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Who is building the tech infrastructure for African businesses?

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API fintech startups are thriving in Africa’s tech ecosystem as they build the infrastructure to facilitate payments, banking, e-commerce, and insurance. By creating the technical foundations, they are allowing businesses to focus on serving their customers rather than work on a non-core business of building tech.

An API, or application programming interface, is a group of functions and procedures that allow creation of applications to access the features or data of an application, operating system, or other service. An API makes it easier to build applications by separating a system’s interface from its code, and the specifics of its implementation, therefore only exposing objects that a developer needs.

Africa’s fintech space is growing rapidly, consistently receiving the highest amount of investment and with more and more players emerging. Fintech APIs are playing a significant role in this development, and some of the most exciting work in this area is being done by female entrepreneurs.

Enabling other businesses

Lami Insurance Technologies, a Nairobi-based insurtech company, is one of many African startups that has found a niche in building APIs to enable other businesses.

Jihan Abass founded Lami to increase Africa’s low insurance penetration by changing the model of insurance agents going to people to try to convince them to buy products. Lami provides businesses with an API to help them design digital insurance products. Businesses, including insurance companies and brokers, can use the API to manage risk by tailoring needs and digitizing their operations.

Users of Lami’s API include Stanbic Bank to provide bancassurance—the selling of insurance products and services by banking institutions—and the e-commerce platform Jumia to power its insurance marketplace on its JumiaPay app.

In May, Lami raised $1.8 million in a seed round led by the US-based Accion Venture Lab to hire more personnel, improve its technology, and expand its presence in the continent.

“I think it’s tough in the tech ecosystem particularly being an African, a Black woman, because for example it’s not as easy to raise funds,” Abass recently said. “But you can’t really say that’s the problem until you’ve overcome it, then you can point it out. That’s…my aim.”

API fintech companies are also big in digital payment

API fintech companies are also playing a big role in the African payment space, with companies such as Flutterwave, Paystack, and Cellulant using APIs to connect the continent’s fragmented environment for digital payments. Their APIs enable businesses to create customized payment processes to collect payment from customers from different countries and through different payment methods without having to sync with multiple payment systems.

“Flutterwave’s job is to be what we call ‘the center point’—the plumbing of African payments infrastructure,” Olugbenga Agboola, Flutterwave’s founder and CEO, told Quartz Africa in a past interview.

Abass, who is also Lami’s CEO, says API fintech companies are here to stay, and more of them will come up, particularly in savings, investments, credit and financial services, because “we have a big lack of infrastructure.” Current digital platforms need to start getting additional and different revenue streams to sustain themselves.

“I think that’s the most exciting part,” she says. “Because now we’re building on what exists and are creating more value there.”

This article is part of Quartz Africa Innovators 2021, the sixth edition of a series that identifies some of the most ambitious and imaginative minds on the continent. The more than two dozen women representing 18 countries and a diverse range of sectors represent the dynamism, entrepreneurial drive, and resilience of millions on the continent. Their innovations show the potential that can be unleashed when women with bold ideas and decisive actions take the lead.

Sign up to the Quartz Africa Weekly Brief here for news and analysis on African business, tech, and innovation in your inbox.

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