Ghanaian FinTech startups raise almost $400m in 2022
Ghana’s fintech start-ups are set to remain an attractive investment opportunity for the rest of 2023, according to Richard Nunekpeku, the Vice President responsible for Legal and Strategy at the Ghana Fintech and Payments Association. Despite concerns that the global economic crunch could lead to a more cautious approach to investments in less-established entities, Nunekpeku believes that the sustained performance of Ghanaian start-ups, which raised nearly $400m in 2022, will continue as existing and emerging products address real-life issues both locally and internationally.
McKinsey and Company estimates that Ghanaian fintech revenues could reach $18.6bn by 2025, and Nunekpeku expects the appetite of investors to continue supporting innovation across the continent to help this growth materialise. He also noted that Ghanaian firms are expanding into other markets and pushing boundaries, suggesting that the trend of investment in Ghana’s fintech industry will continue.
In 2022, Ghana had a very successful year with 47 deals valued at over $400m, nearly eight times more than what the country achieved in 2021, according to data aggregators Big Deal Africa. As a result, Ghana was ranked fifth in funding raised on the African continent in 2022.
Despite some concerns that funding may be skewed towards emerging areas such as agrictech, regulation technology, healthtech and edutech, with fintechs bearing the brunt, Nunekpeku argued that growth in funding to other sectors will have a multiplier effect on fintechs. As fintech is required for the success of every industry, growth in these other areas will eventually trickle into the fintech ecosystem. Furthermore, Nunekpeku highlighted that fintechs’ value and growth potential ensure funding will remain in the industry, even as Ghana’s fintech penetration rate is expected to reach 8% by 2025, better than the continental average of 5%.
According to McKinsey’s analysis, the financial services industry in Africa has the potential to expand by approximately 10% annually, resulting in a market worth around $230bn in revenue by 2025. With transactional solutions provided by fintechs potentially 80% cheaper than those offered by conventional service providers, there is significant potential for Ghanaian fintech start-ups to make a substantial contribution to this expansion.
Ghana’s fintech industry appears to be on a positive trajectory, with sustained investment expected to continue throughout 2023. The industry’s value and growth potential make it an attractive investment opportunity for investors seeking opportunities in Africa’s financial services sector.
