Airtel Africa seals $200m deal with Rise Fund

The Rise Fund, a global impact-investing platform, has sealed a deal with Airtel Africa Plc to invest $200m in Airtel Mobile Commerce BV.

Airtel Africa disclosed this in a statement on Thursday signed by its Group Company Secretary, Simon O’Hara.

“The transaction values Airtel Africa’s mobile money business at $2.65bn on a cash and debt-free basis. The Rise Fund will hold a minority stake in AMC BV upon completion of the transaction, with Airtel Africa continuing to hold the remaining majority stake.

“The transaction is subject to customary closing conditions, including necessary regulatory filings and approvals, as necessary, and the inclusion of specified mobile money business assets and contracts into AMC BV,” the company stated.

Airtel explained that the transaction would close in two stages, and that $150m would be invested at first close, once the transfer of sufficient mobile money operations and contracts into AMC BV had been completed, with $50m to be invested at second close upon further transfers.

Commenting on the deal, the Chief Executive Officer of Airtel Africa, Raghunath Mandava, said, “In most of our markets, there is limited access to traditional financial institutions and little banking infrastructure, with less than half of the population having a bank account across sub-Saharan Africa.

“Our markets, therefore, afford substantial market potential for mobile money services to meet the needs of tens of millions of customers in Africa who have little or no access to banking and financial services, and this demand is driving growth.

“With today’s announcement, we are pleased to welcome The Rise Fund as an investor in our mobile money business and as a partner to help us realise the full potential from the substantial opportunity to bank the unbanked across Africa.”

Partner at TPG, Yemi Lalude, who leads Africa investing for The Rise Fund, added, “We look forward to working with Airtel Africa to enhance its mobile money services, broaden its use cases, and grow into new markets. With this investment in Airtel Africa’s mobile money operations, we are excited to expand The Rise Fund’s global fintech portfolio and continue to deepen our focus on improving financial inclusion in Africa and around the world.”