Earlier this January, Paystack, the Nigerian payments company acquired by Stripe for a reported $200m in 2020, made a move that surprised industry watchers. It purchased Ladder Microfinance Bank, a small Nigerian lender, in an undisclosed deal that transformed Paystack from a payments processor into a regulated financial institution.

The deal is a microcosm of high-stakes strategizing happening across Lagos. Across Nigerian startup boardrooms, a pattern has emerged: Nigerian fintechs are buying banking licenses, securities licenses, and overseas regulatory approvals at an accelerating pace. Between 2025 and early 2026, at least seven Nigerian startups acquired financial licenses through M&A, compared to just one such deal across the rest of Africa.

An analysis of more than 30 African startup acquisitions reveals a continent splitting into distinct M&A strategies. Nigeria accounts for 37% of tracked deals despite representing roughly 17% of Africa’s GDP. More strikingly, Nigerian acquisitions follow patterns absent elsewhere: higher disclosed valuations, aggressive regulatory arbitrage, international targets, and overwhelming concentration in fintech.

The divergence, for one thing, shows that African tech is fragmenting into separate markets with different competitive dynamics, capital requirements, and eventual outcomes.

The license rush

Nigerian startups have discovered that in heavily regulated markets, licenses function as competitive moats. Rather than spending years navigating bureaucracy, they are buying regulated entities outright.

Beyond Paystack’s microfinance bank acquisition, Y Combinator-backed lending platform Rank purchased Zazzau Microfinance Bank to gain deposit-taking capabilities. The company had already acquired AjoMoney, a community savings platform, to strengthen its product. Rank’s pilot program processed ₦16bn ($11.25m) before the deals; the acquisitions transform it into what it describes as a regulated financial ecosystem.

Moniepoint, which processes transactions for more than two million Nigerian businesses, acquired Kenya’s Sumac Microfinance Bank to replicate its model in East Africa. The deal bypasses the multi-year process of applying for a Kenyan license by purchasing an entity that already holds one.

Investment platform Trove Finance bought UCML Securities, a Securities and Exchange Commission-licensed broker-dealer, to bring trade execution in-house. Previously reliant on third-party brokers, Trove now controls its brokerage operations directly. The acquired firm has been rebranded as Innova Securities. Trove has facilitated over ₦500bn in trades.

Three Nigerian fintechs have taken this strategy international. LemFi acquired UK-based Pillar in a deal that included £13m in technology assets, securing Financial Conduct Authority (FCA) approval and credit infrastructure. The company now serves more than two million diaspora customers across the US, UK, Canada and Europe. Pesa purchased Authoripay, another UK electronic money institution, to obtain FCA licensing and Mastercard Principal Membership, enabling multi-currency wallets across Europe. Moniepoint GB is pursuing a similar approach through the acquisition of Bancom, an entity authorised by the UK’s Financial Conduct Authority.

The only comparable license acquisition outside Nigeria came from South Africa’s Stitch, which bought Efficacy Payments to gain card-acquiring capabilities. The deal makes Stitch the first South African fintech to control the full card payment stack without relying on banking partners. South Africa’s card market is projected to reach R2.9tn ($159bn) in 2025.

The contrast is stark. Six Nigerian license acquisitions versus one across the rest of a continent with 53 other countries. The pattern suggests Nigerian founders view regulatory approval not as a barrier to navigate organically, but as an asset to be purchased.

Building the full stack

License acquisitions represent one dimension of Nigerian M&A strategy. The second is vertical integration: owning every layer of the value chain to reduce dependency on third parties and capture more margin.

Flutterwave’s acquisition of Mono for an estimated $25m to $40m in all-stock consideration exemplifies this approach. Mono, often called Plaid for Africa, has powered more than eight million bank account connections and processes over 100 billion data points. The acquisition transforms Flutterwave from a payments processor into a full-stack financial infrastructure provider, combining payment rails with open banking, identity verification, and credit assessment capabilities.

