Fintech shows signs of global boom
Funding for Portuguese fintechs has exceeded the €1bn (£870m) mark for the first time, as a Mastercard white paper revealed that fintech is the fastest growing sector in Africa.
According to the Portugal Fintech Association’s annual report for 2022, fintechs have raised an aggregate of €1.08bn in Portugal to date.
Blockchain and crypto-based firms were show to be the primary recipients of funding, accounting for 76 per cent of the capital raised.
By far the biggest deal conducted over the last year was the €30.6m raised by digital asset trading company Uphold.
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Portugal’s fintech sector was found to be concentrated in the capital city, Lisbon, which is home to 55 per cent of firms, followed by Porto with 16 per cent.
The report also revealed that close to half the funding (48 per cent) was provided by international investors.
Meanwhile, fintech has been found to be the fastest growing sector in Africa, making up 61 per cent of the $2.7bn (£2.3bn) deployed across Africa in 2021.
A white paper by Mastercard, titled The Future of Fintech: Rapid Growth Attracts Smart Capital, found Nigeria was the leading fintech hub across the Middle East, Africa, and Pakistan.
Start-ups in the region accounted for a third of all funding deployed into fintech in 2021. Within Nigeria itself, the fintech sector accounted for 71 per cent of all venture capital.
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“For many years, African countries have largely been neglected of the same access to the tier one financial services typically offered to richer nations in the Northern hemisphere”, Ola Atose, founder and CEO of African digital assets exchange KoinKoin said.
“This lack of access has stipulated a digital revolution across Africa, whereby cutting-edge and African-born fintechs, that solve every-day real-life problems, have emerged.”
He cited regional problems, such as access to cross-border transactions, currency exchanges and access to assets that store value.
He said demand for cryptocurrency has surged across the continent, with funding for Africa-focused cryptocurrency firms growing by 11 times between the first quarter of 2021 and the first quarter of 2022.
“However, for Africa’s digital revolution to truly succeed, we must see even more collaboration between local and national governments, traditional banking services, private companies and exciting new fintechs”, he added.
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