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OPay attains Unicorn status as Soft Bank makes first Africa bet

Chinese-backed and Africa-focused fintech company OPay raises $400 million in new financing led by SoftBank Vision Fund 2, valuing the company at $2 billion.

O-pay, the Chinese-backed and Africa-focused fintech company, becomes the second African fintech unicorn after Flutterwave and the third African unicorn after e-commerce giant Jumia, courtesy of a new $400 million financing led by SoftBank Vision Fund 2 valuing the company at $2 billion.

OPay's fundraise is the largest of the lot in terms of size and value. The new financing comes two years after OPay announced two funding rounds in 2019 — $50 million in June and a $120 million Series B in November.

SoftBank Vision Fund 2 participation in this round means it is the first time the VC is investing in an African startup. The VC joins the growing list of high-flying investors (Dragoneer, Sequoia and SVB Capital, among others) that have cut their first checks in African ventures this year. Existing investors like Sequoia Capital China, Redpoint China, Source Code Capital and Softbank Ventures Asia were also part of the round. Other investors, including DragonBall Capital and 3W Capital, also took part in the new financing round.

"We want to be the power that helps emerging markets reach a faster economic development," OPay Chief Executive Officer Yahui Zhou said in an emailed statement.

Kentaro Matsui, SoftBank Group Corp. managing director, said, "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."

Founded in 2018, OPay's technology is designed to replace cash and other legacy payment methods, helping local governments "improve financial and information security." OPay's figure is impressive. Parent company Opera reported that OPay's monthly transactions grew 4.5x to over $2 billion in December last year. According to Bloomberg, the company's monthly transaction volumes exceed $3 billion at the month. OPay also claims to process about 80% of bank transfers among mobile money operators in Nigeria and 20% of the country's nonmerchant point of sales transactions.

Last year, the company also said it acquired an international money transfer license with a WorldRemit partnership also in the works. OPay is currently working its way into the Middle East. It recently expanded to Egypt, and according to the company, that's an entry point to the Middle East market.

Nigeria in focus

GDP: $432.294 billion in 2020 compared to $448.12 billion in 2019

Population: 206,139,587 in 2020 compared to 200,963,03 in 2019

GDP per capita: $2,097 in 2020 compared to $2,229 in 2019