Nigeria continues to lead Africa’s fintech sector, accounting for 47% of all fintech deals and 44% of total funding on the continent in 2024. The sector attracted $410 million in funding, maintaining its 2023 levels despite a broader decline across Africa. Major drivers include high mobile penetration (87%), a youthful population, and regulatory reforms like open banking and eased cryptocurrency restrictions.
Key Takeaways:
- Market Dominance: Nigeria hosts 28% of Africa’s fintech companies and processed 108 billion mobile money transactions worth $1.68 trillion in 2024.
- Top Deals: Moniepoint and Moove each raised $110 million, showcasing investor interest in established firms with scalable models.
- Sector Growth: Digital payments, credit infrastructure, and embedded finance led funding, while AI and Web3.0 gained traction.
- Challenges: Inflation hit 34.8%, regulatory compliance costs increased, and cybersecurity risks grew.
2025 Outlook:
- Growth Areas: Cryptocurrency, AI integration, and embedded finance are expected to expand.
- Risks: Economic instability, regulatory hurdles, and market concentration could impact smaller players.
Nigeria’s fintech sector remains resilient and poised for further growth in 2025, balancing opportunities with challenges as it evolves into a more mature ecosystem.
Nigeria’s Startups Raised $100M in Q1 2025 | Top 10 Deals & Expert Analysis | Business Insights
2024 Funding Numbers and Major Deals
The numbers from 2024 reveal Nigeria’s fintech sector holding strong, even as the broader African fintech market faces ongoing challenges. Despite a continent-wide decline in investment since 2021, Nigeria continues to dominate as a hub for fintech funding.
Total Funding and Deal Count
In 2024, Nigerian startups raised approximately $410 million, maintaining the same level of funding as 2023. This consistency is notable when compared to the overall decline in African fintech funding, which fell from $2.4 billion in 2021 to just $1.034 billion in 2024.
Nigeria’s contribution remains pivotal, accounting for 44% of total fintech funding across Africa in the first half of 2024. That’s about $455 million of the $1.034 billion raised by African fintech firms throughout the year.
The deal activity further underscores Nigeria’s importance. The country captured 47% of all fintech deals completed in Africa during 2024. Across the continent, fintech companies closed 131 deals – a 16% increase from the previous year – even as the total funding amounts declined. These figures set the stage for a closer look at the standout funding rounds that shaped the year.
Major Funding Rounds
Two major funding rounds stood out in Nigeria’s fintech landscape, each securing $110 million.
- Moove raised $110 million in a Series B round led by Uber, combining equity and debt to support its expansion into India.
- Moniepoint also raised $110 million in a Series C round led by Development Partners International, tripling its valuation to over $1 billion.
Together, these two deals accounted for $220 million, or more than half of Nigeria’s total fintech funding in 2024. This highlights a trend of concentrated investment in established companies with proven business models. Moove plans to use the funding to expand its presence in existing markets and explore new ones, while Moniepoint aims to strengthen its platform across Africa, offering digital payments, banking, cross-border transactions, credit, and tools for business management.
Deal Comparison Table
The funding landscape in 2024 was heavily influenced by a few large deals, with a sharp drop-off in funding amounts after the top performers:
| Company | Funding Amount | Sector | Lead Investor |
|---|---|---|---|
| Moove | $110 million | Vehicle Financing | Uber |
| Moniepoint | $110 million | Digital Payments | Development Partners International |
| Yellow Card | $33 million | Cryptocurrency Exchange | Undisclosed |
| Konexa | $18 million | B2B Payments | Undisclosed |
| Beacon Power Services | $12 million | Energy Fintech | Undisclosed |
There’s a significant funding gap between the top two deals and the rest. After Moove and Moniepoint’s $110 million rounds, the next largest deal was Yellow Card’s $33 million – a 70% drop from the top funding rounds. This disparity illustrates a shift in investor focus toward established players with proven market dominance, signaling a maturing market where scalability and solid financial performance are becoming key factors for attracting substantial investments.
Funding by Fintech Sector
Examining sector-specific investments offers a clearer picture of how investor priorities are shifting. In Nigeria, funding distribution across fintech verticals showcases which areas are thriving and which are emerging as new opportunities. While traditional sectors like payments continue to lead, other areas are quickly gaining ground and reshaping the industry.
Top Funded Sectors and Emerging Opportunities
Digital payments and cross-border transactions led the way in funding during 2024, with companies such as Moniepoint securing significant investments.
