South African fintech under pressure as global money pulls back
Fintech once promised borderless money. Now, the only border that matters is investor caution.
The easy money party is over, and fintech is waking up with a headache. For years, global investors threw dollars at African startups like they were ordering bottomless brunch.
Lately, the taps have tightened, and South African fintechs are nursing their bank balances instead of their egos.
Funding across Africa fell nearly 50 % in 2024, from about ZAR 30 billion (USD 1.6 billion) to ZAR 16 billion (USD 857 million). South Africa still gets a big slice of the pie, but the pie itself is shrinking fast. If you’re a shiny new app looking for an investor to cover your free transfers and launch parties, good luck.
The same fintechs that promised borderless money are now running into very real borders: investor paranoia, stricter regulators, and a rand that isn’t exactly the strongest wingman.
Who’s still cashing cheques?
Not everyone is crying into their cappuccinos.
Stitch, the Cape Town payments startup, closed a ZAR 1 billion (USD 55 million) Series B in April. Early backer Rally Cap even cashed out partly, a rare win in a market where exits usually look like ghost stories.
TymeBank went even bigger, bagging ZAR 2.8 billion (USD 150 million) from Latin America’s Nubank. The deal valued it at about ZAR 28 billion (USD 1.5 billion). These wins are real, but unicorn-level rare.
The squeeze on the rest
For everyone else, reality hurts. The number of African fintechs might have tripled since 2020, but the global cash is drying up, and local venture capital isn’t stepping in to save the day. Survival odds are slimmer than a Joburg traffic cop’s patience.
Regulators want more compliance. Infrastructure is still lagging. “Move fast and break things” doesn’t work when what’s breaking is your balance sheet.
South Africans can expect fewer freebies. Your favourite app might decide “free EFTs” was a phase. That budgeting app you downloaded in 2022 could ghost you, and that glossy dream of cashless living? Still on the roadmap, but someone spilled coffee on the map.
The new obsession: boring survival
The hype isn’t dead. It is simply under new management:
profitability.
Big banks are watching the shift with amusement. Fintechs are learning what incumbents have known for decades: survival is less about free rides and more about proving you can keep the lights on.
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