Payments platform Airtel Africa closed a $100 million deal that gives Mastercard a 3.75 stake percent in its business, now valued at $2.65 billion.
Raghunath Mandava, chief executive officer (CEO) of Airtel Africa, said in a press release on Friday (April 1) that Mastercard’s investment will help the company further its mission to deliver financial services to underserved regions.
He added, “This is a continuation of our strategy to increase the minority shareholding in our mobile money business with the further intention to list this business within four years. We are significantly strengthening our existing strategic relationship with Mastercard to help us realize the full potential from the substantial opportunity to improve financial inclusion across our countries of operation.”
The investment also expands the company’s existing relationship with Mastercard, with “extended commercial agreements” and an updated “commercial framework” that will “deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.”
Airtel Mobile Commerce BV (AMC BV) is a wholly-owned arm of Airtel Africa and the holding company for several of Airtel Africa’s mobile money operations. It provides mobile payments services across all of Airtel Africa’s 14 operating countries. In Nigeria, the company provides services via a partnership with a local bank pending approval of its own banking license.
The company reported annual revenue last year of $440 million and an underlying EBITDA of $216 million.
Earlier this month, Airtel Africa closed a $200 million deal to sell a 7.5 percent stake in its money business to The Rise Fund, the global impact investing platform of U.S. private equity firm TPG.
Digital payment services are quickly taking hold in underserved regions, with a boost in adoption fueled by the pandemic. Nigeria was largely a cash-dependent country, but COVID-19 changed that, making in-person cash transactions harder to come by.
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