Business

Amazon expands its fintech accelerator footprint in Africa

The global e-commerce behemoth Amazon’s cloud computing arm, Amazon Web Services (AWS), has introduced a business accelerator for African financial technology firms. The new programme indicates Amazon’s expanding goals on the continent and the direction in which they are moving.

The programme, sponsored by AWS’ Startup Loft Accelerator, will concentrate on fintech and fintech-related firms operating in Africa. Venture capital funding for African fintech businesses is the highest compared to other technological sectors.

Out of the more than $5 billion invested in African businesses in 2022, fintech startups raised over $2 billion in venture capital. Amazon is now inviting early-stage fintech businesses to apply to participate in the AWS FinTech Africa Accelerator’s inaugural class. The deadline for applications is April 27.

A business accelerator for African financial technology companies has been launched by Amazon Web Services (AWS), the cloud computing division of the giant global e-commerce company Amazon. The new programme shows that Amazon’s aims on the continent are broadening and the direction they are headed.

The course will focus on African fintech and fintech-related businesses and is funded by AWS’ Startup Loft Accelerator. Venture capital funding for African fintech startups is the greatest compared to other technical areas.

Fintech startups on the continent raised more than $2 billion in venture capital out of the more than $5 billion invested in African enterprises in 2022. Amazon is currently accepting applications for the inaugural class of the AWS FinTech Africa Accelerator from early-stage fintech companies. The application deadline is April 27.

In November last year, AWS announced that it was opening an office in Lagos.

Amazon highlights where it sees value in the African market by supplying digital hardware and software infrastructure via data centres and AWS. Still, it isn’t retail e-commerce. Recognising the pattern associated with (South Africa concentration) is not difficult when you consider Amazon’s historical interactions with Africa. The US behemoth has resisted expanding its retail operations and brutally effective delivery service to the continent. Amazon, though, is optimistic about the market for digital services and infrastructure in Africa. That is true for a good reason. According to Xalam Analytics’ study, demand for data centre services in Africa increased two to three times faster than supply in 2018.

Three AWS data centres now provide service to Africa, two located in South Africa and the third in Nairobi, Kenya.

Targeting emerging tech firms sends a message to Amazon and AWS that they want to forge early alliances with Africa’s future tech behemoths, who will serve as their future target clients. The massive retailer is forced to look for new venues to expand its consumer base due to slowing revenue and net income. At the February 2022 Q4 results call with investors and analysts, Amazon CEO Andy Jassy stated, “We’re attempting to develop a set of relationships that outlast all of us.” Many startups as well as significant African enterprises, are already AWS subscribers. Features include Absa, Old Mutual, DPO, JUMO, Mukuru, and Travelstart.

However, the company’s other attempts on the continent have not gone as smoothly. Indigenous groups claim that the projected $280 million project for an Africa HQ will destroy holy sites, and they have been fighting it in court and through other means. From Egypt in northern Africa, Amazon has a logistics hub that serves its middle east and north African business. The biggest online store in Egypt then, Souq.com, was purchased by Amazon in 2017 for $580 million.

The AWS FinTech Africa Accelerator will provide chief executive and chief technology officers with training in strategy, tech team management, product development, and assisting founders in getting ready to negotiate the challenges of fundraising. Amazon won’t invest in businesses with stock or provide venture finance. Companies chosen will enrol in AWS’ Activate programme, giving entrepreneurs access to various services and up to $25K USD in Activate Credits. To address particular issues their business encounters, founders will also take part in workshops and one-on-one consultations with industry experts.