Credit infrastructure and digital lending came in second, highlighting the growing appetite for alternative financing solutions. The rise of digital lending apps and Buy Now, Pay Later (BNPL) services has opened up fresh avenues for consumers and businesses alike.
Spend management, BNPL, and merchant solutions completed the top three most-funded categories.
The embedded finance sector is also showing strong momentum. For instance, Anchor, a startup in this space, processed over 1.5 million transactions worth ₦1 trillion ($652 million) while serving more than 400 businesses.
This shifting funding landscape is paving the way for advancements in areas like AI and Web3.0.
AI and Web3.0 in Nigerian Fintech
Cryptocurrency and Web3.0 have captured a growing share of investor attention in 2024, signaling a notable shift in focus. Nigeria ranked second on Chainalysis‘ Global Adoption Index, a testament to its thriving crypto ecosystem. Between July 2023 and June 2024, the country received approximately $59 billion in cryptocurrency value.
The regulatory environment has also become more supportive. In September 2024, two local cryptocurrency exchanges, Quidax and Busha, earned approval from Nigeria’s Securities and Exchange Commission (SEC).
Nigeria’s contributions to the global Web3 developer community are impressive. In 2024, the country accounted for 4% of the world’s new Web3 developers, the highest share from any African nation. Web3 startups raised $130 million, and the local developer base grew by 28%, reaching about 1.1 million.
Artificial Intelligence is also gaining traction in Nigerian fintech. Around 29% of fintech firms are now leveraging generative AI for tasks like content creation. AI is emerging as a key driver of innovation in the sector.
“Nigeria’s current trajectory in adopting Web3 technologies has the potential to shape not only the local digital economy but also influence Africa’s broader participation in the global blockchain space.” – Hashed Emergent
Sector Funding Breakdown
Fintech dominated Nigeria’s funding landscape in 2024, accounting for 72% of total equity funding, underscoring its critical role in the economy. However, the heavy focus on specific verticals comes with inherent risks.
| Sector | Key Companies | Notable Developments |
|---|---|---|
| Digital Payments | Moniepoint, Flutterwave | Card transactions hit ₦1.01 trillion in June 2024 |
| Cryptocurrency | Quidax, Busha, Yellow Card | SEC approved local crypto exchanges |
| Embedded Finance | Anchor | ₦1 trillion in processed transactions |
| Cross-border Payments | Raenest | $11 million Series A in February 2025 |
The adoption of card payments has seen a significant boost. By June 2024, card transactions reached ₦1.01 trillion, up from ₦930.76 billion in the same month the previous year.
Nigeria’s fintech ecosystem is expanding at a rapid pace. By February 2025, the country had over 430 fintech companies, a sharp increase from 255 companies in January 2024.
Even without the large deals involving Moove and Moniepoint, fintech would still account for 31% of Nigeria’s total funding, a slight dip from 37% in 2023.
These sector trends are closely tied to the regulatory developments explored in the next section.
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Regulations and Market Factors in 2024
The regulatory environment in Nigeria during 2024 brought both hurdles and opportunities for fintech companies, significantly influencing investor sentiment and funding trends throughout the year.
New Regulations and Their Effects
In 2024, the Central Bank of Nigeria (CBN) played a central role in regulating the fintech industry, implementing notable actions that shaped the sector. One of the most impactful events occurred in April when the CBN temporarily banned key fintech players from onboarding new customers due to alleged foreign exchange violations. Although this ban created immediate uncertainty, it was lifted a month later after the affected companies complied with Know Your Customer (KYC) requirements and other regulatory conditions.
Beyond enforcement, the CBN introduced new guidelines aimed at improving transparency, security, and sector stability. These regulations, developed in collaboration with the Securities and Exchange Commission (SEC) and the Nigeria Data Protection Commission (NDPC), helped rebuild investor confidence, supporting a steady flow of fintech investments.
In September 2024, the SEC bolstered the crypto sector by formally approving local exchanges like Busha and Quidax, further legitimizing cryptocurrency operations in Nigeria. Meanwhile, the NDPC intensified enforcement of data protection regulations, offering clearer guidance on the responsibilities of data controllers and processors. This heightened focus on data security led fintech companies to increase compliance spending and invest in stronger data protection measures.
