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Today, I’m dispelling a myth about how successful tech companies are built in Africa: the one that says successful companies almost always come from the genius of little-known founders.

The data shows the opposite, and I’ll be taking you through what it says.

But before we get into it…

Now, to the matter of the day…

You can build one from scratch and try to grow it into something. There are over 5,000 startups in Africa, and this is the route most of them take.

But the second way has produced stronger, bigger businesses. And it’s by building inside or next to a company that’s already big.

For instance, most people will tell you that the most valuable fintech in Africa is Flutterwave, which was valued at $3.25 billion this year. But that’s not true.

It’s MTN MoMo, which Mastercard valued at $5.2 billion when it agreed to buy a minority stake in 2023. 

Even Airtel Africa's mobile money arm was valued at $2.65 billion in a similar deal in 2021. Neither of them raised a seed round. 

And both were departments before they became full -fledged companies. It turns out that this kind of origin story is fairly common in Africa.

In 2003, Nick Hughes, the Global Head of Payments at Vodafone, wanted to build a way for microfinance borrowers to repay loans by phone. 

Vodafone would not fund it out of its own budget, so Hughes applied to a British aid programme, the Financial Deepening Challenge Fund, and won a grant of roughly £1 million ($1.35 million) on the condition that Vodafone matched it. 

The pilot ran in Kenya in 2005 through a new subsidiary called Safaricom, in which Vodafone held a 40% stake.

The pilot did not work as designed. Instead of using it to pay back loans, customers began using it to send money to each other instead, which turned out to be a much larger need than the one the team had set out to address. 

Safaricom rebuilt the product around that behaviour and launched it commercially in March 2007 with a simple ad: Send Money Home.

What made this possible was everything Safaricom already had. 

All these gave that product, M-PESA (if you hadn’t guessed already), strong distribution, capital, and regulatory resilience from the start. 

And the product took off. Today, M-PESA has over 50 million users worldwide, does 136 million transactions a day, and accounts for 44% of Safaricom’s service revenue in Kenya.

This was a company that started as a fringe idea within a much bigger company, championed by someone who knew telecoms and financial services really well.

M-PESA is a big deal so it might seem like the exception,  but the data tell us it’s not offscript at all.

In 2001, Mitchell Elegbe was a young engineer who worked with Telnet, one of Nigeria’s early tech companies. 

On a work trip to Scotland, an ATM swallowed his card. This got him thinking about electronic payments, and how back home, most people never got to use cards at all because banks couldn’t talk to each other. Using one bank meant you were locked into its service.

So he came back home with an idea to build software that would connect Nigeria's banks so cards issued by one would work in others’ machines. He pitched it to his bosses and got the green light to build it. 

But when he tried selling it to the banks while at Telnet, they didn’t buy it.

He decided to create a new company that would run the switch itself. He called it Interswitch. He had no capital and, by his own account, did not know what venture capital was. 

So he brought in Accenture, a consulting firm, to write a business plan the banks would recognise, and pitched a consortium of seven competing banks plus his employer, Telnet. Together, these companies put up ₦200 million in capital, around $1.2 million at the time. Elegbe took the chief executive job with no shareholding at all. 

Nine years later, in 2019, Visa paid $200 million for roughly a fifth of the company, making it a unicorn.

Interswitch was not a startup that banks later invested in. It was a company the banks commissioned, because the problem it solved was theirs. 

Today, many years later…

As far back as 2010, the Nigerian Central Bank made a rule that allowed banks to evolve into holding companies that could own non-banking businesses. 

This sparked a wave of banks pursuing opportunities they had seen outside of traditional banking.

In 2018, GTCO, a holding company that owns Guaranty Trust Bank, one of Nigeria’s biggest banks, launched Habari. It was a consumer super app that connected users to everything they needed, from fashion to music and even food.

The idea was that if people had access to these things in one ecosystem, they’d use the bank’s services to pay for them. Habari never caught on. So GTCO shut it down. In 2022, GTCO restructured Habari into HabariPay, a payment business.

Its core product was Squad, a way for merchants to accept payments online in Nigeria. This time, it worked. In 2025, Squad processed ₦80.9 trillion ($58.6 billion) and made ₦9.74 billion ($7.1 million) in profit. 

In 2022, Access Holdings, the company that owns Access Bank, Nigeria’s largest bank by assets, launched Hydrogen. Last year, it processed ₦85.9 trillion ($63.9 billion).

Stanbic IBTC, another major financial service company in Nigeria, launched Zest in 2023.

These are all startups incubated inside big corporations before they spun out to find legs of their own. Even some of the most successful startups you know got their start in large corporations, either as side projects or first clients.

Olugbenga Agboola, Flutterwave’s CEO, spent ten years at Nigerian commercial banks: four years at GTBank, five at Stanbic IBTC, and then ran the Digital Factory at Access Bank, where he also sat as an entrepreneur-in-residence at the bank's accelerator, before founding Flutterwave in 2016. 

It was during his time at Access Bank that Flutterwave was incubated.

Shola Akinlade built software for several Nigerian banks as a contractor, and has said that the work is what showed him what was broken about payments, and helped him understand how to fix it. Also, his first client was Access Bank.

This thread hits at the heart of something Matt Ridley covers in his book, How Innovation Works.

The popular belief is that most innovation comes from the lone genius, or a small group of geniuses working out of a garage. But that’s not true at all.

Innovation happens when a group of people who have deep experience and leverage in a traditional system figure out that there’s a better way to do something, and then marshal the resources to make all stakeholders move in the new, better direction.

For instance, SWIFT, the global payment network, was created by a consortium of global banks like Chase, Morgan Stanley, and Wells Fargo; three of America’s biggest banks.

Interswitch was created because a consortium of banks backed it. Jumia was Rocket Internet’s baby. And OPay was the brainchild of Telnet and Opera, a browser company with a war chest worth billions of dollars.

There are clear advantages they bring, like:

Besides all these, there’s one more thing these kinds of companies are well-built for…

Earlier this year, Ventures Platform and Stears published a report on exits and liquidity in Africa. 

They tracked 181 verified venture-backed exits between 2011 and 2026.  Among these, they found that trade sales, which means one company buying another company from the same industry, were the most common exit route.

Trade sales accounted for 73% of all exits, more than four times the next most common route. These were startups getting bought out by bigger companies.

If a corporate buyer is the destination in nearly three-quarters of cases, then starting next to a corporate or underneath it might be the shortest and most reliable path to exits. Some corporations are now buying their way into that pipeline early.

IBL, a Mauritian group that runs close to 300 companies across 20 countries, committed $10 million into a seed fund. 

According to IBL, they’re not really looking for returns. They want to stay close enough to see which young companies could take its market share, and to find ones its own businesses can work with. 

The point here isn’t that venture capital is bad or that founders should stop starting companies from zero.

It’s a different point altogether.

It’s about what could happen if more large corporations started incubating technology divisions instead, backing them with capital and expertise.

In our experience, the answer is a lot of the best things we’re seeking: innovation, exits, and companies that last.

Do you think more large corporations should incubate startups?

Let me know here.

That’s it for this week. See you on Sunday for a breakdown on This Week in African Tech.

Cheers,

The Tech Safari Team

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