For over a decade, Dutch impact investor Goodwell Investments has been placing capital into African financial inclusion, long before “fintech” became a global buzzword. The firm’s 2024 impact report now provides a rare, data-backed look into what it takes to build enduring companies in the sector.

Amidst a global venture slowdown, the report’s standout data point is the profitability of Nigerian payments giant Paga, which processed a staggering ₦8.7 trillion (approx. $6 billion at current official rates) in transactions last year. This success, however, isn’t an isolated event. It’s the result of a long-term strategy that offers three clear lessons for anyone building or backing companies in Africa.

Lesson 1: The Hybrid ‘Phygital’ Model is King 

The most resilient path to scale in African fintech isn’t purely digital — it’s a hybrid of physical and digital infrastructure. While the global narrative often champions frictionless apps, Goodwell’s data shows that success on the continent is built on vast networks of human agents who provide the critical bridge to the cash economy.

• Paga’s profitability is powered by its 51,288 local agents across Nigeria. They are the human interface that builds trust, provides cash-in/cash-out services, and onboards millions of users to the digital ecosystem.
• Pan-African payments company Onafriq significantly expanded its reach by acquiring Baxi’s network of over 100,000 agents in Nigeria. It now connects over 500 million mobile money wallets.
• In Uganda, Agent Banking Company (ABC), another profitable company in the portfolio, grew its network to 16,000 agents.

Again, Goodwell’s data suggests a new phase of consolidation and optimisation for the continent’s teeming agent networks. While the portfolio’s total agent count is a staggering 533,003, the year-on-year growth was virtually flat at -0.04%.

This indicates a strategic shift. Instead of pure expansion, companies are focusing on making existing networks more productive and resilient. For example, Paga saw a 22% increase in transactions per agent and a 300% increase in transaction value in 2024, suggesting deeper usage of its network.

These networks prove that to win the market, you must first meet users where they are — and for many, that is still in their local community with a trusted agent.

Lesson 2: There is Money in the ‘Picks and Shovels’ 

While consumer-facing apps garner the headlines, a significant and sustainable opportunity lies in building the B2B infrastructure that powers the entire ecosystem. The report highlights the quiet but immense impact of companies providing the foundational technology — the “picks and shovels” — for other financial institutions.

• Kenya-based Musoni, a cloud-based core banking provider, serves 68 Microfinance Institutions (MFIs) across 24 countries. It doesn’t serve consumers directly but enables these MFIs to reach 2 million end-users and manage 1.28 million microloans digitally.
• Similarly, Oradian, present in Africa, provides a SaaS platform to 55 MFIs, cooperatives, and rural banks, giving them the digital tools to serve 1.37 million users across 11 countries efficiently.

These infrastructure plays are a force multiplier. By enabling the traditional, trusted financial players to digitize, they lower operating costs, improve efficiency, and expand access to credit for millions. It’s a less glamorous but highly scalable and defensible business model that forms the backbone of a maturing financial sector.

Lesson 3: Nigeria Is a Universe, Not Just a Country

The report reveals an exceptionally strong focus on Nigeria. Goodwell has nine portfolio companies in the country — three times more than its next most concentrated market. This isn’t just diversification; it’s a deliberate strategy of deep concentration in Africa’s largest and arguably most complex market.

The performance of Nigerian payments company Paga validates this thesis. In 2024 alone, Paga processed over ₦8.6 trillion (approx. €5.7bn) in transaction value from its 26.7m users. This staggering volume, which is 12 times higher per month than it was in mid-2021, demonstrates that winning in Nigeria can deliver continent-sized returns. The report also notes Paga remained profitable in 2024 despite a tough fundraising climate, underscoring the resilience of market leaders in this space.

The lesson is that a shallow, pan-African approach can be less effective than achieving deep, defensible market leadership in a single, high-stakes arena.

Lesson 4: High Performance Knows No Gender — Diversity is a Strength, Not an Obstacle.

In an industry often criticised for its diversity gap, Goodwell’s portfolio sets a compelling benchmark. The report states that 100% of its portfolio companies have women in board or senior management positions.

The data from individual companies is revealing:

• Agent Banking Company (ABC) in Uganda reports that 60% of its board and 50% of its managers are women.
• Onafriq states that 36% of its executives and 42% of its managers are female.
• Musoni notes that 25% of its executives and 43% of its managers are women.

This suggests that intentional investing can align with strong governance and diversity, challenging the notion that these are mutually exclusive goals in emerging markets.

Lesson 5: Patience is a Profitable Virtue 

The “blitzscaling” model of burning capital for growth at all costs has proven ill-suited for many African markets. Goodwell’s portfolio demonstrates that a patient, hands-on approach focused on sound unit economics from the outset ultimately leads to more resilient — and profitable — businesses.

Goodwell’s first investment in Baobab Nigeria was in 2015 and in Paga in 2016. Their success today is the result of nearly a decade of steady, focused execution. The report notes that Goodwell acts as a “high-touch partner,” providing support in governance, network access, and fundraising. This deep involvement fosters discipline and resilience.

The profitability of Paga and ABC in a tough macroeconomic climate is the ultimate validation of this thesis. It proves that long-term commitment, paired with a deep understanding of local market dynamics, is more valuable than simply deploying massive amounts of capital. For VCs and founders, the lesson is that building an enduring African fintech is a marathon, not a sprint.?