This article examines three case studies – Interswitch, Andela, and TymeGroup – to demonstrate how African unicorns have moved from valuation milestones to lasting market power. The sequencing is consistent: valuation attracts investment, investment enables M&A, and M&A solidifies valuation.

Interswitch: Consolidating payments infrastructure

Interswitch’s billion-dollar valuation was premised on the scalability of Nigeria’s payments ecosystem and its first-mover advantage in digital financial infrastructure. On the strength of this potential, Helios Investment Partners and TA Associates led a funding round that valued the company at over USD 1 billion, formally establishing its unicorn status. With capital secured, Interswitch turned to M&A to entrench its regional position. The acquisition of Kenya’s Paynet Group broadened its footprint into East Africa and embedded the company more deeply within regional financial networks. These strategic moves made Interswitch an attractive partner for Visa, which invested USD 200 million in 2019. That investment not only reinforced Interswitch’s valuation but also entrenched its position as a pan-African payments leader.

Andela: Scaling capabilities through complementary acquisition

Andela’s valuation was derived from its innovative model for training and deploying African software engineers, aligned with the global surge in demand for remote digital talent. In 2021, a USD 200 million funding round led by SoftBank valued Andela at over USD 1 billion and cemented its unicorn status. The company then turned to M&A to consolidate this position, acquiring Qualified.io, a US-based talent assessment platform. The acquisition materially enhanced Andela’s recruitment model by integrating advanced candidate evaluation tools and expanding its reach into new markets. By repositioning itself from a developer placement company to a more integrated outsourcing platform, Andela strengthened its credibility and competitive standing in the global technology sector.

TymeGroup: Leveraging investment for cross-border expansion

TymeGroup’s valuation was underpinned by its innovative digital banking model, designed to address financial inclusion in South Africa and other emerging markets. This potential translated into an oversubscribed Series D capital raise, led by Nubank with a USD 150 million investment, alongside USD 50 million from M&G’s Catalyst strategy and a further USD 50 million from existing shareholders. The round valued TymeGroup above USD 1 billion, cementing its unicorn status, while maintaining ARC and Apis Growth Fund II as the largest and second-largest shareholders. The shareholder base was further diversified with participation from investors, including the Founders, Ethos AI Fund, Tencent, the Gokongwei Group, British International Investment (BII), Norrsken 22, Blue Earth, and Lavender Hill Capital Partners.

Armed with this significant capital base and shareholder backing, TymeGroup pursued international expansion. Its entry into the Philippines through GoTyme Bank was achieved via regulatory partnerships and targeted acquisitions necessary to establish a foothold in a highly regulated banking market. This cross-border growth demonstrated that TymeGroup’s digital banking model could scale beyond South Africa and positioned it as a multinational fintech player with both global recognition and diversified investor support.

Demystifying the African unicorn

It is sometimes argued that African unicorn valuations are “abnormal” because they are not anchored in tangible assets or profitability. However, the case studies above show that once valuations attract investment, the growth path is conventional: capital is deployed through M&A to expand markets, build capabilities and create synergies. Valuation precedes investment, investment precedes M&A, and M&A consolidates valuation. In this respect, African unicorns are not anomalies, they are participants in the orthodox cycle of private capital and M&A, adapted to the continent’s growth context.

What makes a startup attractive for acquisition?

Several factors explain why certain African startups emerge as attractive acquisition targets. Scalability is critical, with companies that can rapidly expand across borders – particularly in fintech and e-commerce – being highly sought after. Proprietary technologies and unique platforms that can be integrated into larger ecosystems are also valuable, making SaaS and digital platforms frequent acquisition targets. A strong market position underpinned by a loyal customer base further enhances a startup’s appeal, particularly to acquirers looking to enter new markets quickly. Finally, companies that have successfully navigated Africa’s complex regulatory frameworks are especially attractive, as they offer global investors a ready-made platform without the delays and risks of building compliance structures from scratch.

Sectors likely to produce the next wave of African unicorns

Looking ahead, several sectors appear particularly well placed to generate Africa’s next generation of unicorns. Fintech remains the most prominent, with financial inclusion driving demand for payments, lending, and insurtech solutions. Logistics and e-commerce are also poised for significant growth as Africa’s consumer markets expand and supply chain inefficiencies create opportunities for scalable platforms. HealthTech and EdTech are equally promising, as rising demand for healthcare and education solutions across the continent supports rapid scaling through strategic partnerships and acquisitions.

Conclusion

The rise of African unicorns such as Interswitch, Andela, and TymeGroup illustrates how valuations, once attained, act as catalysts for transformative growth. Investment follows, and M&A is then deployed to embed these companies within markets and reinforce their long-term sustainability. Far from being speculative, African unicorns are demonstrating that while their valuations may be unconventional in origin, their path to consolidation is firmly rooted in the traditional mechanics of private M&A. These companies are moving beyond the “unicorn” label to become enduring staples of Africa’s corporate landscape.