Amid these regulatory shifts, Nigeria faced a 34.8% inflation rate, prompting stricter foreign exchange policies and data protection rules. While these measures created some immediate challenges, they also laid the groundwork for more targeted government initiatives aimed at fostering long-term stability.
Government Support for the Digital Economy
Alongside regulatory changes, the Nigerian government demonstrated its commitment to advancing the digital economy through various initiatives and reforms. A notable area of focus was the promotion of artificial intelligence (AI) within the fintech sector. By 2024, 29% of surveyed fintech firms were utilizing generative AI for content creation, marking a significant leap in adoption. This progress was fueled by government efforts to encourage AI integration across different industries.
Another major policy shift was the easing of restrictions on cryptocurrency transactions, which created a more optimistic outlook for digital currency adoption in Nigeria. This move not only boosted the country’s standing in global crypto adoption rankings but also attracted international investors.
Beyond regulatory reforms, the government introduced policies aimed at fostering innovation and economic growth. These efforts helped create a more predictable environment, which is crucial for maintaining investor confidence.
However, the regulatory landscape wasn’t without its challenges. Reports of de-banking incidents targeting fintech operators increased, and indirect regulation of the industry became more prevalent. Additionally, digital fraud surged by 468% between 2023 and the first nine months of 2024, resulting in losses of NGN53.4 billion (US$34.8 million).
Despite these hurdles, Nigeria remained the most active hub for fintech deals in Africa, accounting for 47% of all fintech transactions on the continent. While some regulatory actions caused short-term disruptions, they ultimately contributed to a stronger, more compliant ecosystem that continued to attract investor interest.
The regulatory developments of 2024 laid the foundation for the opportunities and challenges the fintech industry will face in 2025 as it strives to balance innovation with compliance.
2025 Outlook: Growth Areas and Risks
As Nigeria’s fintech sector gears up for 2025, it finds itself at the crossroads of promising opportunities and looming challenges. Regulatory shifts in 2024 have opened doors for innovation, but evolving market conditions are shaping how stakeholders approach the industry.
Expected Growth Sectors for 2025
In 2025, cryptocurrency and Web3.0 are expected to flourish. With Nigeria already leading Africa in digital currency adoption, the relaxation of cryptocurrency transaction restrictions is set to further solidify its position. The sector has grown rapidly, with 32 active players reported by early 2025.
The Central Bank of Nigeria’s Payments System Vision 2025 is another major driver of growth. Open banking frameworks, set to roll out in August 2025, will enhance the payments landscape. Nigeria’s transaction volumes in 2024 were staggering, with over 108 billion mobile money transactions valued at $1.68 trillion.
Artificial intelligence (AI) is emerging as a transformative force in fintech. Globally, the AI fintech market is projected to hit $31.71 billion by 2027, and Nigerian companies are positioning themselves to claim a share of this growth. As Olánrewájú Adéníji, a Software Solution Architect, puts it, “For Nigerian FinTechs, AI is not just a tool; it’s a strategic differentiator”.
Embedded finance is also gaining traction, with companies like Anchor demonstrating its potential. Meanwhile, cross-border payments and remittances remain a lucrative area. For instance, Moniepoint’s partnership with Visa in January 2025 has improved transaction visibility across Africa, showcasing the potential of such collaborations.
While these sectors present exciting opportunities, they come with their own set of challenges.
Potential Challenges Ahead
Despite the optimism, 2025 won’t be without hurdles. Regulatory compliance remains a major concern, with increased costs posing a threat to smaller players. In 2024, the Central Bank of Nigeria (CBN) imposed heavy compliance fines on key industry players.
Tunde Alade, a fintech entrepreneur, warns, “The fines are a wake-up call. While large players can absorb these costs, early-stage startups may struggle to meet compliance demands, potentially stifling innovation”.
Economic challenges are also significant. With inflation at 34.8% as of December 2024 and ongoing foreign exchange shortages, companies face difficulty in repatriating capital and managing cross-border transactions.
Additionally, market concentration is becoming a concern. In 2024, fintech dominated 72% of Nigeria’s total equity funding, a sharp shift from the more diverse venture capital landscape of 2023. This concentration could lead to increased volatility. Rising costs are another issue, with application fees for IMTO licenses now at ₦10 million, adding to the financial burden.
