The Africa’s TelFintechs – Airtel Africa MoMO Raises $200M At $2.65B Valuation

The Africa’s TelFintechs – Airtel Africa MoMO Raises $200M At $2.65B Valuation

MTN went all the way when it partnered with Mastercard to link “MTN MoMo (Mobile Money) wallets, to help consumers and merchants engage with brands and businesses abroad through digital commerce, extending their reach to an international marketplace and unlocking a host of opportunities.” That deal made MTN a superb-fintech in 16 countries and with millions of users. In the digital space, one of the most important factors for success is demand. With millions within MTN’s space, the path to the castle is paved with gold.

In the race to win large shares in the growing fintech and e-commerce space in Africa, mobile network providers are taking to partnerships with existing payment companies.

In what seems like a step to expand the MTN MoMo partnership, MasterCard and MTN on Tuesday announced a strategic partnership to enable millions of consumers in 16 countries across Africa to make global e-commerce payments safely and securely.

The partnership is to be facilitated through a MasterCard virtual payment solution linked to MTN MoMo (Mobile Money) wallets, to help consumers and merchants engage with brands and businesses abroad through digital commerce, extending their reach to an international marketplace and unlocking a host of opportunities.

 

With that sword drawn by MTN, Airtel Africa is out with its own playbook: US-based investment firm TPG will invest $200 million in Airtel Africa’s mobile money business, a division which the company aims to take public in the next four years, Airtel said”. The Airtel Africa mobile money business is valued at $2.65 billion which makes it one of the biggest fintech companies in Africa. Nigeria’s Flutterwave and Interswitch are each valued around $1 billion. If MPESA is a separate company within Kenya’s Safaricom, it would command even more.

The transaction values Airtel Africa’s mobile money business at $2.65 billion on a cash and debt free basis. The Rise Fund will hold a minority stake in AMC BV upon completion of the Transaction, with Airtel Africa continuing to hold the remaining majority stake.

“The transaction is the latest step in the Group’s pursuit of strategic asset monetization and investment opportunities, and it is the aim of Airtel Africa to explore the potential listing of the mobile money business within four years,” Airtel said.

As I have noted in Harvard, the telcos are capturing new revenues via these mobile money operations, from their one oasis (the telecommunication operation). Provided they continue to deepen and win users on the telco operations, they have opportunities in the fintech units. Yet, to manage regulatory challenges, they may go orthogonal via some convoluted partnerships. If they can do disintermediation within their networks, some fintechs will have to change their playbooks.

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