African payments startup OPay has raised $50 million in funding after investors such as Sequoia China, IDG Capital and Source Code Capital joined in the latest round, according to a report. Norwegian browser company Opera, the founder of OPay, also contributed its own investment in the mobile payments startup with hopes of growing the company into a leader in mobile payments.
It’s expected that OPay will use the funds to further grow the business in Nigeria, home to Africa’s largest economy and the most populous country on the continent.
OPay was founded in 2018 and serves as a mobile platform for sending and receiving payments. In Nigeria, the platform has 40,000 active agents and has reported $5 million worth of transactions in approximately 10 months.
The platform also links with Opera's other ventures, OFood, a restaurant meal delivery service, and ORide, a motorcycle ridesharing service.
With this funding round, OPay has new backing from Chinese investors like Source Code Capital and Sequoia China. China has been hands-off with African startups and corporations in the past, the report noted, but the acquisition of OPay parent company Opera in 2016 by Chinese investor and current CEO Yahui Zhou provided a new opportunity to Chinese venture capital firms looking to invest in African tech.
Investment in OPay has opened the door to new financial opportunities in Nigeria, which is currently placed right behind Kenya as Africa’s digital payments leader. Nigeria’s Central Bank had kept non-banks from offering mobile payment services, but has now eased some of those restrictions, opening a door for mobile payment operators.
In addition to OPay’s $50 million round, Nigeria’s current digital payment leader Paga raised $10 million in 2018 and reaches 13 million customers.
The popularity of mobile payments apps has grown significantly in recent years. American-based mobile payment company Venmo (owned by PayPal), is one of many household names in the financial realm that has changed the way consumers send and receive payments.