An investment drought in Africa brought on by the coronavirus pandemic could be coming to an end, as venture capitalists return to the continent, especially from China. After more than a year of staying away, funds are again looking at start-ups – particularly in fintech . They include OPay, a mobile-payments platform based in Nigeria which last week said it had raised US$400 million in a funding round led by Softbank Vision Fund 2, the investment vehicle of the Japanese conglomerate. It was also backed by a list of Chinese investors: DragonBall Capital, Sequoia Capital China, Source Code Capital, Redpoint China and 3W Capital. With the new funding, OPay is now valued at US$2 billion, making it one of five tech unicorns – start-ups valued at over US$1 billion – in Africa. The others are Flutterwave, Jumia, Interswitch and Fawry. “We want to be the power that helps emerging markets reach a faster economic development,” OPay chief executive Zhou Yahui said in a statement on Wednesday. The Chinese tycoon, who founded online games firm Beijing Kunlun Technology Co and was the previous owner of dating app Grindr , set up OPay in 2018 and has helped attract other investors to Africa’s start-up scene. Chinese venture capitalists pumped millions of dollars into start-ups on the continent between 2018 and 2019, but the economic uncertainty of the pandemic saw investors put the brakes on. Now they appear to be back, looking for new opportunities in the emerging market. OPay allows people to send and receive money and pay bills through its many agents, and it has thrived in a region of 1.2 billion where many people are either unbanked or underbanked – meaning they might have a bank account but rely on alternative financial services – and where smartphone and internet use is expanding. OPay’s monthly transaction value has now surpassed US$3 billion. The fintech company – developed by Kunlun’s Opera web browser unit – said it would use the new capital to boost its market position in Nigeria and Egypt and expand in other African nations and the Middle East. It said it had seen the biggest growth in registered accounts in those regions in the last five years, and has millions of active users across Africa, where the potential transaction value is estimated at US$490 billion. “We believe our investment will help the company extend its offering to adjacent markets and replicate its successful business model in Egypt and other countries in the region,” said Kentaro Matsui, managing director of SoftBank Group . The group first invested in OPay through its venture capital arm, Softbank Ventures Asia, in 2019, as did several Chinese funds. As well as Nigeria where the company is based, founder Zhou is focusing heavily on Kenya, where Opera is developing a platform for consumer lending apps OKash, OPesa and Credit Hela to offer unsecured loans, often without the need for the applicant to provide any credit history. Others are also jumping into the market. Early this month, another start-up, Wapi Pay – headquartered in Kenya – raised US$2.2 million in pre-seed funding, the earliest stage. Its target is global payments and remittances between Africa and Asia. China-based investors include MSA Capital, Transsion, the largest seller of smartphones in Africa, Gobi Partners and Future Hub. Transsion has also invested in PalmPay – another Africa-focused payment start-up that launched in 2019 with US$40 million in seed funding, including from Chinese tech firm NetEase and Taiwanese chip maker MediaTek. China seeks to expand influence in Africa with more digital projects Wapi Pay has offices in Nairobi, Singapore and the Chinese city of Tianjin and provides a payments gateway for African businesses to send and receive money from Asia via mobile platforms and bank accounts. Co-founder Eddie Ndichu said the initial capital raised would be used to diversify the company’s product range and drive growth, “so that we can evolve remittances into real-time global cross-border payments, starting with Africa and Asia – all while minimising the cost of transactions”. Ndichu said Chinese and Asian investors had seen the opportunity in African start-ups, especially in financial and other technology. “I think like everyone else, not Chinese alone, adoption of technology by Africans is at an all-time high, and penetration of mobile phones is also high,” he said. “Africa is a very young market, the average age is below 25 years, it is where the future lies for the adoption of technology.” Wapi Pay investor MSA Capital, a global fund headquartered in Beijing, said Africa to Asia was a large trading corridor that had been overlooked and was underserved by tech firms. “We are excited to support our extensive China fintech network and playbook,” the company said. Thomas Tsao, co-founder of venture capital firm Gobi Partners, echoed that view, saying there was a tremendous opportunity for investors in connecting Africa with Asia. He said recent investments in start-ups on the continent were just the “tip of the iceberg”, and more Chinese venture capitalists would go looking for opportunities in the emerging market. “The market is huge, and it has been relatively underserved but people are now starting to pay attention,” said Tsao, whose company is based in Shanghai and Kuala Lumpur. Gobi Partners was one of the first to invest in Wapi Pay, and also partnered with Transsion to invest in Future Hub, a China-Africa incubator and venture ­capital fund. Future Hub has in turn invested in Nigerian start-up Termii, a messaging and analytics company. Tsao said interest from Chinese investors would be “particularly strong” as many saw parallels in Africa with the situation in China 20 years ago, when the country’s GDP per capita was very low. “The Chinese market quickly developed through technology and innovation,” he said. “When you look at Africa, a lot of people say it lacks infrastructure and has a large unbanked population, but investors in China would see this as something they are familiar with and see it as an opportunity,” Tsao said. “It is the beginning of an exciting phase for Africa.”