The News: Last week, Mobile Financial Service Africa, (MFS Africa) announced its acquisition of Global Technology Partners (GTP), a US-based prepaid card developer for $34 million.
A few days later (June 14) the mobile payments facilitator netted a $100 million series C extension bringing the total amount raised in the round to $200 million. In this rare and poignant display of possibilities, MFS Africa has become the first of its kind to acquire a US-based company of this size.
The acquisition of GTP will enable the mobile payments company to issue its own prepaid cards and leverage on the card issuer’s presence in the US. Meanwhile the new raise will accelerate its expansion into Asia to enable digital payments between Africa and China and grow its recently acquired payments company, Capricorn better known as BAXI.
Who are the investors?
The round, a mixture of equity and debt, was led by the private equity firm, Admaius Capital Partners, while Vitruvian Partners, a European private equity firm made its first investment in Africa. Another new investor was the alternative investments arm of AXA Investment Managers (AXA IM Alts). Some existing investors, AfricInvest FIVE and CommerzVentures, also put up more money, while Stanbic IBTC Bank Nigeria and Symbiotic provided the debt financing.
Other previous investors in MFS Africa include LUN Partners Group, Goodwell Investments, Allan Gray Ventures, Endeavor Catalyst and Endeavor Harvest, Equator Capital Partners, Ulme B.V., and Vlemeij B.V.
Why GTP counts:
GTP is a leading developer of prepaid and mobile payment software across Africa. The Oklahoma-based company was founded in 2003 and today has an established presence in 30 countries with over 80 banks -including UBA, Ecobank, BIA, Stanbic, Coris, NSIA and Zenith Bank – using its platform. GTP already has a 500,000 clientele in the countries where it is operative and partners with Visa,Mastercard, GIM, GIMAC and Verve networks to provide the processing.
This acquisition will therefore enable MFS Africa to begin issuing its own prepaid card as well as build up on GTP’s presence in the US.
Slow down! How did MFS Africa get here?
Dare Okoudjou founded MFS Africa in 2009 to bridge the digital infrastructure gap in Africa. By using an innovative application programming interface (API), MFS connects mobile payments providers, banks and financial institutions to a central hub and facilitates interoperability between all financial service providers.
A looming acquisition:
However, by 2014, MFS Africa ran short on cash with acquisition being the next obvious choice. Okoudjou turned down the offer even though the “acquisition promised a much needed (a true understatement) cash infusion to support the future growth of the company and would have positioned our story for global reach. It was a great opportunity on paper,” he told How We Made It In Africa.
A breakthrough moment came for the company when MFS Africa was selected as the integrating partner for Vodafone’s interconnections to MTN operations in East Africa. The partnership is one of which Okoudjou remains proud of to this day as it helped raise MFS Africa’s profile, credibility, and massively accelerated the growth of the company.
MFS Africa leads China into the African fintech space:
In 2018, MFS Africa raised a $4.5 million series B round from LUN Partners Group and became the first African fintech to be backed by a Chinese venture capital firm.
Ventureburn reported that prior to the bridge funding round, MFS Africa had raised just under $10-million from angel investors and family offices in South Africa. Safika Holdings, one of MFS Africa’s biggest investors, also participated in an earlier funding round.
Acquisitions
In 2020, MFS Africa, acquired Beyonic, a Uganda-based digital payments company. The 100% acquisition was paid for in Cash and shares. Beyonic tends to business needs with its extensive suite of digital payment services and enables its users to effortlessly collect funds from customers, send payments to vendors and manage cash flow. On the acquisition, Okoudjou said, “With the MFS Africa Hub, we have been creating new digital pathways between mobile money users in Africa and the global economy. And with the acquisition of Beyonic, we can now put this digital payment network at the service of these entrepreneurs.”
In another typical acquisitive move, MFS Africa absorbed Capricorn, the parent company of Baxi. Baxi is a leading digital payment solutions and distribution brand leveraging omnichannel to provide payment solutions to Nigerians with its products such as BaxiBox POS, BaxiPay, Baxi MPoS Device, and BaxiRIMS.
Capricorn will be renamed MFS Africa but its product will retain the Baxi tag. Baxi claims to have processed $1 billion worth of transactions and has over 90,000 agents spread across the country. This synergy will further go further to drive financial inclusion among the 100 million unserved and underserved population in Nigeria. CEO of MFS Africa said, “Crucially it provides entry into the Nigerian market for MFS Africa. Once Baxi is integrated as a key node on our digital payment network, customers will be able to make regional and global payments both to and from Nigeria.”
By acquiring these fintechs, MFS is able to leverage existing technology and user base instead of building one from scratch. The company currently connects more than 320 million mobile money wallets across over 35 African countries. MFS Africa is leading by its motto- to make borders matter less.
