Absa Group Recommends That African FinTechs Explore The Option of Listing Their IPOs on Local Stock Exchanges
Absa Group of South Africa has spotlighted the potential for African FinTechs to explore public listings within their home countries.
Adesoji Solanke, head of FinTech investment banking origination at Absa Securities UK, underscored the opportunity for FinTech startups across the continent to raise capital through initial public offerings (IPOs) on local exchanges, as reported by Bloomberg on Thursday (Feb. 22).
In the midst of a global decline in venture capital funding, going public on local exchanges could serve as a strategic exit plan for FinTech stakeholders, particularly those generating significant revenue in a single local currency, the report highlighted.
Solanke highlighted the availability of substantial pension funds for investment in certain African nations, making local listings an attractive avenue. Moreover, Africa’s burgeoning population, particularly its tech-savvy youth, has fostered a dynamic FinTech landscape.
Although companies like Flutterwave, Chipper Cash, and Interswitch have hinted at potential listings in the United Kingdom or the United States, local listings offer distinct advantages such as familiarity with local investors and less stringent listing requirements.
Several African FinTech entities, including E-Finance for Digital & Financial Investments, Fawry for Banking & Payment Technology Services, e-Tranzact International, and Lesaka Technologies, have already secured listings on local exchanges, according to the report.
Solanke suggested that African FinTech firms with diversified revenue streams across multiple regions and strong growth prospects might also contemplate international listings, according to the report.
According to the report, numerous African FinTech firms, such as E-Finance for Digital & Financial Investments, Fawry for Banking & Payment Technology Services, e-Tranzact International, and Lesaka Technologies, have already completed listings on local exchanges.
Solanke further suggested that African FinTech companies with revenue streams spread across various geographic regions and exhibiting robust growth prospects might also contemplate international listings.
