expanding to Egypt. This next raise, likely a Series C, will be instrumental in the company’s quest for expansion, both geographically and product offerings. Per The Information, OPay’s valuation will increase to about $1.5 billion, three times its valuation in 2019.
We reached out to OPay, but they declined to comment on the story.