Early Mono investors are reportedly set for returns of up to 20 times their initial investment. The deal is the only disclosed transaction with a specific valuation range, and at up to $40m, it dwarfs typical African startup acquisitions.

Food delivery startup Chowdeck, which serves 1.5 million users through 20,000 riders, acquired Mira, a restaurant point-of-sale and management platform that had processed more than $500,000 across roughly 200 restaurants. Rather than simply delivering food, Chowdeck now positions itself as the technology backbone for Nigeria’s food industry, offering inventory management, payment processing, and analytics alongside logistics.

Global talent marketplace Andela acquired Woven, a US-based technical assessment platform, to enhance its screening capabilities for AI-era engineering roles. The deal brings realistic job simulation technology to Andela’s evaluation process, enabling it to identify engineers capable of building production AI systems.

Outside Nigeria, vertical integration is less pronounced. Egyptian, South African, and other African startups are acquiring primarily for geographic expansion or niche capabilities rather than building comprehensive platforms. The exceptions are limited: Morocco’s Ora Technologies acquired last-mile delivery firm Cathedis to integrate its e-commerce platform and digital wallet, but the deal serves a single national market rather than continental ambitions.

The numbers tell the story

Of over 30 tracked startup-led acquisitions between 2025 and early 2026, Nigerian startups completed 12 deals, representing 40% of total activity. Egypt, Africa’s third-largest economy, accounts for six deals. South Africa, the continent’s most developed financial market, completed four. The remaining nine deals are scattered across Kenya, Morocco, Tunisia, Ethiopia, and pan-African platforms.

Sector concentration tells an even sharper story. Nine of 12 Nigerian deals are fintech-related, a 75% concentration. Egypt’s six deals span B2B commerce, education technology, HR tech, and loyalty platforms; none are pure fintech plays. South Africa shows 50% fintech concentration. Other markets demonstrate high sector diversity, from circular fashion in Tunisia to solar energy in Kenya to safety technology in South Africa.

Cross-border activity reveals another gap. Six of Nigeria’s 12 deals, or 50%, involve targets outside Nigeria: three in the UK, two in Kenya, one in the United States. Egyptian startups target the Gulf states, reflecting geographic and cultural proximity. South African firms look to Francophone Africa. But only Nigerian startups are acquiring assets in developed Western markets currently.

What Nigeria is not doing

Understanding Nigerian M&A requires noting what Nigerian startups are avoiding. They are not pursuing the sector diversification visible elsewhere. There are no Nigerian deals in solar energy, fashion technology, safety platforms, or education technology currently. 

Egyptian startups, by contrast, are building across multiple sectors. Nawy acquired UAE-based SmartCrowd to create a real estate super-app. iSchool purchased SEEDS to enter Saudi Arabia’s education market. Basharsoft bought iCareer to expand HR technology into the Gulf. Dsquares acquired PrepIt to add AI-driven loyalty software. Each deal targets a different industry vertical.

South African deals similarly span categories. Community Wolf acquired emergency dispatch app Namola to build an integrated safety ecosystem. Street Wallet purchased digital tipping platform Digitip to accelerate financial inclusion for informal traders. Peach Payments bought Senegal’s PayDunya to enter Francophone West Africa, a rare South African move into new linguistic and regulatory territory.

Kenyan solar company Solar Panda acquired Zambia’s VITALITE to gain Southern African distribution for pay-as-you-go solar technology. These deals reflect opportunistic expansion into adjacent markets rather than systematic platform construction.

Nigerian startups are also not pursuing small-ticket, tactical acquisitions. The only exception is Wakanow’s purchase of event ticketing platform Nairabox, described as expanding into the experience economy. Even this deal serves a platform strategy: integrating travel booking with entertainment and cultural events on a single interface.

The diaspora advantage

One factor driving Nigerian international acquisitions has no equivalent elsewhere in Africa: diaspora markets. Nigeria has one of the world’s largest overseas populations, concentrated in the UK and United States, creating addressable markets for cross-border financial services.

