In 2021, approximately 605 million[1] Sub-Saharan Africans held registered mobile money accounts, up 17% from 517 million in 2020. In contrast, 340 million[1] Sub-Saharan Africans (30% of the population) used mobile internet in 2021, up 12% from 303 million (28%) in 2020. While we believe mobile money penetration growth will outpace that of mobile internet in the short-to-medium term, we believe that smartphone-oriented digital wallet apps will benefit from both catalysts, abstracting away banking and payment complications with a better UX than traditional mobile money interfaces.
Sub-Saharan Africans conducted nearly $700B[2] in transaction volume via mobile money accounts in 2021, up 40% from $500B in 2020. With approximately 1.17B Sub-Saharan Africans in total, we believe multiple digital wallet operators can win meaningful share of transaction volume as both mobile money penetration and mobile internet/smartphone penetration increase over the next decade.
We believe that digital wallet competition in Sub-Saharan Africa should accelerate consumer adoption of smartphones and digital wallets themselves as they demonstrate the convenience, cost-effectiveness, and safety of using digital wallets over cash or even mobile money.
While many digital wallet players in Sub-Saharan Africa focus on local adoption in one or more specific countries, Chipper Cash employs a more agnostic tech infrastructure that allows it to expand quickly into new countries. We believe Chipper’s time to market alongside its capital to fund customer acquisition costs across Africa should provide Chipper with an advantage over other fintech competitors.
Disclosures
We offer our view of Chipper Cash because it is part of the total ARK Venture Fund portfolio. To see the most updated portfolio, please click here.
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