Afridigest Fintech Review: Is peer-to-peer crypto dying in Africa?
Week 14 2023: April 2-8
The Afridigest Fintech Review is a weekly recap of what happened in African fintech.
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On to the week’s highlights:
• Three equity deals were announced for ~$31M, plus a $100M+ debt & equity deal from an Africa-incubated firm.
• News of the week: Paxful, a leading player in Africa’s P2P crypto space, shut down.
• Companies appearing in today’s Fintech Review: TerraPay, Flutterwave, Peach Payments, Luca, BezoMoney, PayMeNow, Moni, Verto, FlexID, MFS Africa, & more.
• Executives appearing: Wave’s Coura Sène, DizzitUp’s Solofo Rafeno, AZA Finance’s Elizabeth Rossiello, Nestcoin’s Maya Caddle, Pivo’s Omolara Aribisala.
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Week 14 2023: April 2-8
💸 FundraisesEQUITY FUNDRAISES
TerraPay, a UK-headquartered cross-border payments platform incubated in Africa by India’s Mahindra Comviva, raised a $100M+ Series B (undisclosed mix of equity and debt).
Peach Payments, a South African payments gateway, raised a ~$31M (€29M) Series A.
Luca, a Nigerian financial bookkeeping platform, raised $120K* from an accelerator.
BezoMoney, a Ghanaian digital bank focusing initially on personal & group savings, raised $120K* from an accelerator.
DEBT
PayMeNow, a South African earned wage access platform, secured a ~$14M (ZAR250M) debt facility.
🤝🏽 Mergers & AcquisitionsBezoMoney acquired local microfinance provider Tiger Force Micro Finance for an undisclosed amount.
📰 News of the Week
Peer-to-peer crypto exchange Paxful announced in a blog post that it has suspended operations indefinitely.
It’s at least the third notable P2P crypto exchange operating in Africa to have shut down in recent months after Localbitcoins and Localcryptos.
But while challenges linked to “the ongoing, very cold crypto winter” were said to have contributed to the discontinuation of the other two services, Paxful CEO Ray Youssef initially pointed to key staff departures and regulatory challenges.
The Paxful message read:
“Today, Paxful will be suspending its marketplace. We are not sure if it will come back... We unfortunately have had some key staff departures… Also, regulatory challenges for the industry continue to grow, especially in the peer-to-peer market and most heavily in the U.S.”
Yesterday, however, Coindesk published a spicy exposé titled ‘Drugs, erratic dismissals, and feuding founders: Behind Bitcoin marketplace Paxful’s unraveling.’ It opens with assault rifles and ends with legal filings, but the long and short of it is an intractable co-founder dispute.
In any case, why does the Paxful shutdown matter?
For one, Paxful was one of the most popular places to buy Bitcoin in Africa, and whale falls tend to have an ecosystem-wide impact.
Beyond that, P2P exchanges have played a crucial role across Africa’s crypto economy to date — you’ll recall, for example, Chainalysis’ finding that the P2P exchange share of crypto transaction volume in Africa far outpaces that of the rest of the world.
In any case, it raises a few questions:
How are Africa’s crypto startups faring during this crypto winter?
Is there some signal in the closure of multiple leading P2P exchanges across Africa or is it mostly noise?
Who will be the winners of Paxful’s shutdown?
And is P2P crypto dying in Africa?
🚀 Partnerships & Product LaunchesLAUNCHES
Nigerian B2B e-commerce platform Omnibiz officially launched/relaunched its embedded wallet Omnipay. Available in Omnibiz’s merchant and distributor platforms, Omnipay enables retailers to receive payments, pay suppliers, and build credit scores for working capital financing. According to Omnibiz, Omnipay currently processes over 500 million naira (~$1.1M) daily.