With the exception of Moniepoint’s Bancom acquisition, three Nigerian deals explicitly target diaspora customers. LemFi’s UK acquisition enables credit access for African immigrants who lack local financial histories. Pesa’s purchase of Authoripay provides multi-currency wallets and cards for diaspora communities across Europe. Pan-African credit infrastructure firm CreditChek acquired US-based CreditCliq to access global credit data for underwriting African immigrants abroad, reducing default risk for lenders.

No other African country demonstrates comparable diaspora-focused M&A activity. While remittances flow to Egypt, Kenya, and other markets, only Nigerian startups are building regulated financial infrastructure specifically designed to serve overseas populations.

Why Nigeria is different

The divergence reflects structural factors rather than random variation. Nigeria’s population exceeds 200 million, providing domestic scale that justifies infrastructure investments. Kenya has 50 million people. Tunisia has 12 million. Markets below critical mass force startups to think regionally from inception; Nigerian founders can build for a single country and still achieve meaningful scale.

Capital access plays a determining role. Lagos attracted the majority of African venture funding during the 2020–2022 boom, with Nigerian startups raising billions. Flutterwave alone has raised more than $400m across multiple rounds. This capital cushion enables larger acquisitions and more aggressive growth strategies. Egyptian and South African ecosystems, while sophisticated, operate with less available capital for M&A.

Regulatory maturity matters. Nigeria’s Central Bank and Securities and Exchange Commission have developed fintech licensing frameworks over the past decade, creating valuable regulatory assets that startups can acquire. The microfinance banking license, in particular, has become a tradable commodity. Other African markets either lack comparable frameworks or maintain regulatory environments less conducive to rapid fintech innovation.

The diaspora factor is structural. An estimated 15 million Nigerians live overseas, many in high-income countries where they face financial exclusion due to lack of local credit histories. This creates economic incentives for cross-border financial infrastructure that simply do not exist for most other African countries.

Founder culture may be the least quantifiable but most important factor. Nigerian entrepreneurs, shaped by the country’s high-stakes business environment and exposure to global capital, demonstrate higher risk tolerance. The willingness to pursue full-stack financial platforms or acquire assets in London and New York reflects ambitions that extend beyond African markets.

Two paths emerge

The data suggests African tech is not converging toward a single model but diverging into at least two distinct approaches. The Nigerian path prioritizes building defensible, regulated infrastructure with global reach. It requires significant capital, tolerance for regulatory complexity, and comfort with premium valuations. Success produces companies that own their full value chains and compete internationally.

The alternative path, visible across Egypt, South Africa, Kenya, and other markets, focuses on solving specific regional problems with leaner operations and sector diversification. Geographic expansion occurs within familiar regulatory and linguistic zones. Deal sizes remain modest. The approach trades Nigerian-style platform ambitions for capital efficiency and reduced regulatory risk.

Neither approach is inherently superior. Both reflect rational adaptations to local conditions. Nigerian startups can pursue aggressive platform strategies because their domestic market, capital access, and diaspora networks support it. Startups in smaller markets must be more conservative because their structural constraints demand it.

The next 24 months will clarify which model produces better outcomes. Nigerian startups must demonstrate that their platform investments translate into defensible market positions and eventual profitability. Startups pursuing the alternative path must prove that leaner operations and regional focus can compete with better-capitalized competitors.

The license to scale

The wave of Nigerian license acquisitions represents a bet that regulatory assets are the foundation of durable competitive advantage in African fintech. By purchasing banking licenses, securities approvals, and overseas regulatory permissions, Nigerian startups are building moats that organic competitors will struggle to replicate.

What is already clear is that African tech’s consolidation phase is producing not one story but several. The M&A patterns of the past two years suggest these narratives will remain distinct. Nigerian startups will continue buying licenses, building platforms, and competing internationally. Startups elsewhere will pursue leaner, more diversified strategies calibrated to their local realities.

For an ecosystem long discussed as a monolith, the divergence may be the clearest sign yet of maturation. African tech is developing the complexity and variety that characterizes developed markets. The license to scale, it turns out, looks different depending on where you are building.