- Visa to acquire a significant
minority equity stake in Interswitch
- Partnership expected to expand the digital payments ecosystem across Africa, the world’s most underpenetrated market
- Interswitch and Visa share a vision to drive financial inclusion across the African continent
Interswitch Limited (“Interswitch” or the “Company”), a leading technology-driven
company focused on the digitisation of payments in Nigeria and other countries
in Africa, and Visa Inc. (“Visa”), the world leader in digital payments, today
announced a strategic partnership that will further advance the digital payments
ecosystem across Africa.
As part of the agreement, Visa will acquire
a significant minority equity stake in Interswitch. The investment makes Interswitch
one of the most valuable African FinTech businesses with a valuation of US$1
billion.
Visa will join globally renowned investors, Helios Investment Partners,TA
Associates and IFC, as shareholders in Interswitch, alongside Company
management.
Founded in 2002, Interswitch disrupted the
traditional cash-based payments value chain in Nigeria by introducing electronic
payments processing and switching services. Today, Interswitch is a leading player in
Nigeria’s developing financial ecosystem with omni-channel capabilities across
the payments value chain, processing over 500 million
transactions per month in May 2019.
In 2018, electronic payments in Africa
accounted for only 12 per cent of transactions by volume, compared to 54 per
cent in Europe and 79 per cent in North America. Sub-Saharan Africa is the
fastest-growing digital payments market in the world, with electronic payment
volume expected to grow at a CAGR of approximately 35 per cent from 2018 to
2023 in the region (excluding South Africa).This progress is expected to be
driven by the deepening
payments infrastructure, population and urbanisation growth, GDP growth above
the global average, increased mobile and internet penetration, as well as a
supportive regulatory landscape for electronic payments and financial
inclusion.
Interswitch’s core market, Nigeria, is the
largest economy in Africa with a rapidly growing electronic payments market.Point
of sale (“POS”) and ATM transactions per adult grew at a CAGR of 94 per cent
and 59 per cent from 2013 to 2018, respectively. In
Nigeria, there were only 11 card transactions per adult per annum in 2018 compared to 92 in
markets like South Africa,126 in Brazil and 465 in the UK. Despite this market under-penetration,POS
card transactions in Nigeria are expected to grow at a CAGR of 63 per cent
between 2018 and 2023.
In addition to its switching and processing
services, Interswitch owns Verve, the largest domestic debit card scheme in
Africa with more than 19 million cards activated on its network as of May 2019.
The business also operates Quickteller, a leading multichannel consumer
payments platform, driving financial inclusion across Nigeria with over 270,000
access points, as of 2018, from which consumers can initiate peer-to-peer transfers,
bill payments, airtime purchases, and other e-commerce transactions, processing
over 42 million transactions monthly as of 31 July 2019 (equivalent to over NGN 560 billion (US$1.5 billion) through direct, indirect and
Paypoint channels).
Interswitch’s
unique market capabilities and strong consumer proposition, has enabled it to
deliver consecutive years of sustainable profitable growth.
The partnership will create an instant
acceptance network across Africa to benefit consumers and merchants and facilitate
greater connectivity for communities. Both parties will also retain their
respective independent solutions, and Interswitch will retain its scheme neutral
strategy.
Mitchell Elegbe, Founder and Chief Executive
of Interswitch, said;
“Sub-Saharan Africa is the fastest growing payments market in the world, with growth driven by a young and dynamic population, rapidly evolving consumer behaviour, and an increasing desire for payment solutions that can be accepted across the continent and abroad. I am delighted that Interswitch has formed a partnership with Visa, with whom we plan to drive the next phase of transformation in the African payments landscape.”
Andrew Torre, Regional President CEMEA,
Visa, said;
“Africa is a priority region for us, and we continually seek strategic partnerships with local players to further strengthen our leadership position and enhance the payments ecosystem across the continent. This partnership aligns with our global strategy to work with and invest in innovative partners, and we look forward to working with Interswitch to provide new consumer and merchant experiences and support the rapid growth of digital commerce across Africa.”
Babatunde Soyoye, Helios’s co-founder and
Managing Partner, added,
“A strategic investment by Visa, the world’s leader in digital payments, into Interswitch is a substantial endorsement of the Company’s expertise in African payments. As an active investor in leading African payments businesses, we see tremendous opportunities to digitise payments across the continent and have worked closely with Interswitch’s management team to build a high quality and scalable platform geared to address some of these opportunities. We look forward to further collaboration with the Company alongside Visa.”
The transaction is subject to the relevant
regulatory approvals and is expected to close by Q1 2020.
FT Partners acted as exclusive strategic
and financial advisor to Interswitch on this transaction.
Enquiries
|
Interswitch
Group
Marketing & Corporate Communications
Cherry Eromosele, Enyioma Anaba,
Tomi Ogunlesi
|
+234 1 6283888 Ext 1253
|
|
International public relations
adviser to Interswitch
Smithfield, A Daniel J Edelman
Company
John Kiely, Charles Harrison, George
Yeomans
|
+44 20 3047 4228
|
|
Nigeria public relations adviser to
Interswitch
Vaerdi
Oluyemisi Lanre-Phillips, Rob Newman
|
+234 909 888 2196
|
|
Visa
Global Corporate Communications
Shannon
Reed
Corporate Communications Nigeria
Niyi
Adebiyi
|
+1 650.432.2990 press@visa.com
+234 816 6109761
|
About Interswitch
Interswitch is a leading technology-driven
company focused on the digitisation of payments in Nigeria and other countries
in Africa. Founded in 2002, Interswitch disrupted the traditional cash-based
payments value chain in Nigeria by supporting the introduction of electronic
payments processing and switching services. Today, Interswitch is a leading
player with critical mass in Nigeria’s developing financial ecosystem and is
active across the payments value chain, providing a full suite of omni-channel
payment solutions. Interswitch’s vision is to make payments a seamless part of
everyday life in Africa, and its mission is to create transaction solutions
that enable individuals and communities to prosper across Africa. Interswitch’s
broad network and robust payments platform have been instrumental to the
development of the Nigerian payments ecosystem and provide Interswitch with
credibility to expand across Africa.
About Helios Investment Partners
Established in 2004, Helios Investment Partners
is the leading Africa-focused private investment firm, led and managed by a
predominantly African team and based in London, Lagos and Nairobi. Managing
funds totalling $3.6 billion, the firm’s portfolio companies operate in over 30
countries in all regions of the continent. Helios has built a record that spans
creating start-ups to providing expanding companies with growth capital and
expertise, building African market leaders in core economic sectors and driving
strong returns via portfolio operations. The firm’s unique combination of deep
knowledge of the African operating environment, a singular commitment to the
continent and a proven capability to manage complexity, is reflected in its
position as a partner of choice.
About TA Associates
TA Associates is one of the most
experienced global growth private equity firms. Focused on targeted sectors
within five industries – technology, healthcare, financial services, consumer
and business services – TA invests in profitable, growing companies with opportunities
for sustained growth, and has invested in more than 500 companies around the
world. Investing as either a majority or minority investor, TA employs a
long-term approach, utilizing its strategic resources to help management teams
build lasting value in high quality growth companies. TA has raised $32.5
billion in capital since its founding in 1968 and is committing to new
investments at the pace of over $2 billion per year. The firm’s more than 85
investment professionals are based in Boston, Menlo Park, London, Mumbai and
Hong Kong. More information about TA Associates can be found at www.ta.com.
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