Fintech in Africa has continued its phenomenal growth in Africa, especially as the continent’s financial inclusion gaps come under the focus of a broad range of financial solutions. While many argue as to whether fintech on the continent is one-sided and focused overtly on payments, financial technology companies are increasingly drawing in more and more investments. Of these many companies, Interswitch is a top leader, reckoned as one of the oldest in the fintech space.
The fintech unicorn, a key player in the digital payments space in Africa, has closed a $110 million joint investment from LeapFrog Investments and Tana Africa Capital to scale its digital payment services across Africa. In 2019, with an investment of over $200 million by Visa, the company had risen to become the first fintech unicorn in Africa.
Confirming the news, Mitchell Elegbe, Group CEO of the enterprising fintech company, said:
We are excited to welcome LeapFrog and Tana on board, as we continue our work to advance the future of the African payments landscape. The evolution of fintech in Nigeria and the broader sub-Saharan region has been driven by the need to solve challenges and barriers that exist within the traditional financial system. Interswitch was born from the need to develop solutions that match the unique needs of local customers and merchants.
Both investors plan to work for hand in glove with the management of the company to continue to push forward the company’s growth interests across Africa, which consist of more innovative methods of customer acquisition and product development to better capture financial inclusion needs.
The investment comes on the back of selling down over 15 percent of their total holdings to both investors. This new investment increases the number of Interswitch’s investors to five. Prior to this sell-down, Helios had owned over two-thirds of the company, while Visa controlled its 20 percent stake in the company as well. The selldown, as explained by the company’s management, is not a loss of confidence by Helios, but rather an interest in expanding its list of investors. Following this investment, Helios, Visa, and other investors will be getting about $110 million through the sell-down of 15 percent of their holdings in the company to the investing parties.
As a key player in the fintech space, Interswitch is targeting an initial public offering outside the country’s shores, and cementing its footprints across the African continent.