The road to unicorn status for African startups has been long and arduous. However, as the years go by, and the investment space blooming with more foreign funds, companies are attaining this prestigious status within shorter periods.
A startup is said to have reached unicorn status when it has a valuation of more than $1 billion. This company has to be privately run.
Globally, there are over 600 companies that have attained this status, according to CBInsights; but Africa literally only gas a handful of them, with a relatively young fintech company completing the full one-hand count.
It is crucial to know that the valuation of a company does not directly translate to the company’s generated revenue.
A one-billion-dollar company has the attention of investors and private equity firms, which boosts the company’s market value. Investors estimate the growth trajectory of these startups, therefore, a company could operate without generating profits when they hit the ground running but can attain the lofty status.
READ ALSO: CBN Sets Rules For Shared Services In Banks, Others
5 African Unicorn Startups
Chipper Cash
Chipper Cash, a digital payments platform with a presence in seven African countries, recently hit the $1 billion valuation, and it did so after four years of entering the market and raising capital.
After raising $100 million – led by SVB Capital and supported by Bezos Expeditions and five other investors – the San Fransisco-based company joined the one billion-dollar-in-valuation league.
It provides other services including a card product launched in Nigeria and a crypto product, with an aim to tap into the thriving digital currency zeitgeist.
Flutterwave
Launched in 2016, Flutterwave has continued to make impressive strides in the payments business.
Recently, it announced partnerships with firms like Paypay, Worldpay, Amole – Ethiopia’s largest digital wallet platform – among others.
But the biggest news came when it made the headlines after it secured $170 million in funding, driving it to unicorn status.
Founded in 2016 by Iyinoluwa Aboyeji and Olugbenga Agboola, the tech firm has established its presence in 20 countries on the continent while its services are used in over 33 African countries.
Jumia
When you talk about e-commerce in Africa, Jumia comes to mind, as it is has entrenched itself as Africa’s foremost e-commerce platform.
It was conceived in 2012 by a team of four including Tunde Kehinde, Raphael Kofi Afaedor, Jeremy Hodara, and Sacha Poignonnec, and has a presence in over five countries in Africa.
Headquartered in Berlin, Germany, the company was founded in Lagos, and in 2019, it was valued at $1.9 billion, listing its shares on the New York Stock Exchange.
It stands as the first company on the continent to reach unicorn status. The claim of Jumia as an “African tech startup” remains contested, as many say that it was set up by a German internet company Rocket Internet.
Fawry
Egyptian e-payment platform was launched in 2008 and hit the $1 billion valuation twelve years after, making it the first and only company to achieve this in North Africa.
Created by Ashraf Sabry, whose aim was to create a platform that would “enable nationwide electronic financial services”, the company is Egypt’s largest electronic payment network.
Its customer base has grown over the years to 20 million, processing more than 2 million transactions daily, according to Wamda.
Interswitch
Founded in 2002 by Mitchel Elegbe, and driven by the need to provide a digital banking system that made payments easier for Nigerians, Interswitch is regarded as Nigeria’s first unicorn startup.
It achieved this feat in 2019 after Visa bought a minority stake in the tech firm for $200 million, according to Sky News.
As part of its provisions of other payment networks, Interswitch created Verve, a local payment card, and Quickteller, a multi-pronged payment services channel used in Nigeria, Uganda, and Kenya.
The firm’s investors include Visa, Helios Investment Partner, and TA Associates.