Opportunities vs Risks Table
The following table highlights the key opportunities and risks shaping Nigeria’s fintech sector in 2025:
| Key Opportunities | Major Risks |
|---|---|
| Crypto & Web3.0 Growth: 32 active players driven by relaxed regulations | Regulatory Compliance Costs: Fines up to ₦1 billion and ₦10 million license fees |
| Open Banking Launch: Vision 2025 framework begins in August 2025 | Economic Instability: 34.8% inflation and foreign exchange shortages |
| AI Integration: Global market projected at $31.71 billion by 2027 | Market Concentration: 72% of equity funding concentrated in fintech |
| Embedded Finance: Strong performance by companies like Anchor | Infrastructure Challenges: Cybersecurity risks demand stronger protection |
| Large Market Share: 47% of Africa’s fintech deals and 36% of funding | Funding Volatility: Reliance on investor sentiment and regulatory changes |
Balancing Innovation and Compliance
As the sector matures, success in 2025 will hinge on how well companies manage this balancing act. Established players with strong compliance frameworks are better positioned to thrive, while newer entrants must tread carefully. Leveraging technologies like AI and blockchain, alongside adapting to regulatory and economic shifts, will be key to navigating the evolving landscape.
Conclusion
Nigeria’s fintech industry has experienced remarkable growth throughout 2024, solidifying its position as Africa’s top fintech hub. With a 70% year-over-year growth rate in 2024 and fintech accounting for 72% of equity funding, the country has firmly established itself as a leader in the continent’s fintech landscape. The number of fintech companies surged dramatically, rising from 255 in January 2024 to over 430 by February 2025, highlighting the rapid expansion of the sector.
This growth has been fueled by success stories of companies achieving unicorn status and drawing significant international investment. These achievements have not only boosted confidence in the sector but have also paved the way for regulatory adjustments aimed at fostering stability and growth.
The regulatory framework has undergone a significant transformation, moving from restrictive policies to a more supportive approach. Key developments, such as easing cryptocurrency restrictions and the introduction of the SEC’s Accelerated Regulation Incubation Program, have contributed to a more stable and attractive market environment for global investors.
FAQs
What factors make Nigeria a leader in Africa’s fintech industry?
Nigeria stands out as a leader in Africa’s fintech sector, thanks to its large, youthful, and tech-savvy population. This dynamic demographic has fueled both innovation and the rapid adoption of digital financial solutions. In 2024 alone, the country recorded over 108 billion mobile money transactions, amounting to an impressive $1.68 trillion – a clear reflection of its thriving financial ecosystem and growing appeal to global investors.
Several factors have driven this remarkable growth. Expanding mobile connectivity, supportive regulatory frameworks, and Nigeria’s dominant share of Africa’s fintech market have all played crucial roles. Together, these elements solidify Nigeria’s position as a key hub for financial technology in Africa, with even greater potential for growth on the horizon as 2025 approaches.
How are regulatory changes, such as easing cryptocurrency restrictions, shaping the growth of Nigeria’s fintech sector?
In 2024, Nigeria’s fintech sector faced a mix of challenges and opportunities due to new regulatory changes. The Central Bank of Nigeria implemented stricter rules, including higher application fees and limiting fintech companies from providing International Money Transfer Operations (IMTO) services. While these regulations create a more cautious operating environment, they also aim to strengthen compliance and improve data security, potentially paving the way for more stable growth in the long run.
On the flip side, the relaxation of cryptocurrency restrictions has created fresh opportunities for innovation. When paired with progress in open banking and the growing adoption of digital payments, Nigeria’s fintech industry continues to expand. Despite regulatory obstacles, the sector demonstrates its ability to evolve and thrive in a dynamic environment.
What challenges could impact the growth of Nigeria’s fintech industry in 2025?
Nigeria’s fintech industry is navigating a series of challenges that could shape its trajectory in 2025. One significant obstacle lies in regulatory requirements, particularly around anti-money laundering (AML) and counter-terrorism financing (CTF) laws. These regulations, while necessary, can complicate operations for businesses trying to stay compliant.
On top of that, macroeconomic pressures – like rising living expenses and a sluggish economy – might dampen both investment inflows and consumer adoption of fintech services. These external factors could slow the sector’s expansion.
The industry also faces cybersecurity risks, which pose a serious threat to user trust in digital platforms. Without robust security measures, maintaining confidence in fintech solutions could become a challenge. Moreover, a talent gap in skilled professionals could hinder innovation and make scaling operations more difficult.
Tackling these issues head-on will be essential for the sector to maintain its momentum and secure sustainable growth in the years ahead.
