Africa’s newest fintech unicorns are winning by keeping their feet on the ground 

Africa’s tech ecosystem just got a boost of attention, with South Africa’s TymeBank and Nigeria’s Moniepoint both raising funds in recent weeks at valuations of over $1 billion and joining the coveted unicorn pantheon. But those valuations don’t just reflect investor confidence. They signal the success they’ve had in taking disruptive fintech models originally developed for mature economies, and scaling by tailoring them to work in a region where nearly half the population remains unbanked.Both companies’ primary aim has been to simplify banking for individuals and businesses in two of Africa’s largest economies. TymeBank began by offering retail customers low-cost bank accounts and savings products before expanding into business banking, providing working capital to small businesses in South Africa.Meanwhile, Moniepoint started out in Nigeria supporting small businesses with accounts, payments, loans, and expense tools and has recently expanded into retail banking.Importantly, both fintechs are taking a hybrid approach to banking, blending the convenience of digital banking with real-world, physical touchpoints.“In Africa, it’s a catch-22: you can’t have one thing without the other,” said Lexi Novitske, general partner at Norrsken22, an investor in TymeBank, to TechCrunch. “Many tech companies must build customer acquisition and engagement through highly analog or physical efforts.”Their strategy contrasts challenger banks in the U.S. and other developed markets. Revolut, Monzo, and Chime operate as their names suggest: digitally. Even some platforms in emerging markets, like Nubank and JPMorgan’s C6 in Brazil or small businesses like Open in India, have focused on digital-only channels to build regional category leaders. But a purely digital approach isn’t ideal in Africa. There are exceptions—such as Valar-backed fintech Kuda—but there’s a cap on the number of customers such a platform could reach. Thus, as Stephen Deng, co-founder at DFS Lab, an Africa-focused early-stage investor, puts it, they will run into (domestic) revenue ceilings.On top of this, it’s a region where cash is king, internet connectivity can be unreliable, and trust in purely online systems remains low. Cash remains the most dominant payment method across Africa, accounting for over 90% of all transactions, according to a McKinsey report. Meanwhile, GSMA says 43% of Sub-Saharan Africa has internet access. Tymebank and Moniepoint have crafted a middle path that thrives on meeting retail and business customers where they are. TymeBank currently claims 15 million users across South Africa and the Philippines, while Moniepoint says over 10 million people and businesses use its services. (Kuda, valued at $500 million, isn’t far off, though, with about 7 million users.)“When venture capital was abundant you could pay people to adopt your digital-only product, but there isn’t enough average revenue per user (ARPU) out there to justi