Chinese interest in African fintech has just stepped up another gear.
OPay, the payments service operating in Nigeria, has raised $120 million in a Series B round led mainly by Chinese investors including familiar names like Sequoia China, IDG Capital and Source Code Capital. The round also included participation from Softbank Ventures Asia, Meituan-Dianping, DragonBall Capitak, GaoRong Capital and GSR Ventures.
It’s the second major funding announcement by OPay this year and comes just five months after it raised $50 million back in July in a round also led by Chinese investors. OPay was incubated by Opera, the China-owned internet browser. OPay says the new funding will be deployed to launch operations in Kenya, Ghana and South Africa.
Notably, OPay’s round follows on the heels of another major funding round by Chinese investors in an African-focused fintech startup after PalmPay raised $40 million in a seed round from Shenzhen-based Transsion Holdings, the top selling phone maker in Africa. While the large amounts in early stage funding for both companies from Chinese investors marks the significant interest, the speed with which OPay has secured its second major round, all but confirms it. In total, Chinese investors have backed the two startups with $210 million in the last five months.
While investors are possibly looking to replicate the successes of WeChat Pay and Ali Pay in China across several African markets, there’s also the option of fueling quick growth in an Africa-focused fintech company with an eye on a major IPO or acquisition by a global payments company.
Visa, Mastercard, Stripe and PayPal have all invested in African fintech startups in the last 18 months. Earlier this month, Nigerian payment processing giant Interswitch sold a 20% stake to Visa for $200 million to become the sector’s first unicorn. The company is slated to go public on the London Stock Exchange next year.
OPay has already shown intent in its pursuit of fast growth by launching operations in other verticals to drive mass adoption on its payments platform. The company isn’t banking on organic growth either: Since launch, ORide, its motorcycle hailing service, has expanded aggressively by running heavily-subsidized promotions to edge out other players in Nigeria’s competitive bike-hailing space. The rising ubiquity of ORide bikes, particularly in Lagos—despite regulatory concerns—suggests the strategy is working. Opera says the latest funding round will help OPay “further accelerate its expansion across its multiple verticals.”
The possibility of OPay and PalmPay, two China-backed payments companies, becoming major players in key African markets is also in keeping with a wider trend which has seen rise of Chinese presence in Africa, from public infrastructure projects to news and media.
Sign up to the Quartz Africa Weekly Brief here for news and analysis on African business, tech and innovation in your inbox
Sign up for the Quartz Daily Brief, our free daily newsletter with the world’s most important and interesting news.
More stories from Quartz: