Nigeria’s Opay raises  $400 million led by SoftBank at a $2 billion valuation

OPay, a Chinese-backed fintech company with a focus on Africa, raises $400 million in new funding led by SoftBank Vision Fund 2, valuing it at $2 billion.

Existing investors Sequoia Capital China, Redpoint China, Source Code Capital, and Softbank Ventures Asia participated in the round, which is the fund’s first investment in an African startup. The new financing round included participation from other investors such as DragonBall Capital and 3W Capital.

OPay competes in a crowded fintech space, where companies like Paga and TeamApt are vying for market share by bringing financial services to Nigeria’s millions of unbanked citizens.

OPay, which was founded in 2018, raised two rounds of funding in 2019: a $50 million Series A in June and a $120 million Series B in November.OPay used to provide both ride-hailing and logistics services, but the former was discontinued last year due to a government ban on motorcycles in Lagos.

During the global pandemic lockdown last year, the fintech firm’s gross transactions increased by 4.5x to over $2 billion in December.The company’s monthly transaction volumes currently exceed $3 billion, thanks to its strong network of 300,000 agents and 5 million app users. OPay plans to expand to other African countries while concentrating on the Middle East.

Although the company has entered North Africa with a shop in Egypt, it has been unsuccessful in its attempts to enter South Africa and Kenya, which it blames on the Covid crisis. Last year, OPay announced the acquisition of an international money transfer license, as well as a planned partnership with WorldRemit.

“We believe our investment will help the company extend its offering to adjacent markets and replicate its successful business model in Egypt and other countries in the region,” SoftBank Vision Fund’s managing partner, Kentaro Matsui, said on the investment in OPay.