Africa Digital Economy Forum

Global investments into fintechs plunged by nearly 40% amid pandemic

The year 2020 was a challenging year for many fintechs. The global slowdown in funding caused by the COVID-19 led to a significant drop in the number of venture capital deals and brought uncertainty for many companies operating in this market.

According to data presented by, global investments into fintech companies hit $105.3bn in 2020, almost a 40% plunge amid pandemic.

US Fintechs Raised 75% of Total Investments

Fintech companies apply modern tech solutions in the financial services industry to offer digitally enhanced products and allow widespread access to financial products at a lower cost than traditional players. Over the years, these innovative startups transformed how people and businesses spend, invest, save, or borrow money.

Even before the pandemic, many fintechs found it difficult to access funding, as investors focused on established companies instead of early-stage businesses. Nevertheless, the total value of investments into fintech companies increased dramatically in the last decade.

In 2010, fintechs raised $9bn in funding, revealed the KPMG’s 2020 Pulse of Fintech report. By 2015, this figure grew more than seven times to $67.1bn. In 2018, the total investment value jumped to $145.9bn and continued rising to $168bn in 2019, as the record year for fintech investments.

After the COVID-19 pandemic brought many deals to a halt in the first half of 2020, H2’20 reversed the trend as investors and fintechs learned to do business in a new normal. Nevertheless, statistics show that last year witnessed 2,861 deals worth $105.3bn, almost $63bn less than before the pandemic.

The Americas were the region attracting the most investments in the sector, accounting for 75% of the total, or $79.2bn. Fintechs from the EMEA region raised $14.4bn last year. Asian fintechs followed with $11.2bn worth of investments.

The Number of Fintech Startups Doubled Since 2019

Although the COVID-19 affected the investment activity in the fintech sector, it also triggered a surge in the use of fintech solutions, creating a huge space for new companies.

The BCG data revealed the number of fintech startups worldwide more than doubled since the pandemic struck, rising from over 12,200 in 2019 to almost 26,500 this month.

As of April 2021, there were 10,738 fintech startups in North America as the leading region, up from 5,800 in 2019.

However, statistics show Europe, the Middle East, and Africa have witnessed even more impressive growth in the number of fintechs. In 2019, almost 3,600 companies were operating in this sector. Since then, the number of fintech startups in the EMEA region surged by 160% to more than 9,300.

Asia and the Pacific ranked third with nearly 6,200 fintech startups as of April, up from 2,850 in 2019.


Driving digital inclusion to promote global equality

Covid-19 has accelerated the rate of digital technology adoption around the world, but also revealed the depth of the digital divide worldwide. For millions of people living in Africa, who do not have access to the internet or laptops and smartphones, the pandemic has resulted in greater social and economic isolation.

In 2020, 56.3% of South Africa’s 60-million population were internet users. This figure is expected to increase to 57.8% this year, up to 62.3% by 2025 [1]. Internet World Stats figures suggest that by December 2020, about 634 million people in Africa were internet users, amounting to 47.6% of the continent’s population.

“For millions of people living in Africa, who do not have access to the internet or laptops and smartphones, the pandemic has resulted in greater social and economic isolation.”

Many factors play a role in entrenching the continent’s digital divide, most notably the high cost of technology and connectivity, which is exacerbated by the lack of reliable network infrastructure.

The pandemic, with its lockdowns and restrictions, has hit Africans hard, leading to job losses, food insecurity, entrenched poverty and – perhaps most worryingly – major setbacks in education delivery.

One organisation that is committed to driving digital inclusion in Africa and globally is media and telecommunications software and services provider, Amdocs. The company employs 26,000 people around the world and creates opportunities for 70,000 more through its operations and supply chain.

Its initiatives in Kenya and Mexico have assisted hundreds of thousands of people during the pandemic. Currently in the planning phase, the company is currently working on another digital inclusion project in South Africa.

Amdocs, VP: Customer Business Executive, George Fraser says the company’s overriding social impact strategy is to provide digital solutions that address world problems. “As a company that creates digital journeys for our customers, we have the skills and capabilities to pay it forward to the communities that need us the most. The past year has resulted in just about everything going remote, and our ability to accelerate digital inclusion has become our number one focus.”

One of its key projects – conducted in conjunction with Safaricom Foundation – was to provide internet access to children in Kenya. “The initiative is a perfect example of how employee engagement and social impact can meet,” explains Fraser.

“Every year, we conduct an organisational health survey, which is open to all employees. In 2020, we incentivised employees to take part by promising internet access to one child in Kenya for every survey completed. The response was astonishing. Employees received the initiative really well and there was a significant increase in the number of surveys completed last year,” notes Fraser.

Amdocs employees reported that the initiative made them feel more connected and engaged with the company and its initiatives. It made them feel proud to work for an organisation that was making a tangible impact in other peoples’ lives.

Another highly successful project was the creation of an app to connect food insecure people in Mexico to businesses with excess food. The app is currently helping more than 400,000 people access food. The project is entirely volunteer-run – in collaboration with local authorities – and is Amdocs’ most impactful initiative to date.

In addition, the company runs digital skills training aimed at specific target populations, whether it is showing the elderly how to use communication platforms to connect with their loved ones or teaching women and children basic – or more advanced digital skills – to increase their digital literacy or enhance their employability.

Amdocs is currently running an internal competition for its employees to get ideas on how to take digital inclusion forward and help solve problems the world is facing. “We are also looking for two projects in Africa to support this year – they need to be legitimate organisations, such as universities or NGOs, that can demonstrate viable solutions to social challenges. Our role will be to bring the technological expertise to the mix,” notes Fraser.

He says Amdocs’ role does not stop with its own programmes. “We also help other organisations to find ways to address social issues in their respective countries and regions, for example, we assisted an Australian company in its drive to provide free data to students.”

Digital inclusion is so high on the agenda at Amdocs that shareholders are updated on progress in this area – alongside business and financial results. “Our company’s purpose is ‘enriching lives and progressing society’. This is not just our CSR purpose. We are profoundly aware of the inequality that the digital divide creates; the massive gap between the privileged and underprivileged; and the inequality in their access to education and other services.

“That’s why we are committed to providing life-changing help to people who need it the most, for example, giving children access to the internet or device when they cannot go to school. This could mean the difference between losing a year at school, maybe even giving up, or advancing to the next year and progressing in life,” concludes Fraser.