Daily investor update: November 2 2022

Amazon Web Services opens a second Africa office in Lagos

Highlights

• Amazon Web Services (AWS) this week opened an office in Lagos, Nigeria’s commercial capital, five years after the US giant’s first Africa branch was set up in Johannesburg, South Africa.
• This move will bring AWS, which already supports a number of Nigerian startups such as SeamlessHR, Yellow Card, BFree, Bankly, and public sector organizations, closer to African startups.
• The Lagos office is AWS’s latest investment in Africa as it’ll house teams of AWS account managers, partner managers, solutions architects, and other roles that support Nigerian customers.

Source: TechCabal

Our Takeaway

Amazon’s decision to double down on its presence in Africa further underlines the huge untapped potential in the continent’s cloud computing market, which has pulled other big operators like Microsoft, Google, Huawei, Equinix Inc, and Teraco, with huge investments being poured into data centers and cloud infrastructure on the continent. The Middle East and Africa’s cloud computing industry is expected to grow to $31.4 billion by 2026, from $14.2 billion in 2021, as more organizations digitize their operations.

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Nigerian digital lender Payhippo acquires microfinance bank

Highlights

• Nigerian digital lender Payhippo has acquired Maritime Microfinance Bank, a financial institution that offers loans, supports investments, and accepts deposits and savings. 
• Although the Central Bank of Nigeria (CBN) is yet to approve this acquisition, Payhippo says this acquisition will enable them to directly access Nigeria’s Inter-bank Settlement System (NIBSS).
• When the acquisition gets the green light, Maritime will adopt Payhippo’s corporate brand, while Payhippo will extend its digital services to existing Maritime customers.

Source: Nairametrics

Our Takeaway

The Payhippo-Maritime transaction is yet another sample in a string of acquisition deals involving African fintech startups (as acquirers) and traditional financial institutions. In May 2021, Kenyan digital lender Branch acquired Century Microfinance bank. Such deals provide startups faster routes to expanding their services—specifically, an MFB license allows them to receive deposits and enhance lending for individual and SME customers. Once the deal is finalized, Payhippo merchants will be able to accept deposits and send and receive money across various commercial banks in Nigeria.

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Moroccan open banking startup Spotter raises funds from UM6P

Highlights

• Morocco-based open finance startup Spotter has raised an undisclosed amount of funding from UM6P Ventures. The startup participated in Morocco’s first Plug and Play acceleration program.
• Founded by Abdele Boukachabine and Mamoune Kettani, Spotter develops an application programming interface-driven platform that helps financial institutions to analyze consumer financial data, aiding millions of people in getting greater access to credit while expanding the capabilities of lenders and other fintech companies. 
• The startup also uses technologies like optical character recognition (OCR) to offer instant cheque verification to businesses struggling with the growing number of returned cheques. 

Source: Wamda

Our Takeaway

Across Africa, open banking has seen considerable traction in recent years with several startups having sprung up allowing developers to build for the continent with ease and quickly. We’ve also seen commercial banks and other financial institutions partner up with API startups to provide digital financial services. Many experts believe the future of financial services in the region rests on interoperability across several players and services and as the continent’s startup ecosystem matures and the fintech landscape gets more sophisticated, we expect to see infrastructure-focused startups seek growth opportunities in new markets, supported by increased venture capital backing.