Airtel Africa’s Mobile Money Business Raises $100m from Mastercard

Airtel Africa mobile money services firm Airtel Mobile Commerce BV (AMC BV), has received $100m from Mastercard valuing Airtel Africa’s mobile money business at $2.65bn on a cash and debt free basis.

Mastercard will hold a minority stake in AMC BV with Airtel Africa continuing to hold the majority stake. This investment follows the $200m investment on 18 March 2021 by TPG’s The Rise Fund, and the sale of its towers companies in Madagascar and Malawi on 23 March 2021.

According to Raghunath Mandava, CEO of Airtel Africa,  “With today’s announcement, we are pleased to welcome Mastercard as an investor in our mobile money business, joining The Rise Fund which we announced two weeks ago. 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 both realise the full potential from the substantial opportunity to improve financial inclusion across our countries of operation.”

The investment aims to help Airtel Africa monetise its mobile money business with minority investments up to a total of 25% of the issued share capital of AMC BV, and to explore the potential listing of the mobile money business within four years. Airtel Africa will also use the proceeds to reduce its debt and invest in network and sales infrastructure in the respective operating countries.

Alongside the investment, Airtel Africa and Mastercard will deepen their partnerships across numerous geographies and areas including card issuance, payment gateway, payment processing, merchant acceptance and remittance solutions, amongst others.

Airtel Money includes mobile wallet deposit and withdrawals, merchant and commercial payments, benefits transfers, loans and savings, virtual credit card and international money transfers and is present across the Group’s 14 countries of operation. The firm is in Nigeria working with a local bank for its own mobile banking licence. 

Airtel Africa’s mobile money business benefits from strong network effects with our core telecom business through the extensive distribution platform of kiosks and mini shops as well as dedicated Airtel Money branches supplementing our extensive agent network, to facilitate customers’ assured wallet and cash.

In this year alone, in addition to Mastercard, we have added partnerships with Samsung, Asante, Standard Chartered Bank, MoneyGram, Mukuru and WorldRemit to expand both the range and depth of the Airtel Money offerings and to further drive customer growth and penetration.

The profits before tax in the full year ending 31 March 2020 and value of gross assets as of that date, attributable to the mobile money businesses were $143.4m and $463.2m, respectively.

Mastercard (through one of its wholly-owned subsidiaries) will invest $100m through a secondary purchase of shares in AMC BV from Airtel Africa. The transaction will close in two stages. $75m will be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV has been completed, with $25m to be invested at second close upon further transfers.

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