By BUSINESS DAILY

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Kenyan fintech startups received $174.2 million (Ksh25.2 billion) in funding in the 24 months to July this year, placing the country fourth in Africa by amounts received after Nigeria, Egypt and South Africa.

The Finnovating for Africa report published by research firm Disrupt Africa shows that Kenya’s capital inflow in the review period, raised in 104 funding rounds, represented 4.8 percent of the total recorded funding in the continent.

Although the report did not name the beneficiaries, a spot check shows, for instance, that financial services provider Power Financial Wellness is among the notable sector players that have secured funding in recent months, bagging Ksh376 million ($2.6 million).

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“The vast majority of fintech funding in Africa goes to the ‘big four’ startup ecosystems, with Nigeria, South Africa, Egypt and Kenya swallowing up 91.2 percent of investment,” reads the report in part, adding that the share was a marginal drop from the 93 percent recorded in a similar period ending July 2021.

Other countries that ranked substantially in the funding share were Ghana and Uganda at three and two percent, respectively.

The leading segments of sector-funded firms include payments and remittances at 43.4 percent followed by lending and financing at 37.8 percent.

Others are blockchain (4.9 percent), insuretech (2.6 percent), invest tech (2.4 percent), business administration (2.3 percent), security and ID (1.8 percent) personal finance (1.3 percent) and others at 3.5 percent.

“Historically the two dominant sub-sectors of African fintech, the payments and remittances as well as lending and financing categories, increased their combined share of African fintech funding to 81.2 percent between 2021 and 2023, from 77 percent two years previously,” says the report.

Read: Venture capital pool for Africa drops by $1.4bn

“The two most populated categories, this pair have always also been the most attractive to investors, and there is little sign of that changing.”

The report further noted that invest tech and personal finance had grown strongly over the period, almost doubling their market shares to 2.4 percent and 1.3 percent respectively.

During the review period, only one fintech startup was acquired in Kenya, compared to 10 and nine in South Africa and Nigeria respectively.

The report comes at a time when the continent’s fintech ecosystem is experiencing rapid growth, with the latest McKinsey forecast projecting the revenue generated by sector startups on the continent to grow to $30 billion (Ksh4.3 trillion) by 2025.