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Uruguayan fintech company dLocal expects to expand its operations in Africa, driven by increased demand from Chinese e-commerce companies and rapid population growth, the company’s co-founder told Semafor.
The Nasdaq-listed firm provides cross-border payments services in emerging markets, allowing international businesses to accept payments in local currencies. It operates in more than 40 countries globally, including 14 in Africa. Sergio Fogel, the company’s co-president and co-founder, said African expansion was one of the “main pillars” of dLocal’s “merchant-led” growth strategy, which involves expanding in line with requests from companies that require payment services.
He told Semafor that recent interest in accessing African markets had been driven by Chinese e-commerce firms, such as Temu, satellite internet companies, and ride-hailing taxi services. “They see Africa as a huge, huge growth opportunity,” he said.
Fogel said Africa’s young population made it “a real market,” more so than in wealthier regions with aging populations. He pointed to Africa’s youth dividend, citing the IMF’s projection that by 2030 half of all new entrants into the global labor force will come from sub-Saharan Africa.
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Increased offshoring — in which African workers such as software developers provide services to companies overseas — has opened up opportunities on the continent, Fogel told Semafor, as have African migrants sending money home. The co-founder said remittances were a “high growth area” for dLocal because of a broader shift away from cash remittances to money being sent to bank accounts or digital wallets. The trend, which began during the COVID-19 pandemic, has accelerated in the last three years, he said.
dLocal has in recent months announced a number of partnerships with companies to provide payment services. In March, it enabled Airtel’s mobile money service as a payment method for Google Play in Kenya, and in September the company announced a deal with Bolt to support the Estonian ride-hailing company’s push into emerging markets.
Step Back
dLocal has a particular focus on Latin America, Africa, and Asia. The company’s biggest markets in Africa include Egypt, Kenya, Morocco, Nigeria, and South Africa.
Its earnings report for the third quarter showed Africa and Asia, which are grouped together, generated revenue of about $48 million — representing 17% of total company revenue — compared with a nearly $41 million and 22% share in the corresponding three months of 2024.
The report, which stressed that the company operates in markets that are “inherently volatile,” flagged Egypt as one of the cases in which potential currency devaluation and FX‑regime change can weigh on revenue growth and margins. But it also noted “strong performance” in Nigeria.
The View From London
Fogel’s company is just one of many fintech players targeting expansion in Africa. Wise, a UK-headquartered payments company, this month secured conditional approval from South Africa’s central bank to offer international money transfer services to personal customers in the country. The move marks the first regulatory approval in Africa for the company.
South African residents and businesses routinely send and receive cross-border payments but fees are often high and opaque. The South African Reserve Bank’s conditional approval paves the way for the London-listed fintech to disrupt the country’s payments market — in which cross-border flows are driven by trade and migrant workers — by offering a low-cost alternative to banks and money transfer operators.
Notable
- AI-powered fintech company Optasia, which uses machine learning to provide credit services, hopes to expand into most African countries over the next five years, its CEO told Semafor last month.