Interswitch, a leading Nigerian electronics payment company, says that Visa Inc wants to acquire a stake in it. This confirms reports from Monday of a significant partial takeover of interests in the Nigerian company.
It’s said that Visa could be taking a 20% stake in Interswitch for $200 million. This price tag values Interswitch at $1 billion, making it Nigeria’s first indigenous tech company to hit the billion-dollar valuation mark.
The new investment could strengthen Interswitch’s arm in the lead up to its planned listing at the London Stock Exchange in 2020. While it has repeatedly delayed going public, next year’s IPO at the UK’s premier bourse is expected to have it valued even higher at about $1.5 billion.
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Some of the company’s existing shareholders include Helios Partners and TA Associates, both international private equity organizations, and the World Bank’s International Finance Corporation (IFC).
Interswitch isn’t the first unicorn to have come out of Africa. Jumia, which holds this title, was listed on the New York Stock Exchange earlier this year.
Fintech companies in Nigeria and elsewhere in Africa have been receiving increased interest from international investors, who are keen on taking a share of the fast-growing industry. In just over a decade, the sector in Nigeria has yielded over 200 companies, with the top ventures getting backed by foreign capital.
There have been significant funding announced for local fintech startups like Flutterwave, Paga, Paystack, and PiggyVest (formerly Piggybank), to name a few.
Visa acknowledges that it wants a bite of the action in what is the next frontier for financial technology. Andrew Toree, the company’s regional president for Europe, the Middle East, and Africa, has said that Visa considers Africa a priority region.
Interswitch was founded in 2001 by Mitchel Elegbe, who still heads it as its CEO. It builds and maintains payments systems for some of Nigeria’s biggest corporations and government bodies, and sustains a platform that lets individuals and small businesses pay for things electronically.
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Its most well-known offerings include Verve, a pan-African payment card brand, and Quickteller, a platform used to pay for everyday services like electricity bills, cable TV subscriptions, and mobile airtime.
The company has itself been involved with a number of acquisitions over the years. It has taken charge of Paynet, an East African payments service provider, and Value Added Network Solutions Limited (VANSO), a financial technology firm.
More recently, Interswitch acquired a 60% stake in eClat, a Nigeria eHealth company. The deal was seen as a sign that it was expending beyond its traditional fintech domain.
Featured image source: Techcrunch
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